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EPA's proposed water pollution trading program eyed
WATER POLLUTION
Daily
06/10/2002

The House Transportation and Infrastructure water resources subcommittee will hold a hearing on Thursday to look into the Environmental Protection Agency's new proposal for a water pollution credit trading policy, which is currently being tried through several pilot programs around the country.
The policy proposal, released May 15, aims to reduce the cost of water quality regulations by allowing companies, municipal agencies and other entities to trade water pollution credits within local watersheds. "This policy will lead to greater efficiency and better results, while being responsive, as we meet our clean water goals," EPA Administrator Christie Whitman said when the policy was released. The proposal is currently undergoing a 45-day public comment period and is expected to be released in its final form this summer.
In order to create the pollution reduction credits that would then be traded to other entities, a pollution source must first reduce pollution loads beyond the level created by the most stringent technology requirements, according to EPA's office of water. For instance, the policy could help farmers to implement EPA's new Total Maximum Daily Load rule, which targets non-point source pollution. A farmer could create pollution credits by changing cropping practices or planting trees near a stream. The credits could then be sold to another landowner in the same watershed.
"Our Water Quality Trading Policy keeps existing controls and safeguards in place, but offers greater flexibility and incentives to states, tribes and companies to comply with the Clean Water Act," Whitman said. "Trading provides incentives for voluntary reductions from all sources to improve and maintain the quality of the nation's waters."
The proposed policy would allow trading to maintain water quality in unimpaired waters, trading in impaired waters prior to the development of TMDL requirements and trading to meet TMDL requirements. Although the policy focuses on nutrients and sediment, the policy addresses the potential to trade pollution reduction credits for other pollutants.
Steve Via of the American Waterworks Association said that in a "holistic watershed context" the idea makes sense, but certain aspects could be difficult to implement without seeing a degradation of water quality.
Greg Schaner, director of government affairs with the Association of Metropolitan Sewerage Agencies, said he felt the policy proposal was "balanced, had some positive provisions, and could provide some cost savings to the watersheds that would be affected."
"Our big issue with the policy is that we want to make sure the TMDL process is still able to generate fair and equitable allocations between the different sources as far as how much impact they're having," he said. "In watersheds that are impaired, you should still go through the process to find out what is coming from where, so that you can trade based on that.
"Another thing we care about is that if you are an entity in a watershed that trades a credit, the liability for the amount of pollution you're trading away should be shifted," he said. "In other words, you're not held responsible in your permit for the amount you've traded in terms of monitoring and reporting -- all the other responsibilities that go along with the permit."
Schedule: The hearing is scheduled for 10 a.m., Thursday, June 13, in 2167 Rayburn.
Witnesses: Although a witness list had not been finalized by press time, representatives from the Environmental Protection Agency, Agriculture Department, Connecticut Department of Environmental Protection, Montgomery (Ala.) Water Works and Sanitary Sewer Board, Wildlife Habitat Council and Center for Progressive Regulation are expected to testify.

-- Damon Franz