WRI 237 - Development and Implementation of a Water Quality Bank and Trade Program for the Potomac River Watershed, WV

West Virginia University proposes a three-phased approach to develop and implement a water quality credit trading program in the WV area of the Potomac River Watershed. The first phase will focus on developing accurate watershed specific information and data to properly inform the trading development process. This information and data will be used to modify the World Resources Institutes NutrientNet electronic trading platform that has been developed for the entire Potomac River watershed. This process will provide an accurate baseline to evaluate potential credit supply and demand, incremental cost of credits and pollutant reductions. In the second phase West Virginia Research Corporation will launch broad public outreach and education to constitute a trading stakeholder process. Informed stakeholder input into the development of the trading framework and infrastructure will improve the trading program design and increase stakeholder trust and support for it. This broader process will be supported, informed, and facilitated by a core team of official project collaborators and other key players. Stakeholders will address and resolve critical trading infrastructure and element issues such as structure and function of the bank or board of trade, trading ratios, liability for non-compliance, enforcement, allowable trades, oversight, legal authority, transparency etc. In the last phase, West Virginia University will use the outcomes from the stakeholder process to establish the program rules and infrastructure and to execute a pilot-trading program. West Virginia University will build administrative functions into existing funding, procedures, staffing and infrastructure of the state agriculture cost-share program. A trading bank will be capitalized by providing incentives for early point source participation. This revenue will be used to offset cost share requirements and kick start the trading process. NutrientNet will serve as the electronic registry and marketplace for facilitating and conducting trades and determining optimal BMP applications and loading reductions. The program will be overseen by a Board of Trade with the responsibility to ensure that trades are conducted in accordance with established rules and to adapt the program in order to encourage maximum participation and efficiency.