UNIVERSITY PARK, Pa. — Watershedwide nutrient credit trading has been suggested as a mechanism for reducing pollution entering the Chesapeake Bay, but a new study by Penn State researchers suggests that the high cost of producing nitrogen credits through the establishment of riparian buffers on Pennsylvania farmland currently does not provide an incentive for buffer establishment.
“The nitrogen credit trading market was set up to help reduce pollution from point sources such as sewage treatment plants, and we wanted to see if Pennsylvania farmers could participate by getting credit for establishing riparian buffers,” said Michael Jacobson, professor of forest resources, College of Agricultural Sciences. “But it turns out that the cost of establishing and maintaining buffers is too high relative to the current credit price to work in that market.”
However, Jacobson added, increases in the market price of nitrogen credits or bundling nitrogen with other nutrient credits such as phosphorus ultimately could result in credit trading providing an adequate incentive for agricultural riparian buffer establishment.