Fact Sheet: Watershed-Based Trading
As states move ahead in their implementation of Total Maximum Daily Loads (TMDLs) and other water quality improvement measures, there is a heightened need for cost-effective means of improving water quality. Watershed-based trading is a potentially cost-effective and efficient approach to achieving and maintaining water quality goals and providing net water quality benefits through pollutant load reductions.
What is trading?
Trading is a stakeholder-oriented approach whose focus is on water quality within a given watershed. This approach can allow stakeholders to examine and include all sources of pollution in a watershed at once.
There are several approaches to trading, but they all share a number of characteristics. These include:
- Clean Water Act restrictions apply, including consistency with water quality standards and application of anti-backsliding provisions
- Point sources must meet applicable technology based requirements, and trades are developed within a TMDL or other equivalent analytical and management framework
- Trading areas generally coincide with watershed boundaries and are of a manageable size, and careful consideration is given to the types of pollutants considered for trading
- Trading programs have classically been applied in situations where nutrients are the pollutants of concern
Who are the key players?
Trading allows for and often encourages non-traditional partnerships from a number of sectors of the community, including utilities, agriculture and industry, although trading can be limited to a single sector as well. Trading programs are generally established at the state level, but local governments and stakeholders are the key players.
Additional resources on watershed-based trading topic:
Legislative/Regulation, Policy and Guidance
Research & Reports
Web Site Links