INCREASINGLY, NATIONAL TO LOCAL POLICIES STRIVE TO REDUCE THE COSTS OF ACHIEVING SUSTAINABILITY GOALS OR TO ENHANCE INCENTIVES FOR THE ECONOMY TO RECOGNIZE THE VALUE OF ENVIRONMENTAL BENEFITS TO SOCIETY. THESE INITIATIVES CAN STIMULATE MARKET OPPORTUNITIES RELATED TO ENVIRONMENTAL BENEFITS THAT AGRICULTURE CAN INFLUENCE, PRODUCE, OR SELL. SUCH OPPORTUNITIES CAN ENHANCE AGRICULTURAL VIABILITY AND CAN SUSTAIN RURAL COMMUNITIES CONSISTENT WITH ENVIRONMENTAL STEWARDSHIP. IN MANY CASES, NON-AGRICULTURAL INDUSTRIES ARE SUBJECT TO ENVIRONMENTAL COMPLIANCE STANDARDS AND WATER QUALITY CAP-AND-TRADE MARKETS GENERATE OPPORTUNITIES FOR AGRICULTURAL PRODUCERS TO PARTICIPATE VOLUNTARILY IN PROVIDING OFFSETS. AGRICULTURE CAN PRODUCE POLLUTION OFFSETS THROUGH ADOPTION OF BEST MANAGEMENT PRACTICES (BMPS) THAT REDUCE NUTRIENTS ENTERING RIVERS AND WATER BODIES AND THEREBY GENERATE A CREDIT THAT CAN BE SOLD TO OFFSET POLLUTION FROM REGULATED INDUSTRIAL POINT-SOURCES.THIS PROPOSAL OFFERS TO ADVANCE THE VALUATION OF ECOSYSTEM SERVICES (SOMETIMES CALLED ANCILLARY OR CO-BENEFITS) PRODUCED IN CONNECTION WITH WATER QUALITY CREDITS ARISING FROM AGRICULTURAL BMPS. WE OFFER TO EXPLORE HOW CONSERVATION-BUYERS COULD CONNECT THESE VALUES TO CREDIT PRODUCTION AND REVENUES FOR AGRICULTURAL PRODUCERS. WE WILL MAKE THE CONNECTION IN PART BY (I) PROVIDING AN APPROACH (KNOWLEDGE) THAT COULD SUPPORT ON-THE-GROUND DECISIONS TO ENCOURAGE ALTERNATIVE SUBSETS OF CO-BENEFITS THROUGH INVESTMENT CHOICES REGARDING BMPS FOR WATER QUALITY AND BY (II) DEMONSTRATING HOW A PUBLIC AGENT, PERHAPS ACTING THROUGH AN INDEPENDENT (NON-PROFIT) PARTNER, COULD USE VALUATION METHODS TO INJECT THE SOCIAL VALUE OF CO-BENEFITS INTO EXISTING WATER QUALITY TRADING EXCHANGES. WE WILL CONDUCT EXPERIMENTS THAT NOT ONLY MEASURE THE VALUE OF CO-BENEFITS FOR A SUBSET OF THE PUBLIC, BUT ALSO LEVERAGE A NEW WATER QUALITY TRADING PLATFORM TO ENHANCE OUR UNDERSTANDING OF THE CONCEPTUAL AND EMPIRICAL FOUNDATIONS FOR NON-MARKET VALUATION BASED ON STATED-PREFERENCE (SP) METHODS, PARTICULARLY CHOICE EXPERIMENTS (CES), OR SURVEYS DESIGNED TO MEASURE ENVIRONMENTAL VALUES OF CITIZENS.THIS PROPOSAL WILL ADVANCE THE VALUATION OF ECOSYSTEM SERVICES IN CONNECTION WITH WATER QUALITY CREDITS ARISING FROM AGRICULTURAL BMPS. WE WILL EXPLORE HOW CONSERVATION-BUYERS COULD ENHANCE NEW REVENUES FOR AGRICULTURE. THE STUDY WILL EXTEND OUR UNDERSTANDING OF CONSEQUENTIALITY IN VALUATION SURVEYS SUPPORTING REAL DECISIONS, THROUGH AN EXPERIMENTAL APPROACH THAT LEVERAGES THE OHIO RIVER BASIN WATER QUALITY TRADING, COORDINATED BY THE ELECTRIC POWER RESEARCH INSTITUTE (EPRI). OUR PRIMARY OBJECTIVES ARE: (1) TO MODEL CHOICE PREFERENCES OF RESIDENTS IN THE OHIO RIVER STATES WHO ARE WILLING TO ENTER ENVIRONMENTAL MARKETS AND TO MODEL THEIR WILLINGNESS TO PURCHASE WATER QUALITY CREDITS IN RELATION TO CO-BENEFITS FROM BMPS; (2) TO EXTEND OUR UNDERSTANDING OF SP VALUATION METHODS RELATIVE THE CONSEQUENTIALITY OF SURVEY RESPONSES, EXPERIMENTS COVERING A SP,ECTRUM OF CONSEQUENTIAL OUTCOME-CRITERIA LINKED TO ACTUAL CREDIT TRANSACTIONS; (3) TO DEMONSTRATE HOW A CONSERVATION BUYER COULD INJECT VALUES OF CO-BENEFITS IN AN AUCTION FOR WATER QUALITY CREDITS; (4) TO DEVELOP A MODEL FOR HOW CO-BENEFITS COULDINCREASE SALES OR ENHANCE REVENUES OR INVESTMENT IN BMPS THAT RETURN CO-BENEFITS (OR ECOSYSTEM SERVICES) THAT REMAIN EXTERNAL TO A REGULATORY MARKET.THE APPROACH WILL TEST-BED METHODS IN LABORATORY EXPERIMENTS TO IMPROVE FIELD EXPERIMENTS COST EFFECTIVELY PRIOR TO DEPLOYMENT. THE COLLABORATION WITH EPRI RAISES THE POTENTIAL FOR NOT ONLY ACADEMIC ADVANCES, BUT ALSO IMPACTS ON POLICY AND MANAGEMENT CHOICES THROUGH KNOWLEDGE GENERATED.