Louisiana Legislature Passes Water Quality Trading Bill

On June 8, 2017 the Louisiana State Legislature passed HB423 authorizing the Louisiana Department of Environmental Quality (LDEQ) to establish and administer a water quality trading program. This is a major milestone for the Louisiana Water Synergy Project, which has an active working group dedicated to designing a voluntary, market-based water quality trading program to improve water quality in Louisiana. 

Market-based solutions to improve water quality were identified by Water Synergy Project participants as a way to convert water problems into economic opportunities, and to develop a collective capacity for conserving watershed systems as both public and private goods. This approach is consistent with the Louisiana Nutrient Management Strategy that suggests that incentives such as water quality trading may provide opportunities for nutrient reduction and assimilation. In addition, this program may provide agricultural businesses and landowners with additional revenue sources and regulators with more policy options for improving water quality.

An existing law allowing a credit program was too narrow for the program to achieve the desired nutrient reductions. The Work Group, which includes representatives from LDEQ, Louisiana Department of Agriculture and Forestry (LDAF), Natural Resources Conservation Service (NRCS), and Coastal Protection and Restoration Authority (CPRA) took on the challenge to design a Water Quality Trading Program that would include both point sources (industrial and municipal wastewater treatment discharges) and nonpoint sources (agricultural production and stormwater management). 

The work group will continue to work closely with the LDEQ, nonpoint source agencies, and stakeholders to continue the program design work leading to adoption and promulgation of regulations to establish and administer the water quality trading program. For more information on the Water Synergy Project, visit usbcsd.org/water or contact us.