Phosphorus Credit Trading in the Kalamazoo River Basin: Forging Nontraditional Partnerships
Table of Contents
1.0 Introduction
1.1 Purpose and Objectives
1.2 Why Trading?
1.3 Kalamazoo River Project Setting
1.4 Formulation of a Demonstration Trading Project - Inception and
Organization
1.4.1 Steering Committee
1.4.2 Work Groups
2.0 Trading Demonstration Project Description
2.1 Water Quality Objectives/Framework (Short and Long-Term Goals)
2.1.1 Kalamazoo River Water Quality Standards (Drivers)
2.1.2 TMDLs
2.1.3 Initial Barriers Identified and Steps Taken
2.2 Structure for Trading
2.2.1 Steps To Implement a Point/Nonpoint Phosphorus Trade
2.2.2 Minimum Steps for Developing Point/Nonpoint Source
Trading Partnerships
3.0 Technical Basis for Trading
3.1 Overview
3.1.1 Trading Concept
3.1.2 Closed, Open, and Hybrid Programs
3.1.3 Voluntary/Open-Trading Format Selected
3.2 Opportunity To Reduce Phosphorus Loadings
3.2.1 Baselines for Nonpoint Sources
3.2.2 Equity Among Nonpoint Sources
3.2.3 "What's Important is What's Right for the Farm"
3.2.4 Kalamazoo Project Nonpoint Source Partner Sites
3.2.4.1 Georgia-Pacific Corporation Streambank
Restoration Site
3.2.4.2 Sutherland Park Streambank Stabilization Site
3.2.4.3 Comstock Township Agricultural Site
3.2.4.4 Cooper Township Agricultural Site #2
3.3 Trading Ratios and Discount Factors
3.3.1 Other Trading Ratios
3.3.2 Kalamazoo Project Trading Ratio
3.3.3 Calculating Site-Specific Discounting Factors
4.0 Economic Basis for Trading
4.1 Introduction
4.1.1 Economic Feasibility Study for Saginaw Bay
4.1.2 Saginaw Basin Modeling
4.1.3 Cost Analyses From Other Programs
4.2 Cost Analysis for Nonpoint Source Sites in the Kalamazoo Project
4.2.1 Georgia-Pacific Load Reductions, Costs, and Key
Considerations
4.2.2 Sutherland Park Load Reductions, Costs, and Key
Considerations
4.2.3 Agricultural Site Controls
4.2.4 Nutrient Load Reduction and Related Costs With and
Without Trading
4.3 Allocation of Credits to Project Partners
4.4 Bank Concept
4.4.1 Issues Affecting Transaction Costs
4.4.2 Administrative Costs and Process Needed for Trades To
Occur
4.4.3 Minimize Administrative and Transaction Costs of
Nonpoint Source Controls
4.5 Community and Economic Benefits of Trading Within This Project
5.0 Trading Project Approvals and Implementation
5.1 Process Developed for Project Approvals
6.0 Key Lessons Learned
6.1 Overview
6.2 Critical Objectives
6.2.1 Collaboration Among Entities With Diverse Interests
6.2.2 Collective Commitment to Water Quality Improvements
6.2.3 Find Points of Consensus and Move Forward
6.2.4 Identify Drivers, Barriers, and Alternatives for the
Nonpoint Source Sector
6.2.4.1 Municipal
6.2.4.2 Industrial
6.2.4.3 Agriculture
6.2.5 Improving Relationships by Working WithRegulatory Agencies
6.2.6 Learning How To Identify Trading Opportunities
6.2.6.1 Economic, Logistical, and Political Considerations
6.2.6.2 Market-Based, Nonregulatory Approach Versus
a Regulatory Approach
6.2.7 Monitoring and Historical Evaluations for Establishing Baselines
6.2.8 Post-Implementation Tracking of Nonpoint Source Controls
6.2.9 Recommendations for a Transferable Program
6.3 Michigan's Statewide Trading Program
6.3.1 Rule Development Process and Status
6.3.2 Michigan Rules Summary
6.3.3 Kalamazoo Project Input on Statewide Rules
7.0 References
8.0 Glossary of Terms
Appendix A - F