by Ching-Wen Cheng (LA), Daniel Gaebel (RPB), Janelle St. Pierre (RPB), and Anna Willow (EE) September 14, 2001

1. A Resting Place for Ducks A Multidisciplinary Master’s Project by Ching-Wen Cheng (LA), Daniel Gaebel (RPB), Janelle St. Pierre (RPB), and Anna Willow (EE) September 14, 2001

2. Outline • The Hennepin floodplain : An introduction • Natural History • Policy and Economics • Site analysis • Proposed restoration plan • Education and interpretation • Conclusions and Recommendations

3. Client and Advisor • Our client, The Wetland Initiative (TWI), is a not-for-profit organization with a mission to enhance water quality of Illinois River. • Our advisor, Dr. Michael Moore, a professor in SNRE, specializes in environmental economics and water policy.

4. Location

5. Hennepin Levee District • 2,544 acre floodplain of Illinois River • Used for agriculture since the early 1900’s • The Wetlands Initiative, having facilitated the acquisition of the property, is restoring the floodplain

6. Regional Context • Natural History • Geomorphology • Hydrology • Human Activity Illinois River Basin • Loss of floodplains • Water pollution • Land Use

7. Beaver (Castor canadensis) Canvasback (Aythya valisineria) Animal and plants species that may use the restored Hennepin Floodplain as habitat. Yellow Monkey Flower (Mimulus glabratus)

8. Research Goals • The ecological sustainability and function of the restored floodplain; • The creation of floodplain-based environmental education interpretive program; and • The political and economic likelihood of using the floodplain to generate nitrogen pollution credits.

9. Policy and Economics • Restoration Policy • Regional and Local Issues • Economics of Restoration • Watershed-based Trading

10. Regional and Local Issues • Upper Mississippi Basin • Land use • Hypoxia • Illinois • Water quality • Urban and rural influences • Hennepin

11. Nitrogen Fertilizer Use in the Mississippi River Basin

12. System Area Affected Km2 Benthic Response Benthic Recovery Fisheries Response Kattegat, Sweden–Denmark 2,000 Mass Mortality Slow Collapse of Norway lobster, reduction of ocean bottom fish. Black Sea North-west Shelf 20,000 Mass Mortality Annual Loss of ocean bottom fisheries; shift to planktonic species. Baltic Sea 100,000 Eliminated None Loss of ocean bottom fisheries; shift to planktonic species. Ecological and economic effects of anthropogenic hypoxic zones in coastal regions.[i] [i] Table adapted from Diaz, R. J. and A. Solow. 1999.

13. Nitrogen Reduction Policy • Best Management Practices • Federal and State Land Retirement Programs • Conservation Reserve Program • Illinois CREP • Federal and State Water Quality Regulations • Total Maximum Daily Loading • National Pollution Discharge Elimination System

14. Economics of Floodplain Restoration • Opportunity cost of foregone agriculture • Nitrogen Reduction • Cost of floodplain restoration

15. Nitrogen Reduction • Removing Agricultural Land from Production • Nitrogen Fertilizers • Legumes • Denitrification • Capacity • Assumptions • Costs • Acquisition • Restoration

16. Present Value and Annualized Costs of Nitrogen Removal • Present value cost of restoration = $19,080,377 • Annualized cost of restoration = $1,282,501.04 • Annualized cost per ton = $2596.16

17. Lead in to nitrogen farming

18. TWI’s Vision: Nitrogen Farming Nitrogen Farming requires 5 components: - Polluted water, • A parcel of land, • Adequate hydric soils, • Energy to achieve and maintain inundation; and • A Credit Market

19. Watershed-Based Trading What is it? Why is it being done? Who is doing it?

20. What is it? - Watershed-based Trading is a market-based system that allows the buying and selling of effluent credits, within defined watershed boundaries, in order to meet water quality standards of individual dischargers and the watershed as a whole. - Credits are generated when a discharger reduces effluent below levels required by regulations, or restoration of natural functions of the watershed reduce effluent levels.

21. Trading systems: - Open - Closed Trading Partners: - Point sources - Nonpoint sources - Intraplant - Reducers Trading Ratios: - Uncertainty - Delivery - Retirement Trading set-up: - EPA Guidelines - Local regulations Elements of Credit Trading

22. Why is it being done? • Cost-effectiveness • Flexibility • Cooperation

23. Who is doing it? The Case Studies: 1) Chesapeake Bay - Nutrient Trading Negotiation Team 2) Long Island Sound - Long Island Sound Study 3) Tar-Pamlico Basin - Tar-Pamlico Nutrient Trading Program

24. Turning to Trading: Common Factors • Recognition of a substantial threat to an important waterway, • Development of coalitions of stakeholders from multiple sides of the issue; and • The political will to create or legislate the administrative capacity to facilitate a trading program.

25. Effects of Hypoxia

26. Application to Illinois Challenges: - TMDLs have yet to be designated - All NPS control measures are voluntary - NPDES permits restrict credit trading Innovations: - Emissions Reduction Market System for the reduction of ground level ozone - Piasa Creek Watershed Project

27. Forces for Change in Illinois • Local Efforts to respond to high levels of nitrogen • Pressure from a coalition of States to address Gulf of Mexico Hypoxia • Sound case studies that demonstrate the benefit of alternative methods of nutrient reduction

28. Conclusion

29. Multiple Uses of Floodplains • Ecological values • Economic sustainability of restoration • Cultural resources • Design components Are these uses compatible?

30. Management Recommendations • Sustainable funding for restoration • Balanced use of floodplain wetlands • Ecology • Economic • Public access and education • Cultural resources • Determine appropriate organization for long-term management