Farms and industrial plants that discharge pollutants into Louisiana wetlands and waterways will soon have a new system to buy and sell pollution credits.

State officials said the idea behind pollution credits was inspired by carbon trading programs intended to curb air pollution. But some environmental watchdogs are skeptical of the Louisiana Department of Environmental Quality's plan, officially called the Water Quality Trading program.

"Louisiana should be very reticent to implement such a program —which many have termed a 'pay to pollute' program," the Tulane Environmental Law Clinic wrote in a letter to regulators.

But Jonathan McFarland, a DEQ administrator with the water planning and assessment division, said there are safeguards in place to prevent abuses.

First, the program isn't for toxic substances but rather targets nutrients like nitrates and phosphates as well as dissolved oxygen, McFarland said.

They all play a part all play a part in making sure aquatic creatures from plankton to fish can breathe underwater and in avoiding hypoxia — areas where animals can't survive, like the infamous Gulf of Mexico dead zone.

Farms, ranches and wastewater treatment facilities all discharge nutrients. A farmer who leaves a buffer between his crops and the nearest river could qualify for credits under the program that he could sell to a sewage plant or fertilizer manufacturer to help them meet their permit requirements, McFarland explained.

The DEQ plans to let the free market decide how much credits will be worth rather than setting a price.

McFarland emphasized that the program would encourage a net reduction in pollution. If a site reduces its pollution by 100 pounds, a buyer could only purchase credits to offset a fraction of that amount at their own facility. However, the state does not have a system for determining how much credit any given project would qualify for. McFarland said the amount of the credit would be determined on a case-by-case basis.

The proposed policy could be implemented as early as June and would only apply to new projects. Asked if the program might unintentionally give polluters an incentive to abandon existing green projects so they can claim the credits later, DEQ press secretary Greg Langley said that won't happen. The credit program is just an income supplement, he said, and it wouldn't be worthwhile to tear down measures already in place.

Officials noted that agricultural, industrial and environmental stakeholders showed a lot of interest in the program in meetings in the past year, though they declined to speculate how many will ultimately participate.

Not everyone is impressed by the DEQ's proposal.

Tulane's Environmental Law Clinic urged the state to start with a pilot program to work out any kinks before adopting a new statewide rule.

The clinic, which officially commented to the DEQ on behalf of several environmental groups, did not respond to requests for comment.

However, in their letter to the state, they called for "clear, transparent documentation available to the public and sound scientific considerations when calculating credit ratios and baselines."

Regulators seem to be putting the cart before the horse, said Matt Rota, senior policy director for the non-profit Healthy Gulf.

Rota's said he's not against a credit program, per se, but argued that Louisiana needs specific nitrogen and phosphate water quality standards in place first. Until then, it's impossible to put a value on any credits generated, and he worries the program may just wind up sitting on the shelf unused.

The DEQ is reviewing comments now and expects to respond next month, McFarland said. If the state decides to forge ahead, the new rule could be in place by mid-June. If regulators decide to change the proposal based on the input it's received, implementation could be pushed back a few months.


Follow Steve Hardy on Twitter, @SteveRHardy.