The Miami Conservancy District (MCD) has worked for decades to understand and address nutrient pollution in the Great Miami River Watershed. One of the most innovative results of that work was the Great Miami River Watershed Water Quality Credit Trading Program, a market-based program designed to reduce nitrogen and phosphorus entering rivers and streams.
MCD began the program as a pilot in 2004 in collaboration with wastewater treatment providers, agricultural producers, Soil and Water Conservation Districts, and state and federal agencies. The goal was straightforward: determine whether investing in voluntary agricultural conservation practices could achieve cost-effective nutrient reductions while providing additional environmental benefits.
The program ultimately funded 467 agricultural projects, generated more than 1.14 million water quality credits, provided more than $1.76 million to agricultural producers, and was estimated to prevent 626 tons of nutrients from entering rivers and streams over the life of the projects.
Water quality credit trading is a market-based approach that creates economic incentives to reduce pollutants entering rivers and streams.
In the Great Miami River Watershed program, agricultural producers voluntarily implemented approved conservation practices that reduced nitrogen and phosphorus runoff. The estimated reductions generated water quality credits that could be purchased by participating wastewater treatment providers.
This allowed money that otherwise might be spent exclusively on wastewater treatment technology to also support conservation projects capable of reducing nutrients before they reached rivers and streams.
The U.S. Environmental Protection Agency has featured the Great Miami River Watershed Trading Pilot Program as a water quality trading case study. EPA describes it as a point source-nonpoint source trading program administered by MCD to address both nitrogen and phosphorus.
The Great Miami River and its tributaries have experienced substantial improvements in water quality, but excessive nitrogen and phosphorus remain a concern.
More than 70 percent of the land in the Great Miami River Watershed is used for agriculture. As a result, addressing nutrients requires looking beyond individual wastewater discharges and considering the entire watershed and the many pathways through which nutrients reach water.
Agricultural producers had already been implementing conservation practices to protect soil and water. The Water Quality Credit Trading Program provided another source of funding to expand those voluntary efforts while testing whether communities could achieve nutrient reductions more cost-effectively.
MCD worked with participating communities, agricultural organizations and conservation districts to establish the program.
Agricultural producers voluntarily implemented eligible conservation practices designed to reduce nitrogen and phosphorus losses from their land.
The nutrient reductions associated with projects were quantified as water quality credits. Soil and Water Conservation District staff conducted field inspections to verify implementation of agricultural practices. MCD also maintained a water quality monitoring program to track nutrient conditions in the watershed.
This created a connection between two parts of the watershed that traditionally had been addressed separately: regulated wastewater discharges and nonpoint-source agricultural runoff.
Economic analysis conducted before the program was developed found a substantial difference between the estimated cost of removing nutrients through additional wastewater treatment technology and reducing them through agricultural conservation practices.
The analysis estimated that wastewater treatment plant upgrades using biological nutrient removal could cost approximately $422.5 million, compared with an estimated $37.8 million for agricultural conservation practices capable of achieving a similar level of nutrient reduction.
Estimated phosphorus reduction costs were:
$23.37 per pound using wastewater treatment technology
$1.08 per pound using agricultural conservation practices
For nitrogen, estimated costs were:
$4.72 per pound using wastewater treatment technology
$0.45 per pound using agricultural conservation practices.
These figures represented projected costs and potential savings—not savings ultimately realized by every community. The pilot was designed to test whether the approach could work in the Great Miami River Watershed.
By December 2015, the program had:
Contracted 467 agricultural conservation projects
Generated more than 1.14 million water quality credits
Committed more than $1.76 million to agricultural producers
Achieved an estimated 626-ton reduction in nutrient discharges over the life of the projects.
Conservation practices can also provide benefits beyond nitrogen and phosphorus reduction, including improved habitat, greater streambank stability, protection of wetlands and floodplains, and more sustainable agricultural operations.
The Great Miami River Watershed program became an important example in the development of water quality trading in the United States.
The U.S. Environmental Protection Agency included the program as a case study in its Water Quality Trading Toolkit for Permit Writers, identifying MCD as the program administrator and describing its approach to generating nutrient credits through agricultural best management practices.
A separate EPA evaluation of water quality trading programs highlighted MCD's role in initiating and administering the Great Miami program and the extensive outreach required to build relationships with agricultural producers and conservation districts.
U.S. EPA — Water Quality Trading Toolkit
Water quality trading required cooperation across the watershed.
Partners and supporters included MCD; the cities of Dayton, Englewood and Union; Butler County Water and Sewer Department; Tri-Cities North Regional Wastewater Authority; the Great Miami River Watershed Joint Board of county Soil and Water Conservation Districts; Ohio Farm Bureau Federation; Ohio EPA; Ohio Department of Natural Resources; USDA Natural Resources Conservation Service; U.S. EPA; and Soil and Water Conservation Districts throughout the watershed.
The Water Quality Credit Trading Program is one part of MCD's broader work to understand nutrients and improve water resources in the Great Miami River Watershed.
MCD has operated a surface water quality monitoring program focused on nutrients since 2006 and has conducted or supported research examining nutrient concentrations and loads, nutrient sources, phosphorus cycling, and the relationship among nutrients, algae and dissolved oxygen.
Explore MCD Water Studies and Research
Learn about nutrients in the Great Miami River Watershed
Lower Great Miami River Nutrient Management Study
Nutrient trading, also called water quality credit trading, is a market-based approach that allows verified reductions in pollutants such as nitrogen and phosphorus from one source to generate credits that may be used by another participating source under an approved trading framework.
The program addressed nitrogen and phosphorus, two nutrients that can contribute to excessive algae growth and other water quality problems when present at elevated levels.
Participating agricultural producers implemented approved conservation practices. Estimated nutrient reductions associated with those projects generated water quality credits.
Soil and Water Conservation District staff conducted field inspections to verify agricultural conservation practices implemented through the program.
By December 2015, 467 agricultural projects had been contracted, generating more than 1.14 million credits and an estimated 626-ton reduction in nutrient discharges over the life of the projects. More than $1.76 million was committed to agricultural producers.
The results presented here document MCD's pilot Water Quality Credit Trading Program and its historical accomplishments through 2015. They should not be interpreted as current annual program activity.
