New WRI Report Addresses Hypoxia Crisis in the Gulf of Mexico.

Business Editors

WASHINGTON--(BUSINESS WIRE)--March 7, 2003

A new report released by The World Resources Institute (WRI) suggests the use of market mechanisms like nutrient trading provide the greatest overall environmental benefits and a cost-effective strategy for reducing the Mississippi River Basin's contribution to the oxygen-depleted area in the Gulf of Mexico.

The report, "Awakening the Dead Zone: An Investment for Agriculture, Water Quality, and Climate Change," evaluates several policy options for addressing the hypoxia, or oxygen depletion, crisis in the Gulf of Mexico.

Trading is a highly targeted program in which farmers are paid not according to the practices they implement or changes they make, but instead according to the reductions in nitrogen and phosphorous loss to the waterways they can achieve. To make these reductions, farmers are allowed to use practices yielding the greatest reduction for the least cost.

Similarly, managers of pollution sources facing more stringent discharge limits can choose the most appropriate reduction strategy for their facilities.

"Giving farmers the flexibility to choose the mitigation option best suited to their operations not only increases cost-effectiveness but may also increase the likelihood of acceptance and adoption of these programs," said Dr. Suzie Greenhalgh, author of the study. "This report highlights real opportunities for farmers to play a leading role in reducing nutrient pollution."

The Dead Zone in the Gulf of Mexico is a phenomenon caused by nutrient pollution where oxygen levels drop below what is necessary to sustain most marine life. Nutrient run-off, primarily from agricultural operations throughout the Mississippi River basin, feeds nitrogen-loaded water into the Gulf, resulting in oxygen depleted, or hypoxic, zones.

The consequences of nutrient pollution are not isolated to the Gulf alone. The use of nitrogen fertilizers, a source of nutrient runoff, has implications for local water quality in watersheds along the Mississippi River and results in nitrous oxide emissions, a potent greenhouse gas contributing to global climate change.

The size and extent of the Dead Zone varies both seasonally and annually. However, this large hypoxic area is at its worst every summer off the shores of Louisiana and Texas in the northern Gulf of Mexico, affecting some of the United States' most important and profitable fishing waters. Oxygen-depletion kills bottom-dwelling organisms and drives mobile marine life from the area.

In the summer of 2002, the affected area was the size of Massachusetts.

"The Basin extends from Minnesota to Texas and Louisiana with nitrogen contributions from 42 states that drain into the Mississippi River," said Mark Muller, director of the Environment and Agriculture Program at the Institute for Agriculture and Trade Policy, in Minneapolis. "State and federal agencies need to work with the agricultural community to address this national crisis."

This new analysis comes on the heels of the government's adoption of a National Water Quality Trading Policy, which calls for the use of economic incentives in the enforcement of water quality regulation.

It allows pollution sources, such as industrial and wastewater management facilities, to meet more stringent regulatory obligations by purchasing offsets or credits from facilities exceeding their mandated water quality standards or from non-regulated sources, like family-owned farms.

"Trading can be a cheaper answer to solving water quality problems in the United States in general and the Mississippi River Basin in particular," said Paul Faeth, managing director of WRI and author of another WRI report, Fertile Ground. "This only works, however, if federal and state agencies establish and implement a nutrient cap for the Gulf or the basin."

According to Dr. Greenhalgh, an upper limit on the amount of nitrogen entering a watershed could be defined using the assimilative capacity of the aquatic ecosystem and the reductions required to address local water quality concerns, such as drinking water quality, or coastal water quality problems.

This nitrogen cap could be established for the Gulf of Mexico, the entire Mississippi River Basin, or divided between smaller sub-basins with all nutrient sources, both point and non-point sources, included in the cap.

If a cap were adopted for the Gulf of Mexico, the adoption of nutrient criteria by upriver states as far north as Minnesota would be required to ensure action within the Mississippi River Basin as a whole.

The World Resources Institute (http://www.wri.org/wri) is an environmental research and policy organization that creates solutions to protect the Earth and improve people's lives.