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F25 Storm water retention credits

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Description

In order to provide more flexibility in their on-site retention rules, cities may create “stormwater credit trading” programs, which allow developers to meet their stormwater retention requirements on their own sites or elect to purchase “credits” for stormwater retention from others who have voluntarily retrofitted their properties through a stormwater credit-trading program. “Demand” for credits will arise as construction projects trigger the on-site retention requirements and developers seek to comply in part through buying credits generated by stormwater management practices (SMPs) located on other properties. Credits would be “supplied” by property owners with relatively low-cost, on-site retention options who voluntarily implement SMPs on their property with the intention of selling retention credits.

Example

Washington DC implemented a credit system in 2013 and new developments of at least 5,000 square feet must retain the expected runoff from a storm that drops 1.2 inches of rain which covers 90 percent of all downpours in the area. If developers meet 50 percent of their water retention requirement, they can purchase credits from others in the city who have expanded their retention capacity.

Source D6.3 Business Models and Financing Strategies