development of statewide water quality trading framework kevin kirsch widnr

8/2/2019 Development of Statewide Water Quality Trading Framework Kevin Kirsch WIDNR

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Development

of a StatewideWater Quality Trading

Framework

Wisconsin Department of Natural Resources
http://dnr.wi.gov/


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What is Water Quality Trading?

Water quality trading is an exchange ofpollutant reduction credits.

A buyer with a high pollutant control cost canpurchase pollutant reduction or treatment

from a willing seller.

Trading can produce substantial cost savingsbut must result in an improvement in waterquality and a net reduction of the pollutantbeing traded.

Trading also can provide ancillaryenvironmental benefits such as floodretention, riparian improvement and habitat.


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Trading is a Potential Tool

Several options exist to meet WQBELs and TMDLallocations including:

Modifying wastewater treatment systems Modifying your production process to limit additives or

raw materials

Trading

Options can be used in combination


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TMDL = LA + WLA + MOS

Where:

LA = Load Allocation(Nonpoint Sources)

WLA = Wasteload Allocation(Permitted Point Sources)

MOS = Margin of Safety


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WLA and LA

Waste Load Allocation

Waste Water Treatment Plants(WWTPs )/ Publicly OwnedTreatment Works (POTWs)

Municipal Separate Storm SewerSystems (MS4s)

Concentrated Animal FeedingOperations (CAFOs)

General permits

Industries

Non-Metallic Mines

Construction Sites

Load Allocation

Background

Agriculture

Non-permitted urban

(no MS4 permit)


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Assemble a stakeholder group of thoseinterested parties in watershed based tradingissues and develop a trading framework

including any recommended rules or guidance tofacilitate watershedbased trading, and reportback to the Board no later than July 1, 2011.

June 2010 NRB Resolution


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Specific Objectives

Develop a water quality trading framework that:

Encourages water quality trading

Prevents exceedances of water quality standards

Results in more water quality improvement than in theabsence of trading


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Denny Caneff, River Alliance of Wisconsin

Paul Kent, Municipal Environmental Group

Betsy Lawton, Midwest Environmental Advocates

Melissa Malott, Clean Wisconsin

Kevin Schafer, Milwaukee Metropolitan Sewerage District Tom Sigmund, Green Bay Metropolitan Sewerage District

Pat Sutter, Dane County Land & Water Conservation Department

Dave Taylor, Madison Metropolitan Sewerage District

John Umhoefer, Wisconsin Cheese Makers Association

Paul Zimmerman, Wisconsin Farm Bureau

Meeting summaries: http://fyi.uwex.edu/wqtrading/

External Stakeholder Committee Members
http://fyi.uwex.edu/wqtrading/http://fyi.uwex.edu/wqtrading/


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WQT Framework Report

Summary

Introduction and Background

Part 1: Summary of Water Quality Trading Efforts

Part 2: Draft Framework

Part 3: Action/Recommendations

Appendices


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Wisconsins History with Trading

Fox River Basin Developed guidance,

element list, issuesummary, and reports.

Rock River Basin Developed a

framework andpursued some tradesbut lack of sufficient

economic incentivesprevent trades.

Red Cedar Basin City of Cumberland

Trade


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EPA Trading Program Structure

EPA Guidance for trading and NPDES permit programs:

Water quality trading programs must meet requirements of theClean Water Act.

The Clean Water Act provides legal authority for states and tribesto develop and administer trading programs.

EPA's 2003 National Water Quality Trading Policy(Trading Policy)

recommends basic ground rules for trading.


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WQT Framework Contents

Part 2: Draft Framework

2.1 Pollutant Parameters Acceptable for WQT

2.2 Appropriate Circumstances for WQT

2.3 Location and Geographic Scope

2.4 Credit Threshold

2.5 Trade Ratios

2.6 Timing of Credit Generation and Use

2.7 Trade Duration

2.8 Quantifying Credits2.9 Compliance and Enforcement

2.10 Trade Administration

2.11 Legal Issues and Statutory Changes


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2.1 Pollutant Parameters Acceptable for WQT

Nutrients

Phosphorus

Nitrogen

Sediment

Temperature

Dissolved Oxygen-related Parameters

e.g., Biochemical oxygen demand


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2.2 Appropriate Circumstances for WQT

WQT May be Used

Demonstrate compliance with WQBELs

Offset pollutant load from new or expanded discharger

WQT not allowed when localizedexceedances of water quality standards will occur


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2.3 Location and GeographicScope

Non-TMDL WQBELs

Credits must be generated upstream

TMDL WQBELs

Credits may be generated within the drainagearea for the impaired segment (segmentshed)


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Figure 1: No Impaired Waters

Reach A(100 ug/l)

Reach B(100 ug/l)

Reach C(100 ug/l)

Reach D(WQC 100 ug/l)

Reach E(75 ug/l)

Reach F(75 ug/l)

PS 1TBEL: 1,000 ug/lNR 217: 900 ug/l

PS 2TBEL: 1,000 ug/lNR 217: 800 ug/l

PS 3TBEL: 1,000 ug/lNR 217: 300 ug/l

Trade should occurupstream of pointsource.

If trading to meetWQBELs, trade should

occur in samewatershed and notcreate violations in localwater quality standards.


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Figure 2: Impaired Waters with TMDL

Reach A(100 ug/l)

Reach B(100 ug/l)

Reach C(100 ug/l)

Reach D(WQC100 ug/l)

Reach E(75 ug/l)

Reach F(75 ug/l)

PS 1TBEL: 1,000 ug/lNR 217: 100 ug/l

TMDL: 650 ug/l

PS 2TBEL: 1,000 ug/lNR 217: 800 ug/lTMDL: 600 ug/l

PS 3TBEL: 1,000 ug/lNR 217: 75 ug/lTMDL: 400 ug/l

Trade location setbased on thewaterbodyresponsible for theWLA.

The trade must occurin the watershed ofthat waterbodyassigning the WLA.


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2.4 Credit Threshold

Credits Generated by Point Source

Lesser of WQBEL or TBEL

Credits Generated by Nonpoint Source

Lesser of TMDL LA or Performance

Standard (e.g., ch. NR 151)

5-yr Interim Credit = Reduction from ExistingPollutant Load


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2.5 Trade Ratio

Uncertainty - Based on effectiveness and ease of verification of themanagement practices employed. Practices will be classified intodifferent categories and assigned ratios.

Lower Ratio 2:1 Ratio Higher Ratio

CompanionCrops

Buffer withupland

practices

TillagePractices

Fall covercrops

Buffer withoutsupportingpractices


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Management Practices Menu

ManagementPractice

AvailableCredits

(ApprovedMethod)

UncertaintyTrading

Ratio

Schedulefor Credit

Use

CreditAvailability

DateCredit Use

Restrictions

CompanionCrops

2.5 lbs P peracrePI-1in.

precipitation(SWAT)

1.2 Credits maybe bankedand usedover the

entire year.

First monthsecond cover

cropestablished

Credits maynot be carriedover from year

to year.

ConservationTillage

Nutrient

Management

Buffer Strips

VegetativeFilter Strips


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2.5 Trade Ratio Delivery (distance between generator and user)

TMDL Same factors used in TMDL

Non-TMDL USGS SPARROW model for P, N and sediment

Equivalency (form of pollutant) Not necessary with phosphorus Not yet specified for N and sediment

Retirement Concept addressed with interim credits


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2.6 Timing of Credit Generation andUse

Credits must be generated before they areused

Point source pollutant reduction must be measurable

BMP in-place and effective

Credit use timing depends on credit source

Point source Averaging period of limit Nonpoint Anytime during calendar year

(highly variable discharge exception)


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2.7 Trade Duration

Water Quality Trade ends:

At conclusion of BMP lifespan, or

When one of the trading partners endstrade agreement


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2.8 Quantifying Credits

Nonpoint Source Credits

SNAP-Plus and RUSLE2 for agricultural fieldpractices

SLAMM and P-8 for urban practices

Point Source Credits

Effluent monitoring


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2.9 Compliance andEnforcement

Credit Users WPDES Permit

WQBELs and Effluent Monitoring

Language Allowing Use of Credits Application Submittal Requirement

Effluent Limit when Trading (e.g. TBEL)

Reporting Requirements for Credits Used

Management Practice Certification

Annual Inspection of ManagementPractice


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2.9 Compliance andEnforcement

Application for Trading

Submitted by permittee credit user for Departmentapproval

Indentifies credit generator

Identifies credit generation method (e.g.,management practice)

Provides site location where credits are generated Provides amount of credits that will be generated

Provides date when credits become available

Provides trade ratio for each site and practice.


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2.10 Trade Administration

DNR intends to: Develop management practices menu

Issue WPDES with WQT conditions Track trades

DNR will not act as broker or central exchange


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2.11 Legal Issues and StatutoryChanges

Modify s. 283.84, Wis. Stats.

Eliminate pilot program reference

Eliminate 5-year trade limit

Provide authority for rulemaking Provide authority for WQT

permit conditions

No rule changes at this time


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development of statewide water quality trading framework kevin kirsch widnr

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