Water Policy In Press, Uncorrected Proof © IWA Publishing 2012  |  doi:10.2166/wp.2012.166

Climate co-benefits of water quality trading in the Chesapeake Bay watershed

Rebecca R. Gasper^a,*, Mindy Selman^b and Matthias Ruth^a

^aUniversity of Maryland, Center for Integrative Environmental Research, 2101 Van Munching Hall, College Park, MD 2074
^bWorld Resources Institute, 10 G Street NE Suite 800, Washington, DC 20002
^*Corresponding author. E-mail: rgasper@umd.edu

First received 19 September 2011; accepted in revised form 2 March 2012. Available online 30 April 2012

Water quality markets are gaining worldwide popularity as strategies to provide flexibility and cost savings to sources managing pollution. One prominent example is the establishment of water quality trading programs in the Chesapeake Bay watershed in the United States to manage nonpoint and point source pollution. Some of the agricultural land use practices that can be used to generate offsets in water quality markets in this region have other environmental benefits including greenhouse gas (GHG) sequestration. This study describes the structure of Maryland's water quality trading program, its climate co-benefits and its potential link with GHG markets. Results reveal that Maryland's agricultural sector could offset half of its GHG emissions by 2020 through projects primarily designed to improve water quality. The potential opportunity for agricultural sources to participate in multiple markets could provide incentives for the adoption of management practices that have climate co-benefits. The results of this study could guide the continued development of multiple markets in the Bay watershed and other regions of the world where ecosystem markets play a role in pollution management.

Keywords: Climate change mitigation; Ecosystem services; Environmental markets; Nonpoint source emission; Water quality trading

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