State Considers Pollution Trading Scheme To Reduce Phosphorus In Lake Champlain

Oct 24, 2014

The clean-up of Lake Champlain looms as perhaps the largest, and most expensive environmental challenge facing Vermont. And state officials are exploring whether a cap-and-trade program for phosphorus runoff might help solve the problem.

Back in the 1990s, the acid rain problem had gotten so bad that some New England lakes couldn’t support brook trout anymore.

One of the main culprits was sulfur dioxide, spewing by the ton from the wide smokestacks of coal-fired power plants. And in their search for a solution, federal regulators looked to some of the same free-market principles that had created the problem.

The EPA set an emissions cap for all major sulfur dioxide emitters. If the polluters didn’t want to comply, that was fine – but only if they paid someone else to cut their pollution on their behalf.
The idea was to let the free market work its magic.

"The theory is that it becomes more economically efficient overall, if you look across the whole sector, that you're making the best possible investments, the most cost-effective investments, to reduce pollution." -David Mears, commissioner of the Vermont Department of Environmental Conservation

“And the theory is that it becomes more economically efficient overall, if you look across the whole sector, that you’re making the best possible investments, the most cost-effective investments, to reduce pollution,” says David Mears, commissioner of the Vermont Department of Environmental Conservation.

The approach has its critics, but the EPA credits the Acid Raid Program with nearly halving the amount of sulfur dioxide pumped annually into the atmosphere. And Mears wonders whether the same kind of framework might help curb the flow of phosphorus into the most polluted areas of Lake Champlain.
“The idea of using the markets as a way of driving and incentivizing further pollution reduction is an enticing one,” Mears says. “It has worked in other scenarios. It’s still relatively unproven in the context of nutrient pollution into waters.”

Uncertainty notwithstanding, the prospects are alluring enough for the state to spend about $100,000 to bring in outside experts to determine whether a phosphorus trading program might work here. “So we’ve put out this RFP so we can get some help from consultants and experts in this arena, who can look to other states that have engaged in these kinds of systems, and see if there’s something that can be crafted for Vermont that would really fit our unique situation,” Mears says.

Vermont has failed to meet federal phosphorus reduction targets, and is under threat of sanctions if it doesn’t figure out a way to comply. The Shumlin administration will negotiate a clean-up plan with EPA officials over the next few months.

"The first step is to put some legal mandates in place that actually bring people to the table and let them know that they're legally liable and responsible for cleaning up the pollution that they're causing." - Chris Kilian, Conservation Law Foundation

Chris Kilian is the head of the Vermont chapter of the Conservation Law Foundation, a group that has used legal maneuvers to try to compel the state to do more to clean up the lake. Kilian says phosphorus trading might have potential, but only if the state finds the regulatory fortitude it’s previously been unwilling to muster.

“The first step is to put some legal mandates in place that actually bring people to the table and let them know that they’re legally liable and responsible for cleaning up the pollution that they’re causing,” Kilian says.

Until and unless Vermont regulators force large farms and other major polluters to pay for their role in the clean up, Kilian says a cap-and-trade approach will be useless.

The state will select a contractor to conduct the study before the end of the year. Mears says any proposals for a program likely wouldn’t come until 2016.