An enthusiastic study on Water Quality Trading recommends using “cap and trade” to control phosphorus levels in the Lake Simcoe watershed.
Lake Simcoe needs a major reduction in phosphorus loadings, even as population and climate change increase. The Lake Simcoe Protection Plan commits the province to complete a Water Quality Trading Feasibility Study under subsection 75 (1.9) of the Ontario Water Resources Act (OWRA), within one year. The Ministry retained a team, led by XCG Consultants Ltd, to undertake the study, which is out for consultation until April 3.
Water quality trading uses economic instruments to reduce the cost of environmental improvements. In essence, it is a form of cap and trade for water pollution. In the Lake Simcoe watershed, farmers can often reduce phosphorus discharges much less expensively than most sewage treatment plants can. The idea is to allow point sources, such as municipal sewage treatment plants, to offset their own phosphorus emissions by paying farmers (and perhaps others) to reduce theirs.
Water quality trading can provide an incentive for non-point source contributors (such as farmers) to reduce their phosphorus loadings. It can also reward farmers for the ecological services they provide. Critics argue that it can be costly to administer, that there may not be enough trading to make a difference, and that it is difficult to verify the results.
XCG concludes that a phosphorous trading program in the Lake Simcoe watershed is feasible, and could have a meaningful impact on the Lake. I expect to see the province adopt the concept, perhaps before the next election.
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I seem to remember that EPA set up a similar system about 30 years ago. They set limits for discharge quantities, to bodies of water, and then asssited dischargers with negotiating the shares.
It appears that South Nation Conservation Authority near Ottawa has had a phosphate trading scheme for about 10 years. Google- clean water program helps farmers and environment- eastern ontario agrinews. A $15,000 grant to Wynand Farms in 2002 appears to return $29, 600 a year to SNC for a 5 year total of $148,000 based on 296 kilograms of phosphate credits for a 100 cow herd X $100.00 per kilogram. After 5 years the program appears to renew. The 8 year total to SNC would now be $236,800 or more (there are now about 150 cows) for a $15,000 investment. Municipalities such as Ottawa and other dischargers buy the credits from SNC who are reaping a bonanza after conning a farmer out of ownership of the farm phosphate credits. This BS must be stopped.
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