By Amena H. Saiyid
The National Association of Clean Water Agencies urged the Environmental
Protection Agency on July 19 to allow water quality trading for waters other
than those that have total maximum daily load plans for restoration.
In a letter
to Denise Keehner, director of EPA's Office of Wetlands, Oceans, and Watersheds,
NACWA Executive Director Ken Kirk said an impairment should not have to be
declared to participate in trading.
The association, which represents publicly owned wastewater treatment plants,
wants EPA to expand the trading program to improve water quality for water
bodies other than those listed as impaired and to cover pollutants other than
“In particular, NACWA is concerned that EPA's Policy appears to focus
primarily on linking water quality trading to implementation of total maximum
daily loads,” Kirk wrote.
Kirk said EPA should embrace “a more holistic approach” to reducing the load
and impact of pollutants irrespective of whether a water body is declared
impaired under Section 303 (d) of the Clean Water Act.
Under this section of the law, states are required to develop lists of
impaired waters and to develop TMDLs for them. A TMDL plan for a given river,
stream, or lake establishes the level of pollutants that each point source, such
as wastewater utilities, and nonpoint source, such as a farm, may discharge
without adversely affecting the water quality standards.
EPA's 2003 water
quality trading policy operates on a cap-and-trade basis, with the TMDL
setting the cap on pollutant levels; both point and nonpoint sources can trade
credits to attain compliance with water quality standards.
The EPA water quality trading program is a voluntary exchange of pollutant
reduction credits under which a facility with a higher pollutant control cost
may buy a pollutant reduction credit from a facility with a lower control cost,
thus reducing their cost of compliance.
Kirk said EPA's current 2003 policy is confining and limited to the TMDL
He cited the policy, which states that “all water quality trading should
occur within a watershed or a defined area for which a TMDL has been
While a TMDL can help facilitate trading because it establishes a pollutant
cap under which trading can occur, Kirk wrote, “it is not a requirement and
should not be interpreted as such.” It is a policy, he said.
For instance, Kirk said, trading should be encouraged to address the areas of
impact, including but not limited to upstream areas of impact because that will
increase participation from multiple sectors and drive more trades.
“Furthermore, trading outside the TMDL process can provide a means to ensure
that water quality standards will be met by reducing overall pollutant loads in
a waterbody, and obviate the need for a TMDL,” Kirk wrote. “This will save costs
for State and Federal agencies on the TMDL development process and benefit the
The letter said water quality trading is a cost-effective tool for meeting
water quality goals. The agency's policy so far has restricted discussions of
the trading policy to nutrient-impaired waters for which states or EPA have
developed TMDLs, Kirk said.
EPA in its policy has said that allowing trading beyond nutrients would pose
a high level of risk, but Kirk said the agency provides no evidence of how that
would be a risk proposition. Going forward, the association said the statement
considering pollutants other than nutrients present a higher risk should be
removed from the policy. “The fundamentals of water quality trading are such
that a well-designed market should work for any type of pollutant,” Kirk
The association also disagreed with EPA's decision to require nonpoint
sources to be at the pollutant level established by the TMDL prior to
According to David Taylor, chairman of NACWA task force charged with
reviewing EPA's trading policy, farmers and ranchers are not legally bound to be
discharging at pollutant levels calculated in the TMDL.
Requiring them to do so would create a disincentive, Taylor, who also is
special projects director for the Madison Metropolitan Sewerage District in
Wisconsin, told BNA July 16 at NACWA's summer conference in Philadelphia.
Rather, Kirk wrote, “EPA should allow agricultural nonpoint sources to
generate credits as they work to achieve baseline requirements. This would
better incentivize nonpoint sources to meet baseline requirements and encourage
reductions that go above and beyond the baseline.”
The NACWA letter on water quality trading is available at http://www.nacwa.org/images/stories/public/2012-07-19ltr.pdf.
More information on EPA's water quality trading policy is available at http://water.epa.gov/type/watersheds/trading/tradingpolicy.cfm.