June 26, 2013 –
Water quality credit trading: A new opportunity for Florida’s businesses and the environment

On June 7, 2013, Florida Governor Rick Scott signed House Bill 713, opening up water quality credit trading to the entire state of Florida. The bill grants the Florida Department of Environmental Protection (DEP) the authority to authorize voluntary water quality credit trading in adopted basin management action plans (BMAPs). The bill also allows water quality credit trading to occur in pollution control programs under local, state or federal authority.

Until now, water quality credit trading in Florida was limited to the Lower St. Johns River Basin pilot project. Florida joins several other states and regions that have water quality credit trading programs in place, including Oregon, Colorado, Connecticut and the Chesapeake Bay Region.

Credit trading provides opportunities to landowners, agricultural interests, industrial interests, public utilities and local governments to lower costs through a mutually beneficial credit trade and to improve water quality in their watershed.

As the DEP develops BMAPs for regions throughout the state, establishing a water quality credit trading bank — similar to wetland mitigation banks — can help alleviate burdens of numerous entities subject to BMAPs, help achieve water quality goals, and open a new business opportunity for landowners. In a water quality trading bank, a landowner can sell “credits” to entities that cannot meet their water quality obligations. In practice, credit trading can be as simple as a two-person trade, or it can be an opportunity for a landowner to address multiple entities’ needs as a bank.

Water quality credit trading can benefit both Florida business interests and environmental interests. The U.S. Environmental Protection Agency has touted water quality credit trading programs as “a powerful tool for achieving pollutant reductions faster and at lower cost.” While these concepts have yet to become established permitting programs with the environmental agencies in Florida, this new legislation and increasingly more stringent water quality laws may be the vehicle to developing this innovative banking concept. With the advent of new water quality regulations such as the numeric nutrient criteria about to take effect, water quality credit trading developed properly can meet these new regulations and create a new business opportunity in the state.

If you have any questions or would like more information, please feel free to contact Luna Phillips with Gunster’s environmental and land use law practice.