EPA Seeks Trade Program for Water Quality

May 16, 2002

Environmental Protection Agency Administrator Christine Whitman Wednesday proposed a "water quality trading policy" to increase the pace and success of cleaning up impaired rivers, streams and lakes throughout the country. EPA officials believe this policy could save the public hundreds of millions of dollars by advancing more effective, efficient partnerships to clean up and protect watersheds.

The policy encourages incentives to maintain high water quality where it exists as well as restoring impaired waters. In addition, the policy sets forth what EPA believes is necessary for state and tribal water quality trading programs to be successful and identifies provisions of acceptable trading programs that are consistent with the Clean Water Act and federal regulations.

Despite the accomplishments of the Clean Water Act, many U.S. waterways are polluted by urban storm water, sanitary sewer overflows, agricultural runoff and pollutants from the air that fall into our waters. What this policy seeks to encourage is more innovative approaches to meeting clean water standards and does not change any of the current regulations or standards that are in place, Whitman said.

The trading policy seeks to support and encourage states and tribes in developing and implementing water quality trading programs that implement the requirements of the Clean Water Act and federal regulations in more flexible ways and reduce the cost of improving and maintaining the quality of the nation's waters.

Under the proposed policy, industrial and municipal facilities would meet technology control requirements and then could use pollution reduction credits to make further progress towards water quality goals. In order for a water quality trade to take place, a pollution reduction "credit" should first be created. EPA's water quality trading policy states that sources should reduce pollution loads beyond the level required by the most stringent technology requirements in order to create a pollution reduction "credit" that can be traded. For example, a landowner or a farmer could create credits by changing cropping practices and planting shrubs and trees next to a stream. A municipal wastewater treatment plant then could use these credits to meet water quality limits in its permit.

EPA officials believe that most trading will occur as states, tribes and sources implement programs to restore polluted waters. The policy supports trading among and between regulated and unregulated sources through watershed partnerships and programs developed by states and tribes.

EPA will publish a notice of availability in the Federal Register and post the proposed policy to protect and restore the nation's waters at: www.epa.gov/owow/watershed/trading.html The policy will be open to public comment for 45 days. The final policy will be released later this summer.