Kentucky’s Division of Water has joined neighboring Indiana and Ohio in entering a water pollution credit trading program.

Basically, this program would allow power plants and other industrial facilities to avoid some controls–and pollute a little more–if they pay farmers upstream to control their runoff.

As Jim Bruggers of the Courier-Journal reports on his blog:

But the concept can be controversial.

It was a Republican idea, designed to give industry flexibility in meeting air pollution regulations. With air quality, pollution trading has been credited with helping to greatly reduce acid acid rain.  Cap-and-trade was was roundly criticized by environmentalists when the Bush administration tried to apply it to mercury, saying it could lead to “hot spots” around plants where operators chose not to install pollution controls. And Republicans took to hating when it came to trying to curb emissions blamed for global warming.

Floyds Fork Environmental Association leader Teena Halbig is blunt in her assessment. “This shifts pollution from one spot to another,” she said.

Her group has long been concerned that the state might someday use the technique to give a pass to MSD treatment plants on Floyds Fork.

Right now, this is a pilot program and is only being implemented in a small part of Northern Kentucky. But if it’s successful, it could be implemented throughout the Ohio River Basin.