NUTRIENT TRADING IN THE MRB

The study concludes that nutrient trading in the MRB is economically feasible, as wastewater utilities could significantly reduce costs by purchasing credits from the agricultural sector. Using case studies of two utilities and six agricultural watersheds, the report finds that nitrogen (N) supply is sufficient to meet demand, while phosphorus (P) supply is more limited. It highlights that some conservation practices are profitable for farmers even without trading due to fertilizer savings and yield increases. However, the report notes that the lack of a strong policy driver, potential local water quality standards, and regulatory capacity are significant barriers to implementation.

• Nutrient trading in the MRB is economically feasible because a significant cost differential exists between onsite wastewater treatment plant (WWTP) upgrades and agricultural best management practices. For example, at an N credit price of $3, two project utilities could save nearly $900 million over 20 years, representing a cost savings of 63%.
• Nitrogen credit supply from the six project agricultural watersheds is ample, estimated at nearly twice the demand of the two project utilities. Conversely, phosphorus credit supply is limited, providing only between 25% and 44% of the potential demand from the utilities.
• Agricultural producers can generate significant profit from selling nutrient credits, with estimates ranging from $25 to $61 per acre for nitrogen and $18 to $42 per acre for phosphorus, depending on policy scenarios and credit prices.
• Some agricultural conservation practices are profitable even without a trading market. The study found that between 12% and 19% of the 4.7 million-acre project area could achieve net savings because fertilizer savings and increased crop yields outweigh the costs of the practices.
• The quantity of credits generated and the resulting profits increase when both nitrogen and phosphorus credit prices are offered compared to when only one is available. An N price signal stimulates more credit generation than a P price signal.
• Future instream numeric nutrient criteria could restrict the geographic scope of trading. If local standards are more stringent than the Gulf hypoxia goal, utilities would be limited to purchasing credits from upstream suppliers within their own watershed to avoid creating local pollution 'hotspots'.
• The study identified that the most stringent policy combination—requiring both N and P trading eligibility standards (TES) and enforcing additionality—still allows for cost-effective trading, though it dampens credit supply and increases net costs.
• Wastewater utilities expressed a preference for N trading over P trading. The Metropolitan Water Reclamation District of Greater Chicago (MWRDGC) showed less interest in P trading due to existing onsite commitments and the likelihood of local instream numeric P criteria.
• Agricultural stakeholders generally viewed trading as an attractive additional revenue source, but expressed concerns regarding the stability of the market, the risk of onerous contracts, and the need for accurate baseline load estimation tools.
• Climate change is expected to increase the demand for nutrient credits and potentially lower the supply by necessitating more stringent trading eligibility standards due to increased runoff and higher water temperatures.

APA

PEREZ, M., WALKER, S., & JONES, C. (2013). NUTRIENT TRADING IN THE MRB. World Resources Institute. https://wriorg.s3.amazonaws.com/s3fs-public/uploads/nutrient_trading_in_mrb_feasibility_study.pdf

Chicago

PEREZ, MICHELLE, SARA WALKER, and CY JONES. NUTRIENT TRADING IN THE MRB. World Resources Institute, 2013. https://wriorg.s3.amazonaws.com/s3fs-public/uploads/nutrient_trading_in_mrb_feasibility_study.pdf.

Wikipedia

{{cite report |last1=PEREZ |first1=MICHELLE |last2=WALKER |first2=SARA |last3=JONES |first3=CY |title=NUTRIENT TRADING IN THE MRB |publisher=World Resources Institute |date=March 2013 |url=https://wriorg.s3.amazonaws.com/s3fs-public/uploads/nutrient_trading_in_mrb_feasibility_study.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{perez2013nutrient, author = {PEREZ, MICHELLE and WALKER, SARA and JONES, CY}, title = {{NUTRIENT TRADING IN THE MRB}}, institution = {World Resources Institute}, year = {2013}, month = mar, url = {https://wriorg.s3.amazonaws.com/s3fs-public/uploads/nutrient_trading_in_mrb_feasibility_study.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }