OPTIMIZING NONPOINT SOURCE CONTROLS IN WATER QUALITY REGULATION1

ABSTRACT: A stochastic programming framework is developed to evaluate the economic implications of reliability criteria and multiple effluent controls on nonpoint source pollution. An integrated watershed simulation model is used to generate probability distributions for agricultural effluents in surface and ground water resulting from agricultural practices. Results from the planning model indicate that reliability and multiple effluent constraints significantly increase the cost of nonpoint controls but the effects vary by control alternative. The analysis indicates that an evaluation of multiple water quality objectives can be an important planning tool for designing nonpoint source controls for innovative programs to promote cost-effective water quality regulation.     

An Ex Post Evaluation of Ohio’s Great Miami Water Quality Trading Program1

Newburn, David A. and Richard T. Woodward, 2011. An Ex Post Evaluation of Ohio’s Great Miami Water Quality Trading Program. Journal of the American Water Resources Association (JAWRA) 48(1): 156‐169. DOI: 10.1111/j.1752‐1688.2011.00601.x Abstract: Market‐based approaches to address water quality problems have resulted in only limited success, especially in trading programs involving both point and nonpoint sources. We analyze one of the largest point‐nonpoint trading programs – the Great Miami Trading Program in Ohio, administered by the Miami Conservancy District (MCD). Our evaluation focuses on the economic and institutional aspects of the program, including cost effectiveness, efficiency of bidding, transaction costs, trading ratios, and innovation. We use a unique dataset consisting of all bids from agricultural nonpoint sources and interviews of soil and water conservation district (SWCD) agents in the watershed. We find that the MCD’s reliance on county‐level SWCD offices to recruit and advise farmers has been essential to achieve relatively high rates of farmer participation. Additionally, the MCD is able to partly free ride on the administrative costs that SWCD offices receive to assist federal conservation programs, which is helpful to lower costs for a fledgling trading program. However, the involvement of SWCD offices reduced the potential cost savings from the reverse auction structure because some agents were able to learn about the threshold price over the six rounds of bidding and help farmers bid strategically. Overall, the program structure serves as an effective model for future trading programs in other regions that seek to involve agricultural nonpoint sources.     

IDENTIFICATION OF CRITICAL NONPOINT POLLUTION SOURCE AREAS USING GEOGRAPHIC INFORMATION SYSTEMS AND WATER QUALITY MODELING1

n integrated approach coupling water quality computer simulation modeling with a geographic information system (GIS) was used to delineate critical areas of nonpoint source (NPS) pollution at the watershed level. Two simplified pollutant export models were integrated with the Virginia Geographic Information System (VirGIS) to estimate soil erosion, sediment yield, and phosphorus (P) loading from the Nomini Creek watershed located in Westmoreland County, Virginia. On the basis of selected criteria for soil erosion rate, sediment yield, and P loading, model outputs were used to identily watershed areas which exhibit three categories (low, medium, high) of non-point source pollution potentials. The percentage of the watershed area in each category, and the land area with critical pollution problems were also identified. For the 1505-ha Nomini Creek watershed, about 15, 16, and 21 percent of the watershed area were delineated as sources of critical soil erosion, sediment, and phosphorus pollution problems, respectively. In general, the study demonstrated the usefulness of integrating GIS with simulation modeling for nonpoint source pollution control and planning. Such techniques can facilitate making priorities and targeting nonpoint source pollution control programs.     

ENVIRONMENTAL AND ECONOMIC DAMAGE CAUSED BY SEDIMENT FROM AGRICULTURAL NONPOINT SOURCES1

Environmental and economic damages caused by agricultural nonpoint source inputs of sediment and associated pollutants are examined. Widespread water quality problems are identified in lakes, rivers, and estuaries in agricultural areas, and billions of dollars of on-site and offsite costs result from this eroded soil every year. Some water bodies have been irretrievably damaged, and expensive rehabilitation programs are needed to remedy in-place water pollution problems if Clean Water Act goals are to be achieved. Unless effective abatement and rehabilitation programs are established, billions of dollars of benefits to future generations will not be realized as more waters become irretrievably damaged, and billions more will continue to be spent by government to treat symptoms of these sediment-related problems.     

Point‐Nonpoint Trading – Can It Work?1

Ribaudo, Marc O. and Jessica Gottlieb, 2011. Point‐Nonpoint Trading – Can It Work? Journal of the American Water Resources Association (JAWRA) 47(1):5‐14. DOI: 10.1111/j.1752‐1688.2010.00454.x Abstract: Water quality trading between point and nonpoint sources is of great interest as an alternative to strict command and control regulations on point sources for achieving water quality goals. The expectation is that trading will reduce the costs of water quality protection, and may speed compliance. The United States Environmental Protection Agency has issued guidance to the States on developing point‐nonpoint trading programs, and United States Department of Agriculture is encouraging farmer participation. However, existing point‐nonpoint trading programs have resulted in very few trades. Supply side and demand side impediments seem to be preventing trades from occurring in most trading programs. These include uncertainty over the number of discharge allowances different management practices can produce, high transactions costs of identifying trading partners, baseline requirements that eliminate low‐cost credits, the reluctance of point sources to trade with unfamiliar agents, and the perception of some farmers that entering contracts with regulated point sources leads to greater scrutiny and potential future regulation. Many of these problems can be addressed through research and program design.     

THE STATUS OF NONPOINT SOURCE POLLUTION: ITS NATURE,EXTENT AND CONTROL1

Nonpoint source pollution remains as the primary reason for the designation of many of the Nation's streams as “water quality limited.” This means that even with the application of technology-based effluent limitations on point sources, ambient water quality standards will not be met. This paper explores several of the reasons why nonpoint sources are so difficult to come to grips with. These reasons include: (1) the inability to expand the definition of nonpoint sources to encompass nonengineering attributes, (2) the relatively primitive state of characterizing nonpoint sources, (3) the lack of prior success in conducting programs to study and alleviate nonpoint problems, and (4) an uncertain approach to providing incentives for control practices.     

沱江流域综合整治规划

本文首先在描述了沱江流域的水质问题，沱江干流的几个主要水质指标与１０年前相比呈继续恶化的趋势，于流的水污染仍未得到控制，工业点源污染和流域非点源是造成流域水污染的主要原因，沱江流域水环境潜在问题陆生生态恶化和水资源贫乏两大难题，文章提出了工业污染源控制，修建城市污水厂，增加枯水流量和提高森林覆盖率等综合防治措施。     

LAWS AND PROGRAMS FOR CONTROLLING NONPOINT SOURCE POLLUTION IN FOREST AREAS1

ABSTRACT: Recent federal legislation strengthened nonpoint source pollution regulations and helped to support and standardize pollution control efforts. A comprehensive review of current state and federal programs for forest areas reveals a substantial increase in agency water quality protection activities. These new efforts emphasize monitoring to assess the use and effectiveness of best management practices (BMPs). Recent monitoring reveals that BMP use is increasing and that such use typically maintains water quality within standards. However, information is generally lacking about the cost effectiveness of BMP programs. Carefully designed and executed monitoring is the key to better specification of BMPs and more cost effective water quality protection. (KEY TERMS: water quality; nonpoint source pollution; water law; watershed management; forestry; best management practices.)     

Rhetoric and Reality of Water Quality Trading and the Potential for Market‐like Reform1

Stephenson, Kurt and Leonard Shabman, 2011. Rhetoric and Reality of Water Quality Trading and the Potential for Market‐Like Reform. Journal of the American Water Resources Association (JAWRA) 47(1):15‐28. DOI: 10.1111/j.1752‐1688.2010.00492.x Abstract: Many public interest groups, government agencies, and professional economists argue that current approaches to water quality trading are a cost‐effective, politically practical innovation for achieving water quality standards, in part by addressing one of the most difficult water quality improvement challenges – limiting the discharge from nonpoint sources. A critical analysis shows that these claims for current water quality trading programs are often unrealized. This rhetoric, without adherence to principles of market‐like reform, can undermine the support of regulated parties for meaningful water quality policy reform, contribute to missed opportunities to implement cost‐effective programs, and postpone successfully meeting the challenge of limiting nonpoint source discharges. A better understanding and application of market‐like principles can result in an improved design of trading as well as general water quality management programs.     

AGRICULTURAL POLLUTION CONTROL: IMPLICATIONS FROM THE RURAL CLEAN WATER PROGRAM1

ABSTRACT: The Rural Clean Water Program has provided a unique opportunity to study the economics of agricultural nonpoint source pollution control. Several implications for improving the economic efficiency of future agricultural nonpoint source pollution control programs can be drawn from the results. First, individual projects should be targeted towards water bodies that have water quality problems causing economic damages. Considerable variation can exist among areas in the magnitude of economic damages, which may not be proportional to physical impacts. Second, the relative costs and effectiveness of the practices selected to reduce the delivery of pollutants can vary dramatically from one location to another. Early identification and emphasis on cost-effective BMPs can substantially reduce project costs and may make a project economically justifiable that would not otherwise be so. Finally, some projects that do not hive potential economic benefits from water quality improvements exceeding government cost may have on-farm benefits from reduced costs and increased long-term yields that are sufficient to make total benefits (water quality and on-farm) exceed costs.     

Economic and Ecological Rules for Water Quality Trading1

Horan, Richard D. and James S. Shortle, 2011. Economic and Ecological Rules for Water Quality Trading. Journal of the American Water Resources Association (JAWRA) 47(1):59‐69. DOI: 10.1111/j.1752‐1688.2010.00463.x Abstract: Emissions trading in textbook form uses markets to achieve pollution targets cost‐efficiently. This result is accomplished in markets that regulators can implement without knowing pollution abatement costs. The theoretical promise of emissions trading, along with real‐world success stories from air emissions trading, has led to initiatives to use trading for water pollution control. Yet, trading, particularly when it involves nonpoint sources of pollution, requires significant departures from the textbook concept. This paper explores how features of water quality problems affect the design of markets for water pollution control relative to textbook emissions markets. Three fundamental design tasks that regulators must address for pollution trading to achieve an environmental goal at low cost are examined: (1) defining the point and nonpoint commodities to be traded, (2) defining rules governing commodity exchange, and (3) setting caps on the commodity supplies so as to achieve an environmental target. We show that the way in which these tasks are optimally addressed for water quality markets differs significantly from the textbook model and its real‐world analogs. We also show that the fundamental appeal of emissions trading is lost in the case of realistic water quality markets, as market designs that reduce the costs of achieving water quality goals may no longer be implementable without the regulatory authority having information on abatement costs.     

COST‐EFFECTIVE POINT‐NONPOINT TRADING: AN APPLICATION TO THE SUSQUEHANNA RIVER BASIN1

ABSTRACT: Point‐nonpoint trading has been suggested as a relatively efficient approach for reducing nutrient pollution in the Chesapeake Bay and elsewhere. However, relatively little economic research has examined the design of trading programs involving nonpoint sources. The purpose of this paper is to investigate the economics of several fundamental design choices for point‐nonpoint trading programs. The Susquehanna River Basin (SRB) in Pennsylvania as an example, although many of the insights should generally apply to other regions as well.     

GOAL-ORIENTED AGRICULTURAL WATER QUALITY LEGISLATION1

ABSTRACT: While significant nonpoint source (NIPS) pollution control progress has been made since passage of Section 319 in the 1987 Water Quality Act, existing federal legislation does not provide for the most timely and cost-effective NIPS pollution reduction. In this paper, we use findings from the Rural Clean Water Program and other nationwide agricultural NIPS pollution control programs, building on legislative history to recommend a coordinated and efficient direction for agricultural water quality legislation. A collaborative framework should be established to accomplish the goals of the Clean Water Act (CWA), Coastal Zone Management Act (CZMA), and the Conservation Title of the Farm Bill. Valuable elements of the 1990 CZMA amendments that created a coastal NIPS program should be subsumed into the CWA. The CWA should reemphasize use of receiving water quality criteria and standards and should allow states flexibility to tailor basin-scale NPS program implementation to local needs. Implementation should involve targeting of NIPS pollution control efforts to critical land treatment areas and use of systems of best management practices to address these targeted water quality problems. The 1995 Farm Bill should reorient production incentives toward water quality to support the collaborative framework, implementing ecologically sound source reduction principles. The Farm Bill and the CWA should contain interrelated provisions for voluntary, incentive-assisted producer participation and fallback regulatory measures. Such coordinated national water quality and Farm Bill legislation that recognizes the need for flexibility in state implementation is supported as the most rational and cost-effective means of attaining water quality goals.     

A Recourse‐Based Interval Fuzzy Programming Model for Point‐Nonpoint Source Effluent Trading under Uncertainty

In this study, a recourse‐based interval fuzzy programming (RIFP) model is developed for tackling uncertainties expressed as fuzzy, interval, and/or probabilistic forms in an effluent trading program. It can incorporate preregulated water‐pollution control policies directly into its optimization process, such that an effective linkage between environmental regulations and economic implications (i.e., penalties) caused by improper policies due to uncertainty existence can be provided. The RIFP model is applied to point‐nonpoint source effluent trading of the Xiangxi River in China. The efficiency of trading efforts between water quality improvement and net system benefit under different degrees of satisfying discharge limits is analyzed. The results are able to help support (1) formulation of water‐pollution control strategies under various economic objectives and system‐reliability constraints, (2) selection of the desired effluent trading pattern for point and nonpoint sources, and (3) generation of tradeoffs among system benefit, satisfaction degree, and pollutant mitigation under multiple uncertainties. Compared with the traditional regulatory approaches, the results demonstrate that the water‐pollution control program can be performed more cost‐effectively through trading than nontrading.     

WATER QUALITY SIMULATION AND PUBLIC LAW 92–500 Case Study: Southwestern Illinois1

ABSTRACT: Section 208 of the Federal Water Pollution Control Act Amendments of 1972 has provided the Southwestern Illinois Metropolitan and Regional Planning Commission (SIMAPC) with a unique opportunity for comprehensive planning of the region's water quality. SIMAPC initiated the 208 study by researching available technology for the analysis of point and nonpoint sources of pollution and establishing criteria by which to judge the various technniques. This led to SIMAPC'S choice of continuous simulation of stream and reservoir water quality as the most appropriate analytical tool for their needs. A continuous simulation model was calibrated and verified on three basins in the SIMPAC region. It was then used to produce load source analysis, pollution event frequency analysis, and pollution event duration analysis for ten pollutants under existing stream conditions and then under alternative future conditions. These results enabled the weighting of pollutant sources, analysis of the effectiveness of control measures, and quantitative analysis of the marginal benefit of each alternative.     

DEVELOPMENT OF A NONDEGRAIATION POLICY FOR HIGH QUALITY WATERS1

ABSTRACT: The development of a nondegradation policy for high quality waters is a complex and often controversial process. This paper discusses the development of a nondegradation policy for two components of the National Wild and Scenic Rivers System. Water quality in these reaches of the Delaware River is threatened by rapid growth and development and the cumulative impacts from numerous wastewater discharges and nonpoint sources of pollution. The Delaware River Basin Commission, with assistance from its member states and the National Park Service, conducted a highly public, six-year planning process to develop a nondegradation policy that protected existing water quality without impinging upon local and state economic development objectives. The resulting non-degradation policy includes such features as numeric definitions of existing water quality and measurable change; stringent point source requirements; nonpoint source requirements including watershed planning requirements; and other water quality management policies.     

CREATING MEANINGFUL STAKEHOLDER INVOLVEMENT IN WATERSHED PLANNING IN PIERCE COUNTY,WASHINGTON1

ABSTRACT: Since 1989, the government of Pierce County, Washington, has prepared four watershed action plans. The watersheds cover almost 800,000 acres and include about 600,000 residents and diverse land uses, from the city of Tacoma to Mount Rainier National Park. The primary purpose of these plans was to address water quality impacts from nonpoint sources of pollution and to protect beneficial uses of water. Pierce County has experienced problems such as shellfish bed closures and the Federal Clean Water Act Section 303(d) listing of local water bodies as a result of declining water quality. Pierce County achieved improvements by engaging diverse groups of stakeholders in generating solutions to nonpoint sources of water pollution through our watershed planning process. Using participatory methods borrowed from private industry, Pierce County was able to reach consensus, build trust, maximize participation, facilitate learning, encourage creativity, develop partnerships, shorten time frames for the planning processes, and increase the level of commitment participants had to implementing the plans. As a result, the earliest plans have a high rate of voluntary implementation. This indicates that the process and methodology used to develop watershed plans has a significant, if not critical, impact on their success.     

TARGETING NONPOINT SOURCE POLLUTION CONTROL: PHOSPHORUS IN THE MINNESOTA RIVER BASIN1

ABSTRACT: The state of Minnesota seeks to reduce phosphorus loading to the Minnesota River by 40 percent from current levels. Looking at one major watershed in the river basin, we examined the cost effectiveness of targeting versus not targeting specific practices or regions within a watershed for controlling nonpoint phosphorus pollution from agriculture. Integrating biophysical simulation results from current and alternative farming systems with production cost and return estimates enabled us to analyze this policy. Our results indicated it is more cost effective to reduce nonpoint pollution by targeting particular regions or practices in a watershed compared to not targeting. Specifically, producers farming on cropland susceptible to erosion in close proximity to water will appreciably reduce phosphorus nonpoint pollution loading potential by switching from conventional tillage to conservation tillage and by reducing phosphorus fertilization levels to those recommended by the state extension service. Efforts to target those producers in the Minnesota River Basin could reduce potential transaction costs and compensation from “takings” by approximately $50 million (74 percent) over not targeting.     

Exploring Nontraditional Participation as an Approach to Make Water Quality Trading Markets More Effective

Water quality trading (WQT) has the potential to be a low‐cost means for achieving water quality goals. WQT allows regulated wastewater treatment plants (WWTPs) facing discharge limits the flexibility to either reduce their own discharge or purchase pollution control from other WWTPs or nonpoint sources (NPSs) such as agricultural producers. Under this limited scope, programs with NPSs have been largely unsuccessful at meeting water quality goals. The decision to participate in trading depends on many factors including the pollution control costs, uncertainty in pollution control, and discharge limits. Current research that focuses on making WQT work tends to identify how to increase participation by traditional traders such as WWTPs and agricultural producers. As an alternative, but complementary approach, we consider whether augmenting WQT markets with nontraditional participants would help increase the number of trades. Determining the economic incentives for these potential participants requires the development of novel benefit functions requiring not only economic considerations but also accounting for ecological and engineering processes. Existing literature on nontraditional participants in environmental markets tends to center on air quality and only increasing citizen participation as buyers. Here, we consider the issues for broadening participation (both buyers and sellers) in WQT and outline a multidisciplinary approach to begin evaluating feasibility.     

Evaluating agricultural nonpoint-source pollution programs in two Lake Erie tributaries

During the past three decades, numerous government programs have encouraged Lake Erie basin farmers to adopt practices that reduce water pollution. The first section of this paper summarizes these state and federal government agricultural pollution abatement programs in watersheds of two prominent Lake Erie tributaries, the Maumee River and Sandusky River. Expenditures are summarized for each program, total expenditures in each county are estimated, and cost effectiveness of program expenditures (i.e., cost per metric ton of soil saved) are analyzed. Farmers received nearly $143 million as incentive payments to implement agricultural nonpoint source pollution abatement programs in the Maumee and Sandusky River watersheds from 1987 to 1997. About 95% of these funds was from federal sources. On average, these payments totaled about $7000 per farm or about $30 per farm acre (annualized equivalent of $2 per acre) within the watersheds. Our analysis raises questions about how efficiently these incentive payments were allocated. The majority of Agricultural Conservation Program (ACP) funds appear to have been spent on less cost-effective practices. Also, geographic areas with relatively low (high) soil erosion rates received relatively large (small) funding.