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EPA pushing water quality trading to address nutrients

The Environmental Protection Agency (EPA) is encouraging states to develop water quality trading programs to tackle nutrient pollution, which has become an increasingly visible issue in farm country. Practices such as nutrient and sediment reduction, and more landscape-scale projects, are also being considered.

In a memorandum to EPA regional administrators, Assistant Administrator for Water David Ross said the agency wants to move toward more market-based solutions to address excess nitrogen and phosphorus in the nation’s waters. The memo follows up on a December letter to states from Ross and USDA Undersecretary for Farm Production and Conservation Bill Northey seeking input on water quality solutions, and a Memorandum of Understanding released last week between EPA and the Water Research Foundation on affordable technologies to recycle nutrients from livestock manure.

In the letter to states, Ross and Northey said “nutrient pollution continues to be widespread, particularly in the Mississippi River Basin.”

In the past, Ross’ memo noted EPA has urged states to develop numeric water quality criteria and Total Maximum Daily Loads (TMDLs) for receiving waters. Those tools are still available, he said, but “EPA believes that market-based programs, including water quality trading, as well as incentive- and community-based programs can be used more effectively than they have to date to achieve water quality improvements.”

In an interview with Agri-Pulse, Ross said state regulators and other interested parties outside the agency have told him they wanted EPA to update its 2003 water quality trading policy, which has not succeeded in bringing about widespread adoption of water quality trading programs.

“They want it be more flexible,” Ross said. One example: The memo says “demanding too much precision in measuring or predicting pollutant reductions from certain types of discharges, e.g., point source stormwater and nonpoint source runoff, can be an impediment to market-based programs.”

Being forced to verify water quality improvements with absolute precision could kill such programs, he said. In the past, “the agency would require precision — almost molecule for molecule — in offsets.”

Ross said modeling has improved considerably since the 2003 policy was released. TMDLs can still be part of the solution, he added, but are not the “be all, end all.”

“TMDLs are an amazing tool but they take too long to set up,” said Ross, who represented the American Farm Bureau Federation when it sued EPA over the Chesapeake Bay TMDL.

He called that TMDL a “great program,” but added a qualifier: “Can we replicate that? It took years and tens of millions of dollars to develop.”

Ross said he’d like to see wetland mitigation bankers get into new areas, such as nutrient and sediment reduction, and more landscape-scale projects.

Don Parrish, senior regulatory relations director at the American Farm Bureau Federation, said AFBF welcomed the news. “This is another tool in the toolbox,” such as farm bill programs like the Environmental Quality Incentives Program, Conservation Stewardship Program, and Conservation Reserve Program. He added, however, “It’s not a silver bullet, it’s not a brass ring, it’s a tool.”

Mark Patrick McGuire, an environmental program manager at the Association of Clean Water Administrators, also had kind words for EPA’s effort. “Many of our members have incorporated trading into their programs,” he said, echoing Parrish’s sentiment about the trading being another way to tackle nutrient pollution.

Asked why states and tribes might want to participate, McGuire said “it’s going to be different for every state, every watershed; it’s really going to depend on the jurisdiction.” McGuire also said, responding to the memo’s flexible approach to water quality monitoring, “it is key for the states that nonpoint source best management practices be measurable.”