Jacob Dorman is region regulatory manager for Contech Engineered Solutions. Dorman can be reached at jdorman@conteches.com.
Mar 16, 2021

Refining Storm Water Credit Trading to Improve Cost-Effectiveness and Watershed Protection

Compliance with post-construction storm water management regulations can be challenging.

As I am writing this article, 2020 is thankfully in the rearview mirror. No doubt that it was immensely challenging both professionally and personally for many people. For me, there was a constant juggling of working, parenting, educating, and frankly, just getting by some days. However, 2020 also provided an opportunity to redefine and refine what's really important as the lines between work and home life became very blurry. Life has a unique way of demonstrating that to us, and we shouldn't take the extra time with family, the staycation memories, and the new ways of connecting with the world around us for granted. 

Speaking of refinement over the past year, I was extremely fortunate to work with a dedicated group of storm water professionals from within the Stormwater Equipment Manufacturers Association (SWEMA) in 2020 to better articulate SWEMA's position on water quality trading. SWEMA represents the storm water equipment manufacturers and associated members on significant water quality issues across the country and supports storm water management strategies and regulations that incorporate advances in storm water science, encourage innovation, and successfully protect and restore receiving waters. Water quality trading is a water quality compliance tool that allows one source to meet its compliance obligations by purchasing pollutant reduction credits at a lower cost from another source. Understanding that clean, healthy waterways benefit everyone, SWEMA's work on this subject includes recommendations for policymakers to consider if they elect to implement water quality trading as part of their storm water best management practices (BMP) toolbox. 

Compliance with post-construction storm water management regulations can be challenging. Alternative tools and strategies that strike a balance between being cost-effective and still protective of water quality should be considered. At the Federal level, the United States Environmental Protection Agency (EPA) supports water quality trading. There are numerous examples of successfully implemented programs across the country. This does not mean water quality trading is appropriate everywhere. When constructed with the appropriate framework, water quality trading can accomplish program goals. If a robust program architecture is not established, local water quality can suffer. 

There are advantages and challenges to establishing these programs. The main advantages of trading programs include lower overall compliance costs and permit compliance and site design flexibility. Challenges are more plentiful; including, establishing what is to be traded and the effect of other pollutants on local water quality, determining where trading can occur and what practices can generate credits, and establishing effective verification protocols, public notification tools, and program transparency. Neither of these lists are all-inclusive. Ultimately, a successful program is one that delivers lower project costs without sacrificing local water quality.

SWEMA's work product on this subject details critical program elements to ensure successful program implementation better. These include:

  • Simply Defined CurrencyCurrency, in this case, is what is traded. Runoff volume and pollutant load reductions are direct measures of BMP impacts and easily measured, making them an easy choice to use.
  • Effect of other pollutants on water qualityUrban storm water runoff contains a wide range of pollutants, from nutrients and heavy metals to trash, bacteria, oil, and other toxic hydrocarbons. Regardless of the chosen program currency, consideration should be given to other constituents' effect on the post-construction environment. Requiring a base level of onsite treatment, i.e., trading nutrients, but requiring treatment for solids or other pollutants onsite, would help mitigate concerns about cumulative impacts. 
  • Determining Trading Boundaries: Managing storm water runoff is most appropriately done close to the source of impacts. A defined trading area that aligns with watershed boundaries or Total Maximum Daily Load (TMDL) boundary should result in trades that affect the same waterbody.
  • Protecting Local Water QualityThese programs are inherently about providing treatment in one location in lieu of another. By doing so, safeguards need to be established to ensure the portions of watersheds left unprotected from the harmful effects of storm water runoff are not degraded or degraded further. 
  • Mitigating Hydromodification: Implementing BMPs at the contributing source is a keystone benefit of onsite storm water management. Allowing water quality trading as an alternative should only be allowed when onsite BMP implementation is infeasible.
  • Strong Design and Construction Verification Processes: Regardless of the currency, the amount of available credit generated is dependent on the original assumptions regarding the size and effectiveness of the installed practice. To address those concerns, the local program should create steps to audit the final designs to ensure the installed conditions match what was designed.
  • Robust Operation and Maintenance Verification ProcessesCredit-generating BMPs need to operate correctly to provide a water quality benefit. Care should be taken to establish a program with policies in place to ensure the credit-generating facility is maintained in good operating condition for the life of the credit.
  • Application of a Safety FactorThe future is unknown. A way to mitigate concerns associated with future conditions is to account for the difference through the application of a safety factor or trading ratio.

A water quality trading program should not be used as the primary storm water management compliance option. These programs are best used to supplement baseline treatment near the pollutant source. Robust programs will lead to successful implementation and improve water quality.

For more information on SWEMA's work product on water quality trading, please visit SWEMA's website at: https://www.stormwaterassociation.com/policy-position-statements