Just as Al Gore can buy carbon credits to offset the damage his globe-trotting causes to the atmosphere, the City of Santa Rosa is exploring ways to offset the damage its wastewater causes to the Laguna de Santa Rosa watershed.

The Sotoyome Resource Conservation District has won a nearly $600,000 federal grant to establish a water quality trading market with the city.

The market, the first of its kind in California, would allow the city to purchase credits to help fund conservation projects that improve the health of the watershed.

Those credits would in turn be used to avoid fines stemming from future discharges of treated wastewater into the laguna, explained Glen Wright, the city's deputy director of water resources.

New state regulations on the city restrict it from adding any additional nutrients to the watershed, specifically nitrogen and phosphorus, Wright said.

The city has made huge investments to avoid discharging treated wastewater into the laguna, which empties into the Russian River. These include piping the effluent to the Geysers steamfields and recycling the water on local agricultural lands.

"We we have a very low nutrient load, but it's hard to get to zero," Wright said. "It's a problem for us and we want to solve it."

In 2002, the treatment plant on Llano Road discharged 2.8 billion gallons of water to the laguna. By 2009, that figure was down to zero. Last year, a wet year, it rebounded to 744 million gallons.

In anticipation of additional restrictions, the city has been working with the conservation district on two projects to improve the health of the watershed. One involves reducing sedimentation into local creeks at Pepperwood Preserve, the 3,120-acre nature preserve northeast of Santa Rosa. Another is a project to improve the handling of manure at the Beretta dairy on Llano Road near the treatment plant.

But the district and the city's consultant, Kieser & Associates, recognized that more projects needed to be identified, vetted and assigned a value in order for any credit market to be viable.

"The whole idea of this marketplace and this tool is we're going to quantify the benefits of these conservation projects," said Kara Heckert, the district's executive director.

The North Coast Regional Water Quality Control Board is currently considering whether the projects will quality as offsets.

Currently, there is a "tiny bottleneck" of such projects in the area, said Valerie Minton, the district's program director. But the hope is that the marketplace can increase the number of projects that would improve water quality in the laguna, and expedite their implementation, Minton said.

Some of the grant funding will likely go to Kieser & Associates, as well as a software vendor that will set up the local program and database, Minton said.

"It's kind of the future of conservation, where you are putting a value on the benefit to the environment," Heckert said.

The award was announced Monday by Agriculture Secretary Tom Vilsack and is one of $2 million worth of conservation grants for projects in California that will be managed by the USDA Natural Resources Conservation Service.

You can reach Staff Writer Kevin McCallum at 521-5207 or kevin.mccallum@pressdemocrat.com.