Water Quality Credit Trading: Developments in 2011

Abstract

Water quality credit trading is being used in a number of watersheds throughout the country in a variety of forms and with a menagerie of rules, which vary based upon the state jurisdiction. October marked the end of the second year of active nutrient credit trading in Pennsylvania and the Pennvest public auction platform. This article provides the latest information on the use of water quality credits in Pennsylvania in 2011. A free commodity market like Pennsylvania's credit trading market can be a good tool to match price with demand, except when speculators enter the market, as we experienced this year. Discussion in this article includes results from the November 2 Pennvest auction, analysis of most current trends and unexpected challenges encountered this year by credit buyers and sellers in the Commonwealth.