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Earlier this Spring WRI released a new report, "Awakening the Dead Zone: An Investment for Agriculture, Water Quality, and Climate Change," evaluating several policy options for addressing the hypoxic, or oxygen depleted, zone in the Gulf of Mexico. The report suggests the use of market mechanisms like nutrient trading provide the greatest overall environmental benefits and a cost-effective strategy for reducing the Mississippi River Basin's contribution to the Dead Zone. Nutrient trading is a highly targeted program in which farmers are paid not according to the practices they implement or changes they make, but instead according to the reductions in nitrogen and phosphorous loss to the waterways they can achieve. To make these reductions, farmers are allowed to use practices yielding the greatest reduction for the least cost. Similarly, managers of pollution sources facing more stringent discharge limits can choose the most appropriate reduction strategy for their facilities. "Giving farmers the flexibility to choose the mitigation option best suited to their operations not only increases cost-effectiveness but may also increase the likelihood of acceptance and adoption of these programs," said Dr. Suzie Greenhalgh, author of the study. "This report highlights real opportunities for farmers to play a leading role in reducing nutrient pollution." The Dead Zone in the Gulf of Mexico is a phenomenon caused by nutrient pollution where oxygen levels drop below what is necessary to sustain most marine life. Nutrient run-off, primarily from agricultural operations throughout the Mississippi River basin, feeds nitrogen-loaded water into the Gulf, resulting in oxygen depleted, or hypoxic, zones. The consequences of nutrient pollution are not isolated to the Gulf alone. The use of nitrogen fertilizers, a source of nutrient runoff, has implications for local water quality in watersheds along the Mississippi River and results in nitrous oxide emissions, a potent greenhouse gas contributing to global climate change. The size and extent of the Dead Zone varies both seasonally and annually. However, this large hypoxic area is at its worst every summer off the shores of Louisiana and Texas in the northern Gulf of Mexico, affecting some of the United States' most important and profitable fishing waters. Oxygen-depletion kills bottom-dwelling organisms and drives mobile marine life from the area. In the summer of 2002, the affected area was the size of Massachusetts. "The Basin extends from Minnesota to Texas and Louisiana with nitrogen contributions from 41% of the United States that drain into the Mississippi River," said Mark Muller, director of the Environment and Agriculture Program at the Institute for Agriculture and Trade Policy, in Minneapolis. "State and federal agencies need to work with the agricultural community to address this national crisis." This new analysis comes on the heels of the government's adoption of a National Water Quality Trading Policy, which calls for the use of economic incentives in the enforcement of water quality regulation. It allows pollution sources, such as industrial and wastewater management facilities, to meet more stringent regulatory obligations by purchasing offsets or credits from facilities exceeding their mandated water quality standards or from non-regulated sources, like family-owned farms. According to Dr. Greenhalgh, an upper limit on the amount of nitrogen entering a watershed could be defined using the assimilative capacity of the aquatic ecosystem and the reductions required to address local water quality concerns, such as drinking water quality, or coastal water quality problems. This nitrogen cap could be established for the Gulf of Mexico, the entire Mississippi River Basin, or divided between smaller sub-basins with all nutrient sources, both point and non-point sources, included in the cap. If a cap were adopted for the Gulf of Mexico, the adoption of nutrient criteria by upriver states as far north as Minnesota would be required to ensure action within the Mississippi River Basin as a whole. EPA studies concluded, while the Clean Water Act has successfully reduced water pollution through tighter regulations on industrial and municipal "point" sources of pollution, there are still about 3,400 waterways in the US that are impaired by nutrients, primarily nitrogen and phosphorus. Excess nutrients are largely the result of "nonpoint-source" run-off from agricultural fertilizer and animal waste. Such runoff can cause algal blooms that die and leave too little oxygen in the water for fish and other species to survive. To a large extent, the new National Water Quality Trading Policy is grounded in WRI research, particularly "Fertile Ground: Nutrient Trading's Potential to Cost-Effectively Improve Water Quality" which was released in 2000. The publication shepherded a movement towards water quality trading in the U.S. resulting in passage of the first comprehensive trading program in Michigan last December. The new trading policy builds on the concepts adopted in Michigan and the work of WRI. Coupled with an online trading resource called NutrientNet (www.nutrientnet.org), WRI's work on nutrient trading provides a blueprint for developing water quality trading programs across the country. "Trading can be a cheaper answer to solving water quality problems in the United States and around the world," said Faeth who authored the report Fertile Ground. "It creates a win-win solution for everyone involved and the new policy will allow states and others to take advantage of the newly created conservation innovation grants program in the 2002 Farm Bill." Congress established the Conservation Innovation Grants Program as part of Farm Bill 2002. These grants promote the implementation of innovative conservation projects including market-based pollution credit trading. The grants could be used to develop pilot trading programs immediately in areas with dire water quality situations such as the Chesapeake Bay and the Gulf of Mexico's Dead Zone.
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 World Resources Institute (WRI) welcomes companies to join our efforts by becoming members of WRI's Corporate Council. Council members receive WRI assistance in identifying environmental trends relevant to their industry, discussions on current issues, and cutting-edge information on business ideas. Members also receive WRI publications and briefings; access to WRI staff; consultation on issues of sustainable business; access to Pathways, our knowledge base on sustainable business; and complimentary registrations to the annual Sustainable Enterprises Summit. Corporate Council leadership members receive invitations to the corporate leadership dinner with WRI's president and access to WRI staff for speaking engagements.
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