Estimating Evapotranspiration and Seepage for a Sinkhole Wetland From Diurnal Surface‐Water Cycles1

Abstract: This study used measured diurnal surface‐water cycles to estimate daily evapotranspiration (ET) and seepage for a seasonally flooded sinkhole wetland. Diurnal surface‐water cycles were classified into five categories based on the relationship between the surface‐water body and the surrounding ground‐water system (i.e., recharge/discharge). Only one class of diurnal cycles was found to be suitable for application of this method. This subset of diurnal cycles was used to estimate ET and seepage and the relative importance of each transfer process to the overall water budget. The method has limited utility for wetlands with erratic hydrologic regimes (e.g., wetlands in urban environments). This is due to violation of the critical assumption that the inflow/outflow rate remains constant throughout the day. For application to surface‐water systems, the method is typically applied with an assumed specific yield of 1.0. This assumption was found to be invalid for application to surface‐water systems with a noncylindrical pond geometry. An overestimation of ET by as much as 60% was found to occur under conditions of low pond stage and high water loss. The results demonstrate the high ET rates that can occur in isolated wetlands due to contrasting roughness and moisture conditions (oasis and clothesline effects). Estimated ET rates ranged from 4.1 to 18.7 mm/day during the growing season. Despite these large ET rates, seepage (recharge) was found to be the dominant water loss mechanism for the wetland.     

Modeling the Effects of Tile Drain Placement on the Hydrologic Function of Farmed Prairie Wetlands

The early 2000s saw large increases in agricultural tile drainage in the eastern Dakotas of North America. Agricultural practices that drain wetlands directly are sometimes limited by wetland protection programs. Little is known about the impacts of tile drainage beyond the delineated boundaries of wetlands in upland catchments that may be in agricultural production. A series of experiments were conducted using the well‐published model WETLANDSCAPE that revealed the potential for wetlands to have significantly shortened surface water inundation periods and lower mean depths when tile is placed in certain locations beyond the wetland boundary. Under the soil conditions found in agricultural areas of South Dakota in North America, wetland hydroperiod was found to be more sensitive to the depth that drain tile is installed relative to the bottom of the wetland basin than to distance‐based setbacks. Because tile drainage can change the hydrologic conditions of wetlands, even when deployed in upland catchments, tile drainage plans should be evaluated more closely for the potential impacts they might have on the ecological services that these wetlands currently provide. Future research should investigate further how drainage impacts are affected by climate variability and change.     

A Method for Improving the Management of Controversial Wetland

Valley bottom wetlands in agricultural landscapes often are neglected in national and regional wetland inventories. Although these areas are small, located in the bottomlands of the headwater catchments, and scattered in the rural landscape, they strongly influence hydrology, water quality, and biodiversity over the whole catchment area. Valley bottom wetlands often are considered as controversial wetlands. Awareness of the functional role of wetlands is increasing, in parallel with their progressive disappearance in intensive farming landscapes. The need to improve tools for controlling wetland management is a primary consideration for decision makers and land users. This article proposes a method for the inventory of valley bottom wetlands. The method is based on the functional analysis of potential, existing, and efficient valley bottom wetlands (the PEEW approach). Several indicators are proposed for checking the validity of such an approach. Potential wetlands are delineated by means of a topographic index using topographic and pedoclimatic criteria computed from a Digital Elevation Model and easily accessible databases. Existing wetlands are identified from observed surface moisture, the presence of specific wetland vegetation, or soil feature criteria. Efficient wetlands are defined through a given function, such as flow or pollutant regulation or biodiversity control. An analysis of areas at the limits between potential, existing, and efficient wetlands highlights land cultivated or drained in the past, which currently represents negotiating areas in which rehabilitation and other intended management actions can be implemented.     

DO WETLANDS BEHAVE LIKE SHALLOW LAKES IN TERMS OF PHOSPHORUS DYNAMICS?1

ABSTRACT: The applicability of empirical relationships governing phosphorus (P) retention and nutrient assimilation in lakes and reservoirs was extended to include free surface water wetland treatment systems. Mixed reactor models have been used in lakes to predict steady state P concentration, characterize trophic state, compare P‐dynamics, and predict permissible P‐loading rates. Applying lake models to free surface water wetlands treatment systems, it was found that: sedimentation rates, loading rates, and settling velocity in these wetlands, and their typology are comparable to their lake counterparts. The analyses also suggest that phosphorus removal efficiency in a free surface water wetland treatment system is independent of trophic status, and similar to lakes, these wetlands can be classified according to their trophic state. Oligo‐and eutrophic wetland treatment systems can be defined by low and high TP inflow concentrations, respectively. In this study, olig‐otrophic status is defined as systems receiving inflow P‐loading less than 0.10 g m^‐2 year‐¹, and their P inputs are mainly derived from agricultural and stormwater runoff. Eutrophic treatment systems, on the other hand, are defined as those receiving inflow P‐loading higher than 0.20 g m² year‐¹, and their inputs are mainly derived from industrial and municipal wastewater. The comparability found between lakes and free surface water wetlands treatment systems raises the question: should we consider these wetlands “shallow lakes?”     

Strategies for assessing the cumulative effects of wetland alteration on water quality

Assessment of cumulative impacts on wetlands can benefit by recognizing three fundamental wetland categories: basin, riverine, and fringe. The geomorphological settings of these categories have relevance for water quality.Basin, or depressional, wetlands are located in headwater areas, and capture runoff from small areas. Thus, they are normally sources of water with low elemental concentration. Although basin wetlands normally possess a high capacity for assimilating nutrients, there may be little opportunity for this to happen if the catchment area is small and little water flows through them.Riverine wetlands, in contrast, interface extensively with uplands. It has been demonstrated that both the capacity and the opportunity for altering water quality are high in riverine wetlands.Fringe wetlands are very small in comparison with the large bodies of water that flush them. Biogeochemical influences tend to be local, rather than having a measurable effect on the larger body of water. Consequently, the function of these wetlands for critical habitat may warrant protection from high nutrient levels and toxins, rather than expecting them to assume an assimilatory role.The relative proportion of these wetland types within a watershed, and their status relative to past impacts can be used to develop strategies for wetland protection. Past impacts on wetlands, however, are not likely to be clearly revealed in water quality records from monitoring studies, either because records are too short or because too many variables other than wetland impacts affect water quality. It is suggested that hydrologic records be used to reconstruct historical hydroperiods in wetlands for comparison with current, altered conditions. Changes in hydroperiod imply changes in wetland function, especially for biogeochemical processes in sediments. Hydroperiod is potentially a more sensitive index of wetland function than surface areas obtained from aerial photographs. Identification of forested wetlands through photointerpretation relies on vegetation that may remain intact for decades after drainage. Finally, the depositional environment of wetlands is a landscape characteristic that has not been carefully evaluated nor fully appreciated. Impacts that reverse depositional tendencies also may accelerate rates of change, causing wetlands to be large net exporters rather than modest net importers. Increases in rates as well as direction can cause stocks of materials, accumulated over centuries in wetland sediments, to be lost within decades, resulting in nutrient loading to downstream aquatic ecosystems.     

Use of wetlands for water quality improvement under the USEPA Region V Clean Lakes Program

The United States Environmental Protection Agency (USEPA) Region V Clean Lakes Program employs artificial and modified natural wetlands in an effort to improve the water quality of selected lakes. We examined use of wetlands at seven lake sites and evaluated the physical and institutional means by which wetland projects are implemented and managed, relative to USEPA program goals and expert recommendations on the use of wetlands for water quality improvement. Management practices recommended by wetlands experts addressed water level and retention, sheet flow, nutrient removal, chemical treatment, ecological and effectiveness monitoring, and resource enhancement. Institutional characteristics recommended included local monitoring, regulation, and enforcement and shared responsibilities among jurisdictions. Institutional and ecological objectives of the National Clean Lakes Program were met to some degree at every site. Social objectives were achieved to a lesser extent. Wetland protection mechanisms and appropriate institutional decentralization were present at all sites. Optimal management techniques were employed to varying degrees at each site, but most projects lack adequate monitoring to determine adverse ecological impacts and effectiveness of pollutant removal and do not extensively address needs for recreation and wildlife habitat. There is evidence that the wetland projects are contributing to improved lake water quality; however, more emphasis needs to be placed on wetland protection and long-term project evaluation.     

A conceptual framework for assessing cumulative impacts on the hydrology of nontidal wetlands

Wetlands occur in geologic and hydrologic settings that enhance the accumulation or retention of water. Regional slope, local relief, and permeability of the land surface are major controls on the formation of wetlands by surface-water sources. However, these landscape features also have significant control over groundwater flow systems, which commonly play a role in the formation of wetlands. Because the hydrologic system is a continuum, any modification of one component will have an effect on contiguous components. Disturbances commonly affecting the hydrologic system as it relates to wetlands include weather modification, alteration of plant communities, storage of surface water, road construction, drainage of surface water and soil water, alteration of groundwater recharge and discharge areas, and pumping of groundwater. Assessments of the cumulative effects of one or more of these disturbances on the hydrologic system as related to wetlands must take into account uncertainty in the measurements and in the assumptions that are made in hydrologic studies. For example, it may be appropriate to assume that regional groundwater flow systems are recharged in uplands and discharged in lowlands. However, a similar assumption commonly does not apply on a local scale, because of the spatial and temporal dynamics of groundwater recharge. Lack of appreciation of such hydrologic factors can lead to misunderstanding of the hydrologic function of wetlands within various parts of the landscape and mismanagement of wetland ecosystems.     

Mechanisms of nutrient attenuation in a subsurface flow riparian wetland

Riparian wetlands are transition zones between terrestrial and aquatic environments that have the potential to serve as nutrient filters for surface and ground water due to their topographic location. We investigated a riparian wetland that had been receiving intermittent inputs of NO3- and PO4(3-) during storm runoff events to determine the mechanisms of nutrient attenuation in the wetland soils. Few studies have shown whether infrequent pulses of NO3- are sufficient to maintain substantial denitrifying communities. Denitrification rates were highest at the upstream side of the wetland where nutrient-rich runoff first enters the wetland (17-58 microg N2O-N kg soil(-1) h(-1)) and decreased further into the wetland. Carbon limitation for denitrification was minor in the wetland soils. Samples not amended with dextrose had 75% of the denitrification rate of samples with excess dextrose C. Phosphate sorption isotherms suggested that the wetland soils had a high capacity for P retention. The calculated soil PO4(3-) concentration that would yield an equilibrium aqueous P04(3-) concentration of 0.05 mg P L(-1) was found to be 100 times greater than the soil PO4(3-) concentration at the time of sampling. This indicated that the wetland could retain a large additional mass of PO4(3-) without increasing the dissolved P04(3-) concentrations above USEPA recommended levels for lentic waters. These results demonstrated that denitrification can be substantial in systems receiving pulsed NO3- inputs and that sorption could account for extensive PO4(3-) attenuation observed at this site.     

Use of created cattail (Typha) wetlands in mitigation strategies

In order to balance pressures for land-use development with protection of wetland resources, artificial wetlands have been constructed in an effort to replace lost ecosystems. Despite its regulatory appeal and prominent role in current mitigation strategies, it is unclear whether or not created systems actually compensate for lost wetland resources. Mitigation predictions that rely on artificial wetlands must be analyzed critically in terms of their efficacy. Destruction of wetlands due to burial by coal fly ash at a municipal landfill in Danvers, Massachusetts, USA, provided an opportunity to compare resulting growth of created cattail (Typha) marshes with natural wetland areas. Once the appropriate cattail species was identified for growth under disturbed landfill conditions, two types of artificial wetlands were constructed. The two systems differed in their hydrologic attributes: while one had a surface water flow characteristic of most cattail wetlands, the second system mimicked soil and water conditions found in naturally occurring floating cattail marshes. Comparison of plant growth measurements for two years from the artificial systems with published values for natural cattail marshes revealed similar structure and growth patterns. Experiments are now in progress to investigate the ability of created cattail marshes to remove and accumulate heavy metals from polluted landfill leachate. Research of the type reported here must be pursued aggressively in order to document the performance of artificial wetlands in terms of plant structure and wetland functions. Such research should allow us to start to evaluate whether artificial systems actually compensate for lost wetlands by performing similar functions and providing the concomitant public benefits.     

FORESTED WETLANDS IN EASTERN CONNECTICUT: THEIR TRANSITION ZONES AND DELINEATION1

ABSTRACT: The delineation of inland wetlands requires close field examination of the biological and physical gradients (transition zones) between wetlands and bordering uplands. As part of a study on the detection and delineation of inland wetlands in eastern Connecticut by remote sensing techniques, this effort was designed to investigate vegetation distribution and composition and selected physical and chemical properties of the soils of wetland to upland transition zones in deciduous wetland forests. Field research was conducted during the growing season of 1975 within a test area consisting of the 45 mi² Town of Mansfield, Connecticut. Changes in vegetation composition and structure, soil pH, and soil water content were determined along line transects extended over wetland to upland transition zones. Differences in soil pH occurred along the transects but were of such magnitude that they probably have little impact on plant distribution. There were significant changes in soil water content along the wetland to upland gradients. Discriminant analysis applied to statistical “index of abundance” data describing vegetation distribution among the various zones (wetland, transition, upland) showed which plant species best distinguish wetlands from uplands. Of the criteria studied, vegetation composition and distribution, soil water content, and relief are the most useful criteria for delineating deciduous wetland forests.     

Denitrification in alluvial wetlands in an urban landscape

Riparian wetlands have been shown to be effective "sinks" for nitrate N (NO3-), minimizing the downstream export of N to streams and coastal water bodies. However, the vast majority of riparian denitrification research has been in agricultural and forested watersheds, with relatively little work on riparian wetland function in urban watersheds. We investigated the variation and magnitude of denitrification in three constructed and two relict oxbow urban wetlands, and in two forested reference wetlands in the Baltimore metropolitan area. Denitrification rates in wetland sediments were measured with a 15N-enriched NO3- "push-pull" groundwater tracer method during the summer and winter of 2008. Mean denitrification rates did not differ among the wetland types and ranged from 147 +/- 29 microg N kg soil(-1) d(-1) in constructed stormwater wetlands to 100 +/- 11 microg N kg soil(-1) d(-1) in relict oxbows to 106 +/- 32 microg N kg soil(-1) d(-1) in forested reference wetlands. High denitrification rates were observed in both summer and winter, suggesting that these wetlands are sinks for NO3- year round. Comparison of denitrification rates with NO3- standing stocks in the wetland water column and stream NO3- loads indicated that mass removal of NO3- in urban wetland sediments by denitrification could be substantial. Our results suggest that urban wetlands have the potential to reduce NO3- in urban landscapes and should be considered as a means to manage N in urban watersheds.     

Mine-drainage treatment wetland as habitat for herptofaunal wildlife

Land reclamation techniques that incorporate habitat features for herptofaunal wildlife have received little attention. We assessed the suitability of a wetland, constructed for the treatment of mine-water drainage, for supporting herptofaunal wildlife from 1988 through 1990 using diurnal and nocturnal surveys. Natural wetlands within the surrounding watershed were also monitored for comparison. The treatment wetland supported the greatest abundance and species richness of herptofauna among the sites surveyed. Abundance was a function of the frog density, particularly green frogs (Rana clamitans) and pickerel frogs (R. palustris), while species richness was due to the number of snake species found. The rich mix of snake species present at the treatment wetland was believed due to a combination of an abundant frog prey base and an amply supply of den sites in rock debris left behind from earlier surface-mining activities. Nocturnal surveys of breeding male frogs demonstrated highest breeding activity at the treatment wetland, particularly for spring peepers (Hyla crucifer). Whole-body assays of green frog and bullfrog (R. catesbeiana) tissues showed no differences among sites in uptake of iron, aluminum, and zinc; managanese levels in samples from the treatment wetland were significantly lower than those from natural wetlands. These results suggest that wetlands established for water quality improvement can provide habitat for reptiles and amphibians, with the species composition dependent on the construction design, the proximity to source populations, and the degree of acidity and heavy-metal concentrations in drainage waters.     

PHOSPHORUS RELEASE AND ASSIMILATORY CAPACITY OF TWO LOWER MISSISSIPPI VALLEY FRESHWATER WETLAND SOILS1

ABSTRACT: Phosphorus fluxes and water quality functions of a bottomland hardwood and freshwater marsh wetland soil were compared. The effect of soil physicochemical conditions, phosphorus loading rate, and diffusive exchange between soils and the overlying food water column on phosphorus release and retention were studied. The predominantly mineral swamp forest soil displayed greater phosphorus sorption potential than the organic freshwater marsh soil. Moreover, due to its low bulk density (0.11 g cm^?3), the freshwater marsh soil surface area required for phosphorus retention is very large compared to the bottomland hardwood wetland soil. For both wetlands, soil redox status affected P release and assimilatory capacity. The more reducing the soils, the smaller their phosphorus retention capacity (greater their release). Phosphorus removal from the overlying water column into the wetland soils followed a first-order kinetic model. Under similar hydrological conditions, phosphorus was found to diffuse 1.2 times faster to the bottom. land hardwood soil than in the freshwater marsh soil. Results indicate that while the bottomland hardwood wetland soil will serve as a sink for phosphorus entering such wetland, phosphorus will be released and exported from the freshwater marsh soil into adjacent ecosystems.     

ISOTOPE HYDROLOGY DYNAMICS OF RIVERINE WETLANDS IN THE KANKAKEE WATERSHED,INDIANA1

ABSTRACT: Wetland restoration activities may disturb shallow ground‐water flow dynamics. There may be unintentional sources of water flowing into a constructed wetland that could compromise the long‐term viability of a wetland function. Measurement of naturally‐occurring isotopes in the hydrosphere can provide an indication of provenance, flow paths or components, and residence times or ages of wetland ground‐water flow systems. Hydraulic head measurements may not provide sufficient detail of shallow flow disturbances and can be complemented by analyzing isotopes in waters flowing through the wetland. Two north‐central Indiana wetlands in the Kankakee watershed are being studied to determine the adequacy of wetland restoration activities. The native LaSalle wetland and the restored Hog Marsh wetland have contrasting ground‐water flow regimes. The conservative water isotopes ¹⁸O, ²H, and ³H, and selected solute isotopes ¹³C, ¹⁴C, ¹⁵N, ³⁴S, ⁸⁷Sr, and 206–208Pb, demonstrate the complexity of ground‐water flow in Hog Marsh compared to the established flow regime at the LaSalle wetland.     

Evaluating cumulative effects on wetland functions: A conceptual overview and generic framework

This article outlines conceptual and methodological issues that must be confronted in developing a sound scientific basis for investigating cumulative effects on freshwater wetlands. We are particularly concerned with: (1) effects expressed at temporal and spatial scales beyond those of the individual disturbance, specific project, or single wetland, that is, effects occurring at the watershed or regional landscape level; and (2) the scientific (technical) component of the overall assessment process. Our aim is to lay the foundation for a research program to develop methods to quantify cumulative effects of wetland loss or degradation on the functioning of interacting systems of wetlands. Toward that goal we: (1) define the concept of cumulative effects in terms that permit scientific investigation of effects; (2) distinguish the scientific component of cumulative impact analysis from other aspects of the assessment process; (3) define critical scientific issues in assessing cumulative effects on wetlands; and (4) set up a hypothetical and generic structure for measuring cumulative effects on the functioning of wetlands as landscape systems.We provide a generic framework for evaluating cumulative effects on three basic wetland landscape functions: flood storage, water quality, and life support. Critical scientific issues include appropriate delineations of scales, identification of threshold responses, and the influence on different functions of wetland size, shape, and position in the landscape.The contribution of a particular wetland to landscape function within watersheds or regions will be determined by its intrinsic characteristics, e.g., size, morphometry, type, percent organic matter in the sediments, and hydrologic regime, and by extrinsic factors, i.e., the wetland's context in the landscape mosaic. Any cumulative effects evaluation must take into account the relationship between these intrinsic and extrinsic attributes and overall landscape function. We use the magnitude of exchanges among component wetlands in a watershed or larger landscape as the basis for defining the geographic boundaries of the assessment. The time scales of recovery for processes controlling particular wetland functions determine temporal boundaries. Landscape-level measures are proposed for each function.     

Rapid removal of nitrate and sulfate in freshwater wetland sediments

Anaerobic microbial processes play particularly important roles in the biogeochemical functions of wetlands, affecting water quality, nutrient transport, and greenhouse gas fluxes. This study simultaneously examined nitrate and sulfate removal rates in sediments of five southwestern Michigan wetlands varying in their predominant water sources from ground water to precipitation. Rates were estimated using in situ push-pull experiments, in which 500 mL of anoxic local ground water containing ambient nitrate and sulfate and amended with bromide was injected into the near-surface sediments and subsequently withdrawn over time. All wetlands rapidly depleted nitrate added at ambient ground water concentrations within 5 to 20 h, with the rate dependent on concentration. Sulfate, which was variably present in porewaters, was also removed from injected ground water in all wetlands, but only after nitrate was depleted. The sulfate removal rate in ground water-fed wetlands was independent of concentration, in contrast to rates in precipitation-fed wetlands. Sulfate production was observed in some sites during the period of nitrate removal, suggesting that the added nitrate either stimulated sulfur oxidation, possibly by bacteria that can utilize nitrate as an oxidant, or inhibited sulfate reduction by stimulating denitrification. All wetland sediments examined were consistently capable of removing nitrate and sulfate at concentrations found in ground water and precipitation inputs, over short time and space scales. These results demonstrate how a remarkably small area of wetland sediment can strongly influence water quality, such as in the cases of narrow riparian zones or small isolated wetlands, which may be excluded from legal protection.     

SIMULATING FLOW IN REGIONAL WETLANDS WITH THE MODFLOW WETLANDS PACKAGE1

ABSTRACT: As part of the Comprehensive Everglades Restoration Plan (CERP), various water supply projects have been proposed in a region located between the Miami metropolitan area and the extensive regional wetland systems that are part of the Everglades or remnant Everglades. A ground water flow model of the surficial aquifer within northern Miami‐Dade County was constructed using MODFLOW to evaluate the effects of these projects on water levels in the wetlands and the underlying surficial aquifer. The new Wetlands package was used to conjunctively simulate overland flow through these wetlands and the shallow ground water system. Comparisons of simulated to measured ground water levels and wetland stages were very satisfactory, where computed and measured water levels agreed within 0.5 ft over most of the period of record at nearly all of the monitoring sites. Temporal trends in water levels were also replicated. It was concluded that the assumptions and methodologies inherent to the Wetlands package were suitable for simulating regional wetland hydrology within the Everglades area.     

Does Wetland Location Matter When Managing Wetlands for Watershed‐Scale Flood and Drought Resilience?

Wetland protection and restoration strategies that are designed to promote hydrologic resilience do not incorporate the location of wetlands relative to the main stream network. This is primarily attributed to the lack of knowledge on the effects of wetland location on wetland hydrologic function (e.g., flood and drought mitigation). Here, we combined a watershed‐scale, surface–subsurface, fully distributed, physically based hydrologic model with historical, existing, and lost (drained) wetland maps in the Nose Creek watershed in the Prairie Pothole Region of North America to (1) estimate the hydrologic functions of lost wetlands and (2) estimate the hydrologic functions of wetlands located at different distances from the main stream network. Modeling results showed wetland loss altered streamflow, decreasing baseflow and increasing stream peakflow during the period of the precipitation events that led to major flooding in the watershed and downstream cities. In addition, we found that wetlands closer to the main stream network played a disproportionately important role in attenuating peakflow, while wetland location was not important for regulating baseflow. The findings of this study provide information for watershed managers that can help to prioritize wetland restoration efforts for flood or drought risk mitigation.     

Evaluating the cumulative effects of alteration on New England wetlands

In New England, patterns of glacial deposition strongly influence wetland occurrence and function. Many wetlands are associated with permeable deposits and owe their existence to groundwater discharge. Whether developed on deposits of high or low permeability, wetlands are often associated with streams and appear to play an important role in controlling and modifying streamflow. Evidence is cited showing that some wetlands operate to lessen flood peaks, and may have the seasonal effect of increasing spring discharges and depressing low flows. Wetlands overlying permeable deposits may be associated with important aquifers where they can produce slight modifications in water quality and head distribution within the aquifer. Impacts to wetlands undoubtedly will affect these functions, but the precise nature of the effect is difficult to predict. This is especially true of incremental impacts to wetlands, which may, for example, produce a change in streamflow disproportionate to wetland area in the drainage basin, i.e., a nonlinear effect as defined by Preston and Bedford (1988). Additional research is needed before hydrologic function can be reliably correlated with physical properties of wetlands and landscapes.A model is proposed to structure future research and explore relationships between hydrologic function and physical properties of wetlands and landscapes. The model considers (1) the nature of the underlying deposits (geologic type), (2) location in the drainage basin (topographic position), (3) relationship to the principal zone of saturation (hydrologic position), and (4) hydrologic character of the organic deposit.     

Water Quality Trading with Lumpy Investments,Credit Stacking,and Ancillary Benefits

This paper studies the economics of a water quality trading market in a predominantly agricultural watershed, and explores the effects of credit stacking in such a market when buyers and sellers of pollution credits can only reduce pollution with large, discrete investments that yield discontinuous supply and demand. The research simulates hypothetical water quality trading markets in the corn‐belt area of Illinois, where wastewater treatment plants (WWTPs) can pay farmers to reduce nutrients by installing wetlands and farmers may or may not be allowed to earn payments for multiple services from one wetland. We find that wetlands are a more cost‐effective way to mitigate nitrogen pollution than abatement by WWTPs. Stacking credits may improve social welfare while providing more ecosystem services if there is enough demand for the primary credit in the market (nitrogen) to cover most of the cost of installing the wetland but the supply of nitrogen credits is not exhausted. However, in the presence of lumpy pollution reduction activities, the effects of allowing stacked credit sales are idiosyncratic and not necessarily positive; stacked payments may or may not satisfy additionality. The results imply that credit trading for nitrogen is likely to make society better off, but the effects of allowing farmers to receive multiple payments from a single wetland depend on details of the situation.