Defending Water Quality Trading in Court—The Right Thing To Do

As has been previously discussed on this blog, water quality trading presents an exciting and innovative opportunity to achieve clean water improvements in an environmentally responsible and cost-effective way. This is particularly true for the Chesapeake Bay watershed and others that are impaired by excess nutrients such as nitrogen and phosphorus. Nutrient trading programs, especially those between point and nonpoint dischargers, hold tremendous promise for achieving water quality improvements in the Bay—so much so that trading was incorporated as part of the EPA’s final 2010 total maximum daily load (TMDL) for the Chesapeake Bay watershed.

Unfortunately, the trading component of the Bay TMDL has come under legal attack, and NACWA is moving aggressively to defend water quality trading in court. In early October, several environmental activist groups filed a misguided and misinformed lawsuit against EPA challenging the trading program included in the final Bay TMDL as illegal under the Clean Water Act (CWA). The lawsuit in particular calls out trading programs between point and nonpoint sources and—perhaps most concerning—could invalidate not just trading within the Chesapeake Bay but all water quality trading programs nationwide.

On December 4, NACWA and a coalition of other municipal clean water and trading associations filed a Motion to Intervene in the litigation on behalf of EPA to help the Agency defend water quality trading. NACWA’s involvement in the case will not only aggressively represent the perspective of the municipal clean water utility community, but will also provide the court with important information on the value of trading programs. Additionally, NACWA distributed a press release explaining the reasons for seeking intervention and highlighting the ways is which trading can be a win-win for both water quality improvement and municipal clean water ratepayers.

Separate and apart from the legal issues involved in this case—on which the environmental activist plaintiffs are very likely to lose—the lawsuit also completely mischaracterizes the nature of trading programs and the valuable role they can play in water quality improvement. Far from being a “giveaway to big Wall Street banks” as disingenuously claimed by the plaintiffs, trading programs provide a sound, market-based approach to achieving the greatest possible environmental return for every dollar spent. This is particularly true for securing meaningful reductions from nonpoint agricultural dischargers, which are the largest source of nutrient impairment in the Chesapeake Bay and in many other watersheds across the country.  

The simple fact is that the municipal clean water community is more committed that anyone to ensuring that questionable credits do not enter water quality trading markets—just as we are equally committed to ensuring that trading programs are not unfairly attacked in the legal system. The trading program included the Chesapeake Bay TMDL, and similar programs underway or in the planning phases across the country, provide a valuable tool to improve our Nation’s waters at a time of both increased water quality impairment and financial strain on municipal budgets.

A lawsuit challenging trading was likely inevitable, and this one may not be the last. But NACWA is committed to defending these programs in court and ensuring that trading remains an available pathway to address water quality concerns. We all want clean water—so let’s make sure we have the best available tools for the job.  

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