New Report: Water Quality Trading Schemes Quietly Upending Clean Water Act in More Than 20 U.S. States

oday Food & Water Watch released a report outlining how overly complex programs of water pollution trading (also known as water quality trading, or nutrient trading) are being quietly implemented across the country with the active endorsement and funding of the U.S. Department of Agriculture and the U.S. Environmental Protection Agency.

The report, which looks closely at the implementation of water pollution trading in Pennsylvania and Ohio, is based on over 1,000 documents obtained by Food & Water Watch through the states' Right to Know Law and Freedom of Information Act, respectively. The analysis reveals a broken system of inherently unaccountable and highly questionable practices, through which agricultural operations such as confined animal feeding operations (CAFOs, or factory farms) will only continue to pollute our waterways, while power plants and other pollution sources that purchase credits will get to discharge more.

"Water pollution trading proponents trumpet successes, but scrutiny of these programs tells a different story," said Wenonah Hauter, executive director of Food & Water Watch. "Pollution trading destroys accountability and the rights of citizens to protect their waterways -- cornerstones of the Clean Water Act -- yet some, astonishingly, continue to hold up the practice as the future of pollution control."

Some of the findings of the report, Water Quality Trading: Polluting Public Waterways for Private Gain, include:

• In Pennsylvania, all of the authority, verification and trading of water pollution credits has been placed in the hands of for-profit companies like Red Barn. A significant number of pollution credits in the state is being generated through what can only be described as a shell game, whereby piles of manure move from place to place to pollute local waterways while middlemen brokers skim profits from sales of highly questionable credits.
• Water pollution trading has put an end to accountable Clean Water Act permitting at Brunner Island, the 59th most polluting power plant in the United States. Brunner Island now operates under a fictitious "net zero" nutrient discharge permit, whereby the facility is free to discharge as much nutrient pollution as it can purchase credits for. It was the third largest buyer of nitrogen credits in Pennsylvania in both 2013 and 2014, purchasing 87,000 credits in 2013 and 78,000 in 2014 -- amounting to almost 10 percent of all credits purchased statewide in those years.
• Under its expansion and subsequent participation in the Ohio River Basin trading program, Alpine Cheese Company was permitted to increase its phosphorous discharge levels to 36.4 million gallons per year -- a 600 percent increase in wastewater discharge over what should have been allowed to protect local water quality. Between 1999 and 2014, the company had 1,251 permit violations -- the bulk of them occurring between 2005 and 2011, while the nutrient trading pilot program was being developed and later implemented.

According to the report, with the use of water pollution trading, our transparent, accountable Clean Water Act system of point source regulation is being replaced with one that makes it virtually impossible for anyone to ever properly track point source compliance. The credits that these facilities rely on are not the product of any measured decrease in pollutant loads from credit-generating agricultural sources like factory farms, but from complex models filled with variables and from questionable manure transport programs that simply move pollutants from one impaired waterway to another.

"I've spent many years confronting factory farms and their irresponsible waste disposal practices that are poisoning waterways and communities, including Toledo, Ohio, where 500,000 people lost their drinking water in the summer of 2014 because of unchecked agricultural pollution," said Lynn Henning, regional associate for the Socially Responsible Agriculture Project and recipient of the 2010 Goldman Environmental Prize. "To clean up these facilities, we need mandatory reductions, not another voluntary scheme like pollution trading where factory farms can profit from the sale of unverified pollution credits."

Regional water pollution trading programs are taking off in the watersheds of the Chesapeake Bay and the Ohio River Basin, currently covering nine states: Delaware, Indiana, Kentucky, Maryland, New York, Ohio, Pennsylvania, Virginia and West Virginia. Trading programs are also active in Florida, Georgia, North Carolina, Oregon and Wisconsin, and are under consideration in several other states.

"I work every day with communities across the Bay states, including Pennsylvania, who struggle to get access to clean water," said Maria Payan, regional consultant for the Socially Responsible Agriculture Project. "Now, with pollution trading, one of our most important tools in that struggle -- the Clean Water Act -- is being taken away. We can no longer hold polluters accountable, when they simply buy their way out of permit compliance."

The report includes the following recommendations:

• Congress needs to reaffirm that the Clean Water Act does not allow for point source pollution trading.
• Federal agencies, particularly the U.S. Department of Agriculture, need to stop spending taxpayers' dollars to promote these pay-to-pollute schemes across the country.
• State and federal governments need to replace voluntary pollution control approaches with mandatory measures in the nonpoint source sector.
• Federal agencies must fund agricultural Best Management Practices without compromising current point source controls.
• The environmental community needs to wake up to the dangers of water pollution trading.
• Advocacy groups need to legally challenge water pollution trading programs.

"We cannot leave the fate of our waterways to the vagaries of the market," said Hauter. "Handing over pollution management to the same industry that brought us the mortgage crisis will spell the end of environmental protections that have helped keep our drinking water safe."

The report will is available at https://www.foodandwaterwatch.org/insight/water-quality-trading-polluting-public-waterways-private-gain.