Improving the Health of the Ohio River

The Ohio River flows from Pittsburgh, Pennsylvania, to Cairo, Illinois, and empties into the Mississippi River.

Background

The Ohio River flows from Pittsburgh, Pennsylvania, to Cairo, Illinois, and empties into the Mississippi River. Thousands of wastewater utilities, 46 power plants, and more than 230,000 farmers reside in an eight-state area within the Ohio River Basin.

All of these sources can emit pollution that winds up in the Gulf of Mexico, where it causes dead zones or hypoxia.

The costs to reduce emissions from the different sources vary. Water quality trading provides an option for businesses with high costs to pay those with lower costs to keep nutrients out of the water.

American Farmland Trust is part of an innovative, award-winning project reducing pollution and improving the health of the Ohio River. Since 2009, the Electric Power Research Institute and AFT, along with a strong collaboration of power companies, farmers, state and federal agencies, and environmental interests, have been developing an interstate water quality trading program in Ohio, Indiana and Kentucky.

The program connects buyers of nutrient credits (power plants, wastewater utilities and corporations) with sellers (farmers) to benefit the environment.

How Water Quality Trading Works

Farmers implement conservation practices that reduce soil erosion and run-off, generating a credit.

Power plants or other buyers purchase these credits, reimbursing farmers for their costs while improving the overall health of the river.

The result? Less run-off in the river and into the Gulf of Mexico. Farmers can try conservation practices without cost concerns. Since practices are implemented in multiple locations, the resulting benefits are felt throughout the watershed and not just at the point where the buyer is located. And, the program is designed so that some of the credits farmers generate are not sold but are retired for the good of the basin. Therefore, we expect real improvements in water quality over time.

AFT played a principal role in the Ohio River Basin. We:

  • Hosted listening sessions as the project got underway and continued reaching out to farmers, taking their ideas and feedback to the project partners to ensure the project takes agriculture's perspective into account
  • Coordinated on-the-ground activities with soil and water conservation districts, explaining how the trading program works and helping district staff and farmers throughout the application, implementation and installation process
  • Evaluated proposals, weighed in on funding decisions, and then worked with state agencies to verify that expected conservation practices were installed on farms (on-farm practices must be confirmed by the local conservation district and verified each year of the nutrient trading contract)
  • Work with farmers to ensure the designated practice is in place and make sure that credits and off-sets actually take place


The Benefits

Benefits go beyond the farmer and the power plant, extending to the health of the river, the Gulf of Mexico, and even to the animals both on-the-farm and in the wild that depend on the river water.

Where Do We Go from Here?

We developed the water quality trading program to generate compliance-grade credits. Power companies and wastewater utilities do not yet need these credits, since they meet current water quality standards for the Ohio River. However, many choose to participate as a stewardship benefit. The credits are voluntary, have significant environmental benefits, and are compliance grade. They would meet all requirements should a compliance market be necessary.

Three energy companies — Duke Energy, Hoosier Energy and American Electric Power — purchased the first credits in March of 2014.

Those interested in purchasing stewardship credits (retired for the pubic benefit) should contact EPRI at ohioriverproject@epri.com. The project plans to hold a public auction of credits later this year.

We will look at how to expand the trading model to integrate other environmental benefits, such as greenhouse gases or wildlife habitat markets.