Effluent trading framework issued by EPA tackles nonpoint sources Alter 15 years of study, EPA has come out in support 01 eniueiii trading among pollution sources within a watershed. Promoted as a tool for communities to use to improve their water quality faster and more economically, the "Draft Framework for WatershedBased Pollutant Trading" (Federal Register, 1196, 61 1113), 29563) )s seen by many observers as a way to tackle the problem of nonpoint source discharges, which are not currently regulated. The draft "establishes a framework for point sources to work with nonpoint sources," said Mahesh Podar, director of policy and budget for EPA's Office of Water, speaking at the June Watershed '96 conference in Baltimore. Bruce Zander, environmental engineer with EPA Region 8, concurred that trading can build incentives for nonpoint dischargers to reduce releases. President Clinton endorsed effluent trading in Nlarch 1995 as a regulatory reform measi ire Unlike other pollutant trading mechanisms such as the Clean Air Act's sulfur dioxide program, effluent trades may only take place locally (within a watershed), and the trading process is not defined by federal laws and regulations. Trading partners can negotiate bilaterally or within an organized program, or they may participate in public or private banks to trade pollution credits. They may choose to negotiate prices and exchange rates individually or trade credits established by a market The draft framework stipulates that trading programs must go above and beyond technologybased requirements of the Clean Water Act, that no hot spots be created as the result of a trade, and that only the same pollutants are traded. An equivalent or better pollutant reduction must result from a trade. Five types of trades are described: trading between outfalls from the same point source (intraplant), trades between dischargers to a publicly owned treatment work or POTW (pretreatment), trades between different point sources (point-point), a point source controlling nonpoint
An effluent trade between water treatment works and urban nonpoint sources at Colorado's Dillon Reservoir (above) was made to reduce phosphorus levels. Photo courtesy Northwest Colorado Council of Governments.
source discharges in lieu of upgrading its own treatment (pointnonpoint), and one nonpoint source providing controls for another nonpoint source (nonpointnonpoint). Before the EPA framework was released, only two effluent trades had occurred. One was a pointnonpoint trade of nitrogen in
The draft "establishes a framework for point sources to work with nonpoint sources." Mahesh Podar, EPA Office of Water North Carolina's Tar-Pamlico watershed. Beginning in 1993 selected POTWs have paid into a state fund that invests in agricultural best management practices. A point-nonpoint trade of phosphorus in Colorado's Dillon Reservoir involves four treatment works in the watershed that have purchased reductions from urban nonpoint sources. Release of the draft framework signals that EPA is encouraging integration of trading into National Pollutant Discharge and Elimination System (NPDES) per-
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mits, said John Hall of Hall & Associates. A participant in the TarPamlico trade, Hall comments that incorporating trading into the permitting process could be a barrier to trading if point source dischargers fear they could be taken to court if their nonpoint trading partners fail to implement best management practices. Chris Rudkin, water quality coordinator for Boulder Colo. noted that "the draft framework acknowledges the need for flexibility " and that many POT\^s are interested in making trades a part of their NPDES permit The lack of effluent trading to date could reflect past concerns that EPA would not approve of trading. Zander said that official affirmation of trading has long been awaited by dischargers. This sentiment was strongly expressed by participants at an EPA administrators forum on point-nonpoint trading in Durham, N.C., four years aso according to Zander. Rudkin believes that the potential for trading will grow with the release of the draft framework. "When a new approach is pulled together in a draft, you can start to envision a process. The strength of the framework is that it puts out an idea and catalogs ways things can be implemented." —JANET PELLEY
