Pollution trading and TMDLs

Some TMDLs are being developed with built-in “pollution trading” strategies. Pollution trading refers to ways that pollutant sources can shift responsibility for addressing pollution. Point sources can trade pollution “credits” with other point sources or with nonpoint sources of pollution. For example, one point source discharger may be able to reduce its load beyond what is required by a TMDL. Under EPA’s trading guidance, that source may be able to “trade” that extra reduction or “credit” to another source for which that same reduction would be more difficult or expensive to achieve. The transaction usually involves purchase of the credits.

Another common example (referred to as a pollution “offset”) is when a point source discharger chooses to pay for better nonpoint source best management practices in the watershed in order to achieve specific pollution reductions rather than to pay for upgrading its facility.

Specifically, a municipal wastewater treatment authority may discharge water that is too warm to support the uses in the receiving water. To address the problem, the authority may invest in riparian vegetation on someone else’s property to create shading that will cool the water.

Pollution trading poses challenges that include difficulties in monitoring progress and holding sources accountable. A trading program may lead to unwanted consequences such as (a) local “hot spots” of poor water quality, (b) a weakening of enforcement provisions; or (c) inequities from allowing trading across watersheds or within large watersheds. Ask for specific details about how the water quality standards will be met.

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