Establishing Trading Ratios for Point – Non-Point Source Water Quality Trades:

This report evaluates and demonstrates technical methods of comparing point source (PS) and non-point source (NPS) nutrient discharges that can be used for developing credit scoring methods for a water quality trading system. We evaluate the state of the science for evaluating hydrologic functions within watersheds and for linking those physical functions to water quality and environmental outcomes. Many factors influence the links between cause and effect, and therefore models are used to consider how heterogeneity in biophysical characteristics and built infrastructure may influence the effectiveness of nutrient management practices at different locations within the watershed. We demonstrate these techniques using a case study of the Patuxent River in Maryland, USA and a suite of models developed for that river by an interdisciplinary team of ecologists, hydrologists and physical scientists who have been working together on Patuxent River water quality problems for many years. We find that reasonably appropriate data and models are available to inform a scoring system for nutrient credit trading in the Patuxent watershed. The system we develop for scoring PS to NPS trades is able to capture some important aspects of landscape heterogeneity and importance of the location of the best management practice (BMP) to measure nutrient reduction effectiveness. However, the models used to inform the scoring do not provide a means to assess potential error of scores and do not capture variability of performance with weather conditions or other temporal factors. The most poorly constrained data appear to be those for nutrient trapping performance by specific BMP. The success of trading programs in achieving environmental goals could be limited by any systematic biases in estimations of BMP effectiveness generated by the process-based models that provided the most comprehensive information and a logical method for scoring nutrient trades (e.g., Chesapeake Bay Program watershed model).