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ISU receives $600,000 from EPA to study water quality trading, effects on Iowa watersheds


Iowa State University's Center for Agricultural and Rural Development has received three grants of $200,000 each from the U.S. Environmental Protection Agency to assess the feasibility of water quality trading programs in three watersheds located within the Upper Mississippi River Basin.

The Center for Agricultural and Rural Development is one of 10 leading organizations chosen to receive funding from EPA's Targeted Watersheds Grant program. The program encourages innovative water quality trading and other market-based programs that will reduce nitrogen, phosphorus, sediment or other pollutants that contribute to the hypoxic zone in the Northern Gulf of Mexico.

"These grants were designed to encourage successful community-based approaches and management techniques to protect and restore the nation's watersheds," said Art Spratlin, Region 7 director of EPA's Water, Wetlands and Pesticides Division.

CARD researchers will target the Raccoon River Watershed and Boone River Watershed in central Iowa and the Walnut Creek Watershed in south-central Iowa. They will assess the economic feasibility of using water quality trading and reverse auctions, as appropriate to each watershed, for addressing nutrient and sediment reduction goals.

In a water quality trading program, agricultural producers would receive points for implementing various conservation practices, and producers would be required to meet a "cap" of a fixed number of points. This cap could be satisfied by placing conservation practices on their own land or by purchasing credits from other producers who have exceeded their point requirement.

In contrast, in a reverse auction, an organization or governmental authority directly purchases conservation practices from willing landowners. Both of these incentive systems will be assessed.

"These research efforts will lead to better understanding of incentive-based conservation programs for these three watersheds and other Upper Midwest cropped regions," said Philip Gassman, an environmental scientist at CARD who helped write the proposals.

The Iowa Department of Natural Resources is collaborating on the projects and is interested in understanding whether an incentive-based system could be used to implement water quality improvements. Researchers with the Iowa Geological Survey in Iowa City and the University of Washington also will take part.

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