Has Clean Water Become a Trade Off?

Environmental Protection Agency (EPA) Administrator Christie Whitman believes a new Water Quality Trading Policy will cut industrial, municipal and agricultural discharges into the nation's waterways.

EPA claims the new policy will implement the requirements of the Clean Water and federal regulations in "more flexible ways" and reduce the cost of improving and maintaining water quality.

"The Water Quality Trading Policy recognizes that within a watershed, the most effective and economical way to reduce pollution is to provide incentives to encourage action by those who can achieve reductions easily and cost-effectively," said Whitman. "Our new Water Quality Trading Policy will result in cleaner water, at less cost and in less time. It provides the flexibility needed to meet local challenges while demanding accountability to ensure that water quality does improve."

Water quality trading allows one source to meet its regulatory obligations by using pollutant reductions created by another source that has lower pollution control costs. The standards remain the same, but efficiency is increased and costs are decreased. Under the policy announced today, industrial and municipal facilities would first 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" must first be created. EPA's water quality trading policy states that sources should reduce pollution loads beyond the level required by the most stringent water quality based 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.

Paul Faeth, managing director of World Resources Institute, claimed water quality trading "creates a win-win solution for everyone involved and the new policy will allow states and others to take advantage of the newly created conservation innovation grants program in the 2002 Farm Bill."

Natural Resources Conservation Service Chief Bruce Knight said the policy provides market-based incentives to encourage farmers, ranchers and woodlot owners and operators to do even more to maintain and improve the quality of the environment.

The National Resources Defense Council (NRDC), a strong critic of the Bush administration's environmental policies, admitted that when used appropriately, trading can be a tool for reducing the cost of improving water quality. NRDC and other environmental groups support trading programs that improve water quality by setting pollution limits that decline over time, called "cap and trade" programs.

The new EPA policy, however, does not require a cap, does not require polluters to reduce their discharges over time, and allows polluters to "avoid compliance by simply buying credits," said a statement from NRDC.

"This new policy violates the Clean Water Act, which protects all of our waterways from pollution not just some," said Nancy Stoner, director of NRDC's Clean Water Project. "Under this scheme, the water quality in some of our lakes, streams and rivers will be traded away for the benefit of other waterways. The EPA is trading good quality water for bad."

She added, "Under this policy, our waterways are for sale. Only corporate polluters will benefit."

Whitman said EPA is providing more than $800,000 in fiscal year 2002 funding support for 11 trading projects around the country. A list of the 11 pilots can be found at www.epa.gov.

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