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EVALUATING ECONOMIC INCENTIVE PROGRAMS: A WATERSHED-BASED TMDL PROGRAM IN OREGON
Impact/Purpose:
The objective is to build on prior effluent trading development efforts in Oregon and carry out at least one model trade.
Description:
The Oregon Department of Environmental Quality (DEQ) has been actively working to develop effluent trading opportunities since 1997. With prior EPA funding, Oregon DEQ developed a draft version of a manual titled "Resource Guide to Watershed-Based Trading". This manual outlined a methodology for trading three different Best Management Practices (BMP's), and identified how preliminary communication with potential trading partners using these three BMP's might be initiated. However, Oregon DEQ and stakeholder input concluded that a more structured approach to launching trading was needed. Oregon DEQ, in cooperation with the EPA Region 10 Office and the EPA Office of Policy, Economics, and Innovation, will build on this foundation by completing a model trade in a Basin(s) with established Total Maximum Daily Loads (TMDLs). Specifically, this project explores the potential for effluent trading in Tualatin River Basin where Total Maximum Daily Loads have been established for phosphorus, ammonia, and temperature. This Basin was chosen as the demonstration project because possible trades have been identified for all three parameters. The Tualatin River Basin covers 712 square miles and is situated west of the Portland metropolitan area in northwestern Oregon. The basin is home to over 320,000 people, and consists of approximately 15% urban, 35% farmland, and 50% forested land. The first goal of this project is to identify potential trading partners and potential trades. Trading could include point source and non-point source trades, and potential trades to be examined could include offsets to some stormwater reductions. Once the trading framework is established, the stakeholders will then be educated about the potential cost savings and pollution reduction of effluent trading through workshops conducted by the Oregon DEQ. Based on cost-effectiveness analysis, a model trade (or trades) will be completed through a one-time trading agreement. This model trade (or trades) will serve as a model for trading in other watersheds and help determine the need for statewide trading guidance or rules, as well as help finalize the draft of the "Resource Guide to Watershed-Based Trading".