EFFLUENT FEES,AN ALTERNATIVE SYSTEM FOR ACHIEVING WATER QUALITY: A CASE STUDY1

This paper reports the findings of a case study of the relative costs of a uniform standards system and an effluent fee system of water quality control. A 30-mile stretch of the Black Warrior River in Alabama is considered. The analysis demonstrates that the dischargers could reduce total pollution abatement costs by 33 percent under the suggested effluent fee system.     

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.     

FLOW VARIABLE DISCHARGE PERMITS1

ABSTRACT: Current approaches to calculating discharge limitations and the use and intent of water quality standards are examined. Flow variable discharge permits, in which the amount of pollutant that may be discharged is based on the magnitude of the flow in the stream, are introduced as an alternative permit strategy that could reduce the cost of pollution control in certain instances while still meeting in-stream water quality objectives. Several possible designs of flow variable discharge permits are presented to show the flexibility of the concept; for example, permits can be based on instantaneous flows, seasonal flows, trigger values, and ranges of flows.     

ADDRESSING TOTAL PHOSPHORUS IMPAIRMENTS WITH WATER QUALITY TRADING1

ABSTRACT: Water quality trading is a voluntary economic process that provides an opportunity for dischargers to reduce the costs associated with meeting a discharge limitation. Trading can provide a cost effective solution for point sources (i.e., wastewater treatment plants) to meet strict effluent limitations set in response to total maximum daily loads (TMDLs). A successful trading program often depends on first determining the trading suitability of a pollutant for a particular watershed. A simple technical approach has been developed to identify sub‐watersheds within the Raritan River Basin, New Jersey, where water quality trading could provide a cost effective and scientifically feasible method for addressing total phosphorus impairments. The methodology presented will serve as a model to conduct similar analyses in other watersheds. The Raritan River Basin was divided into 12 subwatershed‐based study areas. Point‐nonpoint source trading opportunities were examined for each study area by examining the point and nonpoint source total phosphorus loading to impaired water bodies. Of the 12 subwatersheds examined, four had a high potential for implementing a successful trading program. Since instream phosphorus concentrations are closely related to soil erosion, an additional analysis was performed to examine soil erodibility. Recommendations are presented for conducting an economic analysis following the feasibility study.     

A RESERVOIR OPERATING MODEL WITH INORGANIC QUALITY CONSTRAINTS FOR THE TRUCKEE RIVER1

ABSTRACT: This study investigated low flow augmentation as a means of meeting inorganic water quality standards for the Truckee River at the California-Nevada state line. A digital inorganic water quality model was combined with a deterministic dynamic reservoir operating model in an iterative process which allowed the optimization of releases subject to selected inorganic water quality constraints as well as downstream demands. Results from model runs with varied flow and river loading data indicate that flow augmentation may be a feasible and relatively inexpensive way of meeting standards for this system except in time of severe drought.     

WATER MANAGEMENT IN ONTARIO1

ABSTRACT: The Ontario Ministry of the Environment has based its water quality management approach on a set of guidelines published in 1970. In light of the changing societal and economic background, advancement in technology and scientific knowledge, and philosophical attitudes towards water management, the water management program was recently revised. Factors influencing the revised approach, including federal-provincial interrelationships and international commitments under the Canada-U.S. Agreement, are summarized. The revised program consists of a goal statement, policies to implement this goal, revised water quality objectives, and detailed implementation procedures for field staff use. Rather than promulgating regulations to impose arbitrary effluent or receiving water standards on a province-wide basis, the revised approach involves the imposition of legally enforceable effluent requirements on a case-by-case basis. Although the paper emphasizes the surface water quality program, it also outlines the Ministry's goals, policies, and procedures for the management of surface-water quantity, as well as ground water quality and quantity.     

INEQUITIES FOR SMALL FOOD PROCESSING PLANTS RESULTING FROM LIQUID WASTE TREATMENT REGULATIONS1

ABSTRACT: The cost of the liquid wast treatment measures required to meet federal as well as typical state and local regulations was examined for dairy processing plants of various sizes. Federal effluent standards were found to produce higher estimated capital costs per unit of raw material for smaller plants, even with relaxed requirements for smaller plants. State regulations limiting the effluent BOD₅- concentration were also found to result in inequitable costs for smaller processors. These inequities result from economies of scale and not such factors as level of process technology employed or amount of waste produced per unit of raw material. In contrast, applying an example sewer surcharge formula did not produce inequities from economies of scale.     

CONFLICTS IN ATTAINING NATIONAL GOALS FOR BOTH WATER QUALITY AND ENERGY PRODUCTION1

ABSTRACT: The “policy environment” is defined herein as the institutional setting in which planning is conducted and policy decisions are made with regard to meeting two of the Nation's high priority goals: water quality protection and energy independence. The simultaneous pursuit of these goals has resulted in numerous conflicts among the energy industry, environmentalists, and government. An analysis of selected energy development-water quality conflicts shows that these conflicts can be described in terms of one or more of the following policy environment characteristics: resource scarcity, sense of urgency, lack of experience, administrative complexity, uncertainty about future policies and regulations, technological complexity, and uncertainty about impacts. These characterics provide a useful framework for formulating potential strategies for the resolution of energy development-water quality conflicts.     

Deriving Chesapeake Bay Water Quality Standards

Achieving and maintaining the water quality conditions necessary to protect the aquatic living resources of the Chesapeake Bay and its tidal tributaries has required a foundation of quantifiable water quality criteria. Quantitative criteria serve as a critical basis for assessing the attainment of designated uses and measuring progress toward meeting water quality goals of the Chesapeake Bay Program partnership. In 1987, the Chesapeake Bay Program partnership committed to defining the water quality conditions necessary to protect aquatic living resources. Under section 303(c) of the Clean Water Act, States and authorized tribes have the primary responsibility for adopting water quality standards into law or regulation. The Chesapeake Bay Program partnership worked with U.S. Environmental Protection Agency to develop and publish a guidance framework of ambient water quality criteria with designated uses and assessment procedures for dissolved oxygen, water clarity, and chlorophyll a for Chesapeake Bay and its tidal tributaries in 2003. This article reviews the derivation of the water quality criteria, criteria assessment protocols, designated use boundaries, and their refinements published in six addendum documents since 2003 and successfully adopted into each jurisdiction's water quality standards used in developing the Chesapeake Bay Total Maximum Daily Load.     

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.     

EXPERIMENTS IN IMPROVING RURAL WATER SUPPLIES1

ABSTRACT: A series of studies and experiments were conducted to identify rural water supply quality problems and to develop and demonstrate solutions. We found that rural people had severe and widespread problems, while state agencies held potential answers. Communications between experts and town officials were weak or absent. To bridge this gap, an information system was devised and tested. A computer program was developed to provide a printout map of the state, showing town boundaries and the quality of water supplies for each public water system monitored by the State Health Department. The map and data were published in local newspapers with an explanation of the map and its symbols. Town health officers were interviewed to determine the results of the public disclosure. We found that the news releases led to increased awareness, interest, and understanding of water quality and demands for ameliorative action. This program was supplemented by two publications: “A Layman's Guide to Eutrophication” and “A Handbook for Rural Water Uses.” The handbook explains the nature of drinking water standards, the reasons for these standards, the dangers and results of not meeting the standards, and cost-effective alternatives for improving water quality.     

THE ENVIRONMENTAL DISPLAY MANAGER: A TOOL FOR WATER QUALITY DATA INTEGRATION1

ABSTRACT: The Environmental Display Manager, EDM, is a development system on an IBM 3090 mainframe at the U.S. EPA National Computer Center in Research Triangle Park, North Carolina. EDM provides mapping, display, analysis support, and information management capabilities to workstations located across the United States, and connected to EPA through federal, state, academic, and private communications networks. Through interactive software, EDM can quickly support analyses, create maps and graphics, and generate reports that integrate millions of pieces of environmental data. The concept of EDM is to provide easy access to environmental information, to provide automated environmental analyses and reports, and then to provide data, graphics, images, text, and documents that can be used by numerous output devices, software packages, and computers. The mapping cumponent works with an electronic version of the 54,000 7.5 minute quad sheets of the U.S. Geological Survey. The software also works with a hydrographic data base of the surface waters of the United States. With the maps, a user can look at the rivers in any state, can zoom in on a small pond, and can overlay and identify particular features such as industrial waste dischargers and factories. The hydrography allows routing for modeling programs, identification of upstream and downstream components, and linkage of environmental features associated with surface waters. Alternatively, users can query data based on latitude/longitude, city name, EPA permit number, state agency and station code, river name or number, and river cataloging unit. The maps can be overlaid with roads and environmental sites such as: municipal and industrial dischargers, Superfund sites, public drinking water supplies, water quality monitoring stations, stream gages, and city locations. Retrievals from related systems can be performed for selected sites creating graphics showing water quality trends, discharge monitoring reports, and permit discharge limits.     

THE IMPACT OF WATER QUALITY OBJECTIVES ON URBAN WATER SUPPLY PLANNING1

ABSTRACT: Optimal policies for supplying rapidly expanding urban centers with additional water supplies are shown to be dependent on water quality goals for the urban effluent. As effluents are required to meet increasingly stringent standards, the unit costs associated with adding capacity to existing wastewater treatment systems to renovate some waters for reuse are shown to substantially decrease. A nonlinear elimination algorithm is developed to delineate optimal policies. A model employing the technique was applied to the wastewater treatment system of a typical urban system and the water quality objectives varied. A comparison of costs with and without various levels of reuse were made and unit costs of reused water under these conditions determined.     

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.     

Sociopolitical Conditions for Successful Water Quality Trading in the South Nation River Watershed,Ontario, Canada1

O’Grady, Dennis, 2011. Sociopolitical Conditions for Successful Water Quality Trading in the South Nation River Watershed, Ontario, Canada. Journal of the American Water Resources Association (JAWRA) 47(1):39‐51. DOI: 10.1111/j.1752‐1688.2010.00511.x Abstract: The South Nation River watershed has a regulated water quality trading program. Legally, wastewater dischargers must not discharge any increased loading of phosphorus (P) into receiving waters. New wastewater systems are now choosing trading instead of traditional P removal technology, and point source dischargers are buying P credits from rural landowners, primarily farmers. These credits are generated by constructing nonpoint source pollution control measures. Mathematical formulae are used to calculate the credits of P removed by each measure. A successful trading program requires several conditions, including community agreement, legislative backing, credit and cost certainty, simplified delivery and verification, written instruments, and legal liability protection. South Nation Conservation, a community‐based watershed organization, is the broker handling the transactions for these P credits. The program is run by a multi‐stakeholder committee, and all project field visits are done by farmers and not paid professionals. An independent evaluation showed higher opinions for the broker and regulatory agency, and most farmers were willing to, or had already, recommended the program to other farmers.     

Farm‐level Economic and Water Quality Impacts of Comprehensive Nutrient Management Plan Implementation in the Ohio River Basin

In this article, we provide an assessment of comprehensive nutrient management plans (CNMPs) as a tool for addressing nonpoint nutrient and sediment losses from the animal feeding operations (AFOs) in the Ohio River Basin. We employ a macro modeling system to determine the aggregate economic and water quality impacts of CNMP implementation on AFOs in the entire basin. Results of the study indicate that implementing CNMPs on AFOs will help reduce sediment and organic nutrient losses from their current levels at moderate cost. The flexibility inherent in CNMP designs means farmers may be able to achieve water quality and other conservation goals at less cost with CNMPs than with other less flexible policy options.     

Baseline requirements can hinder trades in water quality trading programs: Evidence from the Conestoga watershed

The U.S. Environmental Protection Agency (USEPA) and the U.S. Department of Agriculture (USDA) are promoting point/nonpoint trading as a way of reducing the costs of meeting water quality goals. Farms can create offsets by implementing management practices such as conservation tillage, nutrient management and buffer strips. To be eligible to sell offsets or credits, farmers must first comply with baseline requirements. USEPA guidance recommends that the baseline for nonpoint sources be management practices that are consistent with the water quality goal. A farmer would not be able to create offsets until the minimum practice standards are met. An alternative baseline is those practices being implemented at the time the trading program starts, or when the farmer enters the program. The selection of the baseline affects the efficiency and equity of the trading program. It has major implications for which farmers benefit from trading, the cost of nonpoint source offsets, and ultimately the number of offsets that nonpoint sources can sell to regulated point sources. We use a simple model of the average profit-maximizing dairy farmer operating in the Conestoga watershed in Pennsylvania to evaluate the implications of baseline requirements on the cost and quantity of offsets that can be produced for sale in a water quality trading market, and which farmers benefit most from trading.     

Achieving Nutrient Water Quality Goals: Bringing Market‐Like Principles to Water Quality Management*1

Abstract: Market‐like trading programs for water quality management begin with enforceable limits on the amount of the pollutant allowed in a watershed. Properly designed market‐like trading programs then create incentives for dischargers to reduce nutrient control costs over time by making pollution prevention innovations. However, the structure of the Clean Water Act can be a barrier to establishing market‐like trading programs. First, we describe the general features and advantages of market‐like trading programs. Then we offer practical suggestions for bringing market‐like design concepts to nutrient trading programs within the existing legal and regulatory setting.     

INTEGRATING DIFFUSEINONPOINT POLLUTION CONTROL AND WATER BODY RESTORATION INTO WATERSHED MANAGEMENT1

ABSTRACT: The objective of water quality/watershed management is attainment of water quality goals specified by the Clean Water Act. The Total Maximal Daily Load (TMDL) planning process is a tool to set up watershed management. However, TMDL methodologies and concepts have several problems, including determination of Loading Capacity for only low flow critical periods that preclude consideration of wet weather sources in water quality management. Research is needed to develop watershed pollutant loading and receiving waters Loading Capacity models that will link wet and dry weather pollution loads to the probability of the exceedence of water quality standards. The long term impact of traditional Best Management Practices as well as ponds and wetlands, must be reassessed to consider long term accumulation of conservative toxic compounds. Socioeconomic research should focus on providing information on economic and social feasibility of implementation of additional controls in water quality limited watersheds.     

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.