USDA Offers Grants in Support of Water Quality Trading

Scores of water-quality trading programs are under development across the United States, but few have reached the operational stage and most are limited to parts of watersheds within specific jurisdictions.   The USDA aims to change that with targeted funding for programs that develop market-infrastructure and cross-border trading.  

29 February 2012 | Time is running out for those looking to apply for $10 million in  Conservation Innovation Grants (CIG) that the United States Department of Agriculture (USDA) is offering to help launch water-quality trading (WQT) programs across the country.   The grants are especially targeted at cross-border programs focusing on quality across watersheds (rather than just within state boundaries) and at programs that create the kind of infrastructure needed for well-functioning markets.

Eligible projects must be able to show that they can already cover more than half of their costs with funding from non-federal sources, and the projects must also involve producers who are eligible for the Environmental Quality Incentives Program (EQIP), which is a voluntary conservation support program running under the USDA’s Natural Resources Conservation Service (NRCS).

If you want to apply, however, you have to act fast: the deadline to apply is Friday, 2 March.

Half the money is targeted at projects in the Chesapeake Bay watershed, which includes the District of Columbia and parts of New York, Pennsylvania, Delaware, Maryland, Virginia, and West Virginia.   The other half can be anywhere in the US or its territories, including Puerto Rico, the Virgin Islands, Guam,   American Samoa, and the Commonwealth of the Northern Mariana Islands.

How to Get Details

Agriculture Secretary Tom Vilsack announced the grant on 13 January, and the USDA hosted a webinar on 24 January offering more details.   The original announcement is available here, and the webinar is available here.

Infrastructure and Interconnectedness

Scores of regional programs are under development across the United States, but few have reached the operational stage and most are limited to parts of watersheds within specific jurisdictions.   The grants, therefore, will be targeted at projects that promote cross-border cooperation, the development of infrastructure programs, and education.

“We’re looking to fund a number of different types of projects, including those that support development and completion of state water-quality market rules and the infrastructure that is needed to execute orderly trading from point and non-point sources,” said Wayne Honeycutt, Deputy Chief, Science and Technology at NRCS, at the webinar.  

“Another emphasis is projects that will test and deploys tools and metrics for crediting and verifying the effectiveness of conservation practices on agricultural lands,” he said, before offering a litany of other possibilities – from programs that develop certification and registry mechanisms to those that provide basic education.  

“The goal of the grant is to support the development and completion of state water quality trading market guidelines and to build the infrastructure necessary to launch a successful water quality trading program,” added Carl Lucero, Deputy Director of the USDA’s Office of Environmental Markets (OEM). “We’re looking for market analysis, rules and infrastructure.   Want to deploy and test the tools needed, we want to establish certificating, education, registry and reporting systems, and we want to get to the people who need it the most.”

Relationship to Other Projects

Ann Mills, the USDA’s Deputy Undersecretary for Natural Resources and Environment, stressed the need to view the grant as part of the agency’s overall strategy of promoting voluntary conservation.

In addition to EQIP, for example, the USDA and Environmental Protection Agency (EPA) have been promoting a state-driven program called “agricultural certainty”, which aims to accelerate voluntary agricultural conservation by rewarding specific practices that address specific water quality concerns.

“We see this as a paving the way for environmental market transactions, because certainty helps change the cultural frame around markets,” said Mills.   “It gets producers comfortable with putting in place a set of practices and having them verified, and it also reduces the transaction costs of producers who may eventually get into trading of environmental markets.”

Additional resources