Exploring the adoption of water quality trading as an alternative stormwater regulatory compliance strategy for land development projects: A case study for Roanoke, Virginia

Urban stormwater runoff is a significant source of nutrient pollution that is very costly to treat. Water quality trading (WQT) is a market-based strategy that can be used to lower the costs associated with meeting stormwater quality regulations. While many WQT programs have experienced low participation, Virginia's program has seen high participation due to the inclusion of land developers and other regulated stormwater dischargers. However, the extent to which WQT is used as a compliance option by regulated stormwater dischargers is not well understood, particularly when compared with the adoption of traditional compliance options. To address this knowledge gap, we collated a novel dataset comprising site characteristics and stormwater compliance methods for all development projects in the City of Roanoke, Virginia from December 2015 to March 2022. We analyzed this dataset to characterize the adoption of nutrient offset credits and other compliance methods being used, including best management practices (BMPs) and improved land covers associated with reduced nutrient export. Results show that credits are the preferred compliance option in Roanoke and were used as the only treatment compliance method for 59% of projects with treatment requirements. Projects using credits corresponded with a lower median disturbed area (1.36 acres) and lower median nutrient load reduction requirement (0.69 pounds of total phosphorus per year) compared with other compliance methods. Furthermore, we found that 58% of the projects that used credits achieved stormwater quantity compliance using methods other than implementing stormwater control devices. By mapping buyers and sellers of credits, we found that all credit sellers are downstream of the development projects. We discuss how this downstream trading could be a cause for concern, as part of a larger discussion of the advantages of tracking stormwater compliance methods, drawing on Roanoke as a case study. •We compare the use of water quality trading with alternative stormwater quality compliance options in Roanoke, Virginia, USA.•We find that water quality credits are the preferred stormwater quality compliance method for land development projects.•The majority of the credit offsets are associated with small development impacts.•Twice as much nutrient load is being offset using credits compared with loads treated using onsite best management practices.•Considerations for water quality trading and stormwater management