Water Quality Credit Trading

An Efficient Approach to Meeting Water Quality Goals

In 2008, the Florida Legislature passed HB 547 to amended the Florida Watershed Restoration Act and authorize water quality credit trading in the Lower St. Johns River (“LSJR”) Basin. Water quality credit trading is a voluntary, market-based approach to promote the protection and restoration of Florida’s rivers, lakes, streams and estuaries. It is based on the fact that entities which discharge the same pollutants to a waterbody may face substantially different costs to control those pollutants. The purpose of the program is to facilitate economic exchanges that demonstrably reduce pollution. By October 2010, over ten trades were approved by the Department of Environmental Protection (“Department”). These trades primarily involved draft pollutant reduction allocations, developed cooperatively by stakeholders and the Department, before adoption of the LSJR basin management action plan (“BMAP”).

On June 7, 2013, Governor Scott signed House Bill 713 (Ch. 2013-146, Laws of Florida), expanding the program to the entire State. The bill authorizes the Department to approve voluntary water quality credit trading in adopted basin management action plans (BMAPs).

As the Department continues its adoption of BMAPs for areas of the State, MansonBolves is prepared to assist its clients with trading opportunities. In these trades, those clients with excess load allocations can sell these “credits” to entities that cannot meet their water quality obligations. Alternatively, those clients that find it difficult to meet their water quality obligations may purchase “credits.”

While the regulatory oversight of credit trading is somewhat limited, the Department is responsible for implementation of the practice through permits, or other legally binding agreements as established by the Department. As one of the trading parties must have an individual permit, MansonBolves had the necessary experience to offer a full range of services to assist our clients through the complex, and sometimes conflicting, governmental process.

Water quality credit trading can benefit both businesses and the environment. With the passage of the expanded water quality credit trading program, Florida businesses have another mechanism to meet the numeric nutrient criteria and total maximum daily loads taking effect.