New Stormwater Market In Grand Rapids Will Contribute to A Healthier Rivers and More Climate Resilient City
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Plants on the Alverno College Green Roof. Photo: Sinjin Eberle
Unpredictable weather patterns, drastic temperature fluctuations and frequent, severe storms are compromising key infrastructure and increasing risks to human health. These extreme weather events are resulting in economic losses, utility service disruptions, and impacting community well-being. In response to these emerging climate threats, cities across the country are investing in sustainable infrastructure, pioneering alternative approaches, and developing community-wide initiatives to better prepare for extreme weather-related events. Cities are increasingly deviating from traditional, non-integrative development practices and adopting alternative methods to mitigate climate risks while providing multiple benefits that foster socioeconomic and environmental resilience.
Traditional development practices in most U.S. cities replaced natural landscapes with rooftops and driveways and paved over rivers and wetlands with streets, highways, and other hard impervious surfaces. Without natural areas for rainwater (and snowmelt) to be absorbed and filtered into the ground, rain will collect trash, oil, pet waste, chemicals, and other pollutants and wash them into local streams and rivers. This pollution, referred to as stormwater runoff, is the largest contributor to water quality impairments in neighborhood streams and urban rivers. Rain gardens, green roofs, porous pavement, bioswales and other nature-based green infrastructure solutions help filter out water pollution while also strengthening climate resiliency, because they are able to help control both pollution and excessive rainfall. They can also help provide wildlife habitat, shade and recreational opportunities, while reducing air pollution and the urban heat island effect. Moreover, it is well demonstrated in a wide range of studies that well-designed green infrastructure projects generate economic value to commercial property owners through reduced energy costs and amenities that attract/retain customers.
People walking along the River at AhNabAwen Park
More than 7,000 cities in the U.S. adopted regulations to manage stormwater pollution, but these limited regulations usually don’t focus on reducing pollution, only managing it and offer little protection in managing historical rain events, protecting water resources or enhancing climate resiliency for future impacts. Although important, managing stormwater is a costly responsibility for municipalities and often underprioritized within a city’s limited resources and conflicting priorities. Large parking lots, shopping centers, urban districts, residential neighborhoods, and apartment communities increase stormwater runoff and the city’s cost to effectively manage stormwater pollution. Incentive programs can entice property owners to implement green infrastructure solutions and contribute to addressing stormwater challenges. Community -tailored incentives programs can target priority areas, activate private sector participation in nature-based green infrastructure implementation and foster community-wide watershed advocacy.
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A rain garden in a parking lot in Michigan. Photo: Sinjin Eberle
The City of Grand Rapids, Michigan, collaborated with American Rivers and our partners in our water economics initiative (One Water Econ and Jim Henderson LLC) to harness the power of market forces to reduce stormwater management cost, for both private and public sectors, while advancing the use of green infrastructure across the city. Stormwater (volume) credit trading, is a market-based policy approach which incentivizes private property owners to choose green infrastructure approaches for managing stormwater runoff. The solution encourages private property owners who need to comply with stormwater regulations but may not have the capacity to do so on their site, to purchase volume “credits” from other property owners that can implement nature-based green infrastructure solutions. Regulatory requirements, growing pressure for sustainability development, and limited urban space prompt demand in the stormwater credit market. Private property owners that exceed on-site stormwater requirements or voluntarily implement eligible green infrastructure projects that are not subjected to requirements can sell stormwater volume credits and fuel market supply. Stormwater credit trading provides a cost-effective approach for new and redevelopment projects to meet permit compliance while incentivizing green retrofits and natural infrastructure on residential properties.
Homeowners, businesses, and commercial property owners that voluntarily implement green infrastructure projects or exceed permit requirements, “sell credits” and recover project costs or use the funds for ongoing maintenance. The number of credits eligible for stormwater market trading is determined by the volume of stormwater infiltrated by the green infrastructure installation (pending inspection and certification) and maintenance agreements ensure ongoing performance. Municipal departments that manage public streets and parks can also participate in the stormwater credit trading market in Grand Rapids by implementing eligible green infrastructure projects. Both private and public projects have the option to reserve or “bank” credits to meet stormwater requirements for a future development project within the same trading area.
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Rain garden at the zoo. Photo: Sinjin Eberle
The Grand Rapids stormwater credit trading system was launched in 2023. Trading is limited within the City’s jurisdictional boundaries and was divided into three trading areas to mitigate any unforeseen adverse hydrological and/or socio-economic impacts. A market-based approach to reduce stormwater pollution rewards actionable stewardship and provides green infrastructure co-benefits across neighborhoods while reducing municipal burdens of stormwater management. Stormwater credit trading offers flexibility for developers to meet on-site stormwater compliance and contribute to green infrastructure investments that improve water quality and community health. Simultaneously, local non-profits and community partners can implement credit-generating projects across multiple properties to address stormwater challenges for communities that have historically been neglected. A stormwater marketplace reduces barriers to implementing nature-based solutions to strengthen ecological deficiencies and enhance economic resiliency in climate vulnerable communities.
A rain garden along the sidewalks. Photo: Sinjin Eberle
Conclusion
Local incentive programs, like stormwater credit trading programs, motivate private properties to install green infrastructure amenities that provide valuable public benefits. In many cases, municipalities that support green infrastructure implementations on private property reduce capacity constraints on public infrastructure and ease fiscal burdens. Grand Rapids’ stormwater water credit trading program stimulates collective action to prioritize resilient stormwater investments, protect and restore existing natural assets, and enhance ecological outcomes. Community-driven funding strategies that support private sector participation can accelerate the delivery of green infrastructure benefits for cleaner rivers and more resilient cities.
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Shanyn Viars, Associate Director, Water Economics & Policy, American Rivers. American Rivers, a premier river organization, works to protect wild rivers, restore damaged rivers, and conserve clean water for people everywhere. American Rivers works alongside local communities, partners, and agencies to address the complex and intersecting crisis’s - – climate threats, racial injustice, and biodiversity loss with collaboration, innovation, creativity, and courage to explore alternative approaches through a holistic framework for urban stormwater management. For more than 50 years, American Rivers has worked to advance investments that enhance our environment, ensure more equitable access to clean water and nature, and empower communities to develop actionable solutions.
American Rivers guidance on ESTABLISHING A STORMWATER VOLUME CREDIT TRADING PROGRAM is available for communities interested in exploring non-traditional approach to address stormwater challenges.
City of Grand Rapids - Stormwater Trading Program
