Trading Away Your Right to Clean Water
Trading and the Financialization of Nature
What Is Water Quality Trading?
n 1977, Congress passed a set of amendments to the 1972 Federal Water Pollution ControlAct. Together, the original act and the amendments came to be known as the Clean WaterAct (CWA). The CWA set a strong and simple standard that polluting is illegal, and that thenational goal is
discharge of pollution into our public waterways.
Failing achievementof zero discharge, the CWA set limits on discharges.
Some of those limits were straightforward. If a pipe letsout on a waterway, the CWA limits what can come fromthat pipe. It also ensures a cleaner future environment byrequiring new permits that continue to ratchet down dis-charges using the “Best Available Technology.”
That sortof direct pollution is referred to as point source pollution,as the pollution comes from a single source, and is regu-lated under the CWA. However, many non-point sourcesof pollution exist under less stringent CWA controls. Forexample, many row crops are largely unregulated underthe CWA.
Although the CWA focuses on individual polluters, occa-sionally the U.S. Environmental Protection Agency (EPA)establishes pollution limits for individual waterways and,in the case of the Chesapeake Bay, an entire watershed.Waterways that can't attain the required level of pollutioncontrol, whether due to point source or non-point sourcepolluters, should be managed under a Total MaximumDaily Load (TMDL), a level of pollution that will allowthe body of water to meet the standards. States are givensignificant leeway in finding ways to meet the TMDL.
A recent trend in meeting TMDLs is “water quality trad-ing.” Under these schemes, point source and non-pointsource polluters essentially enter a cap-and-trade systemfor water pollution.
(For more on cap-and-trade, seeFood & Water Watch's report,
Bad Credit: How PollutionTrading Fails the Environment
.) The EPA suggests that,through trading, watersheds can be cleaned at a lowertotal cost than through regulation.Putting aside the fact that water pollutant trading turnsthe CWA, which made trading illegal,
on its head byallowing people to sell the “right” to pollute, and thattrading abandons the successful point source permittingprogram, trading fails on a number of counts. Pollutionabatement, particularly from non-point sources, is oftenuncertain and unverified, which may result in fraudulentreductions and further environmental harm. Even wherepollution abatement from a credit generator is verified,increases of pollution from the credit purchaser may leadto localized impacts or “hotspots.”
Trading is likely tocreate disproportionate environmental impacts on low-income populations that use waterways most susceptibleto localized impacts.
The many problems with trading mean that, despite greatfanfare and seed money, the first 20 years of point-non-point pollution trading have yielded few, if any, positiveresults.
Indeed, a Rutgers University report detailing four“successful” trading projects admits that two were not tra-ditional trading regimes at all, one was a regulatory offsetprogram for point sources, and the fourth listed as its ac-complishment that, “No actual trades occurred.”
Thisapparent definition of success by the proponents of theidea suggests that trading can't pass even a very low bar.
Vague, Uncertain andDownright False: Offsets and Policy
In order to make the most economically efficient pol-lution changes, regulators allow traders to purchase“offsets,” pollution reductions from other, frequently un-regulated, sectors. In water, this frequently involves agri-cultural runoff.Although concentrated animal feeding operations (CA-FOs), or factory farms, are regulated as point sources,other farms including smaller animal operations and