Agriculture and Water Quality Credit Trading in Minnesota: Emerging Opportunities

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Agriculture and Water Quality Credit Trading in
Minnesota Emerging Opportunities
Brian Brandt Director of Risk Management
Programs American Farmland Trust Agricultural
Conservation Innovation Center
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New MN Trading Project

• Starting It Local Transferable Market
  Infrastructure for Trading Water Quality Credits
  Ecosystem Services in the Upper Mississippi
  River Basin
• 1 million of USDA CIG funding
• Project led by Minnesota River Board

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Project Objectives

• Create self-sustainable local infrastructure and
  support systems that facilitate ag participation
  in water quality trading and other ecosystem
  services markets
• Define, test and establish transferable
  approaches using trusted and established local
  watershed institutions to promote ecosystem
  service markets
• Create example market structures and protocols
  and capture in transferable templates for other
  UMRB applications

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Target Locations

• Sauk River Watershed
• The Lower and Middle Minnesota River
• The Greater Blue Earth River Basin

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Primary Market Drivers

• WQCT due to expected credit demand stemming from
  forthcoming restrictions on restrictions on
  wastewater dischargers in the selected watersheds
• Renewable biomass energy production
• GHG markets
• Source water protection

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WQCT Drivers in the Sauk River Basin

• Horseshoe Chain of Lakes TMDL for phosphorus
  over-enrichment
• Drinking water/source water protection
• Lake Pepin TMDL for all sub-watersheds downstream
  of Horseshoe Chain of Lakes

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Supportive Conditions for WQCT in Middle and
Lower Minnesota Basin

• Three existing WQCT permits
• Localized relief via WQCT for new or expanding
  permits for downstream Lake Pepin TMDL
• Dakota Energys pending 2008 energy facility that
  will use steam from Rahr Maltings bio-mass
  fueled plant
• Food producers and cooperatives for sweet corn,
  sweet peas, sugar beets and ethanol form natural
  networks that can assist in the aggregation of
  agricultural credits

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Sauk River Watershed Water Quality Trading Project

• AFT is coordinating a project in the Sauk River
  Watershed in MN
• Partnering with Stearns County SWCD, Sauk River
  Watershed District and Kieser Associates
• First multiple credit trading project in U.S.

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Organization Chart(Big Picture)
Wetland Banking
Greenhouse Gas Market
Water Quality Trading
Habitat
Buyer of Credits
Ecoservices Project
Generator of Credits
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Organization Chart (continued)
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Organization Chart(Who)

• Board Member (1 each)
• SRWD
• Stearns SWCD
• Aggregator Chair
• Tech Com. Chair
• Buyer Rep.
• Generator Rep.
• Ag Consultant

Sauk River WD Chair Ag Representative City
Representative American Farmland Trust NRCS Rural
Water Association
Stearns SWCD Chair NRCS U of MN Ag
Consultant Sauk River WD Board of Soil and Water
Resorces St. Cloud St. University Kieser
Associates (technical consultant)
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Roles ResponsibilitiesPolicy Committee

• Approve bylaws
• Approve protocols/methods
• Set watershed goals
• Review fiscal performance
• Provide forum for public participation
• Leverage state and federal influence

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Roles ResponsibilitiesAggregator

• National bench marking report
• Market base analysis report
• Facilitate vertical communication of project
• Coordinate with buyers ecoservice programs
• Facilitate standard method protocols and
  recommendations with Tech Committee, for Policy
  Committee
• Trade registry development and operation
• Market and administrate program
• Monitoring of water resources

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Roles ResponsibilitiesTechnical Committee

• Provide technical input on standard methods
• Credit estimation process
• Watershed management
• Perform audit of BMP program
• Review of applications for accuracy
• Develop and deliver training materials
• Assist with ecoservices integration among
  multiple programs
• Certification protocol development
• Monitoring of BMP site for effectiveness

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Contact Us

• For more information please contact Brian Brandt
  at 614 221-8610 or email at bbrandt_at_farmland.org