Market Structures for Water Quality Trading in the Lower Fox River Watershed: Survey Results

Transcription

1 Market Structures for Water Quality Trading in the Lower Fox River Watershed: Survey Results Fox P Trade 2 nd Market Structures Workshop Appleton, WI March 17, 2015 Bryan Comer Great Lakes Commission Great Lakes Commission 1

2 MARKET STRUCTURES REVIEW Great Lakes Commission 2

3 WQT Market Structures Four Basic Types Bilateral Negotiations Clearinghouses Exchanges Auction Platforms Great Lakes Commission 3

4 WQT Market Structures Participant Roles There are a variety of potential WQT participants. Their roles change depending on the market structure. Buyer Intermediary Broker; Clearinghouse; Exchange, Etc. Seller Verifier Others Great Lakes Commission 4

5 Bilateral Negotiations (Brokered) Uniform Goods? Pricing Trans. Costs Intermediary No Negotiated Medium Broker Broker Credit Qual. Liability Seller and maybe Broker Potential for LFRW WQT Medium (lower trans. costs) Credits Seller s Agent Credits $$$ Credits $$$ $$$ Buyer s Agent Seller Buyer Great Lakes Commission 5

6 Market Structure Survey 5 Sections 1 Potential WQT Market Roles and Entities 2 3 Potential for Entities to play multiple Roles A potential WQT Market Structure and Entities best suited to serve each Role 4 Special considerations for WQT in the LFRW 5 Survey Participant Information Great Lakes Commission 6

7 SURVEY RESPONDENTS Great Lakes Commission 7

8 22 Respondents (77% attended 1 st Market Structures Wksp) Other: Consultant; Crop Advisor; County Planning Dept.; Educator; Tribal NPS program; WQT Expert Great Lakes Commission 8

9 Potential Roles of Survey Participants in a WQT Market in the LFRW Other: Monitoring/bringing players together; Oversight/regulation Great Lakes Commission 9

10 SURVEY RESULTS Great Lakes Commission 10

11 Is WQT Desirable? A Water Quality Trading program is desirable in the Lower Fox River Watershed. 96% Agree or Somewhat agree Great Lakes Commission 11

12 Is a Brokered Bilateral Trade the Appropriate WQT Market Structure for the LFRW? A brokered bilateral market structure is most appropriate for launching a WQT program in the LFRW Alternatives suggested: An Aggregator w/ a market administrator Permittees negotiate trades via their chosen consultant and a clearinghouse/pool for landowners to market/sell their credits. 59% Agree/Somewhat Agree Great Lakes Commission 12

13 Broker: Is it important? An entity to serve the role of a Broker is important to a successful Water Quality Trading program 86% Agree or Somewhat agree 0% Disagree Great Lakes Commission 13

14 Broker: Important experience/skills A Broker for water quality trading in the Lower Fox should have the following experience or skills: Understanding of WI DNR WQT guidance 73% Professional relationships with WI DNR and Sellers and Buyers 59% Solid understanding of agriculture and conservation practices 55% Thorough understanding of environmental markets, WI DNR Trading 55% Guidance, and the Fox P Trade project generated forms Knowledge of point source permits including timing and compliance schedules 50% All of the above 41% Prices/sales negotiation experience 27% Other 9% Great Lakes Commission 14

15 Broker: Best-suited Entity What entity(ies), if any, is/are best suited to serve as a Broker? (Check all that apply) Great Lakes Commission 15

16 Broker: Can it serve other roles too? A single entity could serve as both the Broker and the Certifier A single entity could serve as both the Broker and the Aggregator 50% Agree/Somewhat Agree 27% Disagree/Somewhat Disagree 73% Agree/Somewhat agree 13% Disagree/Somewhat disagree Great Lakes Commission 16

17 Aggregator: Is it important? An entity to serve the role of an Aggregator is important to a successful WQT program 95% Agree or Somewhat agree 0% Disagree Great Lakes Commission 17

18 Aggregator: Important experience/skills An Aggregator for WQT in the Lower Fox should have the following experience or skills: All of the above 59% Understanding of WI DNR WQT guidance 41% Professional relationships with potential credit generators 41% (sellers) or their representatives Expertise with Snap Plus and other WI DNR approved 36% pollution load reduction tools/models and trade ratios Comprehensive knowledge of and experience with agriculture in the Lower Fox 32% Understanding of permit cycles and compliance timelines 23% Other 0% Great Lakes Commission 18

19 Aggregator: Best-suited Entity What entity(ies), if any, is/are best suited to serve as a Aggregator? (Check all that apply) Great Lakes Commission 19

20 Certifier: Is it important? An entity to serve the role of an Certifier is important to a successful WQT program 86% Agree or Somewhat agree Great Lakes Commission 20

21 Certifier: Important experience/skills An Certifier for WQT in the Lower Fox should have the following experience or skills: All of the above 73% Comprehensive knowledge of agriculture including conservation practices and NMPs Extensive expertise with the conservation elements within Snap Plus Professional relationships with County Land and Water Conservation Departments (or Sellers), Wisconsin DNR and Buyers (or their representatives) Understanding of WI DNR water quality trading guidance, especially the use of trade ratios. 50% 45% 41% 36% Other 5% Great Lakes Commission 21

22 Certifier: Best-suited Entity What entity(ies), if any, is/are best suited to serve as a Certifier? (Check all that apply) Great Lakes Commission 22

23 Certifier: Can it serve other roles too? A single entity could serve as the Certifier and the Aggregator 54% Agree or Somewhat agree 32% Disagree or Somewhat disagree Great Lakes Commission 23

24 Can one Entity be Broker, Aggregator, and Certifier? A single entity could serve as the Broker, Aggregator, and Certifier 27% Agree or Somewhat agree 59% Disagree or Somewhat disagree Great Lakes Commission 24

25 Verifier: Is it important? An entity to serve the role of an Verifier is important to a successful WQT program 96% Agree or Somewhat agree 0% Disagree Great Lakes Commission 25

26 Verifier: Important experience/skills An Verifier for WQT in the Lower Fox should have the following experience or skills: All of the above 64% Adequate technical knowledge and expertise to evaluate the performance of practices used to derive trade credits Understanding of DNR WQT guidance, especially the use of trade ratios Comprehensive knowledge of and experience with agriculture and conservation practices 50% 36% 36% Experience working with County Land and Water Conservation Departments 27% Other 5% Great Lakes Commission 26

27 Verifier: Best-suited Entity What entity(ies), if any, is/are best suited to serve as a Verifier? (Check all that apply) Great Lakes Commission 27

28 Verifier: Can it serve other roles too? A Verifier must be independent from the Broker A Verifier must be independent from the Aggregator 68% Agree/Somewhat Agree 23% Disagree/Somewhat Disagree 55% Agree/Somewhat Agree 36% Disagree/Somewhat Disagree Great Lakes Commission 28

29 Verifier: Can it serve other roles too? A Verifier must be independent from the Certifier 23% Agree or Somewhat agree 54% Disagree or Somewhat disagree Great Lakes Commission 29

30 Special Considerations for Successful WQT in the LFRW & Comments, Questions, and Concerns We received many written comments that we have shared on a handout. Great Lakes Commission 30

31 Thank you! Railroad bridge below Appleton Lock 3 Fox River, Appleton, WI Great Lakes Commission 31