# Presentation: 063406

## Water Quality Trading & EPA 

- Water Quality Trading & EPA

- Ginny Kibler
- April 30, 2007
- EPA Office of Water

## TOPICS

- CLEAN WATER ACT FROM A TRADING PERSPECTIVE
- EPA NATIONAL WATER QUALITY TRADING POLICY
- WQT NATIONAL PICTURE

## Clean Water Act Components

- Water Quality Standards
- Total Maximum Daily Loads (TMDL)
- NPDES Permit

## WQSwater body specific

**Designated**
**Uses**

**WQC**

**Anti-degradation**

**Secondary Treatment Standards or Effluent Limitations Guidelines****(ELGs)**

**TBELs**

**TMDLs**

**WQBELS**

**Permit **

**Where Trading fits within the CWA**

- WLA

- LA

## EPA’s 2003 National WQ Trading Policy

## PS Baseline & Discharge Limits

- Baseline for Buyer & Seller

- Minimum Control Level for Buyer

- Trading Limit for Seller

## NPS Seller Baseline

- TMDL – must first meet load allocation
- Means NPS must 1st meet its portion of LA before it can generate credits
- PreTMDL/no TMDL
- State and local regulations

## What pollutants are “tradable”?

- National Policy allows trades for:
- Total Nitrogen
- Total Phosphorus
- Sediment
- Cross-pollutant trading
- Other pollutants?
- National Policy does not support trades for:
- Persistent bioaccumulative toxics (PBTs)
- Except on a pilot basis

## When can trading occur?

**When can trading occur?**

- Trading in unimpaired waters
- Trading in Impaired Waters with TMDL
- Trading in Impaired Waters without TMDL
- Pretreatment
- Intra-plant

## When can trading NOT occur?

**Trading cannot be used to meet technology-based effluent limitations**
**Trades cannot result in nonattainment of an applicable water quality standard. **
**Trading may not adversely affect water quality at an intake for drinking water supply**
**Trading cannot allow a discharger to exceed a cap established under a TMDL**

## Anti-backsliding

- CWA prohibits the relaxation of permit effluent limits
- Trading Policy:
- Anti-backsliding will be satisfied when a PS increases its discharge through trading:
- In accordance with an NPDES permit
- Consistent with TMDL

## Antidegradation

- CWA requires that once a designated use is achieved it will be maintained
- EPA DOES NOT SUPPORT ANY TRADING ACTIVITY THAT WOULD CAUSE IMPAIRMENT TO AN EXISTING OR DESIGNATED USE

## Common Elements of a Credible Trading Program

- Legal Authority
- Unit of trade
- Timing of Credits
- Managing Uncertainty
- Compliance and Enforcement
- Record-keeping
- Certifications
- Monitoring
- Reporting
- Inspections

## Common Elements of a Credible Trading Program

- Public Notice
- TMDL process
- Permits process
- Public website
- Program Evaluations
- 	  “However beautiful the strategy, you should occasionally look at the results.”
*	**	**Winston Churchill, 1874-1965*

## Trading Scenarios:

## Formula for Water Quality Trading:

- Trading is:
- DRIVEN by regulation
- MOTIVATED by economics
- GOVERNED by local trading rules
- BUILT on trust
- TRADING WILL _NOT_ BE
- VIABLE EVERYWHERE

## Keys to SuccessWQT programs should strive to be:

- Transparent
- Keep the public informed at every step of the process
- Real
- Show pollutant reductions and water quality improvement
- Accountable
- Manage the program effectively
- Defensible
- Base the program on sound science and protocol
- Enforceable
- Establish responsibility for meeting water
- 	quality standards

## National Picture:State WQT Regs & Programs

## Timeline

- Connecticut legislation and rules
- Michigan rules
*EPA policy*
- Idaho guidance
- Colorado policy
- Oregon policy
- Virginia legislation
- Ohio rules
- Virginia rules
- Florida report
- Pennsylvania policy

- 2002
- 2003
- 2004
- 2005
- 2006

## Who can trade?

**PS only**

**NPS as last resort**

**NPS as seller**

**NPS as buyer & seller**

- Connecticut

- Virginia

- Florida
- Idaho
- Michigan
- Ohio
- Oregon
- Pennsylvania

- Colorado

- Point sources can buy and sell in all programs
- 8 out of 9 state programs include trades involving NPS

## Status of WQT in US

## Contact

- USEPA
- Kibler.virginia@epa.gov
- 202-564-0596

- Ginny Kibler
- Office of Wastewater
-  Management