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Water Quality Credit Trading

Water Quality Credit Trading. Florida League of Cities 2013 Annual Meeting. Overview. Clean Water Act 101 Complexities of Regulating N utrients Water Quality Credit Trading New statewide policy A tool in the toolbox for water body restoration Future Policy Modifications?.

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Water Quality Credit Trading

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  1. Water Quality Credit Trading Florida League of Cities 2013 Annual Meeting

  2. Overview • Clean Water Act 101 • Complexities of Regulating Nutrients • Water Quality Credit Trading • New statewide policy • A tool in the toolbox for water body restoration • Future Policy Modifications? David Childs Hopping Green & Sams

  3. Clean Water Act 101 • Water Quality Criteria • Protect “designated uses” of water bodies • Translated into discharge permit limits • TMDL Program (safety net) • Restoration program • Point and non-point sources allocated pollutant loads • Discharge Permits • Wastewater Treatment Plants • Municipal Storm Water Discharges David Childs • Hopping Green & Sams

  4. Nutrient TMDLS • Florida already has over 80 nutrient TMDLs • FDEP Numeric Nutrient Criteria Rule approved by EPA means even more nutrient TMDLs • Significant nutrient reductions for storm water • Bayou Chico: 30% TN & TP reductions • North Escambia Bay: 35% TP reduction • Hillsborough River (channelized segment): 50% TN & 60% TP reductions • Lake Dora: 67% reduction in TP David Childs • Hopping Green & Sams

  5. Complexity of Regulating Nutrients • Citizens have an expectation of healthy natural rivers, streams, lakes, and marine waters… David Childs • Hopping Green & Sams

  6. Complexity of Regulating Nutrients • …but public expectations do not always mesh with scientific, economic, & regulatory realities. • National Academy of Sciences: Reality Check • Report on Chesapeake Bay TMDL • Public concern ≠ public willingness to pay the price • Disconnect between achievement of a standard & appreciable water quality improvement • Substantial public commitment and “some level of sacrifice from all who live and work in the watershed” David Childs • Hopping Green & Sams

  7. What tools are available to help cities restore water bodies and comply with nutrient load reduction requirements (i.e. TMDLs) in a cost effective manner? David Childs • Hopping Green & Sams

  8. Water Quality Credit Trading • TMDL Program (safety net) • Restoration program • Point and non-point sources allocated pollutant loads • Water Quality Credit Trading • Pollutant reductions are environmentally valued in the form of “credits,” which can then be traded on a local “market” to promote cost-effective water quality improvements. • Goal: better water quality protection for less $$. David Childs • Hopping Green & Sams

  9. Water Quality Credit Trading • HB 713 (2013) • Bipartisan Passage • Supporters included the League of Cities, Southeast Milk, Audubon, and other diverse interests • Expanded the St. Johns Pilot Program Statewide • Trading is voluntary & completely market driven • References: • §403.067(9), F.S. • Rule 62-306, F.A.C. (not yet updated) David Childs • Hopping Green & Sams

  10. Water Quality Credit Trading CAFO Storm Water Utility $$$ Nitrogen Load Economic Solution ► Water Quality Standards Achieved ►Local Government Saves Money

  11. Water Quality Credit Trading • The nitty-gritty • Credits must be quantifiable & enforceable • Point source credits must be measured • Nonpoint sources can be estimated • Reasonable assurance • Uncertainty factor • Location factors may increase credits needed • Creditable actions include…installing treatment equipment…operational changes…structural nonpoint source management David Childs Hopping Green & Sams

  12. Water Quality Credit Trading • Practical & Program Limitations • Trading will not work everywhere • Need willing buyer and willing seller • Seller must meet its allocation & can only sell its surplus reductions • Transaction must include a surface water discharge permit holder • No credit for land use changes that don’t result in loadings equal to or less than natural conditions • Ongoing nutrient criteria litigation = chilling effect David Childs • Hopping Green & Sams

  13. Credit Trading 2.0? • Remove barriers to entry into marketplace • Allow trading in absence of discharge permit • Loosen timing requirements • Enable “mitigation banking” style credit generation • Expand concept into water supply arena • Promote land use conversions that restore landscape and promote aquifer recharge David Childs • Hopping Green & Sams

  14. Discussion David W. Childs DavidC@hgslaw.com Hopping Green & Sams 119 S. Monroe Street Suite 300 Tallahassee, FL 32301 (850) 222-7500

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