EPA/600/R-06/155 I July 2007 I www.epa.gov/ada United States Environmental Protection Agency Wetlands and Water Quality Trading: Review of Current Science and Economic Practices with Selected Case Studies .-: Ground Water and Ecosystems Restoration Division, Ada, Oklahoma 74820 National Risk Management Research Laboratory Office of Research and Development ------- ------- EPA/600/R-06/155 July 2007 Wetlands and Water Quality Trading: Review of Current Science and Economic Practices With Selected Case Studies Shane Cherry, Erika M. Britney, Lori S. Siegel, Michael J. Muscari, & Ronda L. Strauch Prepared by Shaw Environmental Inc. EPA Contract No. 68-C-03-097 Shaw Environmental Inc. Cincinnati, Ohio 45212-2025 Timothy J. Canfield, Technical Monitor U.S. Environmental Protection Agency Office of Research and Development National Risk Management Laboratory Ada, Oklahoma 74820 Mary Sue McNeil, Project Officer Ground Water and Ecosystems Restoration Division National Risk Management Research Laboratory Ada, Oklahoma 74820 National Risk Management Research Laboratory Office of Research and Development U.S. Environmental Protection Agency Cincinnati, Ohio 45268 ------- Notice The U.S. Environmental Protection Agency through its Office of Research and Development funded and managed the research described here under contract No. 68-C-03-097 to Shaw Environmental Inc. It has been subjected to the Agency's peer and administrative review and has been approved for publication as an EPA document. Mention of trade names or commercial products does not constitute endorsement or recommendation for use. All research projects making conclusions or recommendations based on en- vironmental data and funded by the U.S. Environmental Protection Agency are required to participate in the Agency Quality Assurance Program. This project did not involve the collection or use of environmental data and, as such, did not require a Quality Assurance Project Plan. ------- Foreword The U.S. Environmental Protection Agency is charged by Congress with protecting the Nation's land, air, and water resources. Under a mandate of national environmental laws, the Agency strives to formulate and implement actions leading to a compatible balance between human activities and the ability of natural systems to support and nurture life. To meet this mandate, ERA'S research program is providing data and technical support for solving environmental problems today and building a science knowledge base necessary to manage our ecological resources wisely, understand how pollutants affect our health, and prevent or reduce environmental risks in the future. The National Risk Management Research Laboratory is the Agency's center for investigation of technologi- cal and management approaches for preventing and reducing risks from pollution that threatens human health and the environment. The focus of the Laboratory's research program is on methods and their cost-effectiveness for prevention and control of pollution to air, land, water, and subsurface resources; protection of water quality in public water systems; remediation of contaminated sites, sediments and ground water; prevention and control of indoor air pollution; and restoration of ecosystems. NRMRL collaborates with both public and private sector partners to foster technologies that reduce the cost of compliance and to anticipate emerging problems. NRMRLs research provides solutions to environmental problems by: developing and promoting technologies that protect and improve the environment; advanc- ing scientific and engineering information to support regulatory and policy decisions; and providing the technical support and information transfer to ensure implementation of environmental regulations and strategies at the national, state, and community levels. This publication has been produced as part of the Laboratory's strategic long-term research plan. It is published and made available by EPA's Office of Research and Development to assist the user community and to link researchers with their clients. The goal of this report is to provide a review of the existing science and economic practices of using wetlands as part of water quality trading programs. This report evaluates the technical, economic, and administrative components of developing and implementing water quality trading (WQT) programs to nu- trient removal is the primary focus to improve water quality. This report collates and synthesizes current literature with the goal of providing a baseline understanding of the current state of the use of wetlands in water quality trading programs. Although this document is intended to gather a significant amount of the current scientific literature available at the time of publication, it should be noted that it does not include all possible literature available on the subject due to the constantly evolving work in this area. This document should be used as a component of all the science on this subject and not considered as the sole document in this area. •Stephen G. Schmelling, Director Ground Water and Ecosystems/ftes/oration Division National Risk Management Re^s§arch Laboratory ------- ------- Contents Foreword iii List of Figures ix List of Tables x Acronyms and Abbreviations xi EPA Technical Oversight Committee xiii Executive Summary xv 1.0 Introduction 1 1.1 What is Water Quality Trading? 1 1.2 Report Overview 1 2.0 Methods for Identifying Technical and Economic Analysis Needs 3 2.1 Literature Search Methodology 3 2.2 Literature Review Questions 4 2.2.1 Level 1 - Preliminary Screening Questions for Selection of Case Studies 4 2.2.2 Level 2 - Case Study Analysis Questions 5 2.2.3 Level 3 - General "State of the Art" Questions 5 2.3 Case Study Selection 5 3.0 Literature Review - Wetland Nutrient Removal 13 3.1 Wetland Removal of Nitrogen and Phosphorus - Technical Overview 13 3.2 Factors that Affect Nutrient Load Reduction Efficiencies 17 3.3 Natural versus Constructed Wetlands 18 3.3.1 Related Outcomes of Constructed Wetlands 19 3.4 Modeling Nitrogen and Phosphorus Removal by Wetlands 22 3.5 Defining Nutrient Load Reduction Credits 25 3.5.1 Measuring Nutrient Removal Performance 26 3.5.2 Modeling and Calculating Nutrient Removal 27 3.5.3 Assessing and Verifying Performance 28 3.5.4 Determining the Useful Life of Credits 28 4.0 Economic Literature Review 29 4.1 What Factors Determine the Cost of Creating a Market? 30 4.1.1 Concept Review and Approval Cost 31 4.1.2 Baseline Assessment Cost 31 4.1.3 Regional Water Quality Objective Costs 31 4.1.4 Allowance Allocation Cost 31 4.1.5 Market Development Cost 32 4.1.5.1 Creating the Exchange 32 4.1.5.2 Creating Demand 32 4.1.5.3 Creating Supply 33 4.1.5.4 Creating Pricing Structure 34 4.1.6 Acceptable BMP Cost 35 4.1.7 Stakeholder Communication Cost 35 4.2 What Factors Determine the Cost of Creating a Credit? 35 4.2.1 Project Initiation Cost 35 4.2.2 BMP Selection Cost 35 4.2.3 Approval and Permitting Cost 36 4.2.4 BMP Implementation Cost 36 4.2.5 BMP Monitoring Costs 37 4.3 What Factors Determine the Dollar Value of a Credit? 37 ------- 4.3.1 Equivalence 37 4.3.2 Establishing Offset Fees 38 4.3.2.1 BMP Cost 38 4.3.2.2 BMP Effectiveness 38 4.3.2.3 Safety Factors 38 4.3.2.4 Administrative Factors 38 4.3.2.5 Trading Ratio 38 4.3.2.6 Offset Fee 39 4.3.3 Transaction Costs 39 4.3.3.1 Agency Transaction Costs 39 4.3.3.2 Trader Transaction Costs 39 4.3.4 The Asking Price 40 4.3.4.1 Minimum Selling Price 40 4.3.4.2 Seller Opportunity and Risk 40 4.3.5 The Bid Price 40 4.3.5.1 The Cost of Command-Control 41 4.3.5.2 The Cost of Alternative Strategies 41 4.3.5.3 Maximum Purchase Price 41 4.3.5.4 Value Created by Trading 42 4.3.5.5 Avoidance Strategy: Game the System 42 4.3.5.6 Buyer Risk Premium 42 4.3.6 Minimum Selling Price 42 4.3.6.1 BMP Cost 42 4.3.6.2 Seller Risk Premium 43 4.3.6.3 Profit 43 4.4 Challenges and Gaps 43 4.4.1 The Perspective Problem 43 4.4.2 Challenges to WQT 43 4.4.2.1 Simplified Modeling of Natural System Impacts 44 4.4.2.2 Expensive Risk Factors 44 4.4.2.3 High Transaction Costs 45 4.4.2.4 Undefined Property Rights 45 4.5 Potential Solutions 45 4.5.1 Regulatory Efficiency 45 4.5.2 PS Liability 46 4.5.3 Market Economic Valuation 46 4.5.4 Non-market Economic Valuation 47 4.5.5 Economic Investment Decision Methods 47 4.5.6 Probabilistic Analysis 48 4.5.7 System Dynamic Analysis 48 4.6 Conclusions and Recommendations 48 5.0 Trading Regulations Literature Review 50 5.1 USEPA Water Quality Trading Policy 51 5.2 Agricultural Policy Drivers for Using Wetlands in WQT 53 5.3 Regulations Related to Wetlands and Trading Programs 53 6.0 Case Study- Cherry Creek, Colorado 54 6.1 Overview 54 6.2 Background 55 6.3 Program Performance 55 6.4 Technical Performance 56 6.5 Economic Performance 58 6.6 Administrative Performance 59 6.7 Summary 59 7.0 Case Study - Minnesota River and Rahr Malting Company, Minnesota - Rahr Malting Company Water Quality Trading: A Multifaceted Success 60 7.1 Overview 60 7.2 Background 61 7.3 Program Performance 61 7.4 Technical Performance 62 7.5 Economic Performance 65 7.6 Administrative Performance 66 VI ------- 7.7 Summary 66 8.0 Case Study- Lower Boise River, Idaho 67 8.1 Overview 67 8.1.1 Location 67 8.1.3 Administration 68 8.2 Background 68 8.2.1 Phosphorus Movement 68 8.2.2 Trading 69 8.2.3 Regulations 69 8.2.4 Trading Framework 69 8.3 Program Performance 70 8.3.1 Trading Process 70 8.3.2 BMPs 71 8.3.3 Discount Factors 72 8.3.4 Calculating Credits 72 8.3.5 Example Trade 73 8.4 Summary 74 9.0 Case Study -Tar-Pamlico River and Neuse River, North Carolina 77 9.1 Tar-Pamlico Nutrient Reduction Trading Program 77 9.1.1 Background 78 9.1.2 Program Performance 79 9.1.3 Technical Performance 80 9.1.3.1 Methods for Defining Caps and Measuring Baseline Nutrient Loading 81 9.1.3.2 Methods for Quantifying Nutrient Load Reductions 81 9.1.4 Economic Performance 82 9.1.4.1 Calculating Offset Credit Value 82 9.1.4.2 Program Costs 83 9.1.5 Administrative Performance 83 9.1.5.1 Point Source Accountability 83 9.1.5.2 Nonpoint Source Accountability 84 9.2 Neuse River Basin Nutrient Sensitive Waters Management Strategy 84 9.2.1 Background 85 9.2.2 Program Performance 86 9.2.3 Technical Performance 86 9.2.3.1 Nutrient Removal by Constructed Wetlands 88 9.2.4 Economic Performance 89 9.2.4.1 Constructed Wetland Construction Costs 89 9.2.4.2 Program Costs 90 9.2.5 Administrative Performance 91 9.3 Summary 91 9.3.1 Unanswered Questions 92 10.0 Synthesis/Summary of Findings 93 10.1 Performance Monitoring versus Conservatism 93 10.2 Motivations for Nonpoint Source Participation 93 10.3 Effects of Compliance Thresholds and Enforcement 94 10.4 Comparison of Program Structure 94 10.5 Credit Life 94 10.6 Economic Challenges to Trading 94 10.7 Property Rights and Transfer of Liability 96 11.0 Research Recommendations 97 11.1 Technical Research Needs 97 11.1.1 Individual Wetland Performance 97 11.1.2 Watershed-Scale System Dynamics 98 11.2 Economic Research Needs 98 11.3 Regulatory and Administrative Research Needs 99 12.0 References 100 Appendix A Annotated Bibliography 110 VII ------- ------- Figures Figure 6-1 The Cherry Creek Basin (CCBWQA, 2005) 54 Figure 6-2 Cherry Creek Basin with selected PRFs identified (CCBWQA, 2005) 58 Figure 7-1 The Minnesota River Basin 60 Figure 7-2 The Minnesota River Basin with sites of NPS sellers identified 64 Figure 8-1. Lower Boise, Idaho river watershed site map 67 Figure 9-1 Watersheds in North Carolina 77 Figure 9-2 Tar-Pamlico River Basin 79 Figure 9-3 Estimated TN concentration decrease using Seasonal Kendall test 80 Figure 9-4 Estimated TP concentration decrease using Seasonal Kendall test 80 Figure 9-5 Neuse River Basin 85 Figure 9-6 Neuse River NRCA performance, 1995 - 2004 87 Figure 9-7 Sources of Nitrogen in the Neuse River Basin (1995) 87 IX ------- Tables Table 2-1. Internet Search Engines and Search Criteria 3 Table 2-2. Waterborne Stressor (Nutrient) Trading Programs 6 Table 4-1 Nitrogen Removal Cost-Effectiveness Comparison 36 Table 7-1 Pounds of Phosphorus and CBODs Reduced over Five Years 65 Table 7-2 Traded Units From Each Controlled Nonpoint Source 65 Table 8-1 Currently Eligible BMPs for Trading in LBR WQT Project 71 Table 8-2 Example Design of Sediment Basin and Wetland System 73 Table 8-3 Summary of Sediment Basin and Wetland System Simulation 74 Table 9-1 New Nutrient Removal Efficiencies for Stormwater BMPs Used Under the Neuse and Tar-Pamlico Stormwater Rules 82 Table 9-2 Nitrogen Removal Cost-Effectiveness Comparison 83 Table 9-3 Summary of Construction Cost Curves, Annual Maintenance Cost Curves, and Surface Area for Five Stormwater BMPs in North Carolina 90 Table 9-4 Cost Comparison of Four BMPs for 10-Acre Watershed (CN 80a) 90 Appendix A: Annotated Bibliography 111 ------- Acronyms and Abbreviations |jg/L micrograms per liter ACVWVA Arapahoe County Water and Wastewater Authority ADAPT Agricultural Drainage and Pesticide Transport (model) Association Tar-Pamlico Basin Association ASWCD Ada Soil and Water Conservation District CCBWQA Cherry Creek Basin Water Quality Authority BMP best management practice CBOD carbonaceous biological oxygen demand CENR Committee on Environment and Natural Resources cfs cubic feet per second CH4 methane CN curve number CO2 carbon dioxide CSCD Canyon Soil and Water Conservation District CWA Clean Water Act CZARA Coastal Zone Management Act Reauthorization Amendments DCFROI discounted cash ow return on investment DSWC Division of Soil and Water Conservation (North Carolina) EEP Ecosystem Enhancement Program ETN Environmental Trading Network CIS geographic information system GWERD Groundwater and Ecosystem Restoration Division ICWC Idaho Clean Water Cooperative IDAPA Idaho Administrative Procedures Act IDEQ Idaho Department of Environmental Quality ISCC Idaho Soil Conservation Commission LAC local and basin committees Ib/yr pound(s) per year LBR Lower Boise River LNBA Lower Neuse Basin Association mg/L milligram(s) per liter mgd million gallons per day MOD Memorandum of Understanding MPCA Minnesota Pollution Control Agency MPP maximum purchase price MSP minimum selling price N2 nitrogen gas N2O nitrous oxide NADB North American Wetlands for Water Quality Data Base xi ------- NANI net anthropogenic nitrogen inputs NBOD nitrogenous biochemical oxygen demand NCAC North Carolina Administrative Code NCDWQ North Carolina Division of Water Quality NCEDF North Carolina Environmental Defense Fund NCEMC North Carolina Environmental Management Commission NH4 ammonium NH4-N ammonium nitrogen NLEW Nitrogen Loss Evaluation Worksheet NO3 nitrate NO3-N nitrate-nitrogen NOAA National Oceanic and Atmospheric Administration NPDES National Pollutant Discharge Elimination System NPS nonpoint source NRCA Neuse River Compliance Association NRCS Natural Resources Conservation Service NRET Neuse River Education Team NRMRL National Risk Management Research Laboratory NSW nutrient sensitive waters O&M operation and maintenance PLAT Phosphorus Loss Assessment Tool PRF Pollution Reduction Facility PS point source PTRF Pamlico-Tar River Foundation Rahr Rahr Malting Company RBC River Basin Center SD standard deviation SDA System Dynamics Analysis Shaw Shaw Environmental, Inc. SISL Surface Irrigation Soil Loss SR-HC Snake River-Hells Canyon SWAT Soil Water Assessment Tool TD technical directive TKN total Kjehldahl nitrogen TMAL total maximum annual load TMDL total maximum daily load TN total nitrogen TP total phosphorus TSS total suspended solids TWDB Treatment Wetland Database USAGE U.S. Army Corps of Engineers USDA U.S. Department of Agriculture USEPA U.S. Environmental Protection Agency WQT water quality trading WTF wastewater treatment facility WWTP wastewater treatment plant XII ------- EPA Technical Oversight Committee Timothy J. Canfield Ecologist U.S. EPA, ORD, NRMRL 919 Kerr Research Drive Ada Ok 74820 Matt Heberling Economist U.S. EPA, ORD, NRMRL 26 W. M. L King Drive, MS A-130 Cincinnati, OH 45268 Kathy Hurld Environmental Protection Specialist U.S. EPA, OWOW, Wetlands Division 1200 Pennsylvania Avenue, NW MCT 4502T Washington, DC 20460 Michael Mikota NNEMS Fellow U.S. EPA - OWOW 1200 Pennsylvania Avenue, NW MCT 4502T Washington, DC 20460 Joseph P. Schubauer-Berigan Research Ecologist U.S. EPA, ORD, NRMRL 26WM. L.King Drive, Cincinnati, OH 45268 Laurel Staley Chief Environmental Stressors Management Branch U.S. EPA, ORD, NRMRL 26WM. L.King Drive, Cincinnati, OH 45268 Richard Sumner Regional Liason U.S. EPA National Wetlands Program 200 SW 35th Street Corvallis, OR 97333 Hale Thurston Economist U.S. EPA, ORD NRMRL 26WM. L.King Drive, MS 499 Cincinnati, OH 45268 Cover Photo: Clover Island - Restored wetland on a marginal agricultural field. Blacksten Wildlife Area., Kent Co. Delaware -T. Barthelmeh XIII ------- Shaw Author Affiliation Shane Cherry Shaw Environmental and Infrastructure, Inc. 19909 120th Avenue NE, Suite 101 Bothell, WA 98011-8233 Phone:425-218-9748 Shane.cherry@shawgrp.com Erika M. Britney Shaw Environmental and Infrastructure, Inc. 19909 120th Avenue NE, Suite 101 Bothell, WA 98011-8233 Phone: 425-402-3207 Erika.Britney@shawgrp.com Lori S. Siegel Siegel Environmental Dynamics, LLC 5 Carriage Lane Hanover, NH 03755 Phone:603-643-1218 lsiegel.sed@comcast.net Michael J. Muscari ESA Adolfson 5309 Shilshole Ave. NW, Ste. 200 Seattle, WA 98107 Phone: 206-789-9658 Fax: 206-789-9684 mmuscari@adolfson.com Ronda L. Strauch King County Road Services Division King Street Center, M.S. KSC-TR-0231 201 South Jackson Street Seattle, WA 98104-3856 Phone:206-205-1561 Ronda.Strauch@METROKC.GOV XIV ------- Executive Summary The Groundwater and Ecosystems Restoration Division of the National Risk Management Research Laboratory serves as the U.S. Environmental Protection Agency's (USEPA) center for risk management research on ecosystem protection and restoration. It provides detailed technical guidance through Technical Directives (TD) for the technical review of papers, technical consultation, short-term project support, and field support. The current assignment for Shaw Environmental, Inc. (Shaw) addressed by this technical report is initiated by TD No. 2OA618SF and titled "Water Borne Stressor (Nutrient) Trading Program to Improve Water Quality: Science and Economic Review." The study evaluates the technical, economic, and administrative aspects of establishing water quality trading (WQT) programs where the nutrient removal capacity of wetlands is used to improve water quality. WQT is a potentially viable approach for wastewater dischargers to cost-effectively comply with regula- tions and to improve water quality. The premise of WQT is that dischargers who cannot cost-efficiently reduce their ef uent loads (i.e., high cost) may buy water quality from more cost-efficient (i.e., lower cost) dischargers. Such trades may include point source (PS) dischargers, nonpoint source (NPS) discharg- ers, or both. This study focuses on WQT programs that allow PS-NPS trades where wetlands are used to achieve the NPS discharge reductions. The report integrates the review of published peer-reviewed literature and data sources addressing the nutrient removal function of wetlands, WQT, and the review of four case studies of existing WQT programs. Findings are used to illustrate opportunities and challenges associated with using wetlands in NPS nutrient trades. Along with any resulting research, this study should provide a technical basis for USEPA to prioritize research and publish related information resources. The literature review addresses three concepts: (1) wetland nutrient removal, (2) trading economics, and (3) trading regulations. The case studies investigate these concepts in practice. Criteria to select the case studies included the type of program (PS-NPS); the constituent traded (nitrogen and phosphorus); implementation status; whether or not wetland construction/enhancement could be used to generate credits; and the extent to which published information was available on the program. Four case studies are evaluated: (1) Cherry Creek, Colorado; (2) Minnesota River and Rahr Malting Company (Rahr), Min- nesota; (3) Lower Boise River (LBR), Idaho; and (4) Tar-Pamlico and Neuse Rivers, North Carolina. The first category of literature review evaluates wetland nutrient removal of nitrogen and phosphorus. Constructed and natural wetlands are compared and contrasted. Both buffer downstream nutrients by storing and transforming nutrients, thereby effectively treating discharge from PSs and NPSs.The fate and transport of nutrients in wetlands is a function of dynamic biological, physical, and geochemical processes. The resulting complexities render each wetlands application unique. As such, each application warrants an evaluation of nutrient availability and the wetlands removal efficiency. Besides nutrient removal, wetlands also provide several human and ecological benefits such as ood control, habitat for endangered and economically important species, erosion control, and recreation. Caution must be exercised, though, to avoid unintended consequences of constructed wetlands. Potential negative consequences include the loss of other productive land uses, the impairment of adjacent water bodies, danger to wildlife attracted to the wetland, in ux of invasive plants, odor issues, and in ux of dangerous or nuisance animals. In order for wetlands to be used for WQT, it is necessary to be able to quantify the nutrient load reduction to calculate tradable credits. Performance measurements or models/calculations of nutrient removal data can be used to quantify these credits. The lifespan of the credits, which is a function of how long the best management practice (BMP) is effective at removing nutrients, with a margin of safety, is also critical to determining the value of the wetlands for a given trade. Economics are examined as the second category of the literature review. WQT involves buyers, sell- ers, and, to varying degrees, regulators. Each of these stakeholders has their own interests, concerns, XV ------- challenges, and gaps. Special interests with diverse specific concerns and the general public also affect economic decisions. There are several economic trading challenges that make the risk and/or return of investing in WQT strategy unattractive to the stakeholder, thereby hindering efficient and fair deal-making and ultimately suppressing WQT. These challenges include simplified modeling of natural system impacts, expensive risk factors, high transaction costs, and undefined property rights. Several changes to WQT program design could help overcome these obstacles by facilitating stakeholder decision-making based on an improved understanding of value and risk. While some of the changes may not necessarily increase the number of active trades, they all serve to improve the market so that trades re ect intended goals. Measures to increase the efficiency of the trading programs would ultimately reduce the cost to develop and operate WQT exchanges. They also reduce the transaction costs of individual trades. Increasing PS compliance liability will provide a significant driver for trading. Improvements to market and non-market economic valuations of ecological services must be achieved and would help to increase the real or perceived value and opportunities NPSs can realize as a result of participating in WQT. WQT would also benefit from making tools for applying economic investment decision methods available to potential participants. Probabilistic analyses for evaluating the risk and opportunity associated with WQT should replace single-point estimate inputs, which are subject to error and bias. Probabilistic analysis would provide decision-makers with more confidence in committing capital to WQT. Finally, System Dynamics Analysis (SDA), which is a modeling process that evaluates the consequences and sequencing of complex events and phenomena inherent in many systems, would optimize the performance of the WQT market. Many of these changes simply require modifications to existing policies and have proven effective for other applications, such as business strategy development and resource management. Finally, trading regulations are examined in the literature review. The report describes the USEPA Water Quality Trading Policy, specifically examining regulations related to wetlands. In 2003, the USEPA released its Water Quality Trading Policy to offer guidance and assistance in developing and implementing trad- ing programs. Trading is particularly encouraged by the policy for phosphorus and nitrogen loads. The geographic area for trading programs is described by the policy as the watershed or area covered by an approved total maximum daily load (TMDL). Surplus credits are defined by the policy as constituent reductions greater than those already required by a regulation. Clear authority to trade along with unam- biguous legal protection for using the purchased credits to meet established regulatory requirements is crucial for a successful WQT program. Success also mandates compliance and enforcement provisions. Programs vary based on the location and circumstances of the trading and are thus administered by the states. While strict limits on discharges drives demand for WQT, the 2007 Farm Bill will likely drive sup- ply by compelling more NPS participation in trading. If supported by Congress, BMPs subsidized by tax dollars will become eligible to generate sellable credits. Four case studies are evaluated according to technical, economic, and regulatory concepts. The first of these is the Cherry Creek, Colorado, case study, which is an example of a clearinghouse type of mar- ket. In 1989, the Cherry Creek Reservoir Control Regulation, listed as Regulation #72, set the stage for WQT between PS and NPS discharges of phosphorus and mandated the Cherry Creek Basin Water Quality Authority (CCBWQA) to administer the basin. The CCBWQA has been dedicated to creating and maintaining its own phosphorus reduction facilities. Furthermore, it has been committed to fostering and evaluating other BMP sources in the watershed. Three trades have occurred, one of which involved an NPS. Although these trades allowed PSs to offset some of their discharges more cost effectively, the water quality goal has yet to be achieved because the TMDL was established to accommodate growth. Nonetheless, with its exible trading approaches and unambiguous guidelines and oversight by the CCBWQA, future success is possible. The second case study, Rahr, in Minnesota, is an example of a sole-source offset accomplished without an established market there. In 1997, the Minnesota Pollution Control Agency (MPCA) issued to Rahr a discharge permit requiring WQT in order to satisfy the conditions of no additional oxygen-demanding discharge into the Minnesota River Basin. The permit specified acceptable BMP options, which included the three selected: critical area set-asides and wetland restoration, erosion control, and livestock exclu- sion. The NPS controls achieved the offsets within four years and must be maintained as long as Rahr discharges ef uent. The trades were necessary for Rahr's growth. The NPS controls implemented also resulted in other environmental and economic benefits beyond improvements to water quality. Despite the successes, limitations to the program's success exist. Instead of validating the performance of NPS controls through monitoring, reductions were evaluated by conservative assumptions, thereby requiring xvi ------- larger water quality improvements from the BMP projects to compensate for uncertainty, and this added expense. Furthermore, NPSs are not regulated and therefore do not have the same marketable incentive to engage in trading. Rahr will have to overcome this in the event it needs to purchase additional credits. Overall, the benefits far outweighed the limitations, rendering this trading program a success. The third case study is the trading program in the LBR in Idaho. The Ef uentTrading Demonstration Project is a start-up program for phosphorus trading in the LBR watershed in Idaho. Although the framework of this exchange market has been established, the phosphorus TMDL has yet to be set, thereby delaying the need for trades. Nonetheless, the WQT simulation of a scenario for generating credits used sediment basins and constructed wetlands to reduce discharge. Unfortunately, high costs and use of resources to develop the trading framework hinder the program. Water rights issues discouraged buyers and sellers from participating. Potential regulation also deterred NPSs participation. Despite these issues, the participants in the demonstration project felt that the LBR framework was successful. The project highlighted issues of efficiency and uncertainties in credit calculations and BMP lifespan, and long-term fate of phosphorus removed using BMPs such as constructed wetlands. The fourth case study comes from the Tar-Pamlico and Neuse Rivers in North Carolina. Both of these programs are based on a group cap-and-trade system and both rely on associations of PS dischargers. A nutrient offset fee must be paid for each pound of nutrient discharged beyond that collectively allowed for the association. This fee is paid to a state-administered fund for implementing BMPs to reduce the nutrient load from NPSs. Both programs successfully implemented strategies to reduce nutrient loads. The nutrient-sensitive water strategies for both basins relied heavily on public and stakeholder input. While many lessons were learned, there remain many unanswered questions regarding issues such as seasonality, nutrient removal efficiencies over time, and lifespan of the BMPs. The literature review and case studies support a synthesis of the information regarding WQT involving NPS reductions that utilize wetlands. This synthesis summarizes the key observations of the state of WQT using wetlands based on examples provided by the case studies as well as warranted research and modifications to encourage its viability. As a cautionary note, of the more than 80 WQT programs, pilots, and simulations identified in the process of selecting the four case studies, these programs are among the longest-standing. All were developed before the USEPA issued the Water Quality Trading Policy in 2003. It is therefore recommended that some of the most recent WQT programs, for which there is cur- rently very little published data, be evaluated to determine how and to what extent these programs are addressing the research needs and data gaps identified in this document. This said, the observations made in this document include a comparison of performance monitoring versus conservative presump- tion; motivations for NPS participation; effects of compliance thresholds; comparison of program structure; credit life; economic challenges to trading; and property rights and transfer of liability. Uncertainty drives the question of performance monitoring versus conservatism, whereby high trading ratios are used to offset uncertainty. Such uncertainty derives from the dynamic, complex factors affect- ing wetland nutrient removal efficiency and from spatial differences between the wetlands and the PS location. Applying conservative safety factors often mitigates such uncertainty. The case studies illustrate that typically program participants presume it is more cost-effective to apply such conservatism than to directly measure the effectiveness of the constructed wetland. WQT with NPS contributors depends on their desire to participate. The case studies demonstrate that NPS nutrient loads often exceed PS loads to a watershed. WQT programs may be used to create an economic incentive for NPSs to control their contributions by compensating them for load reductions. This is feasible in certain circumstances based on the significant difference in costs. Unfortunately, NPS contributors have a subtle disincentive to participate in trading programs in that they may lose their non- regulated status or face stricter enforcement. Stronger incentives for NPS participation call for a better understanding of nutrient loading on a watershed scale. Compliance thresholds directly affect trading attractiveness. Discharge limits must be strict enough to oblige trading, while enforcement of these limits must be credible to avoid dischargers from gaming the system instead of participating in trading. Program structures vary considerably and include sole-source offsets, clearinghouses, and compliance associations. The various models may all be valid when executed appropriately. Questions regarding lifespan of BMPs concern the protocol beyond the expiration of credits, the temporal differences between the times of credits generation and application, and the procedure to deal with surplus credits. Economic trading challenges could suppress WQT by making the net economic value of trading less attractive than xvii ------- alternate compliance management strategies due to risks and uncertainties. These challenges could hinder efficient and fair deal-making because they make the risk and/or return of investing in WQT high to the buyer, the seller, or both. Lastly, the way property rights and liability transfer are addressed depends on the program. Each of the case studies manages differently the question of liability in the event of BMP failure. Lingering liability for the seller leaves unknown risk associated with trading plus additional costs, and logistics associated with monitoring BMPs implemented on the credit seller's property make WQT less attractive to PSs. Additionally, the property rights to a wetland after the credits have expired must be clear. Such doubts deter the use of constructed wetlands as a BMP in WQT programs. Long-term regulatory implications of building constructed wetlands to generate credits for WQT programs need to be clarified. Finally, additional research recommendations within technical, economic, and regulatory categories are presented in the final section of this document. Technical research needs concern reducing uncertainty in trades involving wetlands. Several possible research topics emerge to address uncertainty in wetland performance. SDA can evaluate the complex events and phenomena inherent in many systems, thereby reducing uncertainty and quantifying risk. To address economic challenges, research must aim to deter- mine value and risk associated with strategies that use wetlands to reduce nutrient loads. Administrative research targets regulations that promote opportunities, minimize transaction costs, formally supervise WQT implementation and compliance, assess methods to promote NPS participation, and minimize gaming risks. WQT using wetlands is a potentially viable alternative for achieving water quality standards. This report reviews the current technical, economic, and regulatory status of this option. Based on the observed strengths and identified challenges, Shaw recommends actions to promote such programs to their full- est potential. XVIII ------- 1.0 Introduction The Groundwaterand Ecosystems Restoration Division (GWERD) of the National Risk Management Research Labora- tory (NRMRL) serves as the U.S. Environmental Protection Agency's (USEPA) center for risk management research on ecosystem protection and restoration, focusing its efforts on studies to assess and enhance the ability of terrestrial and aquatic ecosystems to support and maintain water quality, support native species of plants and animals, and to provide ecological services on a watershed scale. Shaw Environmental, Inc. (Shaw) receives detailed technical guidance and direction from NRMRL/GWERD in the form of Technical Directives (TD) for the areas of technical review of papers, technical consultation, short-term project support, and field support. The current assignment addressed by this technical report is initiated by TD No. 2OA618SF and titled "Water Borne Stressor (Nutrient) Trading Program to Improve Water Quality: Science and Economic Review." The relative importance of point sources (PS) and nonpoint sources (NPS) of nutrients varies from watershed to wa- tershed. However, according to an agriculture handbook published by the U.S. Department of Agriculture (USDA), "na- tional-scale water quality assessments strongly suggest that agriculture is a leading source of remaining water quality problems" (Heimlich, 2003). Nutrient inputs into the waters of the United States continue to be one of the major reasons that water bodies do not meet their designated uses as defined under the Clean Water Act (CWA; Federal Water Pollution Control Act Amendments of 1972, later amended in 1977). USEPA instituted a Water Quality Trading Policy to encour- age trading as an innovative way of meeting water quality goals within a watershed context (USEPA, 2003a). The policy is based on the idea that different sources within a watershed may face drastically different costs to control the same constituent. Trading programs, which have proved to be very successful in meeting air quality standards, allow facilities facing higher discharge control costs to meet their regulatory obligations by purchasing environmentally equivalent, or superior, reductions from another source at lower cost than they would incur by installing additional controls. To date, this policy has been implemented to a limited extent for PS-PS trading. There is a great deal of interest in increasing the implementation of this policy for PS-NPS trading, particularly through the use of wetlands (Schubauer-Berigan, 2005; Raffini and Robertson, 2005), but there appear to be a number of possible gaps in the available scientific and economic knowledge needed to implement such trading as part of a regulatory program. 1.1 What is Water Quality Trading? Water quality trading (WQT) is a voluntary alternative for achieving regulatory compliance with water quality standards. It is a program whereby parties can meet their discharge allowances by trading with each other. Although it has been available for over two decades, this option is just recently garnering more attention. In WQT, cost-in efficient discharg- ers1 buy water quality credits from cost-efficient dischargers, who have earned credits by voluntarily implementing best management practices (BMPs) for nutrient control. By trading credits, the overall cost of achieving nutrient reduction is minimized. In an efficient market, WQT leads to lowest-cost nutrient reduction. An established market or exchange provides the structure for the WQT transactions. The regulator or some other entity plays a third-party role in the market, protecting the interests of the public by ensuring that trading maintains or improves water quality and does not lead to degradation of the environment. Overall, economists, regulators, dischargers, environmentalists, and other stakeholders have advocated WQT as a way to use market-based solutions to reduce the cost of complying with water quality discharge limits. The approach provides PSs with alternatives for controlling discharges with less regulation, less cost, and accelerated compliance. The exibility afforded by WQT that includes NPSs can create ecological value without increasing natural resource risk. Regulatory oversight controls the process. 1.2 Report Overview The initial work plan for the study included a broad assessment of published literature pertaining to WQT programs that include NPS trades. As the study progressed, collaboration between the study sponsors and the authors focused the scope of the study on the use of wetlands as an NPS control to reduce nutrient loads and create credits for trade. 1 In this document, "discharger" is a term used to refer to both PSs and NPSs whose discharge is due to human influences. ------- The study evaluates the technical, economic, and administrative aspects of establishing WQT programs that can use and have used wetlands to generate credits for NPS trades. The evaluation relies upon a review of technical literature combined with selected case studies. The literature review and case studies are used to identify critical scientific and economic knowledge gaps that would impede the implementation of a WQT program including both PSs and NPSs. Although examples from several case studies facilitate specific points in the wetlands, economics, and regulatory re- views, this report considers the four programs included as case studies to illustrate the current state of practice of using wetlands in WQT programs. Although the programs described in the case studies are not markets, they are illustrative of important aspects of WQT involving wetlands. Based on the synthesis of this work, the USERA will be able to develop a plan to research gaps regarding using wetlands to generate NPS credits in WQT. Addressing these gaps will provide insight towards assessing the feasibility of such programs and identify factors to opt for certain approaches. ------- 2.0 Methods for Identifying Technical and Economic Analysis Needs The current investigation combines a review of published literature and a case study analysis to establish and evaluate the state-of-the-art in WQT programs. By evaluating existing regionally focused WQT programs, the study identifies data and knowledge gaps and recommends research to address them. Ultimately, this review and any resulting research would enable USEPA to publish technical information for using wetlands in PS-NPS WQT programs. This study inte- grates two primary components: (1) review of published peer-reviewed literature and data sources addressing WQT and wetlands nutrient removal functions, and (2) review of four case studies of existing WQT programs. The literature review and case study analysis results are used to assess opportunities and potential pitfalls associated with using wetlands in NPS nutrient trades. Shaw collaborated with USEPA to develop a list of critical questions to screen and compile relevant literature and other available sources of information for the area of WQT programs for nutrients. The primary sources of information are derived from published peer-reviewed literature, including articles from scientific and economic journals, conference proceedings, and books. Other information sources include relevant federal and state regulations. Information gained from secondary and non-peer-reviewed sources, including conference proceedings, workshops, white papers, fact sheets, web sites, etc., is used to illustrate the level of interest in WQT. The literature review will produce a list of issues pertaining to the successful operation of WQT programs along with published data and a bibliography addressing each of these issues. The association of issues and available data will illustrate the nature and extent of data and knowledge gaps. 2.1 Literature Search Methodology The literature review was conducted as an iterative process by listing issues to inform an initial literature search. Can- didate source documents were compiled, screened according to the critical questions, and then sorted according to subject. A combination of methods was used to identify documents included in the literature review. These methods included use of internet search engines; personal communications with experts, such as the contact people for each of the case studies; agency internet sites, such as the web pages for individual WQT programs; reviewer comments; and references contained in publications already identified. A complete list of all documents identified during the literature review is composed as an annotated bibliography in Appendix A. The following internet search engines and search terms were used to identify relevant documents. Table 2-1. Internet Search Engines and Search Criteria Search engines Agricola http://agricola.nal.usda.gov/webvoy. htm Ecological Society of America http://www.esajournals.org/esaonline/ ?request=search-simple Elsevier http://www.elsevier.com Google Scholar http://scholar.google.com/ Search terms Wetland and nitrogen, wetland and treatment, wetland and con- structed, WQT, assess WQT, assess nutrient trade, assess nutrient credit, assess nutrient models, validate nutrient models, compare nutrient models, nutrient trading Wetlands, nitrogen, nutrients, WQT, nutrient trading Minnesota Pollution Control Agency (MPCA), Rahr Malting Com- pany (Rahr), Cherry Creek, publications, WQT, total maximum daily loads (TMDL), equivalence, wetlands AND WQT, specific author names, nutrient trading WQT, NPS trading, pollutant trading programs, North Carolina case study specific terms: Tar-Pamlico, Neuse, Trading Program, water quality, wetlands, specific author names, TMDL, nutrient trading Date limits 2000 to January 2006 None None None ------- Search engines Google http://www.google.com PubMed database http://www.ncbi.nlm.nih.gov/entrez/ query. fcgi?CMD=search&DB=pubmed Science Direct http://www.sciencedirect.com/ State environmental organization search engines Wetlands website (SWS journal) http://www.sws.org/wetlands/ Environmental Trading Network (ETN) http://www.envtn.org/index.htm Environmental Law Institute http://www2.eli.org/index.cfm Search terms WQT, assess WQT, assess nutrient trade, assess nutrient credit, assess nutrient models, validate nutrient models, compare nutrient models, MPCA, Rahr, Cherry Creek, WQT, Idaho DEQ, Idaho Soil Conservation Commission (ISCC), Lower Boise River (LBR), nitro- gen, phosphorus, TMDL, equivalence, wetlands AND WQT, specific author names, nutrient trading Wetlands, nitrogen, nutrients, WQT, NPS trading, nutrient trading Wetlands, nitrogen, nutrients, assess WQT, assess nutrient trade, assess nutrient credit, assess nutrient models, validate nutrient mo- dels, compare nutrient models, WQT, NPS trading, nutrient trading MPCA, Rahr, Cherry Creek, publications, WQT, TMDL, equivalence, wetlands AND WQT, specific author names, NPS pollution, nutrient trading Wetlands, nitrogen, nutrients, WQT nutrient trading Workshops 2nd National Water Quality Trading Conference, held May 23-25, 2006 in Pittsburgh. (http://www.envtn.org/WQTconf_agenda.htm) Environmental Credits Generated Through Land-Use Changes: Challenges and Approaches held March 8-9, 2006 in Baltimore. http://www.envtn.org/LBcreditsworkshop/agenda.htm Workshop National Forum on Synergies Between Water Quality Trading and Wetlands Mitigation Banking held July 11-12, 2005 in Washington, DC. http://www2.eli.org/research/wqtjTiain.htm. Date limits None None None None None None None 2.2 Literature Review Questions Literature screening criteria are grouped into three categories: Level 1 - Preliminary Screening Questions for Identifi- cation of Case Studies; Level 2 - Case Study Analysis Questions; and Level 3 - General "State of the Art" Questions. The case studies are used to address the Level 1 and 2 questions. The Level 3 group of questions was created with the recognition that the case studies may not be able to directly answer these questions. 2.2.1 Level 1 - Preliminary Screening Questions for Selection of Case Studies 1. Are there any published case studies of WQT programs within the United States or other countries? 2. How far (spatially) are the benefits of a local nutrient load reduction realized within a water body? How does this vary for different designated water uses? How does this vary between watersheds or different water body types (e.g., estuary, river, lake) with distinct hydrologic, geologic, and ecologic conditions? How can appropriate geographic trading areas be established? 3. To what extent does seasonal variability need to be accounted for in trading programs? 4. What are the economic factors that drive the feasibility of various nutrient load reduction measures? How do these factors vary depending on location and watershed conditions? 5. How should the cap for nutrient concentrations in water bodies be defined, especially in multi-state waters? How should a baseline be established? 6. What factors determine the effectiveness of wetlands for reducing or removing nutrients from surface wa- ter? 7. If the price for a nutrient loads reduction credit from an NPS is fixed (e.g., $/lb) within a trading program, how are agencies determining the credit price? ------- 8. How can nutrient reductions from NPSs be quantified? How is "effectiveness" of various management practices measured and documented? How can a reduction be measured after a management practice has been implemented? How can the initial NPS nutrient load be quantified? 9. What are the various ways that trading is being managed? What are the advantages (or drawbacks) of each management approach? To what extent is the management approach dependent on program scale or types of water body included in the program? 10. For multi-state (multi-jurisdiction) trading programs, how can legal authority be established? 2.2.2 Level 2 - Case Study Analysis Questions 1. What have been the key drivers for the implementation of a WQT focused on nutrients, or other environ- mental performance trading programs (such as air quality and wetland mitigation)? 2. What factors contribute to the success of active WQT programs or limit their effectiveness? 3. What type of institutional framework can provide accountability of NPSs? How can compliance with regula- tions be assured and enforced? 4. What role should environmental groups have in the planning and implementation process? How much public participation is appropriate? 5. What is public perception of water-borne stressor (nutrient) trading programs? Are there organizations op- posed to this type of program? 2.2.3 Level 3 - General "State of the Art" Questions 1. What federal regulations and guidance documents address WQT? 2. What state regulations and guidance documents address WQT? 3. Which states have active WQT programs? 2.3 Case Study Selection A few basic selection criteria were used to choose case studies from the list of existing WQT programs compiled in Table 2-2. The selection criteria include type of program (PSs and NPSs); constituent traded (nitrogen and phosphorus); implementation status (the program needed to be fully developed); whether or not wetland construction/enhancement could be used to generate credits; geographic distribution; and the availability of published literature. Four case studies were selected: 1. Cherry Creek, Colorado 2. Minnesota River and Rahr, Minnesota 3. LBR, Idaho 4. Tar-Pamlico River and Neuse River, North Carolina These case studies were selected to represent programs in different regions of the country in an attempt to illustrate region-specific issues or limitations on feasibility if they exist. To the extent possible, case studies were selected to include distinct watershed types varying in scale, topography, land use distribution, and proximity to coastal waters. Market structure was not a selection criteria; the Cherry Creek and North Carolina programs may not fit the definition of a "true market" because purchase and sale of credits occur via a clearing house. In addition, water quality credits in the North Carolina program function more like an exceedance tax than trades within a market. The need for published literature on the WQT program was also a factor that shaped this analysis. Of the more than 80 WQT programs, pilots, and simulations identified in the process of selecting the four case studies, these programs are among the longest- standing. All were developed before the USERA Water Quality Trading Policy was published in 2003, although these programs are far from static. As a result, it is likely that some of the newest programs have already been able to apply lessons learned from the programs in their design and implementation. The collective results of the case studies combined with the results of the literature review are used to identify common lessons learned, successes and failures, and variations in key issues related to geography, watershed scale, land use, and any other factors observed to affect the success of the case study trading programs. ------- Table 2-2. Waterborne Stressor (Nutrient) Trading Programs Project 1. Montgomery Water Works and Sanitary Sewer Board 2. City of Santa Rosa 3. Grassland Area Trad- able Loads Program 4. Lake Tahoe Water Qual- ity Trading Strategy 5. Sacramento Regional County Sanitation District's Mercury Offset Program 6. San Francisco Bay Mer- cury Offset Program 7. Bear Creek Trading Program 8. Boulder Creek Trading Program 9. Chatfield Reservoir Trading Program 10. Cherry Creek Basin Trading Program 11. Clear Creek Trading Program 12. Lower Colorado River 13. Lake Dillon Trading Program Water body Coosa River Russian River San Joaquin River Lake Tahoe Sacramento Area San Francisco Bay Bear Creek Res- ervoir Boulder Creek Chatfield Reservoir Cherry Creek Reservoir Clear Creek Colorado River Dillon Reservoir State AL CA CA CA&NV CA CA CO CO CO CO CO CO CO Constituent Undefined - nutrients Undefined - nutrients Selenium Nutrients and sedi- ment Mercury Mercury Phosphorus Nitrogen Phosphorus Phosphorus Heavy Met- als Selenium Phosphorus Ref. (doc#) 10 10 10,261 10 10 10 10 10 10, 114 1, 10, 11, 150,225, 293 10, 181 10 10, 181, 236,149 Program- specific papers No No Yes No No No No No Yes Yes Yes No Yes Wetlands used in trading? No No No Yes - wetland con- trols, wetland type not specified No No No Yes - habitat restoration and con- structed wetlands (riparian) ? - BMPs for stream bank resto- ration and stormwa- ter runoff Yes - constructed wetlands, (riparian) No No No Candidate study (why) No- Initial development No- No trading No- Selenium trading No- Initial planning stages No- Mercury trading No- Mercury trading No- Point-to-point No- Limited information avail- able No- Limited information avail- able Yes- One of the original projects involved creation of a wet- land. Credits established on case-by-case basis. No- Mine discharge No- Selenium trading No- Wetlands not used CD ------- Table 2-2. Waterborne Stressor (Nutrient) Trading Programs Project 14. Long Island Sound Trad- ing Program 15. Blue Plains Wastewa- ter Treatment Plant (WWTP) Credit Creation 16. Tampa Bay Cooperative Nitrogen Management 1 7. Lake Allatoona Water- shed Phosphorus Trad- ing Program 18. Cargill and Ajinomoto Plants Permit Flexibility 19. Bear River Basin 20. Lower Boise River Ef u- ent Trading Demonstra- tion Project 21. Mid-Snake River Dem- onstration Project & Development of Idaho Water Pollutant Trading Requirements 22. Lake Erie Land Compa- ny/Little Calumet River 23. Illinois Pretreatment Trading Program 24. Piasa Creek Watershed Project: Water Quality Trading - PS for NPS 25. Monocacy River 26. St. Martin's River Water- shed 27. Wicomico River 28. Charles River Flow Trad- ing Program Water body Long Island Sound Chesapeake Bay Tampa Bay Lake Allatoona Watershed Des Moines River Bear River Lower Boise River Mid-Snake River Little Calumet River IL waters Piasa Creek Wa- tershed Monocacy River St. Martin's River Watershed Wicomico River Charles River State CT VA FL GA IA ID, WY, UT ID ID IN IL IL MD MD MD MA Constituent Nitrogen Nitrogen Nitrogen Phosphorus Ammonia and CBOD Phosphorus Phosphorus Phosphorus Undefined Multiple Sediment Undefined Undefined Undefined Water ow Ref. (doc#) 1, 10, 174 10 10 10, 195, 215 10 1, 10, 174, 270, 236 10 10 10, 36 10 10 10 10, 98 Program- specific papers Yes Yes Yes No No Yes No No No Yes No No No Yes Wetlands used in trading? No No No ? - type not speci- fied ? Yes - Constructed wetlands, wetland type not specified No No No ? - sed. ctrl. struc- tures No No No Candidate study (why) No- Point-to-point No- Point-to-point No - Wetlands not used No- In development No- Limited information available No- In development Yes- Constructed wetlands on ap- proved BMP list, which also identified life span. No- Limited information available No- Initial development No- Point-to-point No- No wetlands No- Initial development No- Initial development No- Initial development No- Water ow trading ------- Table 2-2. Waterborne Stressor (Nutrient) Trading Programs Project 29. Edgartown WWTP 30. Falmouth WWTP 31. Massachusetts Estuar- ies Project 32. Nashua River 33. Town of Acton POTW 34. Specialty Minerals, Inc. in Town of Adams 35. Wayland Business Center Treatment Plant Permit 36. Maryland WQT Policy 37. Kalamazoo River Water Quality Trading Demon- stration 38. Michigan Water Quality Trading Rule Develop- ment 39. Saginaw River Basin 40. Minnesota River Basin 41. Minnesota River WQT Study 42. Rahr Permit (lower Min- nesota River) Water body Edgartown River Falmouth Harbor Popponesset Bay, Three Bays and Warham Bay and Agawam River Nashua River Assabet River Hoosic River Sudbury River Chesapeake Bay, other MD waters Kalamazoo River, Lake Allegan Ml waters Saginaw River Basin Minnesota River Minnesota River Minnesota River State MA MA MA MA MA MA MA MD Ml Ml Ml MN MN MN Constituent Nitrogen Nitrogen Nitrogen Phosphorus Phosphorus Temperature Phosphorus Phosphorus and nitrogen Phosphorus Phosphorus and nitrogen Nutrients and sedi- ment Phosphorus Phosphorus Phosphorus, nitrogen, CBOD5 and sediment Ref. (doc#) 10 10 10 10 10 10 10 10 10,261, 233, 236, 204, 226 1, 10, 174,236 236 10,63, 174,233, 236,105, 242, 252 10 1, 10, 261, 133, 193, 194 Program- specific papers No No No No No No No Yes Yes Yes Yes Yes Yes Yes Wetlands used in trading? No No Yes - wetland type not specified No No No No No agri. BMPs No ? - type not speci- fied Yes - BMP and wetland type not specified No Yes - restored riparian wetlands Candidate study (why) No- Sewer/septic only No- Sewer/septic only No- Limited information available No- Initial development No- No trades No- Temperature trading No- Sewer/septic only No- Wetlands not used No- Wetlands not used No- Regs. only No- No trades Yes- High volume of trades No- Point-to-point Yes- Specifically tied to National Pollutant Discharge Elimina- tion System (NPDES) permit requirements ------- Table 2-2. Waterborne Stressor (Nutrient) Trading Programs Project 43. Southern Minnesota Beet Sugar Cooperative Plant Permit 44. Mississippi River/Gulf of Mexico 45. Chesapeake Bay WQT Program 46. Great Lakes Trading Network 47. Cape Fear River Basin 48. Neuse River Nutrient Sensitive Water (NSW) Management Strategy 49. Tar-Pamlico Nutrient Re- duction Trading Program 50. Passaic Valley Sewer- age Commission Ef u- ent Trading Program Water body Minnesota River Mississippi River/ Gulf of Mexico Chesapeake Bay Great Lakes Cape Fear River Neuse River Estu- ary Pamlico River Estuary Hudson River State MN MS Multiple states multi-de- fined by individ- ual pro- grams NC NC NC NJ Constituent Phosphorus Phosphorus and nitrogen Phosphorus and nitrogen Undefined Undefined Nitrogen Phosphorus and nitrogen Heavy Met- als Ref. (doc#) 1, 10 233, 68, 30, 31, 74, 76 10 10 10, 174, 96,46, 129, 132, 46, 129, 132 1, 10, 261, 178, 96, 157, 236, 52, 112, 116, 128, 130, 131, 151, 178 10 Program- specific papers Yes Yes Yes Yes Yes Yes No Wetlands used in trading? Yes - constructed wetlands, wetland type not specified Yes - wetland resto- ration, wetland type not specified No No Yes - wetland restoration and con- structed wetland, wetland type not specified Yes - wetland restoration and constructed wetland (riparian) Yes - emphasis on agricultural BMPs, wetland restoration and constructed wetland (riparian) No Candidate study (why) No- Limited information available Yes- But in concept stage of devel- opment No- Wetlands not used No- See Kalamazoo No- Initial planning stages Yes- Cooperative - PS purchase credits, central agency (North Carolina Wetland Restoration Fund) allocates funds to proj- ects. Nutrient offset payments targeted toward restoration of wetlands and riparian areas within the Neuse River Basin. Yes- One of the oldest trading programs in the US. Coop- erative - PS purchase credits, central agency allocates funds to projects. No- Dissolved metal trading ------- Table 2-2. Waterborne Stressor (Nutrient) Trading Programs Project 51. Truckee River Water Rights and Offset Pro- gram 52. East River 53. New York City Water- shed Phosphorus Offset Pilot Programs 54. Greater Miami River Watershed Trading Pilot Program 55. Clermont County Project 56. Ohio River Basin Trad- ing 57. Shepard Creek (tribu- tary to Mill Creek) 58. Honey Creek Watershed 59. Lower North Canadian River 60. Tualatin River Water- shed NPDES Permits 61. Conestoga River 62. Pennsylvania Water- based Trading Simula- tions 63. Pennsylvania Multimedia Training Registry Water body Truckee River East River Hudson River Greater Miami River Watershed Little Miami River, Harsha Reservoir Ohio River Basin Shepard Creek Honey Creek Lower North Cana- dian River Tualatin River Watershed Conestoga River Delaware River, Moshanon Creek, Swatara Creek and Spring Creek State-wide State NV NY NY OH OH OH - Multi- state OH OH OK OR PA PA PA Constituent Phosphorus, nitrogen, or total dissolved solids Nitrogen Phosphorus Phosphorus and nitrogen Phosphorus, nitrogen or total dissolved solids Nutrients Peak storm- water ows Phosphorus Undefined Temperature Phosphorus and nitrogen Multiple Phosphorus and nitrogen Ref. (doc#) 10 10, 166 10 10 10 10 256 10 10 10 10 10 10 Program- specific papers No No Yes Yes No No Yes No No No No No No Wetlands used in trading? No No Yes - wetland restoration, type not specified ? - see types of agricultural BMPs No No No No No No No No No Candidate study (why) No- Wetlands not used No- Point-to-point No- Limited information available No- Limited information available No- Wetlands not used No- Initial development No- Stormwater retention No- BMP case study, not trading No- Feasibility study No- Riparian restoration No- Wetlands not used No- Simulation, not program No- Wetlands not used ------- Table 2-2. Waterborne Stressor (Nutrient) Trading Programs Project 64. Ef uent Trading Pro- gram 65. Boone Reservoir 66. Colonial Soil and Water Conservation District 67. Henry County Public Service Authority and City of Martinsville Agreement 68. Virginia Water Quality Improvement Act and Tributary Strategy 69. Chehalis River 70. Puyallup River 71. Yakima River 72. Fox-Wolf Basin Wa- tershed Pilot Trading Program 73. Red Cedar River Pilot Trading Program 74. Rock River Basin Pilot Trading Program 75. Wisconsin Ef uent Trad- ing Rule Development 76. West Virginia Trading Framework Water body Providence and Seekonk Rivers, Rhode Island Boone Reservoir Lower James River Smith River Chesapeake Bay, other VA waters Chehalis River Puyallup River Yakima River Green Bay Ta inter Lake Rock River Basin Wl waters State-wide State Rl Total nitrogen (TN) VA VA VA WA WA WA Wl Wl Wl Wl WV Constituent Salinity Phosphorus, nitrogen and BOD Nutrients and sedi- ment Total dis- solved solids Phosphorus and nitrogen Undefined Ammonia and BOD Water ow Phosphorus Phosphorus Phosphorus Phosphorus Multiple Ref. (doc#) 10 10 10 10 10 10 10 10 10, 178 10 10,236 10 10 Program- specific papers No No No No No No No No Yes Yes Yes No No Wetlands used in trading? No No No No No No No No No No Yes - wetland resto- ration (return farm- land to wetland), type of wetland not specified No ? - some info on wetlands, type not specified Candidate study (why) No- Salt trading No- No program developed No- Planning No- Point-to-point No- Planning No- Not implemented No- No trades No- Water quantity No- Point-to-point, nonpoint not defined No- Wetlands not used No- Limited information available No- Wetlands not used No- Concept stage ------- Table 2-2. Waterborne Stressor (Nutrient) Trading Programs Project 77. Cacapon/Lost River 78. Cheat River, West Vir- ginia 79. Hunter River Salinity Trading, USEPA Depart- ment of Environment and Conservation 80. Dutch Nutrient Quota System 81. South Nation River Watershed 82. Kaoping River Basin Water body Lost River Cheat River Hunter River Country-wide South Nation River Kaoping River Basin, Taiwan State wv wv Australia Nether- lands Ontario, Canada Taiwan Constituent Undefined Heavy Metals and acidity Salinity Nutrients Phosphorus Multiple Ref. (doc#) 10 10 34, 273, 272, 290 70, 75 Program- specific papers No No Yes Yes Yes No Wetlands used in trading? No No No No ? No Candidate study (why) No- Feasibility study No- Concept stage No- Salinity trading No- Livestock production No- Focus on agriculture BMPs and riparian stabilization No- Limited information available Candidates for case studies are highlighted in green. CBOD = carbonaceous biological oxygen demand. ------- 3.0 Literature Review-Wetland Nutrient Removal The utility of wetlands in managing nutrient loads and their historical, current, and anticipated future implications in WQT warrant focused review. Numerous studies or summaries of studies have investigated the function of wetlands in the removal of pollutants, including high levels of nutrients (USEPA, 2005a; Fisher and Acreman, 2004; Mitsch and Gosselink, 2000; Hunt and Poach, 2001; Kadlec and Knight, 1996; USEPA, 1999; USEPA, 1993a; Cooper and Findlater, 1990). Results from these studies have been summarized and used to guide the development of constructed wetlands to treat water high in nitrogen and phosphorus (Kadlec and Knight, 1996). This review does not attempt to re-summarize these studies, but references them for readers who desire more information. Rather, this review summarized information on the nutrient removal function of wetlands specifically applicable to WQT. A bibliography of published documents regarding constructed wetlands was compiled by USDA staff from the Ecological Sciences Division of the Natural Resources Conservation Service (NRCS) and the Water Quality Information Center at the National Agricultural Library. The references were acquired in part through searches of the AGRICOLA database. The bibliography has been updated several times, most recently in June of 2000, and contains hundreds of entries, many with abstracts (USDA, 2000). An annotated bibliography of urban stormwater and nonpoint nutrient control was conducted by the Washington State Department of Ecology in 1986 and updated in 1991. The review was conducted to determine the extent of information available on the long-term ecological impacts of stormwater on wetlands and on the ability of wetlands to improve the water quality of urban stormwater (Stockdale, 1991). Both constructed and natural wetlands function to buffer downstream nutrients by storing and transforming nutrients, which are gradually released downstream (DeBusk, 1999). Consequently, wetlands have been considered an effective means to treat PSs and NPSs of nutrients and improve water quality in downstream lakes and rivers. The benefits of using wetlands to treat NPSs of pollutants include the ability to operate under a wide range of hydraulic loads, provide internal water storage capacities, and remove or transform contaminants (Dierberg et al., 2002). 3.1 Wetland Removal of Nitrogen and Phosphorus - Technical Overview Nutrients enter wetlands through various geologic, biologic, and hydrologic pathways; however, hydrologic inputs gener- ally dominate elemental inputs into wetlands. The cycling of nutrients in wetlands has been extensively described and studied (Mitsch and Gosselink, 2000). Inundation, water level uctuations, and biota result in both aerobic and anaerobic processes within the water column and wetland soils. These processes allow the transformation of nutrients like nitrogen and phosphorus as they interact with the biogeochemistry of the wetland environment. Wetlands function to remove phosphorus through sedimentation, plant uptake, organic matter accumulation, immobiliza- tion, and soil sorption. Nitrogen is removed in wetlands by filtration, sedimentation, uptake by plants and microorganisms, adsorption, nitrification, denitrification, and volatilization. Gaseous losses of nitrogen through denitrification are generally the most significant nitrogen removal mechanism in natural as well as constructed freshwater wetlands (DeBusk, 1999; Bowden, 1987; Faulkner and Richardson, 1989). A description of inputs, outputs, and internal cycling of nutrients in wetlands can be described by chemical mass balances. These mass balances for wetlands have been developed and discussed by others to describe the functions of wetlands in nutrient production and cycling. Literature reviews of this subject have been provided by DeBusk (1999), Nixon and Lee (1986), Johnston et al. (1990), and Johnston (1991). However, few investigators have developed a complete mass balance for wetlands that includes measurement of all the nutrient pathways, sources, and sinks. Despite this lack of comprehensive study, some generalizations have been made (Mitsch and Gosselink, 2000). The function of wetlands as sources, sinks, and transformers of nutrients depends on the wetland type, hydrologic condition, and the length of time the wetland is subjected to nutrient loading. Wetlands have been shown to be sinks or storage places for nitrogen and phosphorus, although not all wetlands exhibit this trait. One study found seasonal and permanent swamps had a net export of organic matter. Most of the inorganic phosphorus (60 to 90 percent) was retained, but there was a net release of nitrates, probably associated with the net export of organic matter (Mwanuzi et al., 2003). The location and chemical form of nutrients change within wetlands during the exchange of water and sedi- ment as well as during plant uptake and decomposition (Atlas and Bartha, 1981). The availability of nutrients and the 13 ------- extent to which biogeochemical processes function affect the intracycling of nutrients and the productivity in wetlands. The function of wetlands is closely related to adjoining land and water bodies; changes upgradient of a wetland will affect processes occurring within the wetland. For example, the depth of an adjoining water body or the conveyance capacity of the outlet stream are likely to modulate functions such as depth and storage capacity of natural wetlands (Kadlec and Knight, 1996). The productivity of wetlands is also directly correlated with nutrient input and transformation. Thus, the ability of wetlands to store and transform nutrients is directly connected to the amount of nutrients available for storage and transformation. However, this ability is not limitless, and once storage and transformation capacity is reached, excess nutrients leave the wetland through atmospheric, surface, and subsurface out ows (Mitsch and Gosselink, 2000). If long-term nutrient removal is an objective of a constructed wetland, significant maintenance up to and including re-construction may be necessary, although expecting a constructed wetland to perform this function in perpetuity is likely ecologically and economically unrealistic at best, and not reasonably feasible at worst. Although several generalizations can be made regarding the function of wetlands as sources, sinks, and transformers of nutrients, the complex and unique situation revolving around each wetland limits the application of generalizations. Wetlands can be a sink for a form of nitrogen at one moment in time and a source for the same nitrogen element at another time. Generalizations are also hampered by inconsistent study results and by the variety and imprecision of approaches to measuring nutrient uxes in wetlands. There is little consensus in the literature about nitrogen and phos- phorus fate in wetlands. A few chemical imbalances have been studied and described, but a complete mass balance for wetlands has yet to be developed (Mitsch and Gosselink, 2000). Furthermore, there has been a terrestrial-biased (i.e., applying processes found in uplands) approach in wetland research, especially regarding vegetation and productivity, that limits the understanding and employment of soil and microbial processes specific to wetlands in nutrient reduction (Wetzel, 2001; Johnston, 1991). The chemical transformation of nitrogen and phosphorus is important to understanding how wetlands perform in nutri- ent removal and sequestration. Inorganic and organic nitrogen and phosphorus enter wetlands through water inputs such as overland runoff, outfall pipes, groundwater, and to a lesser degree rainfall. The inorganic and organic forms are transformed or stored in the water, soil, and biota through several processes, including nitrification, denitrification, ammonification, diffusion, plant uptake, litterfall, decomposition, adsorption, precipitation, sedimentation, volatilization, and peat accretion (DeBusk, 1999). Following transformation and storage, both inorganic and organic forms of nitrogen and phosphorus exit the wetland in water out ows or by gaseous states such as nitrogen gas (N2). Other gases are emitted from wetlands, including carbon dioxide (CO2), nitrous oxide (N2O), and methane (CH4), which are produced under highly reduced conditions (Mitsch and Gosselink, 2000). To use wetlands to reduce nutrients from water before the ows enter downstream water bodies, the amount of nutrients in the wetland out ow needs to be less than in the wetland in ow, and the reduction must be measurable. The USEPA found that sequential nitrogen transformation within wetlands used to treat water quality results in a unidirectional shift of elevated total and organic nitrogen forms to oxidized or gaseous nitrogen forms (USEPA, 1999). In addition, plant detritus provides long-term storage of nitrogen in wetlands, and a portion of this nitrogen can eventually become avail- able for nutrient cycling following decomposition, which can take from months to many years (Kadlec and Knight, 1996). A summary of data collected in North American Wetlands for Water Quality Data Base (NADB) found that free water surface wetlands on an annual mean average removed 61 percent of the total phosphorus (TP) in in ow water with a standard deviation (SD) of 30 percent (USEPA, 1999). An approach to control the impacts of elevated nutrients is for the nutrients to be in a form not readily available to biotic organisms such as algae, which consume oxygen during uptake of nutrients. For example, phosphorus chemically bound to minerals (e.g., iron, aluminum, calcium, and organic compounds) is not as readily available as dissolved phosphorus to algae or plants, but represents a long-term source of phosphorus in a water system (NRCS, 2001). One of the key environmental drivers in nutrient transformation is inundation. Inundation affects the oxygen content of the soil and produces anaerobic conditions, although the near-surface soil tends to retain an oxidized layer due to the proximity to the water column, oxygen translocation within rooted plants, and microbial activity (Tanner, 2001 a). Some studies have found oxygen availability to the sediment was the greatest limiting factor for nitrification (White and Reddy, 2003). Oxidation affects the reduction of elements such as iron, resulting in a brownish-red color at the soil surface compared to the bluish-gray color of reduced sediments dominated by ferrous iron. Subsurface systems have been found to display marginal or negative nitrogen removal because of the lack of oxygen (USEPA, 1993a). Inundation also affects pH and redox potential, which in uences the rates of nutrient transformation (Mitsch and Gosselink, 2000). The results from studies on nutrient removal have shown inconsistencies in amount and efficiency of nutrient removal. For example, results from an experimental constructed wetland showed that nutrient removal was primarily the result of plant uptake and harvesting (15 percent of TN input, 10 percent ofTP input). Other processes had a relatively minor contribution: denitrification (8 percent of TN input), sedimentation and accumulation of organic matter in the soil (7 per- cent of TN input, 14 percent of TP input) (Meuleman et a/., 2003). Other studies have shown that denitrification is one 14 ------- of the more important mechanisms for removing nitrogen in wetlands. Nitrogen removal from septage with high solids concentration resulted from sedimentation of waste solids (57.6 percent), denitrification (40.9 percent), and direct uptake by plants (0.5 percent) of the total in uent nitrogen (Hamersley et a/., 2001). Recent studies show a wide range of nutrient removal efficiency values. Studies of constructed surface ow wetlands in Norway found nitrogen removal efficiencies between 3 and 15 percent, due to high hydraulic load and low temperatures (Braskerud, 2002). In constructed horizontal reed bed wetlands in Germany, more than 90 percent removal of TN and phosphorus was achieved (Luederitz et a/., 2001). A compilation of data from 60 studies of 57 natural wetlands in 16 countries showed the mean percent change in nutrient load between water entering and exiting the wetlands was 67 percent (SD of 27 percent) for nitrogen and 58 percent (SD of 23 percent) for phosphorus (Fisher and Acreman, 2004). One of the primary ways nutrients are removed from in ow waters is through storage within the wetlands, typically within soil, organic matter, or biota. For example, phosphorus is stored in wetlands in the soil by adsorption (i.e., surface accumulation) with sediment particles and precipitation with other compounds, within peat and plant litterfall, and in living plant and animal biomass (e.g., bacteria, algae, and vascular macrophytes). Sediment containing high organic matter accumulated twice the nitrogen (Tanner, 2001 b) and six times the phosphorus (Tanner, et a/., 1998) of live and dead plant tissue. Peat is considered a long-term storage location for nutrients (DeBusk, 1999). One study found that twice as much phosphorus was sequestered in submerged aquatic vegetation as in sediment, but these nutrients had a greater probability to be mobilized as plants decay (Dierberg et a/., 2002). Dissolved organic phosphorus and insoluble forms of organic and inorganic phosphorus are generally not biologically available until they are transformed into soluble inorganics (Mitsch and Gosselink, 2000). Therefore, both storage of phosphorus within wetlands and the reduction of downstream export of soluble inorganic phosphorus decrease the effective nutrient load of downstream waters and the associated eutrophication. Nutrient removal in constructed wetlands has been found to follow a seasonal pattern in most temperate conditions. The amount of nitrogen and phosphorus removed depends on the form of the nutrient, type and density of the aquatic plants, nutrient loading rate, and climate. During winter, nutrients sequestered in plants and plankton are released back into the water column upon decomposition (USERA, 1999). Typically, nutrients taken up by plants and microorganisms in dissolved organic forms are returned later in complex organic forms (Tanner, 2001 a). Seasonal temperatures also in uence transformation of nutrients. For example, nitrification is limited by temperature during all seasons when plant gas exchange and oxygen input into the rhizosphere are limited. Denitrification was almost complete in midsummer and was restricted at seasonal temperatures below 15°C in a study conducted on a constructed subsurface horizontal ow wetland in Germany (Kuschk et a/., 2003). Spring and autumn removal efficiencies responded to the nitrogen load in a linear fashion. Efficiencies in winter and summer differed extremely (mean removal rates of 0.15/0.7 g m 2 d 1 [11 percent/53 percent] in January/August) and appear to be independent of the nitrogen load (0.7-1.7 gm 2d 1) (Kuschk et a/., 2003). Wetland treatment systems in Hungary showed that removal performances varied by 40 percent between summer and winter (Szabo et a/., 2001). Several studies found that temperate regions show a rapid uptake of nutrients in early spring with rising temperatures, which stimulates mineralization of organic matter accumulated over the previous winter (Tanner, 2001 a). Although several studies demonstrated seasonal in uences in water quality performance, a study of constructed wet- lands in Florida found no seasonal pattern in phosphorus removal despite uctuations in air temperature and sunshine (Dierberg et a/., 2002). Sub-tropical wetlands lack the annual cycle of fall-winter senescence and nutrient release that is characteristic of northern climates. However, this lack of seasonality may add to the long-term stability of sediments and detritus-bound nutrients in sub-tropical regions. Another regional characteristic found in Florida, but applicable to other similar areas, is the high level of calcium and high alkalinity in runoff. This regional condition of runoff allowed more phosphorus to be sequestered by co-precipitation with calcium carbonate (Dierberg et a/., 2002). These examples illustrate the in uence regional factors have on nutrient removal performance of wetlands and may explain why wetland nutrient removal performance is better in some regions than in others. Climate in uences the amount and timing of nutrient input, as well as nutrient concentration and transformation within wetlands (Mitsch and Gosselink, 2000). Temperature affects growth and productivity of wetland biota. Also, oxygen lev- els in wetlands uctuate with temperatures; oxygen saturation is greater at cooler temperatures. Oxygen levels, in turn, affect several nutrient transformation processes. For example, Woodwell and Whitney (1977) found a salt marsh uptake of phosphate in cold months and export of phosphate in warm months. Areas with high precipitation have increased hydrologic inputs, which can dilute nutrient concentration or increase nutrient concentrations if the precipitation picks up nitrogen and phosphorus before entering the wetland through overland or groundwater ows. A study of several streams throughout the United States found that concentrations of nitrogen and phosphorus increased with precipitation in disturbed watersheds because of increased erosion, but decreased with stream ow in natural watersheds, presum- ably because of reduced erosion and increased dilution (Omernik, 1977). Arid regions can concentrate nutrients as water evaporates from wetlands, which leaves increased salts, affecting chemical binding rates and biological diversity. Additionally, groundwater may be more in uential in arid regions as the subsurface water picks up nutrients within the soil prior to outfalling to wetlands (USERA, 1993a). 15 ------- Climate also has considerable effect on the plant and microorganisms growing in wetlands. The quantity and variety of these organisms in uence the nutrient transformation and removal within wetlands. For example, temperate wetlands retain more nutrients in the growing season primarily because of the higher microbial and macrophyte productivity. Nutrients stored in biomass can be released back into the water column in the autumn following litter fall and subse- quent leaching. This seasonality has application to the concept of using wetlands to reduce downstream nutrient loads. Wetlands can function as sinks for nitrogen and phosphorus in summer, when the biotic community is most productive, which corresponds favorably with the need to reduce summer algae blooms in downstream waters as a result of elevated nutrients (Klopatek, 1978; Lee et a/., 1975). Nutrient removal has been shown to be higher in wetlands containing plants, mostly through denitrification and sec- ondarily through plant uptake (Stein et a/., 2003; Lin et a/., 2002; Jing et a/., 2002; Tanner, 2001 a). Macrophytes have been found to enhance nutrient removal by assisting solid sedimentation, reducing algae production, improving nutrient uptake, and releasing oxygen (Jing et a/., 2002; Bavoref a/., 2001). Studies of surface ow horizontal reed beds in Aus- tralia found removal efficiency with plants to be greater than 96 percent for both nitrogen (9.7 milligrams per liter [mg/L]) and phosphorus (0.56 mg/L) and without plants to be 16 percent for nitrogen (1.6 mg/L) and 45 percent for phosphorus (0.26 mg/L) (Huett et a/., 2005). Another study of constructed wetlands in Taiwan found that planted wetlands removed 80 to 100 percent of ammonium (NH4)-nitrogen (NH4-N) (Jing et a/., 2002). High denitrification rates in the presence of plants has been attributed to a high degree of soil oxidation (Matheson et a/., 2002). An assessment of subsurface constructed wetlands found that oxygen transport down to the roots by emergent plants was the prime source of oxygen needed for nitrification (USERA, 1993a). Submerged aquatic vegetation communities have been found to exhibit phosphorus removal mechanisms not found in wetlands dominated by emergent macrophytes (Dierberg et a/., 2002). Constructed wetlands using oating aquatic macrophytes have been used to improve drinking water supplies in Brazil (Elias et a/., 2001). The submerged plants directly assimilated phosphorus from the water column and mediated the pH so phosphorus co-precipitated with calcium carbonate in soil sediment. Leaves and stems can also act as nucleating sites for co-precipitation. Under high iron and oxygen conditions, phosphorus has been found to co-precipitate on iron oxide as evident from purple plaques observed on roots and stems, contributing to a removal efficiency of 83.6 percent (Jardinier et a/., 2001). Removal efficiencies for organics, NH4-N, and orthophosphates were in uenced by the health and growth rate of macrophytes (Jing et a/., 2002). Even wetlands designed to treat wastewater through subsurface ows showed enhanced nitrogen and initial phospho- rus removal when planted versus unplanted wetlands with gravel-bed substrates (Tanner, 2001 a). Uptake and storage of nitrogen and phosphorus in live plant biomass accounted for a fraction (3 to 19 percent TN; 3 to 60 percent TP) of the improved performance of planted wetlands. The author suggests that plants primarily facilitate improved nutrient removal indirectly through their effects on other removal processes rather than direct nutrient uptake (Tanner, 2001a). A recent study of nitrogen uptake in the rhizosphere concluded that nitrate (NO3) uptake by wetland plants may be far more important than previously thought. The modeled calculations showed that substantial quantities of NO can be produced in the rhizosphere of wetland plants through nitrification and taken up by the roots under field conditions and that rates of NO3 uptake can be comparable to those of NH+4. In addition, the model showed that rates of denitrification and subsequent loss of nitrogen from the soil remain small even where NO3 production and uptake are considerable (Kirk and Kronzucker, 2005). Many studies have shown that different species of plants perform better than others at nutrient removal from waste water. Cattails were most efficient at nitrogen removal, and aquatic plants increased phosphorus removal in wetlands constructed to treat saline wastewater in Thailand (Klomjek and Nitisoravut, 2005). Careful consideration should be given to the choice of plant species used for nutrient removal systems. While many species can be desirable and effective for nutrient removal in some regions, those same plants can be undesirable in other regions (Mitsch and Gosselink, 2000) and can often be highly invasive, spreading to and causing problems in nearby aquatic systems. Other species that have shown high rates of nitrogen removal from waste water include Phragmites (Mayo and Bigambo, 2005), Typha angus- tifolia (Belmont et a/., 2004), Scirpus validus (Fraser et a/., 2004), and Schoenoplectus (Poach et a/., 2003). However, some studies found that plant species had little impact on nutrient concentration or removal (Jing et a/., 2002; Huang et a/., 2000). A study of constructed wetlands in the Florida Everglades found that species differed in their uptake and accumulation in plant tissue, but it was a minor contributing factor in overall nutrient removal (Dierberg et a/., 2002). In addition to plants affecting transformation processes, plants also take up nutrients into their tissues. Much of the storage of nutrients in plants occurs in below-ground tissues, particularly in emergent species where up to 90 percent of the plant productivity occurs in below-ground tissues (Tanner, 2001a; Wetzel, 2001). This is particularly true when plants enter maturity and senesce as nutrients are translocated to root tissues for storage until the next growing sea- son. Consequently, the removal of above-ground tissue is often not a practical method for removing nutrients from the wetland (Wetzel, 2001; Matheson et al., 2002). Plant tissue analysis has shown that a single annual harvest of plant material accounted for 10 percent or less of the nitrogen removed from constructed subsurface wetlands. Increased harvest frequency may increase this performance, but would increase the operation costs of the constructed wetland (USEPA, 1993a). 16 ------- Studies of the effect of hydrologic and hydraulic conditions show inconsistent results. Hydrologic and hydraulic conditions in a wetland can in uence the efficiency of processes that remove nutrients from water (Jing et al., 2002; Sakadevan and Bavor, 1999). Hydraulic residence time was negatively correlated with TN and phosphorus removal in constructed subsurface ow wetlands (Schulzef a/., 2003). NH+4 and total Kjehldahl nitrogen (TKN) concentrations within a wetland decreased exponentially with increased residence time (Huang et a/., 2000). TKN is the organically bound nitrogen in a water sample that is released from organic matter through a digestive process before analysis. Knight et al. (2000) found that removal of nutrients was a function of inlet concentrations and hydraulic loading rates, but in other studies nutrient removal efficiencies were unaffected by variation in hydraulic loading rates (Lin et al., 2002). Dierberg et al. (2002) found the greater the residence time, the greater reduction in nutrients. Ideally, the optimal performance of a constructed wetland can be achieved by affecting the in ow concentration and residence time. Consideration should be given to designs of constructed wetlands with localized in ows, which generate a nutrient soil gradient. A study of wetlands used for 40 years to treat wastewater in Florida found that TP in wetlands sediments was significantly correlated with depth and distance from the point of surface water in ow (White and Reddy, 2003). Nutrient retention has been found to be affected by wetland size relative to the watershed (and therefore reten- tion time), land use of the watershed, any intrusion of groundwater, and the nature of the wetland in terms of its shape and vegetation (Raisin and Mitchell, 1995). An assessment of subsurface constructed wetlands found that the media (e.g., gravel, sand) affected the hydraulic conductivity and, subsequently, the nutrient removal performance. Systems with sandy substrate had low conductivity and, therefore, needed to be larger in size to generate a retention capacity effective at removing nutrients, which requires more land surface for construction and operation (USEPA, 1993a). 3.2 Factors that Affect Nutrient Load Reduction Efficiencies Wetlands that are undersized compared to the amount of water that will ow through them are more susceptible to frequent ushing by storms (which can ush out nutrients and organic matter) and are therefore not as effective as properly sized wetlands. Wetlands need to be large enough to be able to store the total from the "first ush," the first 1 inch of precipitation (Hunt and Doll, 2000). Bass (2000) indicated that current recommendations are that a wetland surface area should be at least 1 percent of the contributing watershed area. However, given that the amount of runoff from a drainage area will vary considerably depending of the amount of impervious area within the watershed, Hunt and Doll (2000) calculated surface areas of wetland ranging from 7 percent for a watershed with a low permeability (curve number [CN]=98)2 to slightly more than 1 percent for residential areas with fairly clayey soils (CN=60). This illustrates one limitation of constructed stormwater wetlands relative to other stormwater BMPs: they require a large area of land. Wetland designs can improve the overall performance of the wetland and partially address the problem of stormwater ows ushing wetlands by including a high ow bypass ( ow splitter) that allows larger storms to circumvent the wetland (Hunt and Doll, 2000). In North Carolina, constructed stormwater wetlands have been located on watersheds as small as 4 to 5 acres, but they are most commonly used for larger drainage areas and typically serve watersheds ranging from 15 acres to more than 100 acres. Geographic position and land use affect the nutrients owing into wetlands (Mitsch and Gosselink, 2000). The size of the watershed, the steepness or slope of the landscape, soil texture, and variety of topography in uence these nutrient inputs. The position of the wetland within the landscape, in addition to the climatic situation, in uence the cycling of nutrients within and through wetlands. For example, tidal salt marshes have significant tidal exchange while closed om- brotrophic bogs have little material exchange except for gaseous matter into and out of the wetland. Upstream wetlands have the ability to affect the amount and form of nutrients owing into wetlands (e.g., a series of wetlands will produce a different outcome compared to a single wetland). Land uses can affect nutrient inputs by affecting erosion rates, ap- plying fertilizers, modifying hydrologic ows, and altering buffer features of wetlands. Adjacent land use practices also may impact a wetland's ability to store nutrients, thereby altering the structure and function of the wetland (Gathumbi et al., 2005). Obvious direct input from sewage ef uent, urban runoff, and industry can have dramatic impacts on nutrient loads within wetlands. Studies of a natural wetland in New Zealand that received sewage oxidation pond ef uent for more than 30 years showed elevated nutrient concentrations in ground and surface water, increased weed invasion and plant growth, and high concentrations of certain heavy metals (Chague-Goff et al., 1999). Anthropogenic sources of nitrogen and/or phosphorus include sewage, fertilizers, animal waste, erosion, industrial discharge, mining, drinking water treatment, synthetic materials, and fossil fuel burning. As previously discussed, both phosphorus and nitrogen are present in wetlands in inorganic and organic forms. Both nutrients are used by living or- ganisms for basic life processes, but too much can be harmful to aquatic environments. The potentially harmful effects associated with anthropogenic enrichment of nutrients are most noticeable in environments where these nutrients are normally in limited supply, such as within surface water bodies (e.g., eutrophication). Nitrogen and phosphorus are often found in higher than natural levels in areas of human activity. Consequently, the negative effects of too much nitrogen CN reflects the ability of a watershed to store water through initial storage and subsequent infiltration. A high CN indicates a watershed with limited storage capacity. 17 ------- and phosphorus are concentrated downstream of these areas, leading to the need to reduce nitrogen and phosphorus within water bodies. Removal of nutrients from water before the water is discharged downstream can reduce the poten- tial for eutrophication; however, upgrades to treatment processes cannot eliminate this potential. For example, sewage treatment typically decreases ammonia discharge, which results in increased NO3 discharge, but does not address TN discharge concentrations (Murphy, 2005). Additional studies focusing on the design issues of constructed wetlands are necessary. These studies should look at the impacts of scale and edge effects in research wetlands. Also, the delivery of treatment water at a single point or dispersed delivery and in batches versus continuous ows should be studied further for modeling and application of constructed wetlands and as treatment BMPs. Longer-term studies are also lacking within the literature. Further study is needed on quantifying and comparing the oxygen release characteristics of different emergent species in response to root-zone treatments and the effect of this release on removal efficiencies (Tanner, 2001 a). 3.3 Natural versus Constructed Wetlands Natural wetlands exist where water inundates land, even seasonally, orgroundwater is shallow enough to create hydric soils near the surface, which supports hydrophytic plants adapted to living in water or saturated soils. Constructed wet- lands developed to improve water quality are defined as engineered or constructed wetlands that use natural processes involving wetland vegetation, soils, and their associated microbial assemblages to assist in the treating of ef uent or other water sources (USEPA, 2000a). Because constructed wetlands are typically designed specifically for water quality improvement functions, many of the wildlife habitat functions provided by natural wetlands are lacking in constructed wetlands (DeLaney, 1995). A third type of wetland, often referred to as a created wetlands, are often designed to pro- vide wildlife habitat functions similar to natural wetlands as mitigation for project impacts (Hammer, 1996). There are generally two types of constructed wetlands: subsurface and free-water-surface systems (USEPA, 1999; USEPA, 1993a; Hammer, 1989). Restored and enhanced wetlands are historical, naturally occurring wetlands that have been disturbed through filling, dredging, water elevation changes, plant community alterations, and/or modifications to buffers surrounding the wetland that impact the wetland characteristics or functions. Restoration of disturbed wetlands usually involves rehabilitation of hydrologic conditions and reestablishment of vegetation (Mitsch and Gosselink, 2000). Degraded wetlands offer opportu- nities for restoration and enhancement through the careful application and operation of them for water quality treatment. However, this approach should only be attempted if the water quality of the wetlands would not be degraded, there was a net benefit to the wetland, and it would promote a return of historic or natural conditions to the wetland (USEPA, 2000a). In natural wetlands with low productivity, nitrogen and phosphorus are often limiting factors, and adding nutrient-rich water can increase productivity (Mitsch and Gosselink, 2000; Ewel and Odum, 1984). Restoring wetlands is an effec- tive strategy for reducing agricultural NPS nutrient discharge. These systems can remove 90 percent to 100 percent of suspended solids, 85 percent to 100 percent of TP, and 80 to 90 percent of TN (DeLaney, 1995). A compilation of data from 60 studies of 57 natural wetlands in 16 countries showed that 80 percent of the wetlands reduced nitrogen loading and 84 percent reduced phosphorus loading. The mean percent change in nutrient load between water entering and exiting the wetlands was 67 percent (SD of 27 percent) for nitrogen and 58 percent (SD of 23 percent) for phosphorus (Fisher and Acreman, 2004). Constructed wetlands designed to retain nutrients from wastewater can function similarly to natural systems. They have similar physical and biological processes and the operation is more passive and requires minimal operator interven- tion as compared to WWTPs (USEPA, 2000b). Planning and design considerations for building constructed wetlands have been developed by USEPA (1999). Wetzel (2001) provides a summary of the fundamental processes in natural and constructed wetlands. Both natural and constructed wetlands exhibit plant and microbial metabolism involved in nutrient/pollutant uptake, sequestering, and retention that is highly dynamic on daily, seasonal, and long-term annual scales (Wetzel, 2001; Kadlec and Knight, 1996; Ewel and Odum, 1984). Furthermore, the amount and concentration of nutrient loading in uence these processes at all scales. Nutrient removal rates have also been shown to be very high in some natural and constructed wetlands. A study of 50 years of treating wastewater by owing it through existing forested wetlands in the Mississippi Delta showed that nitrogen and phosphorus were reduced by more than 90 percent (Day et a/., 2004). A constructed wetland in France was reported to have removed 54 to 94 percent of TN from coke plant wastewater (Jardinier et a/., 2001). Though there are similarities between natural and constructed wetlands, there are also several differences. Constructed wetlands often vary in the shape and structure from natural wetlands. Often, constructed wetlands are shaped to fit into the landscape with other features such as roads, buildings, or mature vegetation. This "fitting in" can limit the ability to create a natural-looking and -functioning wetland. Many of the studies of constructed wetlands use conveniently-sized plots (e.g., mesocosms) that provide straightforward control of soils, plants, and water levels as well as in ow and out ow controls, which ease measurement of water quality parameters (Dierberg et a/., 2002; Jing et a/., 2002). Additionally, constructed wetlands often have engineered substrates composed of gravels or artificial liners, which affect the sub- surface nutrient removal processes. 18 ------- Natural wetlands are typically higher in biodiversity, while constructed wetlands are typically planted with a few select plants and occasionally are inoculated with microorganisms (Wetzel, 2001). This greater diversity often allows more light to penetrate deeper into the water, increasing the vertical extent of photosynthesis and survival of microorganism assemblages. The increased species diversity and productivity maximizes nutrient retention, recycling, and storage (Wetzel, 2001). Guidelines for constructing wetlands produced in 2000 identified more than 600 active projects using constructed wetlands to treat municipal and industrial wastewater, as well as agricultural and stormwater sources (USEPA, 2000a). Using these projects and wetland science, USEPA developed "Guiding Principles for Constructed Treatment Wetlands" to develop wetlands that improve water quality as well as provide wildlife habitat (USEPA, 2000a). The document gives guidance on planning, siting, designing, constructing, operating, maintaining, and monitoring of constructed treatment wetlands. Other guidance documents on constructing wetlands have been developed and provide useful information to consider when constructing wetlands (Davis, 2003; Moshiri, 1993; Cooper and Findlater, 1990; Hammer, 1989 and 1996; Kadlec and Knight, 1996). USEPA also developed two technical assessments of different constructed wetlands: Free Water Surface Wetlands for Wastewater Treatment: A Technology Assessment (USEPA, 1993a), and Subsurface Flow Constructed Wetlands for Wastewater Treatment: A Technology Assessment (USEPA, 1999). These can help determine the selection and design of an appropriate constructed wetland. Some recent studies provided additional information on design and performance of constructed wetlands. For example, interspersing open water with emergent vegetation appears to maximize NH4 removal efficiency (Thullen et a/., 2002). Adding maerl (calcified seaweed) to a laboratory wetland resulted in 98 percent reduction in phosphorus (Gray et a/., 2000). Wetzel (2001) suggests that all wetland treatment strategies should maximize physical contact and duration of contact between water and microorganisms and periphyton. Periphyton growing on aquatic vegetation have been found to be significant in their assimilation of nutrients (Dierberg et a/., 2002). The importance of submerged aquatic vegeta- tion and periphyton in improving constructed wetland performance in removing nutrients was demonstrated in studies in the Florida Everglades (Goforth, 2001). Research also indicates that the uptake and return of nutrients are separated in time and occur on different temporal scales, which should be taken into account during the design and operation of constructed wetlands (Tanner, 2001 a). A comparison of subsurface systems found that wetlands performed better at removing ammonia when incorporating three design elements: no algae, longer detention times, and deep root penetra- tion of emergent plants, rather than only one or two elements (USEPA, 1993a). Even though natural and constructed wetlands have been used for water quality treatment for many years, there are still gaps in knowledge on performance and design factors. Studies are still needed to better understand the chemical and physical characteristics of various nutrient fractions in runoff as well as the nature of nutrients that remain after passage through wetlands (Dierberg et a/., 2002). Other studies have suggested the need for a widespread measure- ment program to provide a more detailed evaluation of wastewater treatment systems to identify variability and factors contributing to variability (Szabo et a/., 2001). The nutrient removal rates and capacity in both natural and constructed wetland systems need further investigation to allow identification and comparison of nutrient removal in a wide spectrum of wetland types, scales, landscape positions, regional climates, geology, and nutrient inputs. 3.3.1 Related Outcomes of Constructed Wetlands Constructed wetlands designed to treat water high in nutrients generate related beneficial and detrimental outcomes. These outcomes provide additional advantages and disadvantages to using constructed wetlands as BMPs in a WQT program that should be considered when selecting this BMP to generate WQT credits. Knight (1992) provides an over- view of the ancillary benefits and potential problems with the use of wetlands for NPS nutrient discharge. These related outcomes are discussed brie y and incorporated with other study findings. Constructed wetlands can provide many benefits in addition to water quality treatment (Kadlec and Knight, 1996). These benefits include: photosynthetic production; secondary production of fauna, food chain, and habitat diversity; export to adjacent systems; and services to human society such as aesthetics, hunting, recreation, and research (Knight, 1992). One of the key biological benefits of constructed wetlands is their ability to provide habitat for plants and animals. Many plants and animals live in wetlands, and many periodically use wetlands as drinking sources, breeding sites, or foraging areas. For example, a series of shallow ponds constructed to maximize NO3 removal in California had an average avian specie richness ranging between 65 and 76 species per month, including both common and rare species. Wetlands also provide a food source for animals such as nutria and muskrats; however, these species can consume much of the vegetation and reduce the nutrient removal function of constructed wetland (USEPA, 1999). A summary of 17 case studies located in 10 states found that constructed wetlands can provide valuable wetland habitat for waterfowl and other wildlife (USEPA, 1993b). However, wildlife can sometimes be detrimental to the nutrient removal efficiency of wetlands. For example, in a constructed wetlands near Chicago, a large number of carp were found foraging and resuspending sediment, thus decreasing the performance of the wetland. These fish had arrived as juveniles in the in ow and grew up in the wetland. In another example, a wetland constructed to remove nitrogen from 19 ------- municipal wastewater included open water habitat to attract waterfowl. Wintering waterfowl and colonial red-winged blackbird (Agelaius phoeniceus) used the open water areas, but contributed a small amount (2.6 percent nitrogen and 7.0 percent phosphorus of mean daily loads from WWTP) to nutrient loading during November through March (Ander- sen etal., 2003). Using wetlands for nutrient treatment can have demonstrated additional water resources benefits within the wetland and downstream. The use of a natural forested wetland in the Mississippi Delta for wastewater treatment over 50 years has shown significant sedimentation and resulted in increased accretion rates (Day et a/., 2004). The results of the study suggest that the application of nutrient-rich wastewater, and the resulting sedimentation, can also gradually increase wetland elevations and counteract some of the negative effects of sea level rise on coastal wetlands. Adding nutrient-rich water into natural wetlands has been demonstrated to increase productivity of woody vegetation, measured as stem diameter growth, and growth of herbaceous emergent and aquatic vegetation (Day et a/., 2004). The additional growth of emergent and aquatic vegetation contributes more to sediment accretion. This sedimentation function also improves downstream habitat. Water typically ows slowly through both natural and constructed wetlands because of their gentle gradient and vegetation. The slow ow allows fines to settle out or deposit on vegetation. Con- sequently, fewer fines are transported downstream, benefiting fish. Fines in streams can fill interstitial spaces within gravel substrates, reducing the quality of spawning success in fish. In addition to improving fish spawning habitat, constructed wetlands can provide additional benefits by ameliorating ood waters, storing water for multiple uses, and recharging groundwater (Feierabend, 1989; Slather, 1989; Knight, 1992). Watersheds composed of 5 to 10 percent wetlands are capable of providing a 50 percent reduction in peak ood period compared to those watersheds that have none. Therefore, constructed wetlands can be valuable in watershed manage- ment strategies, especially in areas where wetlands have been lost (DeLaney, 1995). The effectiveness of wetlands is determined in part by the location of each wetland in the watershed. In arid regions, the reuse of wastewater through treatment wetlands can be especially helpful in serving to conserve water, provide habitat, recharge groundwater, and maintain longer instream ows downstream (USERA, 2000a). Wetlands built along shorelines of streams, lakes, and marine environments can help control erosion from ows, wind, and shoreline uses. The erosion is largely controlled by the rooted vegetation established in the wetland, which disrupts the ow velocities and binds the soil. Constructed wetlands positioned along shorelines need to be carefully designed, constructed, and maintained to ensure in ow water is treated by the wetland before discharging to adjacent water bod- ies (Hammer, 1992). There are several direct human benefits possible from constructed wetlands. The improvement of water quality by wetlands has been found to benefit human health by reducing disease-causing bacteria and viruses (Jing etal., 2002). Wetlands remove toxic chemicals found in wastewater in addition to nutrients. Harvesting of wetland vegetation has been used for the production of methanol (USERA, 1999). Constructed wetlands with public access and public use pro- vide recreation, research, and educational opportunities. Public education has ancillary benefits of generating support for water quality and watershed protection. Constructed wetlands have been used in combination with other treatment mechanisms to provide safe drinking water (Elias et a/., 2001). Even though there are many benefits from constructed wetlands designed to treat water quality, these wetlands can also have detrimental outcomes. For example, the use of farmland to construct a wetland results in a loss of that land for farming or another land use. Constructed wetlands located in other water bodies (i.e., wetland, stream, or lake) or immediately adjacent to natural water bodies can negatively affect the natural water quality or quantity of these water bodies (USERA, 2000a).This effect depends on the quality of the natural water body and the design of the constructed wetland. Constructed wetlands that attract wildlife may have a negative consequence. For example, siting a constructed wetland near an airport might attract birds, which present a hazard for airplanes and the birds. Constructed wetlands can also be a hazard to wildlife if they provide large amounts of habitat where many birds of various species can interact and spread diseases. Attraction of wildlife could also lead to increased encounters with domestic animals, leading to direct or indirect harm to both animal groups (USERA, 1999). As mentioned above, wildlife can negatively affect the nutri- ent performance of a wetland through direct input of nutrients or remobilization of nutrients. If water input is episodic or seasonal, the high uctuations in water level and potential drought periods could be detrimental for organisms that reside in the wetland. Constructed wetlands can be directly harmful to organisms if the water quality is poor or even toxic. For example, selenium has been found to bioaccumulate in constructed wetlands, leading to reproductive failure in fish and aquatic birds (Nelson et a/., 2000; Lemly and Ohlendorf, 2002). The building of constructed wetlands requires disturbance of soil and vegetation. Disturbed areas are prime locations for colonization by invasive plant species, especially if sources are nearby. Additionally, nutrient loading of wetlands can result in a shift in plant species assemblages, often seen as an increase in weed invasion at the point of ef uent discharge (Chague-Goff et al., 1999). Consequently, constructed wetlands can provide habitat and opportunity for spreading invasive species. 20 ------- Public health and safety may be compromised by constructed wetlands if they are not designed and maintained care- fully. Wetlands can have odors that are unpleasant for neighboring communities. Odors in constructed wetlands are typically associated with high organic loadings, especially near the inlet. Also, without safeguards, wetlands can pose a safety hazard to visitors to the wetland. Constructed wetlands used to treat wastewater need to prevent human contact with the untreated water, which could carry pathogens harmful to human health (USEPA, 1999). In some areas of the country, dangerous reptiles, including poisonous snakes and alligators, could be attracted to constructed wetlands. A USEPA study is examining if treatment wetlands are more or less likely to create risks to wildlife species than adjacent natural wetlands (USEPA, 1999). Another species attracted to wetlands that can be a nuisance or harmful to humans is mosquitoes. Studies of mosquitoes have concluded that the number of breeding mosquitoes in treatment wetlands is not higher than in adjacent natural wet- lands (Crites et a/., 1995). Controlling vegetation to create dispersed open water patches can result in reduced mosquito populations by limiting mosquito refuge areas and increasing predation areas (Thullen et a/., 2002). However, another study found that vegetation management within constructed wetlands conducted in autumn to stimulate denitrification correlated with higher mosquito abundance than control wetlands lacking management (Walton and Jiannino, 2005). According to a USEPA fact sheet (2004), as long as wetlands function as healthy ecosystems—i.e., are able to sustain mosquito-eating fish, amphibians, birds, and insects—they are not uncontrolled breeding grounds for mosquitoes. In fact, it was found that mosquito habitat was reduced by almost 100 percent and the Culex species of mosquito almost eliminated after a degraded wetland no longer requires mosquito control measures (USEPA, 2004). There are also potential negative impacts to air from constructed wetlands. Denitrification process within microbes that occur in wetlands converts NO3 to N2O, which is released to the atmosphere and has negative effects on local ground-level ozone (DeBusk, 1999). This process occurs in anaerobic conditions, typically below the soil surface. A study of constructed wastewater treatment wetlands in Sweden showed that N2O emissions varied seasonally during two years of measurements: large spatial and temporal variations were measured in N2O ux; the largest positive ux of N2O occurred in October, and the smallest positive ux in July (Johansson et a/., 2003). The release of CH4 gas is also a negative outcome of denitrification (Wetzel, 2001). CH4 gas emissions from wetlands can contribute to local odor issues and add to greenhouse gas levels. Emissions of greenhouse gases (CH4 and CO2) were measured throughout an annual cycle and shown to be positively correlated with water temperature in shallow wetland ponds constructed for nitrogen removal (Stadmark and Leonardson, 2005). CH4 production was most pronounced from May to September when NO3 concentrations were low. The study concludes that constructed nutrient removal ponds emit greenhouse gases comparable to lakes in the temperate region. Knight (1992) provides guidance on optimizing the appropriate ancillary benefits and avoiding undesirable side effects while achieving primary nutrient control goals. Many of the benefits and problems with constructed wetlands can be ad- dressed during the planning and designing process. Maintenance following construction of the wetland is also important in prolonging and enhancing the nitrogen and phosphorus removal efficiency and ancillary benefits, while minimizing detrimental outcomes. Thus, the design for constructed wetlands needs to provide access for maintenance. There are several techniques to improving nutrient removal. For example, partial nitrification of swine waste water prior to discharge to a constructed wetland increased TN removal rates (Poach et a/., 2003). Another study found that adding iron to the substrate significantly improved phosphorus retention (Cerezo et a/., 2001). A model showed that increasing nitrification rates in the summer and denitrification rates in the winter would improve nitrogen removal efficiencies. This might be accomplished by increasing carbon supply in winter (Gerke et a/., 2001). The selection of the appropriate plants for constructed wetlands affects the performance and maintenance of the wetland. Floating aquatic systems are more affected by pests and cold temperatures and are more expensive to construct and operate than surface- ow systems planted with emergent plants (Payne and Knight, 1997; Hunt and Poach, 2001). Common plant species used as emergents include bulrushes (Scirpus sp.), cattails (Typha sp.), and rushes (Juncus sp.). These plants are important in transporting oxygen from the leaves and stems to roots, providing an oxidized mi- croenvironment in the typically anaerobic root zone of wetlands (Armstrong, 1964). The juxtaposition of aerobic and anaerobic zones at the soil-water interface is important for nitrification when ammonia is transformed into NO3 (Hunt and Poach, 2001). Thus, the amount of oxygen reaching the root zone affects the rate of nitrification. Different plant species transport oxygen at different rates to this zone; therefore, plant selection affects the performance of constructed wetlands at treating nutrients. For example, bulrushes have higher rates of oxygen transport than cattails (Reddy et a/., 1989; Szb'gi et a/., 1994), and the sediment around bulrush roots was aerobic 30 percent of the time versus 0 percent of the time around cattails (Szb'gi et a/., 2004). Even so, Wetzel (2001) suggests that rooted emergent plants cannot be expected to aerate saturated sediments because the function of translocating oxygen to the roots is to support the metabolic needs of the root tissues, not to oxidize the sediments. 21 ------- Although the results of some of the studies cited above suggest that certain plants may transport excess oxygen down to the sediments, if very high levels of nitrogen removal are required from a treatment wetland, procedures that increase oxidation of wastewater prior to entering the wetlands or designs to include open water areas might be needed to in- crease nutrient removal efficiency (Hunt and Poach, 2001). Removing accumulated emergent biomass and physically limiting the area available for vegetation reestablishment sig- nificantly improved the ammonia removal efficiency. Limiting emergent plants mimics early successional patterns with actively growing plants and results in interspersed open water, which also reduces mosquito populations by increasing predation areas (Thullen et a/., 2002). Harvesting shoots may not be important for long-term nitrogen removal because most of the nitrogen is removed through denitrification (Wetzel, 2001; Matheson et a/., 2002). Tanner (2001 b) found that sediment containing high organic matter accumulated twice the nitrogen and six times the phosphorus than live and dead plant tissue (Tanner et a/, 1998). Therefore, harvesting the above-ground portions of emergent vegetation might provide only a small contribution to long-term removal of nitrogen and phosphorus from the system. Because constructed wetlands mimic natural systems, they are, by design, naturally functioning, passive, and require limited operational maintenance. However, the imitation of natural systems does not eliminate the need for maintenance of constructed wetlands. The most critical element of maintenance is the quick identification and action when water level adjustments are needed (USEPA, 2000b). Water level affects many of the processes occurring within the wetland and the survival of aquatic organisms. Regular inspections are fundamental to identifying problems and taking corrective actions, such as adjusting weirs or other water level control features (Kadlec and Knight, 1996). Constructed wetlands have maintenance requirements similar to stormwater ponds, including hydraulic water and depth control, inlet/outlet structure cleaning, grass mowing of berms, inspection of berm integrity, wetland vegetation management, disease vector (e.g., mosquito) control, and accumulated sediment/organic matter management. Subsur- face systems are prone to clogging and are limited in function by oxygen diffusion (USEPA, 1993a). Surface systems may need extraction of built up sediments or vegetation that block ows (USEPA, 1999). Inspections may identify the need to eliminate or control invasive or nuisance species (USEPA, 2000a). Sprinklers have been used successfully to control adult mosquito populations in constructed wetlands because the sprinklers disrupt the water surface, affecting ovipositioning (Epibare et a/., 1993). Review of the related outcomes of constructed wetlands identified several research needs. The quantitative magnitude of related benefits and detriments may vary greatly from one system to another (Knight, 1992). Therefore, related outcomes need to be quantified and compared to different designs, regional variation, human values, etc. For example, studies are lacking on odor associated with constructed wetlands used for water quality treatment, especially in comparison with natural wetlands (USEPA, 1999). The causes, controls, and magnitude of odors as well as their community acceptance would benefit from research. There is additional need to monitor reference wetlands to compare performance of constructed wetlands and impacts of external factors on wetlands. Monitoring should also include surrounding area as well as the constructed wetland. The design and management of constructed wetlands lack complete understanding and incorporation of problems of channelization, altered microhydrology at the spatial scale of microbes, and assimilation versus physical absorptive retention (Wetzel, 2001). More research is needed on the temporal nature of nutrient removal by constructed wetlands. For example, one study found nitrogen removal efficiency dropped from 79 to 21 percent in one year (Tanner et a/., 2005). Removal efficiencies also dropped between the first and second year in experimental mesocosms (Hench et a/., 2003). These changes in removal efficiency could be attributed to seasonality, wetlands maturity rates, or regional factors. The use of constructed wetlands for trading programs could benefit from additional planning and understanding about the long-term performance and fate of constructed wetlands. 3.4 Modeling Nitrogen and Phosphorus Removal by Wetlands Modeling is used to quantify the performance of processes and to attempt to optimize this performance. Models are useful for acquiring information about performance when actual measurement is prohibitively expensive (Johansson et a/., 2004). The benefits of accurate models include improved designs, reduced monitoring, and predictability of per- formance. This predictability could be used to define credits in a market-based WQT program. A predictive model for constructed wetlands should be able to describe and predict wetland hydraulics, because this directly affects the treat- ment performance of a wetland according to basic water quality modeling such as the k-C* model (Bojcevska, 2005; Persson, 2005; Kadlec, 2000; Persson et a/., 1999; Wong and Geiger, 1997; Kadlec and Knight, 1996). Although the physical and biological processes that drive wetland systems are complex, many mathematical models have been developed to simulate nutrient removal in wetlands. Many of these models were developed by accounting for hydrologic conditions and nutrient dynamics. A mathematical model was developed from studies of lowland rice fields and can be used to assess the extent of absorption from the rhizosphere by wetland plants growing in coded soil, incorporating important plant and soil processes (Kirk and Kronzucker, 2005). McBride and Tanner (1999) developed a 22 ------- mathematical model to simulate patterns of nitrogen removal that were observed in experimental studies of constructed wetlands treating NH4-rich water. Brown (1988) developed a simulation model to predict water quality of out ow water from natural and constructed wetlands. The model requires data input for wetland type, discharge rate, and concentra- tion of nutrients in surface water in ow (Brown, 1988). Another mathematical model that simulates wetland hydrology and nutrient-driven interactions between wastewater and wetlands was tested by comparing simulations with data from a wastewater treatment facility (WTF) (Kadlec and Hammer, 1988). The simulation accurately predicted solute concentrations, biomass growth patterns, changes in the litter pool, and soil accretion rates. Another two-part model was developed by Dorge (1994) that contains a hydrological submodel and a more complex biological submodel. The model was developed to determine the retention and removal of nitrogen in wetlands as water ows from cultivated agricultural land through wetlands to aquatic systems. The model can be used to describe the transport and turnover of nitrogen from fertilization through soil and groundwater to aquatic systems (Dorge, 1994). Some models have focused specifically on plant uptake of nutrients (Langergraber, 2001; Mankin and Fynn 1996; Romero et a/., 1999; Wegehenkel, 2000). Langergraber (2001) developed a model (CW2D) to simulate plant uptake of nutrients in constructed subsurface ow wetlands relative to water uptake. The model was tested with indoor pilot-scale con- structed wetlands. Langergraber (2005) tested the CW2D model for the portion of nutrient removal attributable to plant uptake and concluded that it is possible to simulate plant uptake of nutrients in constructed wetlands with a model that links nutrient uptake with water uptake. Another model, HYDRUS-2D, also models nutrient uptake by plants coupled with water uptake (Simunek et a/., 1999). A mass balance method was used to quantify the performance of nutrient storage systems in an experimental artificial wetland (Breen, 1990). In this simulation, hydrologic design to maximize wastewater-root zone contact was determined to be important for treatment performance. Furthermore, uptake by plants was found to be responsible for most of the nutrient removal, and plant biomass was determined to be the primary nutrient storage mechanism. Other studies that included field measurements of nutrient uptake in constructed wetlands often come up with the opposite result; plant uptake is a relatively small component of total nutrient uptake compared to microbial processing (Hamersley et a/., 2001; Lin et a/., 2002; Stein et a/., 2003). Simulations of natural wetlands have also been modeled. A model was developed specifically for riverine wetlands to describe the interaction and processing of carbon, nitrogen, and phosphorus (van der Peijl and Verhoeven, 1999). The simulation results showed a good fit to data collected on riverine wetlands in southwestern England. In a later test of the model to study nutrient enrichment of a riverine wetland, results diverged from the field studies when the simula- tions predicted a far greater role for nitrogen as limiting factor than the field experiments (van der Peijl et a/., 2000). The lack of agreement between the simulation and the field experiments was attributed to differences in the environmental conditions (e.g., weather and area measurements) between the field experiment and the computer simulation. Field-scale simulation models have recently been practiced instead of intensely and expensively surveying farms or conducting field trials for the myriad of conditions in a watershed (Johansson et a/., 2004). The advantage of field-scale models is that they account for variability in land cover, soil, tillage, and drainage practices. An example of this type of model is the Agricultural Drainage and Pesticide Transport (ADAPT) model. This model simulates the nutrient loads and crop yields resulting from alternative phosphorus BMPs using variable management practices (e.g., crop choice, fertilizer use) and climatological data (Johansson et a/., 2004). Watershed modeling has been used to predict nutrient loadings (Arheimer and Wittgren, 2002; Gowda et a/., 1998). For example, a study in Eastern Europe between Estonia and Russia used a large-scale geographic information system (GlS)-based nutrient transport model over a 15-year period to model the change in nutrient levels caused by reduced agriculture experienced by the region since the restructuring of the former USSR (Mourad and van der Perk, 2004). The study applied the modeling approach developed by De Wit (1999, 2001), the PolFlow model, which used large-scale, spatially variable estimates of sources, transport, and decay of TN and TP over five-year periods. The model consists of three steps: estimating both diffuse (i.e., nonpoint) and PS emissions; calculating long-term hydrological uxes; and modeling the transport of emitted nutrients through the soil, groundwater, and surface network. Results from applying the PolFlow model were compared to measured loads and were found to coincide reasonably well with one river and overestimate loadings for another with a smaller drainage basin. In the model, nutrient retention within a drainage basin is simply modeled using a transport fraction factor that is determined by slope and discharge. The study found that modeling was complicated by the transfer of nutrients from nonpoint emissions, which is strongly governed by the retention in and periodic release from storages such as root zone, tile drains, ditches, channels, substrates, oodplains, etc. Future research is needed to refine the quantification of this nutrient transport fraction. Improvement to modeling nonpoint emissions was suggested by increasing knowledge about the spatial and temporal distribution of various nutrient storage and uxes along pathways between the soil surface and water bodies (Mourad and van der Perk, 2004). In north Georgia, watershed-scale modeling is being used to estimate phosphorus loads for different NPS agricultural practices. The Soil Water Assessment Tool (SWAT), based on the USERA Better Assessment Science Integrating Point 23 ------- and Nonpoint Sources software, is used for rural watersheds and can estimate phosphorus loads by calculating soil loss. The model is calibrated using field samples and local watershed data. Calibration is conducted for two reasons: to determine the parameter values that characterize the general hydrology of the watershed, and to find the parameter values that describe phosphorus and sediment losses from agricultural sources and the effect of BMPs (River Basin Center [RBC], 2003). The DUFLOW model was developed in The Netherlands for simulating one-dimensional unsteady ow and water quality in open channel systems (EDS, 1998). This model allows for the modeling of pollutant transport and defines processes and pollutant interactions. A similar model was developed and applied to wetlands surrounding Lake Victoria, Tanzania, to simulate the buffering process of wetlands and the capacity of individual natural wetlands to absorb sediments, nutrients, and pollutants. This model estimated the impacts of inputs on water quality, quantity, and accumulation rates in permanent fringe wetland and seasonal oodplain wetlands. This model included both nitrogen and phosphorus compounds and 28 different parameters. The application of the model showed that there was seasonal ow from the lake to the wetlands (Mwanuzi et a/., 2003). A study in southwest Sweden was conducted to examine the applicability of the GLEAMS model to simulate the drain- age discharge and nitrogen and phosphorus concentrations in the discharge water from a clay field with drain tiles (Shirmohammadi et a/., 1998). The results indicated that GLEAMS was capable of simulating reduction of NO3 and dis- solved phosphorus losses reasonably well, but there were no algorithms to simulate the particulate phosphorus losses via drain tiles. Therefore, a submodel, "PARTLE," was developed and tested. These two models, combined, provided reasonable estimates of particulate phosphorus loss via drainage through soil. The study concluded that considering the impact of preferential ow and the ratio of annual drainage discharge to annual precipitation is necessary for proper predictions of particulate phosphorus in structured soils. Modeling fate and behavior of pollutants requires simulation of both transport and controlling processes such as sedi- mentation, biomass uptake, sorption, etc. (Mwanuzi et a/., 2003). Modeling nitrogen ux in the lower Mississippi River has been investigated by Mclsaac et a/. (2002). One model they examined accounted for 85 percent of the variation in observed annual NO3 ux, but tended to underestimate high NO3 ux and overestimate low NO3 ux. Another model that used water yield and net anthropogenic nitrogen inputs (NANI) accounted for 95 percent of the variation in riverine nitrogen ux. The NANI approach accounted for nitrogen harvested in crops and assumed that crop harvest in excess of the nutritional needs of the humans and livestock in the basin would be exported from the basin. The U.S. White House Committee on Natural Resources and Environment (CENR) developed a more comprehensive nitrogen budget that included estimates of ammonia volatilization, denitrification, and exchanges with soil organic matter. The residual nitrogen in the CENR budget was weakly and negatively correlated with observed riverine NO3 ux. When the CENR nitrogen budget was modified by assuming that soil organic nitrogen levels had been relatively constant, and ammonia volatilization losses were redeposited within the basin, the trend of residual nitrogen closely matched temporal variation in NANI and was positively correlated with riverine NO3 ux in the lower Mississippi River (Mclsaac et a/., 2002). Crop yield simulation models that incorporate spatial information may apply to modeling nutrient removal in constructed wetlands. Many of these models predict nutrient cycling such as nitrogen and phosphorus fertilization, nutrient transfor- mations, crop uptake, and nutrient movement (Priya and Shibasaki, 2001). Typically, robust and general models combine both empirical and mechanistic modeling. To gather large amounts of data for empirical modeling, large databases have been developed. One of the most comprehensive summarization ef- forts to date was the development of the NADB, funded by USERA (USEPA, 1994). Two versions of the database were ultimately distributed. Version 1, completed in 1994, used an MS®-DOS database system known as Dbase III and was the most widely distributed version. Version 2 of the NADB was built upon an MS® Windows Access database engine. Collected data is analyzed using regression to determine relationships between variables. However, regression does not necessarily indicate causality; thus, spurious relationships can be modeled. Research databases have been used to validate and modify computer models (Humboldt University, 2000). The first NADB database fell short of meeting its goal of providing sufficient information to optimize the design of treat- ment wetlands (USEPA, 1999). The bulk of the entries in the revised USEPA-sponsored database (NADB Version II) have been placed into a new database called the Treatment Wetland Database (TWDB). This web-based database adds many additional treatment wetlands to the USEPA-revised database. While the emphasis is on constructed wetlands, natural wetlands are also included in the TWDB database (Humboldt University, 2000). Rigorous models for constructed wetland systems need to be developed by designing a comprehensive series of iterative studies, collecting data based on quality-controlled specifications, and analyzing the relationships between design features, environmental parameters, and performance. An assessment of current modeling efforts suggests that an effective plan is needed for the design of studies that will provide a comprehensive understanding of the processes that occur within constructed wetlands. The study design should include extensive, quality-assured, transect data at numerous selected sites to capture spatial variation over an extended period of time to identify temporal variation. Using existing 24 ------- mathematical models of wetlands processes combined with the study data, an iterative model of complex systems can be developed and used (USEPA, 2000b). Modeling constructed wetlands is complicated by the complexity of the reaction mechanisms within these systems, the difficulty in charactering the constituents within the in ow water, and the accountability of in uential physical and external factors. Additional challenges include the ability to scale up, shortcomings in analytical and sampling methods, and the capacity to verify models with long-term monitoring (USEPA, 2000b). Modeling is also problematic because wetlands are highly ephemeral in capabilities and efficiencies for uptake and especially biologically-mediated retention of nutrients and pollutants (Wetzel, 2001). Proper model selection is one of the most important steps in any modeling exercise (Priya and Shibasaki, 2001). Many of the current design models for constructed wetlands rely on the assump- tions of steady-state water ow conditions and first-order decay of pollutants. Studies have suggested that this is not representative of field conditions (Kadlec and Knight, 1996; Persson et a/., 1999; Persson and Wittgren, 2004). Thus, there is a need for more experimental data to further define how hydraulic patterns are affected under different envi- ronmental conditions, both spatial and temporal. Further research is needed to improve nutrient models, including detailed hydraulic investigations of full-scale wetlands, simulations of outdoor constructed wetland systems, investigation of plant uptake models, improving the simulation tool by accounting for substrate clogging processes, and developing experimental techniques to measure model param- eters (Langergraber, 2003). More work is needed to adequately account for field environmental conditions in computer simulations (van der Peijl et a/., 2000). Modeling nutrient removal by wetlands should account for delays in nutrient ow pathways through groundwater. There are temporal lags in groundwater ow depending on the size of the aquifer extent and recharge zone, as well as soil type and geology. Consequently, land-use management practices to reduce nutrient loading to a watershed might not result in water-quality improvements for many years, especially if implemented on land far from streams (Wayland et a/., 2002). Additional incorporation into models of microbial and hydrological in uences on nutrient uptake could improve the pre- dictability of nutrient reductions. Models tend to underestimate that most nutrients from in uent sources are assimilated directly by microbiota (i.e., bacteria, algae, fungi) ratherthan plants and are intensively recycled amongst these microbial communities, which coverall wetted surface in aquatic ecosystems (Wetzel, 2001). Channelization and variability in ow velocity are among the greatest limitations to maximizing retention capacities of nutrients in wetlands (Wetzel, 2001). If these channels and ow patterns are not included in models, then the predictability of the models is hindered by the inadequate consideration of these patterns and their effect on absorption/adsorption rates. Advances in understand- ing the hydraulic performance in wetlands can be gained by studying water ow patterns or hydraulic residence time distributions obtained from tracer experiments (Persson, 2005). 3.5 Defining Nutrient Load Reduction Credits A comprehensive review of WQT in the United States identified 40 trading initiatives in 17 states, 29 of which specifically cover nitrogen or phosphorus (Breetz et a/., 2004). According to the information on WQT programs compiled by Breetz et a/. (2004), potential NPS WQT partners include: new or expanding WWTPs trading with stormwater BMP retrofits, street sweeping, land reclamation, surplus reductions from existing WWTPs, diverted ow from existing WWTPs, conversion from surface to subsurface discharges, removal of poorly functioning septic systems, or wetland restoration. The service area for WQT programs (i.e., the area in which trades are allowed) is most often defined by a watershed or sub-basin boundary. A trading program in New York allowed trades only within the same basin, with the exception of one WWTP that received credit for reduction in upstream phosphorus in a basin hydrologically connected to the basin of discharge (Breetz et a/., 2004). Establishing a trading service area can be further complicated by political boundaries, particularly in watersheds that cross state boundaries. Further division of hydrologically-related boundaries into trading zones may be necessary in some area because of non-uniform mixing of nutrients in water bodies (Kramer, 2000). Credits are often restricted to sources upstream from the point of discharge (Breetz et a/., 2004). Building sufficient credit inventory to make a trading program cost-effective can be accomplished in areas that have certain conditions favorable for the establishment of WQT programs. Favorable conditions usually include a wide varia- tion in PS control costs, a large number of PSs, and the availability of low-cost NPS reductions (Kramer, 2000). The seasonality of NPS reductions through implementation of BMPs is also an important factor to consider. The extent to which the spatial and temporal patterns in wetland (or other BMP) nutrient removal performance match the spatial and temporal patterns in load reductions needed by the PSs can determine whether NPS reductions would be appropri- ate to offset PS discharges (Crumpton, 2006). Further organizational details that are required for a successful trading program are outlined by Stavins and Whitehead (1996). These details include clearly defining responsibility for total discharge; defining trading area; establishing legal authority for trades through rulemaking, legislation, and NPDES permits; monitoring or statistical models to verify compliance; establishing procedures to reduce the costs of identifying potential trading partners, negotiating trades, and program administration; encouraging public involvement to help speed the regulatory process; and regular evaluation of the program for overall efficiency. 25 ------- Most BMPs used in WQT programs are general and are applicable to many agricultural operations; a few are specific to certain farming activities. Example BMPs used in WQT programs include: livestock exclusions, buffer strips, constructed wetlands, wet ponds, alternative surface tile inlets, cover cropping, roof gutters, filter walls and filter strips, manure storage pits, conservation tillage, runoff control systems, settling basins, concrete barnyards, diversions, underground outlets, livestock exclusion rotational grazing, wetland restoration, land set-asides, nitrogen application restriction, ma- nure incorporation, sediment reductions through land acquisition, conservation easements, streambank stabilization, development of silt basins, dry dams, terraces, grassed waterways, filter strips, and grade control structures (Breetz et a/., 2004; Kramer, 2000). Determining credit value for NPS operations is primarily based on getting agency concurrence of acceptable BMPs that reduce nitrogen and phosphorus loading. Some agencies have developed a list of BMPs that are eligible to be used in WQT programs (Idaho Department of Environmental Quality [IDEQ], 2003). The nutrient reductions from these BMPs are usually required to be surplus, quantifiable, permanent, and enforceable. Creating credits can be difficult in watersheds where agricultural sources are significant contributors to nutrient loads. A common assumption is that agriculture can be a primary supplier of these credits; however, the willingness of farmers to participate in such programs can be problematic for several reasons. Often, trading guidelines prohibit farmers from selling credits when making legally required (e.g., by state regulation) land management changes3 or for which the farmer has already been paid (e.g., green payments). These prohibitions reduce the ability of farmers to supply low-cost credits. Because they require farmers create credits by implementing BMPs in addition to current practices and then demonstrate that the BMPs do indeed reduce discharge levels (King, 2005). Many BMPs do not show direct improvements and are not easily validated. Rahr, LBR and North Carolina have skirted this issue by assigning typical performance values to specific BMPs. Applying additional BMPs and validating their effectiveness can be a risky endeavor for credit producers because there is no guarantee that the time and money spent will generate more credits. The need to establish a baseline nutrient load and show reduced discharge levels after BMP implementation creates two additional obstacles for farmers considering supplying credits. First, in order to establish the baseline to quantify marketable credits, an outside party must determine what nutrient-reducing land management practices and/or BMPs farmers have already implemented.) This evaluation is something most farmers are leery about because it could gener- ate questions regarding their justification for green payments or repercussions related to the legality of their land use practices with respect to state requirements. Second, farmers know that their NPS nutrient discharge is currently not regulated as much as PS discharge because NPSs can be difficult to measure, are weather-dependent, and can be costly to control. By showing that they can create baseline information and then reduce their discharges below baseline, they are actually demonstrating that NPS discharge is measurable and that perhaps it should be regulated the same as PS discharge (King, 2005). Farmers are reluctant to participate in a program that could lead to additional regulatory controls over their activities. The LBR program attempts to sidestep this issue through the approach for calculating nu- trient credits. The baseline load of a NPS is first determined using the USDA-NRCS Surface Irrigation Soil Loss (SISL) model. Credits generated by a BMP are calculated by subtracting the individual NPS share of nutrient reduction required in the TMDL from the total nutrient reduction created by a BMP (baseline load multiplied by the BMP effectiveness ratio [Breetz et a/., 2004]). 3.5.1 Measuring Nutrient Removal Performance Estimating or quantifying existing NPS nutrient loads is necessary for calculating credits and for providing a baseline to measure performance. Methods for measuring baseline conditions and performance of NPS nutrient reduction efforts are highly dependent on the type of activity being conducted and the associated land use practices. Credits have been granted for reductions in nutrient loads achieved through livestock exclusion, stabilization of eroding stream banks, con- version of farmland back to oodplain, and vegetation restoration. These activities result in reductions in sediment and soil loss as well as the associated nutrient reductions (Fang and Easter, 2003). Other programs have granted credits for voluntary reductions as quantified by a "qualified soil and water conservation professional" according to standardized procedures (Breetz et a/., 2004). Where nutrient reduction data are limited and models contain uncertainties, as is currently the case of constructed wetlands on a watershed scale, measurements of nutrient reductions can be taken to determine credits. Performance can be measured as power (nutrient mass removed overtime) or efficiency (nutrient fraction removed overtime). Direct measurement of nutrient reduction performance of a constructed wetland requires measuring the difference in nutrient concentration between water in ows to and out ows from the wetland. The amount of actual nutrient reduction can be measured using grab samples taken during the BMP operation. In the LBR WQT program, the measurement schedule is determined in the trading contract for specific watershed-scale BMPs and regulatory guidance (ISCC, 2002). Sfate land management requirements are relatively rare. North Carolina is an example of a state with land management re- quirements in some watersheds. 26 ------- Measuring the nutrient removal performance of a BMP has advantages and disadvantages. An advantage of measuring over calculating nutrient reduction is that it diminishes uncertainties, especially in terms of modeling nutrient loss, nutrient removal by the BMP, and final nutrient loading in downstream water bodies. A disadvantage of measuring the effective- ness of nutrient reduction is that it is very difficult and time-consuming in natural and restored wetlands because the inlets and outlets often extend over relatively broad areas. It is much easier to measure the effectiveness of constructed wetlands than natural wetlands because they can be designed with limited inlets, and outlets are often confined in order to control water levels. The difference in concentrations of phosphorus, nitrogen, and other water quality parameters of interest can be measured at the inlet and outlet, and can be taken as a direct measure of nutrient removal efficiency of the wetland. However, measurement approaches need to account for diurnal, seasonal, and spatial variability in nutrient retention efficiency (Wetzel, 2001). A review of 60 wetland studies showed that the duration and frequency of sampling, as well as which nutrient forms were analyzed, in uenced in part whether the wetland appeared to reduce or increase nutrient loading (Fisher and Acreman, 2004). Studies that included frequent sampling during high- ow events, or that were conducted for more than one year, were more likely to indicate that the wetland increased nutrient loading, which is the opposite of the expected result. Nutrients can be ushed out of wetlands during high- ow events, which results in an increase of nutrients contained in water exiting a wetland. Wetland design can be used to mitigate or prevent this from happening. Measurements need to be taken throughout the year in order to capture the variations in removal ef- ficiency that wetlands experience overtime and seasons (Fisher and Acreman, 2004). In addition to temporal factors, removal efficiency can vary depending on the position the wetland has in the landscape and in the watershed. For example, wetlands high in the watershed may have limited opportunity to intercept nutrients, and wetlands low in the watershed may have a ow-through rate that limits efficiency. Efficiency is also affected by the geologic and ecologic conditions in the wetland, where different plant species or vegetation structure vary in their ability to in uence nutrient removal (Mitsch and Gosselink, 2000). As described in the following section, WQT ratios can be designed to account for the location of a BMP within a watershed. 3.5.2 Modeling and Calculating Nutrient Removal Credits generated by implementation of BMPs can be modeled or calculated if it is too costly or infeasible to measure the actual performance of the BMP. The first step in calculating credits is to determine the amount of nutrients produced at a location. For example, to estimate the current phosphorus loads from cropland, formulas, such as the Revised Universal Soil Loss Equation and SISL Equation, are used as the most accurate and simple method to estimate soil loss from surface-irrigated cropland (ISCC, 2002; ETN, 2003). These tools can be used to calculate the tons of soil loss per acre per irrigation season. Phosphorus reduction is compared against the phosphorus loads in baseline years used for the TMDL (ISCC, 2002). As another example, reductions in phosphorus loads from cattle exclusion and rotational grazing can be derived by calculating the volume of manure deposited and the associated phosphorus content and delivery ratio (Breetz et a/., 2004). Once the nutrient load has been calculated, the nutrient reduction from BMPs is needed to generate credits. One method of calculating potential nutrient reduction is by estimating the average nutrient load reduction associated with a BMP. Nutrient load reductions achieved through agricultural BMPs can also be estimated using field-scale water management simulation models such as the ADAPT model. The ADAPT model can be used to model erosion and sediment transport, which allows for an estimate of phosphorus load reductions from cover cropping, tillage practices, fertilizer applications, crop rotation systems, and planting/harvest dates (Fang and Easter, 2003). When modeling or calculations are used to estimate nutrient reductions, WQT programs tend to apply a discount to compensate for the uncertainty associated with the effectiveness of the BMP, the accuracy of the modeling results, and geographic variations in nutrient loads and environmental benefits. The multiplier, which is often expressed as a ratio (e.g., 2.1:1 is the trading ratio used by the Neuse River Basin WQT program), is used by WQT programs to reduce the number of transferable credits generated by a BMP. The trading ratio is designed to account for the level of uncertainty associated with the methodology selected to calculate credits, and it is also often established for WQT between NPSs and PSs to include a margin of safety to account for uncertainty in the determination of load reduction (Kramer, 2000). Credits are also sometimes discounted using delivery ratios to account for location of the BMP project versus the loca- tion of the nutrient source that is purchasing the credit. Location within the trading service area can affect credit value. Delivery ratios were developed for the LBR program, which vary from 100 percent in riparian areas, to 20 percent within % mile of the receiving water body, to 10 percent at distances greater than % mile from the receiving water body (Breetz et a/., 2004). Ratio discounts range from 1.1:1 to 3:1. Overall, trading ratios are applied in WQT programs to ensure that water quality in a watershed is protected and trades between sources distributed throughout a watershed result in environmentally equivalent or better outcomes at the point of environmental concern (IDEQ, 2003). To minimize local impacts or hot spots from PSs off-setting some of their nutrient discharges through trades, NPDES permits may place a limit on the total amount of the nutrient discharge the PS may be offset through Another common approach to mini- mizing the creation of hot spots, requiring prior approval from the organization that administers the trading program or the state WQ regulator ensures the trade does not result in localized impacts to water quality. 27 ------- Other WQT programs have developed several ratios used in combination to address uncertainties. In Idaho, a River Location Ratio accounts for the transmission loss of phosphorus occurring within the river system. Site Location Fac- tors account for transmission loss due to phosphorus uptake by plants, water reuse, and the portion of phosphorus that will bind with river sediments and settle out. Drainage Delivery Ratios are determined using a linear calculation of phosphorus transmission loss in the subwatershed's main channels (IDEQ, 2003). Additional information on trading ratios is also included in Section 4.3.2.5. 3.5.3 Assessing and Verifying Performance The performance of BMPs needs to be assessed and verified to ensure a WQT program is successful. In the Idaho WQT program, BMPs are certified as installed according to NRCS and meeting applicable laws and regulations. Once the BMP is certified and operational, phosphorus reduction credits can be generated and traded (IDEQ, 2003). Monitor- ing is another way to evaluate performance of BMPs. In Idaho they are used to demonstrate that the BMP is designed and maintained properly, and the program guidance requires at least one annual field inspection to evaluate BMP per- formance. Constructed wetlands are to be evaluated before and during the middle of the season of use (ISCC, 2002). Another program suggests field spot checks should be performed for BMPs with a maintenance life of over one year. The number of checks is determined based on an annual percentage of those BMPs (ETN, 2003). Although protocols that produce reliable, quantifiable results have been established to monitor discharges from PSs for most industries, similar protocols are not available to measure discharges from NPSs. Generating reliable, long-term monitoring data of NPS discharges is one of the major challenges faced by WQT programs (Breetz et a/., 2004). Many trading programs do not have systems for monitoring discharges from NPSs because it would be prohibitively expensive and a long monitoring period is required to provide conclusive results (Breetz et a/., 2004; Jaksch 2000, Fang and Easter 2003). Periodic reviews of BMPs are often used in lieu of quantifiable monitoring. Some programs use a combination of site-specific inspection at 5 to 10 percent of BMPs and continuous water sampling every eight hours at four locations on a sub-watershed scale (Breetz et a/., 2004). Models used to determine nutrient loads and nutrient reductions also need to be verified. A common method to verify models is to calibrate them using local data. For example, stream ow conditions are monitored and grab samples are collected to calibrate SWAT for ow and phosphorus removal rates. In addition, background levels of soil phosphorus are determined by soil samples and used to calculate a soil phosphorus extraction coefficient, which is used to calibrate SWAT. Other models can also be calibrated using daily data of groundwater, inter ow, and overland ow from differ- ent land use and soil combinations. Several years of data are required for accurate calibration (RBC, 2003). Validating models must consider spatial and temporal scales as well as data sources and manipulation (Priya and Shibasaki, 2001). Modeling nutrient fate and transport within a watershed is an extremely complex technical field, and a large volume of information is available on various modeling techniques used in watersheds across the United States. As- sessing the various methods being used to model nutrients within a watershed is beyond the scope of this paper, but is an important research need. 3.5.4 Determining the Useful Life of Credits Many programs establish time limits on the useful life of BMPs, after which it may no longer be effective. The length of time a BMP can be used to generate credits, tends to be a function of how long it tends to be effective at removing nutrients, with a margin of safety added (ETN, 2003). A comprehensive survey of trading initiatives found that structural BMP credits were assigned a 10-year useful life, and non-structural BMP credits were typically good for 3 years (Breetz et a/., 2004). A BMP's maintenance life and a margin of safety for uncertainties are used to determine the duration of credits (ETN, 2003). Credited reductions are also sometimes limited in time to be contemporaneous with credit use (e.g., the term of a NPDES permit) (Kramer, 2000). BMPs have been given individual life spans to assure credit buyers that credits would be available and to assure credit sellers that opportunities to market their credits persist for at least the designated life span of the BMP they choose to implement. In some WQT programs, the life span assigned to BMPs re ected the professional judgments of scientists, regulators, and field practitioners. In the LBR case study, constructed wetlands were originally assigned a 5-year life span, but this was increased to 15 years based on discussion within a technical focus group (Koberg, 2006). In the Tar- Pamlico case study, the credit life span for constructed wetlands is currently 10 years. The handling of credits that have been banked, but not used within 10 years, is one of the issues participants in this WQT program are currently working to resolve (Huisman, 2006). More research and discussion are needed to evaluate and determine the ecologically and programmatically functional life spans for constructed wetland BMPs used in WQT programs throughout the United States, the change in BMP performance over this life span, and the relationship of this life span and performance to water quality credit value. 28 ------- 4.0 Economic Literature Review Traditionally, PS dischargers have three alternatives for managing their discharger liability: (1) meet allowances by investing in additional control measures, (2) meet allowances by trading for WQT credits, or (3) evade regulations and use legal and political processes to minimize enforcement penalties that are unavoidable (Kydland and Prescott, 1977). Because direct action (i.e., items 1 and 2) has been expensive and financially ineffective, strategies involving avoidance or liability transfer have become popular recently (King, 2005; Faeth, 2000). WQT is a voluntary alternative for achieving regulatory compliance. It is a relatively new program, whereby parties can meet their discharge allowances by trading with each other. In WQT, cost-ineffective dischargers buy nutrient allowances or credits from cost-effective4 dischargers, who have earned them by voluntarily implementing BMPs for nutrient control. By trading credits, parties reduce the overall cost of achieving nutrient reduction targets. In an ideal market, this process minimizes the cost of nutrient abatement. An established market or exchange provides the mechanism for WQT transactions. The regulator may play a third-party role in the market, protecting the interests of the public by ensuring that trading does not lead to degradation of the environment, and setting the ground rules for trading. At a minimum, the regulator must recognize WQT as a legitimate alternative to discharge compliance. Overall, economists, regulators, dischargers, environmentalists, and other stakeholders have advocated WQT as a way to use markets to reduce the cost of nutrient compliance. For example, a simulated trade for the Idaho LBR trading program estimated cost savings to be $10 to $158 per pound of phosphorus reduction using a sediment basin and constructed wetland in series over PS controls (Breetz et a/., 2004). Furthermore, the Tar-Pamlico Basin Association (Association) estimated potential costs at $7 million to achieve a comparable level of nutrient reduction that a $1 million investment in NPS controls yielded (DeAlessi, 2003). The approach diversifies discharger alternatives for controlling nutrient with less regulation, less cost, and accelerated compliance. This diversification allows for optimum utility of the watershed without increasing natural resource risk. In all the case studies reviewed, regulatory oversight controls the process. WQT is an attractive strategy for managing and reducing nutrient discharge. It presumes that PS dischargers will prefer to meet their allowances by buying credits on the market if it is less expensive than installing and operating new controls. It also presumes that NPS dischargers will elect to generate and sell credits by implementing and operating BMPs, if risks and return on investment are favorable compared to other uses of the land. As of 2004, more than 70 WQT initiatives have been set up in the United States, establishing several WQT trades and pilot projects (Breetz et a/., 2004). USERA (2004) has simplified the task for future exchanges, providing technical information for setting up an exchange, measuring equivalency of nutrient discharges, developing rules of exchange, establishing trading baselines, and structuring liability transfers (see Section 5.0 for more information on the USERA Water Quality Trading Policy). Despite established market infrastructure and strong institutional support, nutrient trades have been relatively scarce to date. However, some trades have resulted, especially PS-NPS trades characterized by high financial leverage. Scarce nutrient credit supply from NPSs and lackluster credit demand from PSs are primarily responsible for this weak market performance (King, 2005; King and Kuch, 2003). Incomplete economic valuations of WQT alternatives may lead to hesitation to participate in WQT. Price should re ect the intersection of the supply and demand curves, which define the relationships between how much a seller will supply and a buyer will demand for a given price, respectively. However, several factors affect each of these relationships and thus the market efficiency. A more reliable approach to credit pricing, based on thorough and cost-effective economic valuation accounting for risk, which will more accurately define Cosf effectiveness refers to the cost of achieving desired outcomes in terms of relevant outputs, programs or administered expenses. Cost effectiveness of an output or program is different than efficiency. The latter refers to output per unit of input. Economic efficiency allocates resources to people who are the most successful at gaining social power. In the economist's ideal world, the rich get richer and the poor get poorer... There is an assumption in economics that the market system handles resource allocation in an efficient manner unless proven otherwise (Tietenberg, 2001; Nguyen et al., 2004). 29 ------- the supply-demand curves, is needed to enable traders to value their option to reduce their nutrient management costs by WQT. Based on a review of past initiatives, particularly those of the four case studies presented in Sections 6 through 9, this section identifies the primary economic challenges to developing a robust WQT market involving wetlands and to set- ting up these exchanges. Potential solutions to these problems are introduced and suggestions are offered to stimulate the WQT market and accelerate nutrient reductions in watersheds and receiving waters. With the focus on the utility of wetlands as a means to earn sellable credits, these challenges are not necessarily generalizations applicable to all of WQT. WQT provides an alternative way to quickly implement policy that includes NPSs and ensures a reduction in water nutrient loads. Two strategies are available to the NPS dischargers: (1) function as status quo, discharging at accepted baseline levels and (2) reduce discharges from baseline levels through BMPs, thereby generating tradable credits The selection of a strategy involves an assessment of costs and benefits, accounting for risk. Only the second strategy provides NPS dischargers with opportunity to invest in BMPs and WQT. Only the generation of credits by NPSs and the demand for credits by PSs provide the environment for a trade. This does not mean a trade will be executed. Agency policy controls the risk of degrading the watershed. As such, the value of WQT is well defined in terms of "overall reduced pollution rate," (pounds/time) within concentration limits (mg/L), rather than the rate of economic value creation (dollars/time). As a result, regulators supporting WQT only have to guide strategies that lead to constituent mass rate reductions. Beyond that, regulators may also contribute to developing, implementing, and monitoring the market. The implication is that reducing nutrient discharge for credit generation increases the services of ecosystems reliant on that water, and thereby the potential to create economic value in the future. In WQT, nutrient reduction is driven by discharge limits imposed on PS. The price of nutrient credits is in part determined by the demand for and supply of credits. Economic valuation of strategic alternatives, i.e., accounting for risk aversion, is a valuable metric for potential trading participants to decide whether to trade, and negotiating the terms and conditions of the trade. Although a full economic valuation may encourage an active market, it is not critical for successful trades. 4.1 What Factors Determine the Cost of Creating a Market? WQT requires establishing certain structures: (1) approved use of discharge credit trades to achieve compliance, (2) a trading platform or exchange, (3) sources of supply and demand, (4) a pricing structure that accounts for liability transfer, and (5) a governing body responsible for oversight and enforcement. Although Step 1 mandates regulatory involvement, the remaining steps are plausible with varying degrees of it. Likewise, actual trading involves private transactions with varying degrees of regulatory oversight. A team of oversight and contributing agencies assumes most concept development and market development costs. Individual and associated dischargers, independent investors, private and public grant institutions, and other enterprises contribute as well. Certain costs are usually incurred when WQT markets are developed and launched, as listed below. These are one-time set-up costs, which may span several years. Once the market is operational, administration and governance costs are embedded in transaction costs, as described in Section 4.3.3 • Concept review and approval cost • Baseline assessment cost • Objective-setting cost • Allowance allocation cost • Market development cost • Pricing structure cost • BMP development cost • Stakeholder buy-in cost Each of the selected case studies—i.e., Cherry Creek in Colorado, Rahr in Minnesota, LBR in Idaho, and Tar-Pamlico River and Neuse River in North Carolina—demonstrate these cost structures (e.g., Breetz et a/., 2004; Jaksch, 2000; Anderson, 2000; Kieser and Associates, 2004). To cut costs and improve internal efficiencies, certain lead agencies hire dedicated staff for WQT market and permit development. In the Rahr (PS) Malting Company trade, MPCA absorbed 85 percent of the dedicated staff cost. As the WQT credit buyer, Rahr paid the remainder (Jaksch, 2000). 30 ------- 4.1.1 Concept Review and Approval Cost Agencies and/or dischargers interested in WQT thoroughly assess the viability of WQT in their jurisdictions, considering watershed-specific issues, such as hydrology, geology, biology, ecology, economics, source distribution, stakeholder interests, and so forth. The agencies engage local, state, and federal stakeholders potentially interested in the process (e.g., USEPA, US Department of Fish and Wildlife Service). They explore the viability of forming teams of regulators experienced in WQT, as well as agricultural, industrial, environmental, and other stakeholders. The cost of completing this review is highly variable, and dependent on watershed-specific physical conditions, natural resources, stakeholder views, agency positions, and other matters. For example, each of the four trades for Rahr required concept review and approval, contributing to total transaction costs of $105,000 (Fang and Easter, 2003). 4.1.2 Baseline Assessment Cost As part of concept evaluation to achieve a watershed's TMDL, agencies oversee field studies that assess the distribution of nutrients in surface waters and shallow groundwater. Ecosystems, hydrology, biota, and other natural systems are studied as well. In addition, field investigations and records audits establish or approximate nutrients discharge history for PSs (e.g., NPDES-permitted dischargers) and NPSs (e.g., non-permitted agricultural, forested and urban land) in the watershed. In certain situations, validated information from detailed studies is needed to implement watershed management mod- els, ecosystem models, land use models, or commodity models (e.g., timber production). For example, $300,000 were spent to develop a special estuary model to track and predict the behavior of nutrients in the Tar-Pamlico WQT region of North Carolina, (Gannon, 2005a). An association of prospective PS traders paid the cost to develop this sophisticated model. Environmental grants, subsidies, and special contributions might be available to offset most or all of the baseline as- sessment costs, including those for model development. 4.1.3 Regional Water Quality Objective Costs Regional watershed water quality objectives, such as TMDLs, provide the over-arching driver for WQT. These water quality objectives can be expressed as constituent caps, step-down caps, fractional rate reductions, or other metrics that are clearly measurable in space, time, and mass. When distributed to individual PS dischargers, these measures become potentially tradable allowances. Typically, the regulatory cost to set up and manage watershed discharge limits is built into existing regulatory duties. However, in some cases, regulators undertake special scientific studies to establish the bioequivalence of nutrients discharged to different parts of the watershed. Depending on scope, these studies can comprise simple calculations or expensive field measurements and laboratory analyses. The studies are used to aid in fair allocation of allowances in a heterogeneous watershed, and provide a balanced platform for trading water quality credits from different source areas. The cost of such "equivalence studies" is described in Section 4.3.1. Delayed promulgation of a watershed's water quality objectives, such as TMDLs, can add significant cost to WQT. As a specific example, WQT markets were developed in a Maryland jurisdiction, but were only used when regional TMDLs (and thus individual allowances) were imposed (King, 2005). Lacking a tradable commodity, buyers and sellers did not appear. In the interim, regulators developed innovative command-and-control measures to encourage PS investment in traditional wastewater treatment. Innovative subsidies were also offered to NPSs, for the use of BMPs. This procedure led to nutrient reductions at a risk-free cost significantly higher than would be expected in WQT. The difference between the use of WQT market compliance and the implemented programs is an avoidable opportunity cost5 of delayed TMDL development. 4.1.4 Allowance Allocation Cost Whether a constituent-specific cap is driven by a TMDL, total maximum annual load (TMAL), a remedial action plan, or some other water management action plan, allocations must be distributed amongst dischargers. The total load for a water body is generally determined as the sum of the loads from PSs and NPSs, accounting for projected growth, seasonality, and a margin of safety. Monitoring and modeling typically determine the distribution of total load to individual dischargers. Sensitivity analyses on various combinations of allocations factor into allocation development, with the aim to collectively meet a desired load reduction (Michigan DEQ, 2002; USEPA, 1996; USEPA, 2002a). By allocating allow- ances, regulators create a marketable commodity with an exchange value. The opportunity cost of capital is the minimum rate of return, or "hurdle rate," which is used for discounted cash flow analysis calculations. 31 ------- Allowance allocations are critical for creating a WQT program. However these costs are generally considered external to the costs for developing and implementing a WQT program because the requirement to establish an allowance al- location (TMDL, TMAL, etc) is present, regardless of whether or not a WQT program is established. 4.1.5 Market Development Cost Market structures must be created to fit the stakeholder needs, physical situation, regulatory jurisdiction, local economy, and impacted natural resources. Regulatory agencies may facilitate this process by establishing a marketable commodity, proposing an attractive market framework, and retaining control of nutrient discharge risk. However, the onus for this in a predominantly free market environment falls solely on the buyers and sellers. In the Cherry Creek case, 40 percent of the Cherry Creek Basin Water Quality Authority's (CCBWQA) budget is assigned to monitoring, special studies, planning documents, technical reports or memoranda, and administrative costs (CCBWQA, 2005). While some of those allotted funds are used for previously discussed costs, they mostly fall into the market development category. 4.7.5.7 Creating the Exchange Creating the exchange begs several questions, such as which kinds of trades should be allowed (e.g., PS-PS; NPS- PS, NPS-NPS), and how to delineate the geographic limit of allowed trades. At a minimum, regulators must authorize WQT as a valid alternative to internal control methods to satisfy discharge limits and confirm the necessary generation of credits. In a free market, regulator involvement would cease there. However, regulators may structure the market framework so that engaging in the market is attractive. Efforts are made to control the transactional cost of trading (see Sections 4.3.3 and 4.4.2.3). In addition, the regulators may create and manage the trading organization responsible for approving trades, protecting the environment, and administering the data generated by trading. The regulators could also appoint and advise the governing body for the exchange, which is usually a Board of Directors, an independent enterprise, an academic institution, a government organization, or other group. Market structures are categorized as exchanges, clearinghouses, bilateral negotiations, and sole-source offsets6 based on several criteria, including: (1) the commodity traded, (2) the market size, (3) the market structure, (4) the purpose of the program, and (5) the governing authority for water quality (King and Kuch, 2003). As examples, the Cherry Creek Basin program functions on a clearinghouse structure; the Rahr trade is a sole-source offset; the Association and Neuse River Compliance Association (NRCA), each of which is issued a collective NPDES permit based on the sum of members' allocations, create exchanges internally and function as an exceedance tax or group cap and trade program within the watershed; and the LBR program in Idaho relies on bilateral negotiation. (Breetz et a/., 2004). Ultimately, market structures must balance the needs for uid, low-cost trades that ensure environmental protection with minimal oversight. Clear delineation of rights, responsibilities, and liability are essential considerations. The selection of best market structure involves research, professional collaboration, optional fee consulting, and careful assessment of stakeholder perspectives. 4.7.5.2 Creating Demand Market designers create demand by assigning source responsibility for ef uent control and setting discharge limits. The allowances should be measurable, and readily quantified or calculated by all parties. Demand for WQT arises when the command-control cost of compliance is significantly higher than the trading cost of compliance, accounting for risk. The wider the spread between control cost and traded cost, the higher the demand for credits. Note, however that gaming the system7 becomes an attractive strategy when either: (1) regulations are weak or The literature on this topic is confusing and contains references to credit trading, allowance trading, offset trading, emission trading, pollution trading, etc. It also refers to different types of trading systems using terms such as clearinghouses or market style or commodity-type trading as opposed to bilateral trades or centrally managed allowance offset contracts or sole-source agreements. The taxonomy used here was presented in a recent paper by Richard T Woodward & Ronald Kaiser, Market Structures for U.S. Water Quality Trading, 24 Rev. of Agric. Econ. 373 (2002), which does a good job of explaining critical dif- ferences in these market structures (quoted verbatim from King and Kuch, 2003). "Gaming the system" refers to when a dischargers perceive small expected environmental liability in failing to meet permitted discharge requirements. These dischargers may elect to "game the system" as a preferred strategy. They invest to avoid, defer, or dispute compliance requirements, accepting the expected cost of enforced compliance as a cost of doing business. 32 ------- absent, or (2) the cost of enforcement and penalties is low (King, 2005).8 Either of these conditions suppresses demand for WQT, and for NPSs to sell credits. As an example, strict regulations prohibiting any new discharges compel trading with NPS dischargers. Rahr had to implement BMPs in order to build its own treatment facility. Without trading with NPSs, their only other alternative was to continue paying fees to the WTF, sti ing growth. Only three trades have been executed in the Cherry Creek Basin program, and water quality standards for phosphorus remain in violation. In this case, WQT demand has been soft because the cost of command-control compliance has been low, due to TMDLs that are achieved through affordable technology. More stringent load allocations would likely improve water quality and stimulate trading. Demand-side risk is an important factor in creating WQT credit demand and in credit pricing. As described below, re- vocation risk, insolvency risk, and knowledge risk apply to WQT, but not to adding control measures. To some extent, each risk suppresses demand. Accordingly, although regulations addressing these issues are not critical to WQT, they should encourage trading. • Revocation risk: Regulatory enforcement risk presents significant concerns to both buyers and sellers. A major concern is that WQT schemes will not meet the requirements of the CWA in the future, if challenged. A CWA rul- ing against WQT could negate or reverse credit sales, returning the compliance liability to the PS discharger. A similar result could be caused by regulatory changes or rulings that revoke permission to trade nutrients as a way to achieve compliance. A revocation would require the PS discharger to reassume compliance liability. Compliance could require significant investment in technology, capital equipment, and regulatory relations over a long time. This would be substantially more expensive than using WQT to comply with discharge allowances. • Insolvency risk: This is the risk that an NPS trading partner becomes insolvent, and financially unable to meet BMP requirements established by agencies. In this case, the PS discharger might have to take direct responsibility for maintaining, monitoring, operating, and reporting on BMP activities at the NPS property. The relative cost of this scenario is unclear, but certainly less than direct compliance through traditional command-and-control. • Knowledge risk: The buyer may be responsible for implementation of a BMP on an NPS property. In that case, the buyer assumes certain, limited risk by having to pay for practices of business and environmental compliance in which they are not expert. In this area of exposure, the buyer hopes that the Seller does an efficient job managing their BMPs. 4.7.5.3 Creating Supply Supply is created when NPSs (and other low-cost dischargers) implement cost-effective BMPs, which reduce their discharges below their allowances. In so doing, the NPSs earn tradable credits that can be sold or banked for later use. Tradable credits are in surplus when supply exceeds demand, signaling that credit prices should decrease. Many fac- tors in uence the supply of nutrient credits, including compliance risk, financial risk, the cost of the BMP, the expected selling price (unserved demand) and transaction costs. • Following is a list of risks that in uence the generation ortradability of WQT credits. The magnitude of these risks depends on the site-specific conditions of the NPS, including discharges, allowances, receiving water conditions, impacted ecosystems, business operations, NPS finances, regulatory jurisdiction, and impacted stakeholders. Revo- cation risk: Likewise for the buyer risk premium, contractual enforcement risk presents significant concerns to both sellers, as well. A revocation would require the NPS to maintain BMP obligations and liabilities without offsetting (credit sale) contributions from PSs. • Non-compliance risk: By joining a WQT program, NPSs accept regulatory audit and inspection of existing operations. Despite their typically unregulated discharge, NPSs may be regulated for other facets of operation. The inspection will determine if current operations meet practices that are already required by law. If not, regulators could cite the facility for non-compliance. Thus, by joining a WQT program, a non-compliant NPS assumes the risk that inspec- tions will identify liabilities that had been avoided previously. • Subsidy and green payment risk: In conducting baseline assessments, regulators might evaluate how subsidies and green payments are used to control or mitigate discharges at NPSs. This review could identify situations where Certain dischargers may perceive small expected environmental liability in failing to meet permitted discharge requirements. These dischargers may elect to game the system as a preferred strategy. They invest to avoid, defer, or dispute compliance requirements, accepting the expected cost of enforced compliance as a cost of doing business. Perceived enforcement costs might be high, including fines, penalties, imposed "best-available technology," dispute cost, and regulatory charges. However, dischargers electing this strategy view the probability of enforcement and penalties as exceedingly low, offsetting the cost exposure. 33 ------- funds are used inefficiently, resulting in additional regulatory obligations or loss of compensation. The risk is that the net income from subsidies or green payments could be reduced with additional regulatory scrutiny or obligations. The frequency or likeliness of it occurring is neither readily measurable nor reported. • Discharger status risk: Most NPSs are unregulated or implementing voluntary discharge programs. By entering a WQT program, these dischargers embark on a path that increases regulatory involvement in their operations. Once tradable discharge allowance is definable, an NPS could become liable to manage nutrient loads as a discharger named in a waste discharge agreement or permit. Thus, certain NPSs might risk losing their "non-regulated" status, potentially leading to substantial future regulatory liabilities and costs. For example, the American Beef Cattle Asso- ciation worries that a nutrient discharge baseline set by allocated allowances would be a disincentive for WQT. They propose that most beef producers would prefer to set voluntary discharge limits (voluntary baseline), and gain credits by exceeding them. Farmers would be encouraged to apply BMPs to generate credits and drive the market. • Trade risk: This is the risk that NPS credits are not salable once generated on the WQT market, leaving the NPS with a residual, uncompensated BMP risk or cost. This could happen if the NPS implements a BMP due to specula- tion when the market is robust only to have the market lose its viability. The actual demand could fall so far short of the predicted demand so as to preclude a sale. It could also occur if the contracted buyers could no longer afford the credits. • Performance risk: There is no guarantee that all BMPs will perform up to expectations. However, BMPs that turn out to be expensive will be unmarketable, leaving an NPS discharger with the cost of operating the BMP (or discontinu- ing maintenance and foregoing the possibility of selling credits) without offsetting contribution from a PS. In these situations, the return on BMP investments may be low or possibly even negative. • Litigation defense risk: Failing to manage nutrient loads or implement BMPs presents litigation risk to the NPS com- mitted by contract. Advocates of public interest might sue NPS dischargers for failing to contain or mitigate known or should-have-known nutrient discharges. This risk increases as the values of natural resources increases, and special interests become more effective in using litigation as a way to leverage green behavior by NPS. As with the effects of risks on demand, each of these risks may suppress supply. The structure of the WQT market should aim to alleviate these concerns. Doing so at the outset or during WQT programs will encourage participation, credit supply, and the benefits of trading. Agencies can reduce nearly all these risks when they structure the WQT market programs by removing regulatory uncertainty, in uencing price, protecting discharger status and income, and providing legal protections. Accordingly, although regulations addressing these issues are not critical to WQT, they should encourage trading. In one example, supply issues were blamed for lackluster trading in the Cherry Creek Basin market. Aside from the credits for the Phosphorus Bank, phosphorus reductions achieved from BMPs were not eligible for trading if they were funded by the CCBWQA, the government entity charged with administering and managing the water quality issues of this watershed. Furthermore, additionally9 dictated that credits be generated from controls satisfying one of the following criteria: (1) controls where there were not any previously, (2) modifications to existing controls to improve the reduction capabilities, or (3) new controls to reduce phosphorus loadings to less than the NPS TMAL allocation (Breetz et a/., 2004). Eliminating these as potential sources for trading has dampened the supply of nutrient credits. 4.1.5.4 Creating Pricing Structure Depending on the market environment, regulators, prospective traders, and other stakeholders all may be responsible for creating the broad pricing structure for WQT during market creation and initial trading. This structure is set by direct negotiations, auctions, or by a permitting authority. Direct negotiations are used when buyers and sellers together de- cide on the price of a credit for the specific trade. The trades for Rahr were priced in this way. This approach may be inefficient for larger markets due to complexities of scale. Instead, several auction alternatives are available. Uniform price auctions promote equitability in that a single credit price is determined through the bidding of buyers' and sellers' bids and offers for credits. Once determined, the credit price is used for all transactions. Finally, the permitting authority may set the price of credits in a reserve pool to sellers in default. The authority-set price for credits in the reserve pool is greater than the market-set price for credits exchanged between buyers and sellers. Reserve pool credits are to supplement the credits of a seller who would otherwise default on the trade agreement with a buyer. The Cherry Creek and Tar-Pamlico programs offer examples of this special case of price setting (Negotiation Team, 2001). Additionality stipulates that any NPS offset that would have occurred regardless of the trading program cannot count toward a trade. This prevents double counting by ensuring that a nutrient control activity counts toward only one objective if multiple objectives are met (Fang and Easter, 2003; Jaksch, 2000). 34 ------- Private value is re ected in the buyer's cost of compliance (or avoided compliance) and the seller's cost of BMP-gener- ated credits eligible for trading. The cost to create market-pricing structure depends on the type, size, and complexity of the developed WQT market. New programs should draw lessons from previous programs in North Carolina, Minnesota, Colorado, Idaho, and other states. 4.1.6 Acceptable BMP Cost Regulatory lead agencies may be charged with identifying and listing BMPs that NPSs could use to generate credits. In a de-regulated environment, the traders would have to identify appropriate BMPs; however, regulatory agencies would still have to approve the chosen approach. In most cases, this list is extracted from a broader list of potential mitigation technologies and strategies that have been used in site-specific instructions to dischargers. Initial cost assessments may extrapolate from previous experiences or from literature. The first phase of the Tar-Pamlico cost assessment drew from BMP development for the adjoining Chowan River basin (Research Triangle Institute & USEPA, undated). The incremental cost for this activity should be modest unless special studies or extensive research are needed. 4.1.7 Stakeholder Communication Cost Lead agencies may be responsible for identifying and engaging stakeholders at the WQT program level and individual project level. However, this is often not the case, few states have led trading efforts. Most pilots have been bottom up, with state agencies coming to the table as participants. Grants have supported most of these efforts. Obligations include arranging education and public outreach, leading public hearings, addressing stakeholder concerns with appropriate strategies, developing and maintaining communication channels, maintaining public records, and so forth. The regula- tory cost of these services is relatively high at the outset of WQT market development. Project-specific costs for these services vary, depending on the regulatory structure proposed and the stakeholder sensitivities and special interests involved (Fang and Easter, 2003). The project-specific stakeholder costs are included as transaction costs, described in Section 4.3.3, or are subsidized. 4.2 What Factors Determine the Cost of Creating a Credit? The private cost of the party seeking to generate credits is the sum of three sub-costs: (1) the cost to create the oppor- tunity by engaging trading parties, (2) the cost to implement the BMP, and (3) the cost to manage the BMP. Analysis of WQT cost-effectiveness must considerthe sum of these costs, not just the cost of the BMP implementation, versus the cost of alternative actions, i.e., PS control, gaming the system, or zero-growth (King and Kuch, 2003). Because credits are marketable goods and services, the costs of creating credits may be estimated and used to guide credit develop- ment and trading strategy decisions, a potentially daunting task in the absence of an established market. The private benefit includes the increase in marketable value afforded to the seller and other responsible parties. Ex- amples include improved land use (e.g., more efficient farming) and asset creation (e.g., higher property value). Since BMPs leverage private investmentto create public benefit, a thorough net benefit valuation is appropriate to assess the value of BMP strategy for: (1) selecting the BMP to implement, (2) obtaining stakeholder approval, and (3) valuing credits in the marketplace. Such an evaluation is not critical and has yet to be thoroughly performed, but it could indicate additional BMP value, thereby encouraging WQT. 4.2.1 Project Initiation Cost Low-cost dischargers who seek to earn credits by implementing BMPs to reduce discharges may incur regulatory cost, especially if a third party is not involved. Agencies may be involved in every step of the process, starting with an as- sessment of the applicability and potential success of BMP projects under consideration. This can involve field studies, baseline assessments, technical research, stakeholder communication, and negotiations with the discharger. They may also support or directly pursue grant applications for funding, on the part of the discharger or the agency. Alternatively, in a de-regulated environment, these tasks fall on the traders. 4.2.2 BMP Selection Cost A free market requires dischargers to invest in the identification, evaluation, and selection of BMP alternatives. As market regulation increases agencies take on an increasingly larger share of these responsibilities. Acceptable alternatives are based on: (1) the physical and constituent conditions of the discharger and the watershed, (2) the available investment budget, (3) the regulatory and discharger objectives, and (4) the project timeline. This process usually involves a short- listing of BMP alternatives and some level of field testing. Analytical testing of system performance is an optional step, aiming to optimize project design. Investments in formal work planning, permitting, documentation, risk communication, and stakeholder involvement are inevitable and appropriate. 35 ------- The total cost of this phase of work can vary widely, depending on the complexity and size of the project, the diversity of stakeholder interests, the risk of failed innovative technology, and the sensitivity of impacted ecosystems (private and public). 4.2.3 Approval and Permitting Cost The regulatory cost to review, approve, and permit proposed BMPs depends on the complexity of the program. Involv- ing stakeholder participation and even public hearing(s) may add to these expenditures. Project-specific costs may be wrapped into cost for typical regulatory activity. 4.2.4 BMP Implementation Cost The responsibility to manage the cost of BMP implementation is typically borne by the PS without compensation, by the NPS with compensation, or by a third-party entity. For example, cost management for Rahr's traded BMPs was managed by a five-person board, with one member being an employee of Rahr, but otherwise independent. This cost normally includes expenses incurred in the design, installation, and management of BMPs during construction. Most BMPs are simple, and involve no one other than the discharger (e.g., relocation of livestock) or farm equipment operators (e.g., change in tillage by tractor operator). The discharger maintains records of these BMP expenditures for regulatory reporting, tax reporting, real estate appraisals, WQT credit pricing, and other purposes. Private dischargers typically determine the cost of implementing BMPs. Once committed, these costs are sunk, re- gardless of credits generated or trades made. On the other hand, the regulator (market administrator) values the BMP investment from a public perspective, whereby they participate in the selection of BMPs. Their value metric is cost per mass of nutrients reduced, which measures the effectiveness of BMPs before the application of a safety factor. This value is calculated by dividing the cost of implementation ($) by the nutrient reduction achieved (pound). The cost of BMP implementation can range widely. In the Tar-Pamlico case, values for agricultural BMPs ranged from $1 to $80 per pound of nitrogen reduced from discharge streams. Similar values for wetland restoration ranged from $11 to $20 (Table 4-1). More expensively, values for stormwater BMPs ranged from $57 to $86 per pound of nitrogen removed from urban runoff (Gannon, 2005a). Table 4-1 Nitrogen Removal Cost-Effectiveness Comparison Practice Agriculture • Water control structure • Nutrient management • Vegetated filter strip • Conservation tillage Stormwater / Bioretention Riparian wetland restoration $/lb Reduced (30-year life equivalent) $1.20 $7- $9 $7- $8 $20 - $80 $57 - $86 $1 1 - $20 Source: Gannon, 2005a. The owner of many BMP projects for Cherry Creek has been the CCBWQA, the government entity charged with ad- ministering and managing the water quality issues of this watershed. Using three-year projections, BMP implementation costs are separated into design, capital, land acquisition, and operation and maintenance (O&M).Their 2004 projections totaled $9,691,000 for capital costs, $600,000 for land costs, and $243,000 for O&M costs. Water requirements were also considered, but were not valued (CCBWQA, 2005). These costs were phased over three years. A simulated BMP development forthe Idaho trading program estimated costs by breaking them down into capital, includ- ing engineering, construction, contingency, land acquisition, and O&M. Capital was estimated at $3,004,000, including a 20 percent contingency factor and $10,000 per acre of land. O&M was estimated at $145,800, including $71,800 for annual O&M and $74,000 for harvesting wetlands plants every five years. Assuming a 30-year life span and a 3 percent in ation rate, annualized cost for removal of TP was $118 per pound or $67,000 per acre. This simulated cost is very high compared to the cost of constructing wetland systems for treating stormwater, estimated at $10,000 to $30,000 per acre (Zentner, 1995; Reed, 1991). 36 ------- The Rahr trades with four NPSs cost $250,000 (plus an extra $50,000 for a failed BMP) to implement. The cost of credits was estimated based on the capital and O&M costs of the project, the estimated pounds of offset nutrients it could deliver, trading ratios, and safety factors. Assuming a 20-year lifetime and applying an 8 percent discount rate, the average cost of reduction decreases to $0.20 per pound CBODs and $1.56 per pound of phosphorus. The long-term measures, such as conservation easements and re-vegetation, are the most effective of the BMPs because they provide greater nutrient reduction with low investment. Furthermore, the BMPs are expected to remain effective for the same amount of time overwhich the nutrient reductions are estimated, minimizing the uncertainties associated with the trade (Fang and Easter, 2003). 4.2.5 BMP Monitoring Costs Once BMPs are operational, the installing discharger is responsible for meeting permit requirements including, but not limited to, uninterrupted monitoring, appropriate maintenance, organized data management, and timely compliance reporting. The WQT process is available to compensate the NPS discharger for his costs for system installation and these ongoing responsibilities. Failure to comply can result in fines or penalties paid by either the NPS discharger (before trading) or the PS discharger (after acquiring credits by trade). As an example, the Tar-Pamlico WQT market stipulates that the ultimate penalty for non-compliance is reversion to Best Available Technologies discharge regulations (Gannon, 2005b). Monitoring criteria may be judged by performance, i.e., how well the BMP reduces discharges, or by activity, i.e., that changes to reduce discharges have been implemented. (King and Kuch, 2003). Costs will be negligible for simple prac- tices, such as rearranging ranch grazing. Costs for network monitoring will be low to moderately expensive, depending on: (1) the technology applied, (2) the size and density of the monitoring network, and (3) the frequency of monitoring events. Capital costs for fixed monitoring devices can add to the costs significantly. 4.3 What Factors Determine the Dollar Value of a Credit? WQT credits are private goods and services that have private value set by trader negotiation, and are subject to a few adjustments that are made to protect public interests (environmental goods and services). The marketplace sets the value of WQT credits, specifically: (1) the buyer and seller cost of compliance using non-trading strategies, and (2) the difference between generating and transacting water quality credits accounting for risk. The dollar value of WQT credits is unique to the trading situation, and dependent on many criteria. For simple agricultural BMPs, the cost of credits is a function of: (1) the present worth cost to implement BMPs for an extended time period, (2) an equivalency factor,10 (3) a contingency for technical uncertainty, or "safety factor"11 designed to ensure non-degradation of natural resources, (4) an "administrative factor,"12 designed to finance agency oversight of WQT, and (5) the number of credits generated. Stormwater and other NPS credits are priced using more complicated formulae involving stormwater ows, the cost-ef- fectiveness of nutrient management, nutrient reduction goals, project life span, drainage rate, land cost, and so forth. The pricing structure for WQT is based on simple supply and demand for credits, within guidelines set by those responsible for administering the market or by the market itself. 4.3.1 Equivalence Water quality varies in space and time. As a result, the actual and potential human health and natural resource damage or loss caused by discharges is site-specific. Therefore, the nutrient allowances should vary from place to place. As a preliminary step in valuing credits, regulators establish a baseline discharge allowance that applies equally throughout the watershed. Site-specific nutrient discharges and credits are normalized to this watershed baseline by applying equivalency factors (multipliers) to measured rates. Discharges that are less harmful to the environment than the baseline will have equivalency factors less than 1.0. Discharges that are more harmful will have equivalency factors greater than 1.0. Equivalency factors are applied in trading, to normalize the risk of continuing discharge at one location in exchange for reducing discharge elsewhere. Establishing nutrient equivalency fortrading can be expensive. For example, the Rahr WQT case spent roughly $100,000 of regulatory, trader, and third-party consulting time to establish quality equivalency factors for discharges of malt in Min- nesota (Fang and Easter, 2003). This case posed unique challenges to achieving equivalence. In particular, the traded nutrients were not the same as the TMDL targeted constituent, requiring equivalence among phosphorus, nitrogen, sediment, and CBOD (Jaksch, 2000). Diligent efforts used site-specific modeling to estimate ratios. 10 An equivalency factor is a multiplier to establish the environmental substitutability of PS and NPS loading (Jaksch, 2000). 11 A safety factor is a multiplier to account for a margin of safety. 12 An administrative factor is a multiplier to account for administrative costs associated with the trade. 37 ------- 4.3.2 Establishing Offset Fees Offset fees are the cost basis for trading, incorporating BMP cost, safety factors, administrative factors, and BMP ef- ficiency in reducing nutrient. Following are descriptions of the components of these fees. 4.3.2.7 BMP Cost BMP cost comprises seller investments made to design, permit, and implement a BMP that potentially generates credits for trading. Note that, depending on the program, credits from certain BMPs may not be tradable, including those gen- erated from practices that are required by law and practices that are funded by subsidies, green payments, or govern- ment programs that do not involve WQT. This reduces NPSs' potential to generate credits (King, 2005). As presented in Section 5.2, if a 2007 agricultural bill passes, it would indeed recognize subsidized BMPs as eligible for WQT, likely driving more NPS participation in WQT. The total cost to implement a BMP is the net present value of cash ow for: (1) the plant, property, and equipment needed to construct the BMPs, plus (2) the operational, regulatory, maintenance, and replacement costs to effectively run the system throughout its useful life, minus (3) relevant subsidies or green payments received, plus (4) depreciation and other accounting benefits. The unit credit cost is the total BMP cost divided by the number of credits generated by the process. 4.3.2.2 BMP Effectiveness The effectiveness of BMPs in reducing nutrient discharges is an important component of credit value. Relatively ineffective BMPs are worth proportionally less than effective ones, and this value impact is re ected in trading ratios, equivalence factors and price. The BMP effectiveness is less than or equal to 1.0. 4.3.2.3 Safety Factors A "safety factor" is a multiplier that is applied to offset the uncertainty or risk of degradation or other negative con- sequences of WQT. Since each BMP and trade is unique, safety factors are unique to site-specific BMP and trading opportunities. Within a watershed, separate safety factors might be developed for separate watershed zones, different seasons, and constituent species. As such, safety factors often account for equivalency factors. A risk-neutral trading opportunity would have a safety factor of 1.0, meaning the risk of compliance without trading is the same as the risk of compliance with trading. In contrast, high safety factors are applied to WQT where the risk of negative environmental effects is high, relative to compliance without trading. Predictably, conservative (large) safety factors inhibit trading, by deeply discounting the value of the NPS credit to the PS buyer. However, overly optimistic safety factors can lead to abundant trades that threaten the environment by allow- ing too much PS discharge above limits. Thus, the regulatory challenge is to use safety factors to encourage trading while protecting the environment. Most safety factors are in the range of 1 to 2.5. Safety factors of 3 (or more) can suppress the market, because buyers have to pay for three (or more) credits in order to acquire one credit. Nonetheless, the CCBWQA for the Cherry Creek program, which sets a minimum trading ratio of 2:1, recently removed the trading ratio cap of 3:1 to stimulate more trading with NPSs farther from the Cherry Creek Reservoir (CCBWQA, 2005). 4.3.2.4 Administrative Factors Administrative factors are applied to baseline cost to cover the cost of setting the ground rules for the WQT program. In the Tar-Pamlico and Neuse River Basin case studies, this value was 10 percent, i.e., 1.1:1 (Breetz etal., 2004). The Tar-Pamlico program also applied a 200 percent safety factor to the 10 percent administration fee, creating a 2.1:1 "trading ratio" for purchase of nitrogen offset credits. The fee to purchase nitrogen offset credits in the Neuse River Basin Nutrient Trading Program takes into account a required 30-year BMP life span, as well as land costs (Breetz et a/., 2004; Gannon, 2005b). 4.3.2.5 Trading Ratio The trading ratio is the number of credits that a buyer must purchase in order to receive one nutrient credit. It is a func- tion of the safety and administration factors, such that: Trading Ratio = (1+safety factor)* (1+adtmin factor) Every WQT has a trading ratio. Nearly all these ratios exceed one because safety factors are usually significantly greater than 1.0. 38 ------- As trading ratios increase, the demand for nutrient credits is reduced. Payoffs, in terms of avoided capital cost to the buyer or return to the seller, become relatively small, compared to risks plus "transaction costs."13 4.3.2.6 Offset Fee The offset fee is the present worth BMP cost times the trading ratio. As an example, the offset fee for the Tar-Pamlico program in North Carolina considered uncertainty in BMP effectiveness and administration costs (Gannon, 2005a).The base offset fee took into account farmers' capital costs, maintenance costs, BMP effectiveness, area affected, and BMP life expectancy. BMP effectiveness values were based on a literature review that included empirical studies of conserva- tion tillage, terracing, and buffer strip BMPs in the Chesapeake Bay. The offset fee also includes the 2.1:1 trading ratio that re ects a 10 percent administrative factor and a 200 percent safety factor (Breetz et a/., 2004; Gannon, 2005b). Within a program, evaluations of different BMPs should re ect their specific lifetimes. Tar-Pamlico credits for structural BMPs were assigned a useful life of 10 years, while non-structural BMPs were assigned a credit life of 3 years (Breetz et a/., 2004; Gannon, 2005b). Evaluations often analyze the sensitivity of lifetime impacts as a way to compare costs per year. 4.3.3 Transaction Costs Transaction costs may be incurred by the regulator and/or by the traders. These costs are built into the price of credits, as a cost of doing business. Keeping transaction costs to a minimum is essential for robust trad ing, as these are bottom- line expenses to a WQT strategy. Excessive transaction costs are cited as a primary reason for limited trading within well-established markets and exchanges (Collentine, 2003; Fang and Easter, 2003; Tietenberg, 2001). 4.3.3.7 Agency Transaction Costs Several regulatory expenditures are directly tied to the agency development, execution, and oversight of specific trades. Trade-specific regulatory transaction costs are incurred for: • Audit and verification cost: These costs are incurred when regulators confirm the site-specific baseline for trades at the NPS facility. This work includes site inspection and confirmation of correct BMP implementation by the seller. Sampling and analysis cost might be included. • Administrative and consulting costs: Regulatory costs to track the status and performance of the trade, and provide regulatory consultation to traders as requested. Included are regulatory costs incurred to confirm that trades adhere to transaction standards for equivalency, additionality, and accountability. • Trade oversight: These costs relate to obtaining regulatory approval for the trade concept and the preparation of agreements and permits. This includes unbiased trust fund management costs assigned to the project and con- struction management oversight. • Monitoring and enforcement cost: Trade management, monitoring, and enforcement were trade-specific agency duties in the case studies. These costs include, but are not limited to, direct measurement of discharges at PSs, indirect calculation of discharges, or fractional discharge reductions at NPSs. Also included are costs for internal tracking of discharges, credits, credit reallocations, computerized data, stakeholder communications, and external reporting to state and USEPA. • Stakeholder communication cost: The regulator incurs costs associated with communicating with stakeholders po- tentially impacted by the proposed trade to gain consensus support for the trade. Included are costs for education, public hearings, special meetings, expert consultation, presentations, and related expenditures. The detail of agency transaction costs is often blurred, since certain trade support activities overlap with normal agency duties. However, documentation usually presents the overall costs, which must be borne by credit traders. For example, for the Cherry Creek program, applications cost $100 and a discharger must pay an additional $500 to cover costs incurred by the CCBWQA to evaluate the request for credit withdrawal from the Phosphorus Bank. The cost to apply for credits from the Reserve Pool, regardless of the number of credits involved, is $2,500 (Breetz et a/., 2004). 4.3.3.2 Trader Transaction Costs In a free WQT market, many of the agency transaction costs described above, particularly trade oversight, monitoring and enforcement, and stakeholder communication costs, fall instead on the traders. Additional costs that accrue directly to the traders are proportional to their activities in the trade (Collentine, 2003; Fang and Easter, 2003). The buyer and/or seller incur these trade-specific transaction costs: 13 If these transaction costs are borne by taxpayers in general rather than the parties involved in the offset contracts, they may not inhibit trading. However, these transaction costs reduce the economic gains from trade regardless of who pays them and they will affect the acceptability of trading (quoted verbatim from King and Kuch, 2003). 39 ------- • Broker costs: Expenses to find trading partner and secure an exchange. Brokers in WQT can include private enti- ties operating under fee agreement or public agencies. The efficiency of brokering is directly proportional to experi- ence. • Legal and accounting costs: Both buyers and sellers require a certain degree of professional service consultation, to ensure leveraged negotiation support and appropriate tax and financial management strategies. Additional legal costs include liability management services and seller creditworthiness assessment, to mitigate loss in the event of seller insolvency. Risk transfer instruments might be valuable in certain situations as well, necessitating the par- ticipation of insurance or risk management specialists. • Engineering consulting costs: Consulting scientists are typically used to advise traders during the course of trade development and execution. These specialists provide traders with information that would in uencethe risk-adjusted value of the proposed trade, from public and private perspectives. As trading ratios increase, the price differential between buyers and sellers decreases, suppressing the demand side. Payoffs, in terms of avoided capital cost (buyer) or offset BMP cost (seller) become relatively small, compared to risks plus "transaction costs." 4.3.4 The Asking Price The seller's asking price for one credit is the seller's PS offset fee plus the seller's share of transactional cost plus the amount of profit the seller seeks for taking risk in implementing BMP and entering WQT agreements. Price in ation that is built into the offset cost, i.e., the safety and administrative factors, is allocated to agencies responsible for managing compliance, and is not distributed to the seller. 4.3.4.7 Minimum Selling Price The seller's minimum selling price (MSP) is the minimum amount the seller will accept for selling a credit in a nutrient trade. This amount is the present worth cost of implementing BMPs, plus a reasonable profit, plus seller's share of transaction cost (see Section 4.3.3), divided by the number of credits sold. The minimum safety, administrative, and efficiency factors established by agencies are applied to MSP to establish the lowest trading price that would be ac- ceptable in a nutrient trade. Sellers may expect to generate profit from implementing WQT when the returns are high relative to other uses of the land. As a guideline, the level of profit should meet or exceed their opportunity cost of capital, or minimum rate of re- turn. To the extent possible, sellers will build negotiable profit expectations into the price of their credits unless they are motivated to implement the BMP for other reasons, e.g., their operations will benefit in other ways in addition to income earned from implementing the BMP. For example, stream bank stabilization projects completed as a part of the Rahr BMP projects was very valuable to the property owners whose land was being eroded away by the Minnesota River. 4.3.4.2 Seller Opportunity and Risk NPSs and other prospective credit sellers commit capital to WQT programs in order to create value for their organiza- tions. Participation presents risk and opportunity to value creation, however. Example risks include the potential loss of subsidies, or assumption of discharge restrictions, increased regulatory liability, or negative cash ow. Representative opportunities include improved land value, reduced liability, avoided cost of compliance, reduced operating costs, and so forth. Sellers should assess the risk and opportunity of WQT before committing to a WQT program. Sellers can use expe- rienced WQT brokers, strong advisers, BMPs with precedent, and risk-transfer mechanisms to lessen the risks and increase the opportunities of implementing BMP and trading water quality credits. In ideal markets, investors build their cost of risk into the price of their goods and services. Typically, credit prices have not been structured to compensate sellers for their risk in implementing BMPs and engaging in WQT, but clearly need to be. Based on the literature reviewed and the examples provided in the case studies, not pricing credits to include the cost of investor risk may be a reason that WQT supply and trading are suppressed. 4.3.5 The Bid Price The bid price is the fully loaded amount a buyer is willing to pay to obtain a credit, considering the risk of compliance by trading. Despite the role of regulations in establishing the market, traditional market factors, such as supply, demand, and competition, strongly affect the bid price. Internal business factors are relevant as well, especially: (1) the cost of the next-best long-term compliance alternative (e.g., command-control or gaming the system), (2) exposure to liability (e.g., potential litigation), and (3) opportunity to create assets (e.g., Rahr; Fang and Easter, 2003). Chosen alternatives will depend on the business attitude of the buyer. Some, focused on reputation and societal obligation, will not game the 40 ------- system. For them, the only alternative to compliance by WQT is command-control. Others, willing to take enforcement risk, prefer to game the system.14 4.3.5.1 The Cost of Command-Control Most PS dischargers comply with evolving regulations by adding or modifying discharge control measures. This strategy is attractive because it enables dischargers to be in permit compliance (and operations status) and compliance cost at low risk. Through trade and enterprise associations, PSs may be able to leverage their permit requirements. Adding control measures is a relatively costly compliance strategy in terms of risk-neutral cash ow compared to costs to implement BMPs for NPS. Depending on the permit requirements, expensive capital equipment, monitoring, and regulatory reporting may be needed. Cost offsets, capital benefits, and other benefits may alleviate the financial burden that these requirements pose for the PS. Special subsidies, grant relief, and tax incentives may be available to reduce or offset these capital requirements. Capital investment realizes additional benefits including the improvement or addi- tion of plant, property, and equipment assets. Finally, reduced regulatory and third-party liability may result as well. It is important to quantify these sources of value when deciding whether to meet permit requirements by adding control measures by WQT or by an alternate strategy. 4.3.5.2 The Cost of Alternative Strategies Intuitively, discharge sources would likely first search for inexpensive ways to improve internally in order to avoid paying another source to reduce discharges. In most cases, simple measures are implemented to reduce nutrient discharges before long-term compliance strategies are adopted. Buyers estimate the present worth cost of implementing their chosen alternative to establish a baseline for pricing water quality. If the chosen alternative is to game the system, the buyer's estimate must include the cost to ultimately comply plus the cost of implementing the gaming strategy, plus the uninsured expected (probable) liability of litigation defense, regulatory enforcement, and other exposures.15 According to King (2005), the expected marginal cost of gaming relates negatively to the strength of the laws and en- forcement and positively to the penalties for non-compliance. This would peg the MSP for WQT near zero, as gaming would be the least-expensive alternate strategy. As a result, demand for credits would presumably be soft, weakening the market despite well-designed exchanges for trading (King, 2005). If the chosen alternative is command-control, the cost of compliance is readily estimated using traditional means that include the value of assets at the end of their lifetime and financial benefits, such as subsidies or tax treatments. Im- portantly, some WQT structures require that PS buyers pay NPSs "incentive fees" for discharges above the regional cap. The rationale for this scheme is to encourage PSs to satisfy their discharge requirements, but if that were not ac- complished, to provide funds for BMP implementation. For example, under the Tar-Pamlico WQT agreement (Anderson, 2000), the PS association is obliged to pay $13 per pound of nutrients exceeding the discharge cap to the North Carolina Agriculture Cost Share Program, a pre-existing program administered by the Division of Soil and Water Conservation (DSWC) that funds 75 percent of the capital costs associated with voluntary implementation of agricultural BMPs. This structure, which is analogous to a penalty, motivates the PS dischargers to invest in their own remedies to stay within allowances. Comparisons between alternatives are based on the metric of expected (probable) net present value of cash flow. To the extent possible, the value of strategic exibility of broad alternatives is included in these comparisons, such that various designs of a BMP may be compared to various designs of a given PS end-of-pipe technology. Buyers commit to compliance by WQT when the fully loaded cost16 of other options exceeds the fully loaded cost of WQT, accounting for the time value of money, risk, liability, feasibility, efficiency, cash ow, and other important considerations of the buyer. 4.3.5.3 Maximum Purchase Price A buyer's maximum purchase price (MPP) equals the fully-loaded cost to implement the least-expensive option divided by the number of credits needed to achieve compliance. Water quality priced above the buyer's MPP will not be tradable without special terms and conditions (e.g., indemnification) that create value for the buyer. 14 Gaming is a theoretical issue identified by economists, however this review did not identify literature regarding the extent to which gaming is actually practiced and whether in practice this is an issue for WQT. 15 Reputation risk, which is difficult to quantify, is an important aspect of gaming strategy. Many dischargers resist the temptation to "game" the regulatory process to protect their reputation from discredit, even when the expected costs of additional controls are significantly greater than the penalties associated with gaming the system. 16 In this use, the "fully loaded cost" is the present worth sum of all known and potential direct and indirect costs, liability, and as- sets that would be caused by the implementation of strategy, accounting for uncertainty (risk). Uncertainty and risk are not the same thing. 41 ------- Quantifying MPP should account for strategy risk, transactional cost, and the time value of money. The importance of accounting for risk is apparent in comparing strategies, such as "additional control measures" (not risky) with "gaming the system" (highly risky). The selected strategy should not re ect the regulatory cost to comply, but rather the discharger's perceived least cost to manage his regulatory liability (which might involve non-compliance cost, litigation defense, or liability transfer expense). In some cases, the MPP is based on asset-driven considerations. For example, Rahr was willing to pay $250,000 to set up a trust fund dedicated to implementing BMPs because it had no choice but to trade with NPSs. Otherwise, it would not have been allowed to build its treatment facility at all, thereby hindering its growth. Furthermore, cooperating with the community and environmental organizations served to elevate its social reputation. 4.3.5.4 Value Created by Trading NPSs can create value over and above the value of mitigating nutrient discharge compliance liabilities by implement- ing BMPs. Such value can include social benefits, increased property values, decreased liabilities, if any, unrelated to compliance or WQT, improved cash ow or NPS net worth, and other private benefits that accrue to the NPS. These values are quantified in terms of explicit (short-term) and continuing (long-term) value, discounting cash ow at a rea- sonable rate of return. The owners of land at two of the BMP sites that Rahr funded in its trade reaped the added benefit of controlling severe bank erosion that had threatened their property. Since 1988, the property owners had been trying, unsuccessfully, to gain financial means to control the bank erosion. Rahr accomplished for them what they had unsuccessfully tried to fund for nearly a decade (Breetz etal., 2004; Fang and Easter, 2003). Many of the Cherry Creek BMPs have improved the quality of the Cherry Creek State Recreation Area (CCBWQA, 2003a). 4.3.5.5 Avoidance Strategy: Game the System Certain dischargers may perceive little expected environmental liability in failing to meet permitted discharge require- ments. These dischargers may elect to "game the system," or evade compliance, as a preferred strategy. They invest to avoid, defer, ordispute compliance requirements, accepting the expected cost of enforced compliance as a cost of doing business. Perceived enforcement costs might be high, including fines, penalties, imposed "best-available technology," dispute cost, and regulatory charges. However, dischargers electing this strategy view the probability of enforcement and penalties as exceedingly low, offsetting the cost exposure. Due to the covert nature of this activity, the frequency or likeliness of it occurring is neither readily measurable nor reported. Given the $25,000/day fines and reporting require- ments NPDES permit holders are subject to, the application of this strategy by NPDES permit holders may be limited, but there is no literature to support or refute this conclusion. 4.3.5.6 Buyer Risk Premium It is important that buyers account for their risk attitude, especially risk aversion, in establishing MPP. Particular risks of concern, as described in Section 4.1.5.2, include revocation risk, insolvency risk, and knowledge risk. 4.3.6 Minimum Selling Price In WQT, the MSP is the minimum amount the seller will accept for selling a credit in a nutrient trade. Typically, it would consider the seller's costs to generate one credit (cost to generate credits divided by credits generated, or $BMP), the expected risk premium (r), the unit credit value created from the BMP divided by the credits generated, and the expected profit (p) calculated at a reasonable opportunity cost of capital. Following is a general formula for MSP: MSP = ($BMP*(1+r) + $Val} * (1+p) MSP does not include costs that are beyond the seller's control and that do not accrue to the seller, such as regulatory upcharges re ected in "trading ratios." These price in ations concern the public value (cost) of strategy, and they are allocated to those who manage the trade and BMP implementation. BMPs can also create value by increasing sellers' assets, such as building the value of real property. In this model, transaction costs are split, and not part of the MSP. 4.3.6.7 BMP Cost BMPs are calculated in discounted cash ow, including all costs incurred by the seller, regulator, contractors, technical consultants, and professional advisers. Sellers should include WQT subsidies they receive in calculating their BMP cost and MSP. However, buyers and sellers would negotiate the amount of these subsidies that would be included in the terms of a trade. The offset fee for the Tar-Pamlico program in North Carolina accounted for administration costs and for uncertainty in BMP effectiveness (Gannon, 2005a). The offset fee was refined when the Phase II agreement was developed. The base offset fee takes into account farmers' capital costs, maintenance costs, BMP effectiveness, area affected, and 42 ------- BMP life expectancy. BMP effectiveness values were based on a literature review that included empirical studies of conservation tillage, terracing, and buffer strip BMPs in the Chesapeake Bay. The offset fee also includes a trading ratio that re ects a 10 percent increase for administrative costs and a 200 percent margin of safety (Breetz et al., 2004; Gannon, 2005b). The offset payments made to the Agriculture Cost Share Program are used to fund voluntary BMP implementation (75 percent state, 25 percent producer) and pay for staff resources to track and target contracts and verify compliance. 4.3.6.2 Seller Risk Premium Sellers must assess program risk, as described in Section 4.1.5.3, before exercising the option to develop BMPs for the purpose of WQT NPSs must assume certain roles and responsibilities in participating in the program. Most outcomes of these commitments will be worse (risky), or better (opportunistic), than the current situation. As an example, some believe that regulated PSs do not compete equally (on a cost basis) with NPSs, which use sub- sidies and green payments to implement voluntary programs. They argue that certain actions should level the compli- ance "playing field," including (1) shifting more responsibility for nutrient reduction to NPSs; (2) reducing subsidies; or (3) regulating PS and NPS dischargers equally. Offsetting opportunities, such as the chance to improve land value or reduce operating costs, are present, also. We infer that risks exceed opportunities for most BMPs for three reasons: (1) the price structure for credits is fixed in some programs, such asforthe clearinghouses for the Long Island Sound, Tar-Pamlico, and Neuse River programs, and there is no way for the investor to recoup the cost of taking risk, (2) most WQT benefits and opportunities accrue to the public (watershed), and (3) most WQT costs and risks accrue to the private investor (discharger). The inability of investors to generate return on their investment while taking risk explains why many BMPs remain to be undertaken. Ideally, investors would build risk-related costs into the price of goods and services. However, in the WQT markets re- viewed, the third-party regulator set credit prices using established nutrient reduction cost and site-specific contingency factors. The contingency factors represented public interests (regulatory cost, non-degradation cost, equivalency cost). Contingencies re ecting private interests, such as program risks to the seller and investor, were not accounted. In a free market, in which transactions occur directly between buyers and sellers or are facilitated by a broker or aggrega- tor, the price of credits would depend on traditional market forces: supply and demand. The LBR project is structured in this way: however; no trades have occurred. Thus, in theory, WQT credit prices have been artificially suppressed. This should stimulate PS demand and encourage trading. However, it should also suppress supply, as NPSs will be reluctant to invest in the WQT market if their net risk is significant. 4.3.6.3 Profit Sellers may expect to generate profit from implementing WQT, especially if the risk they assume (Section 4.3.6.2) is not offset by value created. As a guideline, the level of profit should meet or exceed their opportunity cost of capital. A minimum of 10 percent is reasonable for most businesses. To the extent possible, sellers will build negotiable profit expectations into the price of their credits. 4.4 Challenges and Gaps It might take substantial modification of views to better understand the economic value that public and private interests may generate by managing nutrients with WQT. Immediately needed are thorough economic valuations of strategic alternatives that involve WQT. These valuations will enable decision makers and policy makers to quantify the value of investing in WQT as a discharge management strategy of choice. 4.4.1 The Perspective Problem WQT involves four essential stakeholders, each with his own interests, concerns, challenges, and gaps: (1) the buyer, (2) the seller, and (3) the regulator, and (4) special interests and other stakeholders. The buyer and seller are concerned with the financial risk and return of private transactions involving WQT. The regulator is concerned with protecting public values in natural resources, i.e., enforcing non-degradation and conservation of natural resources such as water, wet- lands, habitat, and species. Other stakeholders may in uence the regulators, who in turn will in uence the market. Importantly, each stakeholder perceives different gaps in the current WQT exchanges, policies, programs, and transaction structure. These gaps should be addressed in order to achieve a smoothly functioning and robust trading marketplace. To complicate this challenge, differences from program to program, because of the need to tailor them to the specific needs of the stakeholders within the watershed, creates potential for discord or potential litigation. 4.4.2 Challenges to WQT Many established WQT exchange programs are relatively inactive. The challenges appear to lie not with the develop- ment of exchanges, but with the viability of trading as a cost-effective mechanism of liability transfer between buyers 43 ------- and sellers. Economic trading challenges suppress WQT by making the risk-adjusted net economic value of trading less attractive than alternate compliance management strategies. Four economic challenges threaten the development of robust, sustainable WQT programs because they reduce the discounted cash ow return on investment (DCFROI) of trading. These are: (1) simplified modeling of natural system impacts, (2) costly environmental protection, (3) high transaction costs, and (4) ill-defined property rights. These challenges hinder efficient and fair deal making, usually because they make investing in WQT strategy risky to the buyer, the seller, or both. 4.4.2.7 Simplified Modeling of Natural System Impacts Most problems are analyzed as simplified forecasts of natural system behavior in the presence of nutrients. In reality, nutrient discharges impact a complex web of interconnected ecosystems, hydrologic systems, biosystems, geologic systems, and other natural conditions that evolve overtime. Even with seemingly simple scenarios, such as a bilateral trade between a PS and an NPS utilizing wetlands downstream, the system is still complex in terms of reaching equiva- lence between the spatially and temporally distinct discharges. Continuous time modeling and analysis of nutrient impacts to complex natural systems is a daunting task. This ap- proach allows the mapping and analysis of meaningful cause-and-effect relations within the natural environment and the nutrients that affects it. Such analyses identify the total system cost and value of strategy, accounting for feedback behavior among system components, including unintended consequences and counterintuitive behavior. They provide platforms for real-time testing of new and evolving conditions, on a periodic or event-driven schedule. In addition to the complexities of executing a single trade (quantification, ensuring equivalency, etc.) between a PS and NPS, BMPs usually produce a variety of interlinked private and public; market and non-market values. For example, the size of a wetland (e.g., private investment) not only delivers value in terms of water quality, it also provides ood control, fish habitat, erosion control, recreation opportunities, etc. (e.g., public benefit, when used). This "non-market" value is not accounted for in the price for a water quality credit. However, if implementation of BMPs, such as wetlands is to be encouraged, a strategy that thoroughly accounts for public market value is needed. This could results in the following possible outcomes: a multiple market system whereby a landowner is able to sell or otherwise gain compensation for the other ecological services provided by a BMP, or a more complete understanding of the multiple ways a landowner will benefit by implementing a BMP on their property, in addition to the income from selling water quality credits. Incorporating public market values in decision analyses would allow traders to more accurately quantify and report their return on investment in WQT. This would provide important information that would increase trading and market support among NPS. 4.4.2.2 Expensive Risk Factors Everything that is not known and provable is uncertain. This includes all future events. Quantitative analyses deal with uncertainty by: (1) assuming it away, (2) assuming median values, (3) estimating to conservative values, (4) estimat- ing to optimistic or best-case scenario values, (5) estimating using multiple experts, and/or (6) calculating "expected values." Every calculation that includes uncertainty assumes the risk that the future will be worse than calculated, and the opportunity that the future will be better than calculated. Each uncertain variable carries some risk of inaccurately estimating its value. Together, these risks compound the estima- tion risk of the overall outcome of concern. The default approach to evaluating the performance of a complex system is to make assumptions that simplify the system and to include contingencies to account for risk of inaccurate estimates. As a result, behavioral models are replaced with simple formulas. This process does not account for the in uence of underlying variables (e.g., seasonal precipitation on peaking ow rates and reduced residence time of nutrients in riv- ers). Averaging reasonably approximates some of this variability. Other rate changes are more difficult to assume, such as increasing nutrient removal efficiency with evolving wetland ecosystems. Uncertainty of future events is quantified by mean or conservative assumptions without calculation of the potential impacts of under- or over-estimation. As a result, calculations of values for a WQT strategy are filled with arbitrary as- sumptions, guesses, and/or estimates of what the future may hold. Regulators tend to use aggressive safety factors to offset their lack of knowledge about how the polluted watershed system will perform given all complexities and uncer- tainties (e.g., Breetz et a/., 2004). Thus, WQT credit asking prices are often in ated beyond the buyers' willingness to pay, suppressing demand. Agencies are charged with protecting the public trust, specifically the human, environment and natural resources that are directly and indirectly impacted by nutrient discharges. They aim to protect the public from trade risks that are as- 44 ------- signed neither to buyers nor to sellers.17 Lacking quantitative methods for this assurance, agencies apply risk factors to calculations of TMDL and other discharge limits. Necessarily, these factors are conservative to the extreme, re ect- ing the most risk-averse stakeholders in the public trust. This conservative risk management has the effect of in ating market prices and may in turn prohibit trading. The challenge is thus in balancing the protection of public interests and stakeholder concerns. A quantitative method of finding this balance and tools to achieve it would allow for a reduction in risk factors to a level that still benefits the public without overwhelming the market. As a result, the trader's return on investment would increase, thereby encouraging more trading. 4.4.2.3 High Transaction Costs WQT transaction costs are fairly well established by practice, precedent, and policy. However, trades can ounder if parties are compelled to bear onerous agency transaction costs. The barrier to robust WQT is created when the trans- action costs are high relative to the value created by trading. High transaction costs are caused by (1) unprecedented circumstances or inexperienced programs, (2) complex trades, (3) large agency commitments, (4) inefficient BMPs, and (5) overly conservative safety factors. The latter is often a problem, whereby multiple conservative assumptions together require the number of PS credits purchased per those needed to be cost-prohibitive. It is possible to significantly reduce many transaction costs by using dynamic system modeling (rather than static system modeling) to analyze natural system behavior in the face of discharge alternatives. In a large market, with multiple po- tential buyers and sellers, the long-term benefits would justify the fact that developing the model incurs costs up front. 4.4.2.4 Undefined Property Rights The discharge volume is considered a property right that requires quantification and ownership, thus challenging suc- cessful WQT. In a free market, property rights belong to the buyer and sellers. Whoever drives the market, i.e., sellers or buyers, assigns the limited property rights of the transaction. The other extreme is where the regulator assumes property rights. In a seller's market, the regulating agency, representing the demand side, assumes the property rights of the discharge from the NPS. As such, the NPS transfers liability and control of the BMPs to the agency. On the other hand, in a buyer's market, the regulating agency, representing the supply side, owns the property rights of the discharge. It may transfer a limited set of these rights, including the liabilities associated with those rights, to a PS buyer through a discharge permit, while still retaining control of the BMPs (Collentine, 2003). Without a clear definition of liability and control of the property rights, stakeholders cannot weigh the true risks and returns of the potential trade. 4.5 Potential Solutions The gaps and challenges to WQT complicate value- and risk-based decision making, leading to default decisions to not trade. Current decisions to commit to WQT and negotiate the terms of WQT deals are based on partial informa- tion that emphasizes known or predictable management, implementation, and transaction costs. The contributions of assets created, liabilities reduced, risks and opportunities incurred or avoided, risks transferred at cost, public and pri- vate economic valuation, and simplifications that compound uncertainty combine to restrain trading. These challenges need to be addressed to enable WQT to thrive. Each of the following objectives and tools could be used alone or in conjunction with another to gain insight into the utility of WQT and to streamline its application. Performing a thorough economic valuation or System Dynamics Analysis (SDA) analysis for a program would help other programs to do the same because they would not need to start from scratch. 4.5.1 Regulatory Efficiency Inefficient regulatory practices increase the cost to develop and operate WQT exchanges. Reducing the regulatory cost (and risk) of WQT exchange operations and trading would lower the administrative factor in credit price, thereby improving the traders'DCFROI. Examples of such measures could involve special training for agencies, dedicated WQT agency staff, clarification of legal issues that reduce disputes, improved system modeling, and simplified data manage- ment. Free WQT markets minimize regulatory involvement, such that the regulatory agency sets the minimum rules of engagement and then let the market propel itself. These improvements could greatly increase the rate of WQT, which could further reduce the carrying cost of exchange administration while accelerating the environmental benefits of reduced nutrient discharges. 17 Trade risk in this context does not involve financial risks to buyers or sellers, but rather the likelihood that the trades will not result in gains in environmental functions and values equal to losses. A recent review of wetland mitigation trading in the United States, for example, concludes that the inherent riskiness of wetland mitigation trades and trade terms that do not assign li- ability to trading partners have resulted in a significant loss in wetland functions and values, and, possibly, a net loss in wetland acres. See National Research Council, Committee on Mitigating Wetland Losses, Compensating for Wetland Losses Under the Clean Water Act (2001) (quoted verbatim from Kuch and King, 2003). 45 ------- Measures to improve efficiency are both technically and economically feasible. The only caveat to the economic fea- sibility is finding the agency budget to invest in improving staff, policies, practices, and equipment. Financing these improvements by increasing the administrative cost of WQT could help fund this effort, but could be counterproductive to stimulating trading. 4.5.2 PS Liability The command-control compliance liability for PS dischargers is a significant potential driver for trading. As PS com- mand-control liability rises, the value of satisfying the requirements would rise and the MPP for buyers would increase. Stricter water quality objectives would improve the overall quality of the receiving waters, allowing agencies to decrease the "safety factors" built into credit prices, which in turn would stimulate the generation and trading of water quality. All things remaining unchanged, stricter PS discharge limits should increase the economic attractiveness of WQT, encouraging more trades and better environmental protection. For Rahr, very strict restrictions against any additional discharges into the Minnesota River Basin left the company no practicable alternative to engaging in WQT. It would be technically and economically simple to stimulate WQT by shifting PS liability through a change in relevant regulations. Politically, however, that change is daunting. If regulations were to occur, the economic impacts of such changes would warrant extremely close inspection and justification before implementation. With current regulations, PSs typically retain liability to meet permit limits, while NPSs take on the contractual obligations of the trade. In some cases, however, liability transfers to a third party, such as for the cases in NC where the State assumed liability for a failed BMP and the NPS would have to return subsidies. 4.5.3 Market Economic Valuation Thorough valuations that are critical for informed decision-making may facilitate participants to engage in WQT. Ecosys- tems supply stock and ow resources that are resources for productivity and growth, thereby generating societal value or benefit. Establishing values for these resources is important to policymakers who are challenged to use regulations, laws, and incentives to responsibly manage publicly owned natural resources, habitat, and species. The total economic value of an ecosystem is the amount of money that all people who benefit from the watershed would be willing to pay to see it protected (Whitehead, 1992). This total economic value is the amount society would be willing to pay for the services and attributes of the ecosystem if they were not provided free of charge. This value comprises: (1) market eco- nomic value, which is established by transactional precedent, and (2) non-market economic value, which is estimated by methods that rely on public opinion surveys or costs of alternate strategies incurred without the resource. Society values watersheds and wetlands because their existence and outputs (goods and services) are sources of current and future consumptive and non-consumptive uses. For example, consumptive uses of wetlands include conversion to cropland, and consumptive uses of wetland outputs include the harvesting offish from wetland fisheries. Non-consump- tive benefits are long-lived, such as aesthetics or ood control. Values are multi-dimensional, and measured from several perspectives: (1) individual owner, (2) individual user, (3) regional, and (4) societal (Leitch and Frigden, 2000). Overall, market values are lower than non-market values for watersheds and wetlands (Stedman and Hanson, 2005). Market values are economic values established and directly observable in functional markets, where landowners and investors realize economic benefits. Since few markets exist for wetlands or watersheds, typical valuations focus on the goods and services within those natural systems, such as harvested plants or animals, rather than the systems themselves. Components of ecosystems are potentially marketable, and suitable to market economic valuation. For example, ecosys- tem health will in uence the rate of tree growth, the rate of commercial tree harvesting, and the net economic (market) value of timber produced. Fisheries and commercial fishing provide an analogous source of economic value. However, it is more difficult to quantify this value because fish are migratory, and their growth rate and net economic value as a commodity are in uenced by the conditions of multiple, complex aquatic ecosystems. Importantly, the total economic value of an ecosystem or hydrologic system is expressed in terms of the cost to keep the land in its current use. The opportunity cost of alternate land use, such as draining a wetland and using it for crop- land, is not considered. Public policy makers face strategic decisions that affect the short-term and long-term health and productivity of natural resource systems, including watersheds and wetlands. Strategic alternatives are always available for managing such systems. Economic valuation provides a consistent metric for comparing the performance of strategic alternatives over time, and justifying and communicating decision choices to stakeholders. Several design criteria required for a quality market economic valuation, such as: (1) a clear definition of the system (e.g., named wetland) or system component (e.g., annual shrimp production, in pounds) to be valued, (2) a clear de- termination of the valuing party (municipal tax authority, commercial fisherman, regional grocery stores), (3) the years to be used in establishing value, and (4) the regional market to be used in establishing value. 46 ------- The cost of establishing the market economic value of a natural system (or a zone within a system) is directly pro- portional to the complexity of the system and its components, the diversity of the valuing population, and the volatility of defining markets. The methods for establishing the market value of a watershed or a wetland are well established and not controversial. However, difficulties exist in the interpretation, including: (1) communication challenges among scientific disciplines, (2) economic principles not followed, (3) site-specific nature and variability, (4) unclear context of valuation (why and how needed), and (5) shortage of scientific and economic information, leading to assumptions (Leitch and Frigden, 2000). These challenges are readily overcome provided adequate time is available for the analysis and sufficient resources are invested. 4.5.4 Non-market Economic Valuation Watersheds and wetlands generate marketable and non-marketable natural goods and services, in economic terms. Examples of non-marketable economic values include water quality control, stream ow control (and habitat manage- ment. These non-marketable economic values primarily benefit the public. Unfortunately, because they are difficult to quantify, non-market economic values often weigh less than market economic values in determining policy and natural resource management strategy. However, including these values in economic assessments of strategy or policy should encourage trading. The ideal method for non-market valuation depends on the purpose or application of the valuation and the quality of available information, and no single method applies to all situations. Non-market economic valuation methods are site- specific, focusing on the physical properties, location, and the socio-economic context of the condition to be valued. Wetlands, watersheds, and other natural systems perform multiple geologic, biologic, and hydrologic functions that produce goods or support ecological services and socially valued outcomes. These functions, goods, services, and outcomes are intricately intertwined, or bio-economically linked. For example, valuing the non-market benefit (e.g., downstream water quality and fish habitat) of investing in management controls (e.g., nutrient source reduction or wet- land restoration) is difficult because the bio-economic linkage between cause and effect is indirect and complicated by multiple physical and biological functions. Non-market (e.g., fish habitat) and market (e.g., commercial fishing revenue, employment and tax revenue) goods and services are also linked, adding to the complexity of valuing strategies that impact natural systems such as wetlands. As an example, estuaries and their wetlands evenly distribute stream ow and runoff energy ( ood control) and loadings (water quality), thereby generating market economic value in the fishing industry. The National Oceanic and Atmospheric Administration (NOAA) reports that marine fisheries contributed $19.8 billion to the United States gross national product in 1993. The business employed more than 364,000 fishers and onshore workers in 1991. Freshwater and saltwater recreational fisheries in 1991 supported 924,600 jobs, contributing $1.1 billion in state sales tax, $227 million in state income tax, and $2.1 billion in federal income tax. At a local level, it is possible to roughly approximate the minimum non-market value of an estuary wetland loss as the replacement cost of lost local fishing revenue, including tax, employ- ment, and other economic considerations. Non-market economic valuation techniques are established, and widely used in the valuation of strategy and policy. They are essential in the valuation of natural resource strategy, regulations, and policy, because the non-market component of natural resources economic value typically outweighs the market component of economic value.18 In many situations, it is difficult to complete a non-market economic valuation rapidly enough and with enough sensi- tivity to usefully inform cost/benefit decision makers. However, the techniques are appropriate when environmentally sensitive, large-scale (e.g., watershed), or long-term and/or policy decisions are at stake. Overall, non-market economic valuation should focus on what is indicated or learned by the valuation process, i.e., effective interpretation of results, rather than the numeric results themselves. 4.5.5 Economic Investment Decision Methods Economic investment decision methods comprise the classic DCFROI calculations used to evaluate competing capital investment opportunities (Stermole and Stermole, 1993). These analyses quantify DCFROI, cash ow, and break-even metrics. These methods map the expected performance of an investment in a cash ow format. Spreadsheets are often used as the platform for these calculations. Cell data are entered as known, assumed, or expected (probabilistic) values 18 In their review and synthesis of the economic value of open space, Faushold and Lilieholm (1996) note, de Groot (1994) has suggested a system for valuing natural systems based on a checklist of 37 functions, grouped into four categories: regulation functions (ecological processes and life-support systems that supply and protect the quality of air, water and soil); carrier func- tions (providing space and substrate for habitat, recreation, and cultivation); production functions (producing food, fiber, energy and genetic material); and information functions (providing opportunities for reflection, spiritual enrichment, and cognitive development). 47 ------- for revenues, costs, assets, and liabilities. Cash ow is discounted at a rate set by the analyst. Decision makers select strategy based on the net present value of cash ow or return on investment. This method is used ubiquitously in business and is taught as a core course in business schools as a way to compare the economic value of strategic alternatives, including "no change." This methodology gives decision makers confidence in the merit of their decisions, accelerating commitment of capital, leveraging negotiations, and structuring exit strate- gies. Using this can accelerate the approval and implementation processes for each project, benefiting the environment as a result. Economic decision methods are completely feasible as they are already applied broadly to assess and select envi- ronmental and other business strategies. Any costs would be borne by the trader. The cost to complete such analyses depends on the complexity of the trading situation. 4.5.6 Probabilistic Analysis Probabilistic analyses define uncertainty of known possible outcomes in terms of "probability of occurrence" and "mag- nitude of occurrence." Calculations that are based on probabilistic inputs or data are more accurate than single-point estimate inputs, which are subject to error and bias. Inputs for calculations are derived from experts in appropriate fields of inquiry, such as the cost to treat water or the cost to dredge sediment from a specific location. Experts provide inputs as guesses, estimates, range values, probable values, or other methods. Risk and opportunity are accounted for in probable values, making them more reliable than the alternative inputs. Probabilistic inputs can be used for all, part, or none of the uncertainties in a value calculation. Probabilistic analysis is applicable to many kinds of problems, and is well established in practice and literature. This approach may be widely employed at present, but reports of its use for WQT are not published. The cost of probabilistic analysis of WQT strategy is higher than the cost of an assumption-based analysis. No agency cost would be required, except when agency staff serve as experts providing information for analyses. This approach would provide decision makers with more confidence in committing capital to WQT, thereby accelerating the rate at which all parties may agree to the transaction terms. This approach is technically and economically feasible, providing a better understanding of the data and uncertainties surrounding the data to improve the decision-making process. 4.5.7 System Dynamic Analysis SDA is a modeling process that enables decision makers to evaluate the outcomes of their decisions by modeling in advance of making investments. This process evaluates the consequences and sequencing of complex events and phenomena inherent in many systems. Multiple strategies are always available to the investor or decision-maker. SDA is capable of evaluating how systems will behave as a result of change, whether it is due to decided actions or uncon- trolled events. The WQT market and watersheds, like all complex systems, are networks of positive and negative feedback loops. Complex interactions lead to possible unintended consequences and counter-intuitive behavior. SDA addresses these characteristics inherent in the real world, simultaneously managing continuous and discontinuous relationships. Model development and analyses proceed iteratively, refining the model with increasing knowledge of the system. Further- more, SDA supports sensitivity analyses, either Monte Carlo or ad hoc, for the communication and defense of choices to stakeholders. The different drivers, goals, and risk attitudes of buyers, sellers, and regulators necessitate quality forecasts of information in order to commit capital to good use. Intuition and experience are not adequate when the problem is too complicated and dynamic. The SDA structure is capable of resolving many of the challenges hindering WQT. To adequately and cost-effectively ensure equivalence, SDA analyses may elucidate the complex processes af- fecting equivalence and trading effectiveness. This tool has benefited many similar projects, including planning water resources. Unfortunately, there are no available precedents for using this tool for WQT improvements. 4.6 Conclusions and Recommendations To date, there is little direct evidence that WQT creates the advantages ascribed to it. However, specific trades have demonstrated its utility, which lends to optimism that it may still be a compelling alternative to achieve water quality. Many changes could be implemented to grow the WQT markets and encourage trades within the existing policies and regulatory framework. For example, trading ratios could be distributed to include third-party beneficiaries (e.g., public stakeholders), credits earned by implementing BMPs could be increased, or agencies could absorb specific transaction costs currently paid by traders. Indeed, a number of options could facilitate this growth to the extent they address the identified challenges. Economic considerations must support WQT for it to be a viable tool to achieve water quality standards. The market should acknowledge the true valuation of an exchange. Currently, several information gaps typically elicit ineffective valu- ation that does not accurately address risks and returns, thereby generating economic trading challenges. Establishing sophisticated methods of decision-making and of evaluating and managing risk would promote WQT's viability. Without 48 ------- complete valuations of the WQT alternative, which comprehensively address the information gaps and challenges, the market may not achieve its optimum potential. In fact, it may lose its marketability entirely. To clarify, every trade does not mandate a rigorous valuation process. Rather, the market viability would benefit from a framework within which to more readily qualify costs and benefits of WQT and specific designs. These valuations will enable decision makers and policy makers to quantify the value of investing in WQT as a discharge management strategy of choice. 49 ------- 5.0 Trading Regulations Literature Review The Federal Water Pollution Control Act, or CWA, of 1972 provides the foundation for WQT in that it establishes regu- lations to protect water quality and allows exibility with respect to how those requirements can be met. This national law was enacted to restore and maintain the chemical, physical, and biological integrity of the nation's waters. The act established national policy and preserved the primary responsibilities and rights of the states to prevent, reduce, and eliminate nutrient discharges. In order to carry out this policy, USEPA was given the authority to require permits of PSs that discharge nutrients into waters of the United States, through the NPDES permit program (CWA Sections 402 and 404). PSs are discrete conveyances, such as pipes or man-made ditches (40 CFR 122.2). These permits set ef uent quality limitations and require implementation of best available technologies that may include specific BMPs. USEPA allowed the states to decide how NPSs should be regulated (IDEQ, 2005c). Amendments to CWA (Section 319) in 1987 included the requirements for states to develop and implement programs to control NPSs of nutrient discharges. Section 319 does not provide direct authority to regulate NPSs of nutrient discharges (Heimlich, 2003), but it does establish mechanisms for states, tribes, and territories to receive support for programs de- veloped to control NPSs of nutrients in the form of technical and financial assistance, training, technology transfer, and monitoring to assess the success of projects to control NPSs of nutrients (USEPA, 2005b). Programs developed by the states to control NPSs of nutrients have tended to emphasize voluntary actions (Heimlich, 2003). According to Heimlich (2003), 31 states have taken additional steps towards controlling NPSs of nutrients by passing laws or implementing programs that include enforceable mechanisms to protect water quality from agricultural sources of nutrients. These enforceable mechanisms tend to emphasize technology standards. The Tar-Pamlico and Neuse River Basin NSW Strate- gies in North Carolina provide two examples of state rules that emphasize technology standards to address agricultural and urban NPSs of nutrients by requiring that these sources achieve nutrient discharge requirements by implementing their choice of BMPs from a pre-approved list for which the state had determined average nutrient removal efficiencies (see Section 9.0 for more information). The NPDES program has made significant progress in reducing pollutants discharged by PSs to the nation's waters (USEPA, 2003b); however, between 40 and 50 percent of the streams, rivers, and lakes still remain below water quality standards. Advocacy groups blame the USEPA for waters still being impaired due to the delays in issuing guidance and providing assistance, states for not reaching beyond conventional knowledge and approaches, and the US Congress for not providing adequate resources to meet USEPA and state needs. More than 40 lawsuits, in 38 states, have been filed against USEPA and states for failure to fulfill requirements of the CWA. Consequently, innovative approaches are being sought to further recover water quality. WQT is one such approach that promises greater efficiency in achieving water quality goals on a watershed basis (USEPA, 2003a). WQT projects have occurred in the United States since the early 1980s (Copeland, 2005). The CWA also requires the development of water quality standards for all contaminants in surface waters, which in- clude standards for designated uses, water quality criteria, and antidegradation provisions (Section 303[c]). The act also requires the establishment of TMDLs (Section 303[d][1]). TMDLs are the amount of an identified pollutant that a specific stream, lake, river, or other water body can "accommodate" without violating state water quality standards and an allocation of that amount to the pollutant's sources (USEPA, 2003c). States are required by CWA to address both PSs and NPSs by establishing TMDLs for waters that do not meet water quality goals. These TMDLs typically function to set the baseline for determining trading units called credits. TMDLs must be approved by USEPA and developed for every pollutant that causes a watershed to exceed clean water limits; thus, TMDLs are generated specifically for nutrients such as nitrogen and phosphorus. In addition to the CWA, the Coastal Zone Management Act Reauthorization Amendments (CZARA) of 1990 contains NPS water nutrient requirements. The CZARA requires that states with approved coastal zone programs submit plans to implement measures for NPSs of nutrients to restore and protect coastal waters. States can employ voluntary mea- sures, such as education, technical assistance, and financial assistance, but must be able to enforce these measures should voluntary approaches fail (Heimlich, 2003). 50 ------- Arguably, one factor that seems to have hampered the ability of USEPA and states to protect water quality and ensure that state water quality standards are not violated is the challenge of developing programs (regulatory or voluntary) to control NPSs of nutrients. As discussed in Section 1.0, NPSs, particularly agriculture, are important sources of water nutrients. It is difficult to measure the contribution of an individual NPS of nutrients or the actual effectiveness of vari- ous BMPs to control discharges because of the diffuse nature of this type of discharge, as discussed in Section 3.0. WQT programs are yet another mechanism that may increase the participation of NPSs in implementation of BMPs to improve water quality by providing another platform for education and means by which land owners receive outside funds to make improvements to their properties (by implementing BMPs). 5.1 USEPA Water Quality Trading Policy To encourage the implementation of WQT programs, USEPA developed a WQT policy in 2003 (USEPA, 2003a). This policy provides guidance for states, interstate agencies, and tribes to assist them in developing and implementing such programs. Specifically, the policy is intended to encourage voluntary trading programs that facilitate implementation of TMDLs, reduce the costs of compliance with CWA regulations, establish incentives for voluntary reductions, and promote watershed-based initiatives. Voluntary trading before TMDLs are established could decrease the pollutant reduction required by the TMDL and possibly improve water quality enough to meet water quality goals and eliminate the need for a TMDL. Within the trading approach, ecological benefits that complement water quality improvements are promoted by the policy. For example, two of the trading objectives of USEPA's trading policy discuss the use of wetlands in trades, and are stated as follows: F. Achieves greater environmental benefits than those under existing regulatory programs. EPA supports the creation of water quality trading credits in ways that achieve ancillary environmental benefits beyond the required reductions in specific nutrient loads, such as the creation and restoration of wetlands, floodplains and wildlife and/or waterfowl habitat. H. Combines ecological services to achieve multiple environmental and economic benefits, such as wetland restoration or the implementation of management practices that improve water quality and habitat. Trading is particularly encouraged by the policy for nutrient (e.g., phosphorus and nitrogen) and sediment loads. Other pollutants may pose a higher level of risk and should receive a higher level of scrutiny to ensure that they are consistent with water quality standards. The geographic area for trading programs is described by the policy as the watershed or area covered by an approved TMDL. Trading credits are defined by the policy as nutrient reductions greater than those required by a regulatory requirement or established under a TMDL. USEPA encourages the inclusion of specific trad- ing provisions in the TMDL itself, in NPDES permits, in watershed plans, and the continuing planning process (USEPA, 2003a). USEPA's water quality policy identifies several mechanisms for providing provisions for trading, including legislation, rule making, incorporating provisions for trading into NPDES permits, and establishing provisions for trading in TMDLs or watershed plans. As discussed in the case studies presented in Section 6.0 through 9.0, NPDES permits have pro- vided an essential part of the regulatory basis for WQT programs, and TMDLs have furnished the driver for trading. For example, the NPDES permit issued to Rahr (Section 7.0), stringently capped the company's oxygen-demanding discharge into the Minnesota River Basin. The cap was set according to the TMDL, which allocated 53,400 pounds per day of CBOD at mile 25 and downstream of Rahr. North Carolina took a slightly different approach to using NPDES permits in WQT programs. Both the Tar-Pamlico and Neuse River Basin WQT programs (Section 9.0) tailored the NPDES permits of PSs within the river basin to provide them with exibility in meeting permit requirements, which furnished the option of trading. Both programs establish associa- tions that include a majority of the PS dischargers within the basin. The NPDES permits of the Association members do not contain limits for TN and TP, which means that if they overperform, they are not subject to the antibacksliding requirements in the federal CWA (these requirements would result in adjustments in permit limits if association members showed they could meet more stringent requirements). The NPDES permits do, however, contain a "reopener" clause stating that if conditions in the agreement signed by the Association, the North Carolina Environmental Management Commission (NCEMC), the North Carolina Division of Water Quality (NCDWQ), and the Department of Soil and Water are violated, then permits would be revised to impose new discharge limits (Kerr etal., 2000). The agreement specifies a group discharge allowance forTN and TP. As with Tar-Pamlico, the NPDES permits of individual dischargers within the NRCA do not contain a discharge limit forTN. Instead, the TN limit for the NRCA is specified in the group compli- ance NPDES Permit (USEPA, 2002b). Both of these programs were established prior to development of TMDLs for the river basin, but the final TMDLs agreed with the limits that had already been established by these programs. These programs allow for trading among PSs and trading with NPSs via a state-administered fund for every pound by which the aggregate annual discharge of the association exceeds the established limit. 51 ------- The Water Quality Trading Policy also identifies several key elements that should be incorporated into trading programs so that they are credible and successful. Units of trade (e.g., nutrient-specific credits) are necessary for trading to oc- cur. These may be expressed in rates or mass per unit time. Credits should be generated before or during the same period they are used to comply with a monthly, seasonal, or annual limitation or requirement specified in an NPDES permit. As long as the discharge controls or management practices are functioning to reduce nutrients that generate credits, credits may be generated (USEPA, 2003a). To encourage trading, there needs to be clear authority to trade and clear legal protection for using the rights purchased (in the form of water quality credits) to meet established regulatory requirements (Kieser and Fang, 2005). Specific requirements for trading programs will vary based on the location and circumstances of the trading. These re- quirements are left up to the states to generate, although USEPA's trading policy encourages consultation with USEPA during program development. USEPA believes trading programs must have clear and consistent standards for measuring compliance and to ensure that appropriate enforcement action can be taken for noncompliance. The incorporation of compliance and enforcement provisions within a trading program framework is an essential element for a credible trad- ing program, according to USEPA's water quality policy (USEPA, 2003a). These may include a combination of record keeping, monitoring, reporting, and inspections. Enforcement provisions within the trading program must ensure legal accountability for generation of credits that are traded. Compliance audits should be conducted frequently enough to ensure that a high level of compliance is maintained across the program. If compliance is not maintained, the NPDES permit holder using those credits would be respon- sible for complying with discharge limitations as if the trade had not occurred. For example, in the Cherry Creek WQT program in Colorado (Section 6.0) and the LBR WQT program in Idaho (Section 8.0), the PS project owner that initiated the trade is responsible for ensuring BMPs selected to generate credits are properly implemented and for any ensuing liability issues. The Idaho program also requires the BMP implemented to be certified as installed before the phosphorus credit can be generated and traded. In the Rahrtrading program, the NPDES permit ensured legal enforceability of the selected controls by prescribing the types of BMPs, selection process, reporting, and goals. MPCA was charged with verifying each trade and confirming annual nutrient reductions prescribed in the permit (Breetz et a/., 2004). On the subject of liability, Raffini and Robertson (2005) noted that wetland mitigation banking has dealt with liability dif- ferently than WQT in order to ensure that the service offered by wetland mitigation banking is attractive to developers and dischargers. The transfer of liability from the credit purchaser to the third-party mitigator was identified as critical to making wetland mitigation banking work: credit purchasers are not interested in buying healthy wetlands or clean water; they are purchasing rapid permitting and avoidance of liability if a mitigation site fails. In the case of Cherry Creek and Rahr, the credit purchaser is not offered a release from liability if the mitigation is ineffective and may be faced by the need to continuously monitor and maintain the mitigation measures, incurring additional costs and being exposed to ongoing uncertainty. The LBR also places liability on the credit purchaser to ensure that the BMPs are performing. This makes the purchase of credits much less attractive to PSs. Transfer of legal and financial liability from the credit purchaser to another entity is one way of making nutrient credits a more desirable commodity (Raffini and Robertson, 2005). North Carolina handled the issue of liability in the Tar-Pamlico and Neuse River Basins by assigning identification and management of WQT mitigation projects to existing government entities which are responsible for ensuring NPS credits are generated. However, PS compliance associations have not needed to purchase nutrient credits to date. Another form of program auditing included in the USEPA water quality policy is providing program transparency to the public. Public participation and comments on trading program development, use, and evaluation should be sought to ensure that water quality objectives and economic efficiencies are achieved, and that trading does not result in an impairment of designated uses (USEPA, 2003a). Some states have passed water quality laws, rules, regulations, and/or policies supporting and regulating watershed- specific trading operations. As discussed in the case studies, Colorado, Idaho, and North Carolina developed regulations to support and govern WQT. In the case of the LBR, no trading has occurred to date because the phosphorus TMDL has not been finalized; as a result, the trigger for trading is missing. New trading programs would also need to develop similar watershed-specific policies, rules or regulations. These provide the drivers and trading framework necessary for watersheds to implement exible programs to accommodate local conditions and socioeconomic factors (Kieser and Fang, no date). Regional or state trading policies exist for 10 states. There are several different models for managing trades, including: • State-managed exchange - state is broker (CT) • NPDES Compliance Association - association is the broker (NC Neuse and Tar-Pamlico) • Third party is broker, such as a non-profit, private enterprise, conservation organization, or district, etc. (Idaho; South Nation, Ontario) 52 ------- Credit managers can facilitate trading by assisting numerous credit buyers and sellers in finding each other. Further- more, they can identify and facilitate trades among multiple buyers and potential sellers. Multiple locations with small amounts of credit could be consolidated by an administering organization for sale to a large buyer. Other functions of credit managers or brokers could perform include: verifying and discounting credits that vary widely in performance and uncertainty, optimizing the selection and location of BMPs, and providing escrow or backup credits in case of BMP failure (Hough and Hall, 2005). 5.2 Agricultural Policy Drivers for Using Wetlands in WQT For decades, the USDA has encouraged conservation measures on farmland. Towards that goal, several "Farm Bills" have established agricultural policy to increasingly rely on financial incentives to promote conservation practices. Many of the provisions of the farm bills encourage the use of wetlands to achieve environmental quality. • The 1985 Farm Bill created the Conservation Reserve Program, which included a provision to link eligibility for financial incentives to wetland conservation practiced on ecologically sensitive land. • The 1990 Farm Bill created the Wetlands Reserve Program, a federal program to restore and place conservation easements on wetlands, and authorized the Water Quality Incentives Program. • The 1996 Farm Bill consolidated several programs created in previous Farm Bills into the Environmental Quality Incentives Program. Among other functions, the Environmental Quality Incentives Program funds BMPs on working farmland. • The 2002 Farm Bill dramatically increased funding for CS, making it possible to restore much of the country's lost or damaged wetlands. The USDA has been promoting the applications of private-sector markets for achieving environmental goods and services (USDA, 2005). While traditional financial incentives have been through cost-share programs, trading in environmental credits will provide the next generation of incentives for conservation. In large measure, the World Trade Organization has driven this potential expansion of using environmental markets by disputing trades associated with agricultural production subsidies. Specific restrictions limit the amount of financial support the farm may receive without losing their eligibility to be considered "green box", a status that exempts them from annual limits on support. Alternatively, WQT markets would allow agricultural operations to earn income by providing nutrient credits to those that need them. In fact, Congress will vote on a proposed 2007 Farm Bill that would allow credits generated by BMPs implemented with federal funds to be sold within the market (USDA, 2006). Support by Congress of this measure would significantly promote the participation of agricultural NPSs in WQT. 5.3 Regulations Related to Wetlands and Trading Programs The CWA contains requirement that could have implications for wetlands constructed as a part of a WQT program. Waste treatment systems designed to satisfy the requirements of the CWA are by definition not considered waters of the United States (USERA, 2000a). However, if a constructed wetland is constructed in a water of the United States, the area will remain a water of the United States unless a CWA Section 404 permit is obtained that identifies it as an excluded waste treatment system. It is possible that the constructed wetland will revert to a water of the United States if it is abandoned or is no longer being used as a treatment system and it fits the definition of a water of the United States. This definition is met if the constructed wetland has wetland characteristics (hydrology, soils, vegetation), is an interstate wetland, is adjacent to another water of the United States, or is an isolated intrastate water that has con- nections to interstate commerce (USERA, 2000a). These requirements have regulatory implications. If a constructed wetland is built to generate credits for a WQT program and the credits are assigned a finite duration, then the wetland could become regulated under the CWA, thereby limiting potential uses of the land. This could serve as a deterrent to using constructed wetlands as a BMP in WQT programs. If USEPA and states would like to encourage the use of constructed wetlands in WQT programs, then the long-term regulatory implications of building constructed wetlands to generate credits for WQT programs will need to be modified. 53 ------- 6.0 Case Study - Cherry Creek, Colorado 6.1 Overview The Cherry Creek Basin trading program aims to protect water quality in the basin through trades between two PSs and between PSs and NPSs. Several tributaries and the Cherry Creek mainstem ow into the 850-acre Cherry Creek Reservoir, located in southeast Denver, Colorado (Figure 6-1) (CCBWQA, 2005). The U.S. Army Corps of Engineers (USAGE) constructed the dam establishing the Cherry Creek Reservoir in 1950 to protect Denver from coding (USAGE, undated). The USAGE owns the Cherry Creek Reservoir and the 3,915 acres of land surrounding it, but leases both to the State of Colorado. That land is now the Cherry Creek State Recreation Area. Cherry Creek ows from the reservoir supplying a watershed of 245,500 acres for Denver. Groundwater also ows into Cherry Creek from beneath the dam downstream of the reservoir, supplementing the watershed supply (CCBWQA, 2003a).The CCBWQA administers and manages the water quality issues of this watershed. Within the watershed, six WTFs discharge ef uent as PSs into the streams owing into the Cherry Creek Reservoir. Trading between PSs occurred as early as 1985, expanding to allow trades with NPSs in 1989. Final guidance for trades was approved in 1997. Since then, three trades have occurred, one of which involved an NPS (Breetz et a/., 2004). Legend Stream Stream Intermittent Lake Interstate Highway Watershed Boundary FIGURE 6-1 The Cherry Creek Basin Figure 6-1 The Cherry Creek Basin (CCBWQA, 2005). 54 ------- 6.2 Background The State of Colorado initiated WQT in 1989 through the state's Department of Public Health and Environment when its Water Quality Control Commission embraced the Cherry Creek Reservoir Control Regulation, listed as Regulation #72. The regulation approved WQT between PS and NPS discharges of phosphorus. Four years earlier, the Water Quality Control Commission distributed TMDL allocations of phosphorus aimed to control eutrophication of the Cherry Creek Reservoir to the PSs with discharges into the reservoir. PS dischargers had to obtain a permit under NPDES before discharging ef uent into the streams owing into the Cherry Creek Reservoir. The Department of Public Health and Environment accepted trades with NPSs despite the fact that these sources were unregulated. Their rationale was that NPSs at that time represented approximately 80 percent of the phosphorus load into the basin. The state's impetus for the trading program was to allow growth while preserving the aquatic ecosystem of the basin. Regulation #72 also legally mandated the CCBWQAto administer the basin (Breetz et a/., 2004). In 1997, approval of guidelines for Regulation #72 trading finally gave direction to the program. Guidance identified trading opportunities, determination of trading ratios and credits, procedures for applicants, evaluation criteria, and trade implementation. Revisions to Regulation #72 in 2001 established the TMAL allocating phosphorus loads into the basin to both PSs and NPSs. In 2003, they issued the Cherry Creek Reservoir 2003 Watershed Plan with new guidelines to re ectthe updated trading program. The plan set the surface water standard forTPat40 micrograms per liter (ug/L). The Trading Program Guidelines offered more detail on trade evaluations and implementation. The TMAL was set at 14,270 pounds of phosphorus per year, of which the CCBWQA allocated approximately 72 percent (10,300 pounds per year [Ib/yr]) to NPSs and regulated stormwater sources, 13 percent (1,900 Ib/yr) to municipal and industrial PSs, 8 percent (1,150 Ib/yr) to background sources, and 3 percent (450 Ib/yr) to individual septic systems (CCBWQA, 2003a, 2003b, and 2003c). An additional 3 percent was allocated to reductions achieved by the Reserve Pool and Phosphorus Bank. The CCBWQA set up these two entities (Reserve Pool and Phosphorus Bank), each initially worth up to 216 pounds of phosphorus per year to broker trades. The Phosphorus Bank obtained its 216 pounds of phosphorus per year through four projects the CCBWQA initiated in the early 1990s and has been maintaining since then. The Reserve Pool could earn its 216 pounds of phosphorus per year through new NPS control projects. A PS discharger could apply for Reserve Pool credits either for a BMP project or for extending their wastewater service to a semi-urban area. In total, PS dischargers could buy or lease up to 432 pounds of phosphorus per year, i.e., the sum of the Reserve Pool and Phosphorus Bank, of new or increased allocations, bringing their total allocation to 2,310 Ib/yr, or 16 percent of the TMAL. Semi-urban areas, which are not designated to a service area but are planned for urbanization in the future, were allocated 236 credits, already included in the PS allocation (CCBWQA, 2003a; CCBWQA, 2005). Recent amendments to Regulation #72, effective as of December 30, 2004, removed the upper limit of 216 pounds of phosphorus per year that the Reserve Pool could achieve. The NPSs and regulated stormwater sources were also increased to 10,506 pounds of phosphorus per year to include the Phosphorus Bank's 216 pounds of phosphorus per year (CCBWQA, 2005). These changes are intended to encourage more interest in trading by eliminating ceilings on a trade's potential. Stormwater is included in the trading program as another regulated discharge. Colorado regulates stormwater discharges through a mandate for NPDES permitting. The permit adds requirements for stormwater BMPs to reduce phosphorus discharges into surface waters (Breetz et a/., 2004). 6.3 Program Performance The four criteria fundamental to a successful trading program involving NPSs include equivalency, additionality, ac- countability, and efficiency (Fang and Easter, 2003). The first three criteria address technical and administrative issues, necessary to evaluate efficiency. Equivalency, which is a measure of how nutrient loads from various sources relate to the constituent of concern to be offset, is vital to avoid surpassing the TMDL. Conversion ratios accounted for temporal, spatial, and/or chemical differences in the sources. Such differences are often complex, so this criterion is fraught with uncertainties, which must also be factored into the trade. Additionality stipulates that any NPS offset that would have occurred regardless of the trading program cannot count toward a trade. This prevents double counting by ensuring that a nutrient control activity counts toward only one objective if multiple objectives are met. For example, phosphorus reduction from a BMP that is already necessary for land development activities is not eligible for trading (Breetz et a/., 2004). Finally, accountability mandates appropriate monitoring and oversight to ensure proper implementation of all program requirements. Performance, design monitoring, and reporting could satisfy this criterion. Conservatively set- ting the conversion and trading ratios also contributes to satisfying this criterion. The last criterion is one of economics. Efficiency mandates the trade proceed only when one source is able to more cost-effectively reduce its discharges than another source. This condition is critical to making the program financially attractive, and thus marketable (Fang and Easter, 2003; Jaksch, 2000). 55 ------- The Cherry Creek trading program structure is conducive for success in achieving these four criteria. Conversion ratios account for differences in particulate versus dissolved forms of phosphorus. In addition, trading ratios, which qualita- tively account for spatial differences in loads, add a level of certainty to equivalency. Additionality precludes a credit from counting towards a trade if it already existed or was required. Monitoring and reporting are essential components of the program, providing accountability. A PS could increase its TMAL allocation through trading more cost-effectively than through implementing its own controls. However, as the following sections present, threats to these criteria, particularly to equivalency and efficiency, have thus far hindered this success. Complexities involved in the determination of conversion and trading ratios hindered the certainty of equivalency. However, this factor should be more quantitative, and account for temporal differences, as well. In fact, equivalency must account for the effects of the dynamic interactions of processes, such as concentrations of other nutrients. Establishing equivalency with more certainty must be achieved without burdening the program with added costs. Financial incentives are critical to perpetuating the program, and are currently not sufficient to stimulate trading. Currently, there is not enough need for most PSs to reduce their phosphorus loads. 6.4 Technical Performance The trading program operates on a system where one credit is equivalent to 1 pound of phosphorus per year. Trading credits functions through a clearinghouse structure, whereby the CCBWQA may sell credits to dischargers needing to increase their allocation. A PS discharger may also trade directly with another PS discharger if the buyer at least strives to minimize phosphorus loadings (Breetz et a/., 2004). Success of the trading program is predicated on PSs abiding by their discharge limits. The CCBWQA mandates that, prior to discharge, PSs must remove as much phosphorus as possible through advance treatment or secondary treatment followed by land application. The 30-day average concentration of phosphorus in ef uent must not exceed 0.05 mg/L. Dischargers using land application must achieve a 30-day average concentration of phosphorus less than 0.05 mg/L divided by the return ow rate, unless lysimeters are used, in which case the ef uent concentration limit is 1.0 mg/L (CCBWQA, 2005). Such restrictions aim to control the release of phosphorus in the solid phase into the watershed through stormwater runoff. The trading program incorporated safety factors to provide accountability. These factors aimed to account for project uncertainties, particularly those in Pollution Reduction Facility (PRF) effectiveness and those associated with complex dynamic fate and transport processes. The CCBWQA set equivalency at 2.9:1 forTP and 2.2:1 for dissolved phospho- rus. These ratios were derived from a USEPA-approved method to assess the settling of suspended solids, ratios of dissolved-to-total suspended solids (TSS) from a comparable facility, and a fate and transport adjustment (Breetz et a/., 2004). These ratios indicate 2.9 credits of reduced TP discharge or 2.2 credits for dissolved phosphorus discharge are needed for each pound of phosphorus discharged from a PS. Accordingly, Equation 6-1 calculates the number of credits of phosphorus earned based on the weight of phosphorus reduced per year, using a conversion ratio. , pounds_per yearp reduced (6-1) credits earnedp=- =^-^—LE^I p CR where credits_earnedP = credits earned from trade, defined as pounds of phosphorus per year pounds_per_yearp = Ib/yr of phosphorus reduced by BMPs CR = conversion ratio Credits that are earned from the BMP implementation are added to the allocation. With a minimum trading ratio of 2:1, a minimum of twice the earned credits is lost from the entity trading its credits (Breetz et al., 2004). (6-2) credit_lostp=credits_earned«TR where credit_lostp = credits lost from allocation TR = trade ratio Four "historic trade projects" supplied the Phosphorus Bank with its 216 credits. These PRFs include the Shop Creek detention pond and wetlands established in 1990 (Figure 6-2), Quincy Drainage detention pond established in 1996, Cottonwood Perimeter Road Pond established in 1996, and improvements to the East Shade Shelter streambank estab- lished in 1996 (CCBWQA, 2005; Wulliman, undated). The CCBWQA is charged with maintaining and managing these PRFs. If approved, a PS discharger may buy credits from the CCBWQA for a price set by the CCBWQA. For example, a PS discharger needing an additional 20 credits, worth 58 credits with a 2.9:1 equivalence, could purchase twice that, 56 ------- i.e., 116 credits, from the CCBWQA's Phosphorus Bank, which is now part of the NPS and regulated stormwater al- location. To date, no discharger has requested a withdrawal from the Phosphorus Bank (CCBWQA, 2005). These historic PRFs earned their credits primarily through erosion and wetland restoration, and continue to reduce phosphorus loads into the Cherry Creek Reservoir. The performance of each PRF is monitored annually by measur- ing and comparing phosphorus loads upstream and downstream of each PRF. Development had significantly eroded Shop Creek and eliminated all of its vegetation. The Shop Creek Water Quality Improvement Project created wetlands to stabilize channel erosion and reduce phosphorus load to the Cherry Creek Reservoir. The project established a 9-acre-foot detention pond upstream of five wetland channels in series, each stepped down from the previous. Deten- tion ponds typically fill with water during storm events and then allow for slow drainage thereafter, allowing time for the particulates with phosphorus to settle. Each wetland channel adds settling time, as well as natural biological, chemical, and physical treatment, and infiltration. Between 1990 and 2000, phosphorus leaving the Shop Creek wetlands to enter the Cherry Creek Reservoir averaged 173 pounds less than that entering the detention pond, representing an aver- age reduction of 63 percent. The Quincy Drainage detention pond reduced phosphorus loads by restoring a vegetated infiltration basin. Measurements collected before and after this PRF from 1996 to 1999 calculated average load reduc- tions of 138 pounds and efficiencies of 99 percent. The Cottonwood Creek Perimeter Road Pond PRF involved road improvements to decrease water ow, restoring vegetation through the channel, thereby reducing phosphorus loadings. In 2004, phosphorus measurements before (3,334 pounds) and after (2,592 pounds) the pond indicate an average an- nual load reduction of 742 pounds, i.e., 22 percent (CCBWQA, 2005). Finally, the East Side Shade Shelters area had suffered from severe erosion, which was remedied through gravel benching and vegetation along the shoreline. This stabilization reduced phosphorus loadings into the Cherry Creek Reservoir. Although actual data on the performance of this PRF is not readily available, the 2003 Watershed Plan reports an average of 15 Ib/yr. In total, annual measurements of phosphorus loads before and after the PRFs indicate that they reduce on average over 1,100 pounds annually. With equivalency and trading ratios considered, the reductions support the 216 credits for the Phosphorus Bank (Wulliman, undated; CCBWQA, 2005; CCBWQA, 2003a). Although trading with the Phosphorus Bank has yet to occur, three projects have created new credits that reside in the Reserve Pool available for trade. New BMP projects or PRFs supply credits for the Reserve Pool to allow for growth and expansion. The CCBWQA may purchase NPS phosphorus reductions for Reserve Pool credits. Any entity construct- ing or planning a PRF may apply to the CCBWQA for credits anticipated with that PRF. If granted CCBWQA approval, that entity may then buy those credits to offset its own discharge, sell them to another discharger, or retire them.19 No longer capped at 216 credits, the Reserve Pool may achieve however many credits an innovative approach may offer. The trading ratio for the latter must be at least 2:1, but should increase for PSs that are farther than the NPS is from the Cherry Creek Reservoir. These ratios aim to assure equivalence. Until December 30, 2004, the trade ratio could not exceed 3:1, but the amendments removed that upper limit (CCBWQA, 2005). Of the three new credit trades, two were needed to satisfy significant growth to semi-urban areas since initial alloca- tions. Specifically, in 2004, the Pinery Water and Sanitation District granted use of 25 of its credits to the Plum Creek Wastewater CCBWQA, and 25 credits were taken from the semi-urban area allocation. Another 10 credits from the semi-urban allocation went to the City of Aurora for Land Applications within the Cherry Creek Watershed (CCBWQA, 2005). The third trade was between PS and NPS, the first of its kind for the program. In 2004, the Arapahoe County Water and Wastewater Authority (ACWWA) planned to modify one of its stormwater detention ponds, located 2 miles upstream of its discharge point. In doing so, it would reduce 165 pounds of phosphorus to supplement its own TMAL allocation. Trading ratios were critical to the amount of credits that the transaction was worth. According to the TP ratio of 2.9:1, the reduction will earn ACWWA 57 credits. While ACWWA receives 57 credits, the minimum trade ratio of 2:1 reduces the NPS allocation by 114 credits, resulting in a reduction in the TMAL (CCBWQA, 2005). Despite effective reductions, mass balances indicate approximately 4,000 pounds of phosphorus annually accumulate in the Cherry Creek Reservoir (CCBWQA, 2003a). Accumulated phosphorus acts as an internal load for which the TMAL allocations do not account. The CCBWQA continues to pursue other PRFs intended to improve the water quality as much as possible. In 2002, the CCBWQA contributed 16.5 percent of the funds needed for the Piney Creek Reclamation project, which was completed in 2004. Soil erosion controls and restoration of riparian vegetation along 5,100 feet reduce approximately 90 pounds of phosphorus annually from entering the Cherry Creek Reservoir. In 2002, another PRF involved a second detention pond on Cottonwood Creek just outside the Park, west of Peoria Street, aimed to complement the Park Perimeter Road PRF. By 2004, this PRF reduced phosphorus loads, measured at 2,590 pounds upstream and 1,499 pounds downstream of the detention pond. The Cottonwood Reclamation project of 2003 aimed to reclaim the natural wetlands capabilities of the area covering 11,600 feet along the stream. Annual phosphorus loadings are estimated to decrease by approximately 730 pounds through soil erosion control, wetlands treatment, infiltration, and settling. 19 When a credit is retired, it is no longer eligible for credit, but rather serves solely to improve the environment. 57 ------- The only available indication of a method to derive this estimate is comparisons with Shop Creek results and a 2004 study that indicated its feasibility. The CCBWQA has also been conducting feasibility studies to restore, reclaim, and construct wetlands in the Cherry Creek State Park. An agreement drafted in 2004 identifies those responsible for any PRFs within the park. When completed, 60 acres of wetlands will control approximately 600 pounds of phosphorus per year. Again, a methodology to derive this estimate is not clear, but sampling and analyses in 2004 and testing of wetlands reclamation on a smaller scale seem to have factored into this methodology (CCBWQA, 2005). Credits from CCBWQA-funded projects, aside from those for the Phosphorus Bank, are not eligible for trading, but instead aim to further improve water quality (Colorado Department of Public Health and Environment, Water Quality Control Commis- sion, 2001). Figure 62 Cherry Creek Basin East Side Shelters PRF Quincy Drainage PRF Shop Creek PRF LEGEND: O Sample Site Road ^—^— Stream (^^B Reservoir/Pondi'PRF N 0 05 10 2.0 M APPROX SCALE Note Labeled site locations for Quincy Drainage and East Side Shelters PRFs are approximate. Figure 6-2 Cherry Creek Basin with selected PRFs identified (CCBWQA, 2005). 6.5 Economic Performance The CCBWQA is funded through a combination of property taxes, user fees and grants. The Base Price for credits purchased from the Phosphorus Bank is based on the minimum cost the CCBWQA would incur to pursue additional projects that would achieve comparable reductions (CCBWQA, 2003b). Applications to create Reserve Pool credits cost $2,500, and a discharger must pay an additional $500 to cover costs incurred by the CCBWQA to evaluate the request for credit withdrawal from the Phosphorus Bank. The cost of Reserve Pool credits depends on the BMP implemented to achieve the offset. When the ACWWA retrofitted the detention pond, they achieved 57 credits. Therefore, with each credit worth $8,000 (the unit cost for traditional controls), and a cost to retrofit the detention pond to achieve those credits of $400,000, the gain in value was $56,000 (Breetz et al., 2004). Subtracting the cost of $2,500 to apply for credits from the Reserve Pool, the net value for just 57 credits is $53,500. Considering the avoidance of the alternative potential fines for violations, which range from $10,000 to $25,000 per day (Breetz et al., 2004), the detention pond retrofits are worth even more. While NPSs face a total load allocation, regulations do not apply to individual NPSs. To offer incentive for NPSs to engage in trading where they otherwise may not have any, the CCBWQA puts the implementation of the BMP and any ensuing liability issues onto the PS project owner (Breetz et al., 2004). This incentive for the NPS places a liability is- sue onto the PS. 58 ------- Financial incentive exists in that BMP implementation to gain credits is typically more cost-effective than PS controls to abide by their allocated credits. The incentive is lost, however, if the PS already easily complies with its waste load allocation. TMAL allocations were distributed with growth in mind. Trading will only achieve efficiency as this growth is realized or the TMAL is lowered and allocations re-distributed. The relationship between PS discharge levels directly determines the market demand for credits and the regulatory thresholds set for individual and collective PSs. The CCBWQA is required to spend at least 60 percent of it annual budget, derived from property taxes, user fees, and grants, on construction and maintenance of PRFs. It applies the remaining funds towards administrative costs. In 2004, the $1,400,000 budget distributed $840,000 toward construction and maintenance of PRFs and $560,000 to administra- tive costs. To account for anticipated future financial burdens, the CCBWQA as of 2005 has a "sinking fund" in its annual budget. Using three-year projections, PRF costs are separated into design, capital, land acquisition, water requirements, and O&M.The CCBWQA contributed $118,000 to the Piney Creek Stream Stabilization, which will cost $714,000 when completed. The long-term average cost to the CCBWQA will be $115 per pound of phosphorus per year. The Cottonwood Creek Reclamation will cost $2,100,000 with a long-term average annual cost of $330 per pound of phosphorus per year. The Cherry Creek State Park Wetlands Project represents a capital cost of $1,928,000 with a long-term average cost of $280 per pound of phosphorus per year (CCBWQA, 2005). The intent of these projects has not been to compete against PS controls, but rather to supplement them in the pursuit of achieving water quality standards. 6.6 Administrative Performance The CCBWQA must approve any withdrawal from the Phosphorus Bank. For each potential trade, approval requires a thorough evaluation of treatment capacity and population estimates of the potential buyer as well as of the other dis- chargers in the watershed. All activities related to a trade with the Reserve Pool also require approval by the CCBWQA, who must consider the type of trade, corresponding trade ratios, and monitoring and reporting (CCBWQA, 2003a). The CCBWQA conducts annual water quality monitoring in the Cherry Creek Reservoir and basin. It evaluates reser- voir water quality, reservoir in ow and loading, surface and groundwater quality in the watershed, and effectiveness of CCBWQA PRFs. Permits for PSs are contingent on monthly reports of 7-day and 30-day averages of phosphorus concentrations and loadings (CCBWQA, 2003a). Continued allocation of traded credits relies on both PSs and NPSs complying with Regulation #72 and abiding by their revised shares (Water Quality Control Commission, 2001). Besides the CCBWQA's annual report on watershed activities, every three years the Water Quality Control Commission must update Regulation #72 as necessary (Water Quality Control Commission, 2001). This triennial review is critical to satisfying current needs of the dynamic basin. 6.7 Summary The trading program has been successful in that PS phosphorus discharges with trading have remained below the TMAL. Loads of phosphorus into the Cherry Creek Reservoir in 2004 totaled 12,512 pounds, 1,758 pounds below the allowed 14,270 pounds. Furthermore, PRFs have proved effective, with approximate removal efficiencies as follows: Cottonwood-Peoria Pond-42 percent, Cottonwood Perimeter Pond-22 percent, Shop Creek-63 percent, and Quincy Drainage - 99 percent. These successes have not yet translated to compliance with the goal of 40 ug/LTP in the Cherry Creek Reservoir (CCBWQA, 2005). This discrepancy may indicate that improvements are not immediate but rather will emerge over time. Alternatively, internal loadings in the reservoir could be to blame, indicating that the TMAL may be too lenient for the water body to achieve the target of 40 ug/L TP PS allocations were typically large enough to pre- clude the need for credit purchases. Such purchases, however, may be more attractive as population growth demands expansion of WTF capabilities. When growth of a facility exceeds the point where its discharge equals its allocations, or when expansion occurs in a semi-urban area, which is not included in the allocated districts, interest in trades with NPSs through the Reserve Pool will likely grow. Trading ratios can become higher depending on location within the watershed, which suppresses trading, and more research should go into the development of the TMAL, as well as that of conversion and trading ratios. These critical determinations would benefit from insight into fate and transport issues such as (1) competing ions, such as magnesium (Mg+2), calcium (Ca+2), and hydrogen (H+)—i.e., those that compete to bind with sediment and organisms; (2) biological activity; and, moreover, (3) the dynamic nature of the ecosystem. The CCBWQA needs to take actions which would achieve short-term improvements. Decreasing the TMAL would likely have the most dramatic effect in terms of driving trading and meeting water quality goals. Nonetheless, the exibility of trading approaches, coupled with clear guidelines and oversight by the CCBWQA, suggests that future success for this trading program is possible. The CCBWQA demonstrates a strong commitment to design and implementation of its own PRFs, as well as facilitation, coordination, education, and monitoring of other potential BMP sources in the watershed. With determination, PSs will benefit from WQT to realize water quality objectives. 59 ------- 7.0 Case Study - Minnesota River and Rahr Malting Company, Minnesota - Rahr Malting Company Water Quality Trading: A Multifaceted Success 7.1 Overview The MPCA issued to Rahr in 1997 one of the first wastewater discharge permits in the U.S. requiring WQT. Rahr is in Shakopee, Minnesota, in the Minneapolis-St. Paul metropolitan area (MPCA, 1997). Permit MN0031917, issued under NPDES, stringently capped the company's oxygen-demanding discharge into the Minnesota River Basin (Figure 7-1) (USEPA, undated). Despite the stringency, these discharge levels would still have introduced more oxygen demand into the river than allocated by the river's TMDL, thus requiring offsets to be achieved elsewhere in the service area. MPCA administered the federal permit and trades fundamental to the permit. Much of the nutrient loading into the basin, which drains 16,700 square miles, derives from NPSs. In particular, nearly three-quarters of the phosphorus loading into the river is from NPSs (MPCA, undated). In accordance with the permit, three approaches, including critical area set-asides and wetland restoration, erosion control, and livestock exclusion, controlled phosphorus discharge into the TMDL zone. The permit was issued in 1997 and offsets were all achieved within four years, more than a year less than the five years it was allowed for this goal. NPS controls must remain in effect thereafter as long as Rahr continued its discharge (Breetz et a/., 2004). Besides allowing Rahr to achieve growth and reduced costs, added benefits were the environmental and economic improvements to the NPS areas, including restored habitats and property upgrades. Legend Stream Freeway J Watershed Boundary Shaw CLIENT NAME CLENT LOCATION FIGURE 7-1 THE MINNESOTA RIVER BASIN Figure 7-1 The Minnesota River Basin (base map taken from http://wrc.coafes.umn.edu/lowermn/maps/mnbasin.htm) 60 ------- 7.2 Background Rahr initiated the program in an effort to increase its production by 20 percent, while gaining control and decreasing costs of its wastewater discharge. To do so, it proposed to build its own treatment facility. Until then, the company had sent its waste to the Blue Lake WTF in Shakopee, Minnesota, located 25 miles upstream from the con uence of the Minnesota and Mississippi Rivers. The Metropolitan Council Environmental Services operated the WTF. Significant stress to dissolved oxygen levels to below acceptable levels due to nutrients in the lower Minnesota River, below mile 25, led to the implementation in 1988 of the TMDL for five-day CBOD (CBOD5).20TheTMDL had allocated 53,400 pounds per day of CBOD at mile 25 and downstream. This allocation was based on the 7-day, 10-year low ow in 1988 because low- ow periods are when dissolved oxygen levels are most vulnerable (Faeth, 2000; Jaksch, 2000). Excessive oxygen demand results in dissolved oxygen levels that do not adequately support aquatic life. Phosphorus loads contribute to the CBOD. Additional stress to the dissolved oxygen levels result from nitrogen and sediment loads, which deplete oxygen from the river water via nitrogenous biochemical oxygen demand (NBOD)21 and sediment oxygen demand.22 The TMDL obligated MPCA to prohibit new oxygen demanding loads into the river. Therefore, any new discharges would require an existing source to be eliminated. The key impetus for implementing the program was the infeasibility of Rahr to reduce down to zero the pollutant loads in the ef uent from its planned WTF. Therefore, Rahr needed to somehow reduce other loads into the river to offset its own. Blue Lake WTF would not agree to trade any of its allocated loading because it was needed to accommodate growth. The company negotiated an agreement with MPCA to offset CBODs discharge from its new WWTP by funding upstream NPS phosphorus reductions. Under this agreement, Rahr developed the program to treat its process waste- water to within specified levels and reduce upstream loading by an amount equal to its resulting discharges (Fang and Easter, 2003). The resulting trade included fourNPSs upstream of the TMDL zone. Rahr was the sole PS. While nitrogen and sediment were also included in the trades prescribed in the permit, phosphorus is the nutrient traded in the chosen BMP. 7.3 Program Performance The trading program was a multifaceted success due to diligent efforts by all those involved to maximize and balance efficiency, equivalency, additionality, and accountability (Fang and Easter, 2003). These four criteria are fundamental to a successful trading program involving NPSs. The first criterion is one of economics. Efficiency mandates the trade proceed only when one source is able to more cost-effectively reduce its discharges than another source. This condition is critical to making the program financially attractive, and thus marketable. Although Rahr had no alternative but to buy credits from NPSs, in contrast to market- based systems where there is a choice of whether or not to trade at all, it had to optimize cost-effectiveness in the types and locations of NPS controls. NPSs, which are not presently regulated, typically have little incentive to control their discharges with the high costs involved in trading. Indeed, there may be disincentives in participating in such trades. In particular, by agreeing to a quantified load reduction, an NPS discharger may unintentionally facilitate future regulation of that discharge. Rahr was fortunate to have found the trading partners that it did. This good fortune was the result of actively involving the community and environmental organizations throughout the process, promoting Rahr's position to fund the BMPs, financially compensating the NPSs, and avoiding quantified validation of load reductions. So while the NPSs were not driven by regulation, they recognized the opportunity to improve their property free of charge without acknowledging measurability of their loads. The other three criteria address technical and administrative issues necessary to evaluate efficiency. Equivalency is a measure of how pollutant loads from various sources relate to the pollutant of concern to be offset. Ensuring that offsets are equivalent to or greater than the permitted load is vital to avoid exceeding the TMDL. Conversion ratios multiply the offsets to account for uncertainties associated with temporal, spatial, and/or chemical differences in the sources. Such differences are often complex, so this criterion is fraught with uncertainties, which must also be factored into the trade. Additionality stipulates that any NPS offset that would have occurred regardless of the trading program cannot count toward a trade. This prevents double-counting actions simultaneously applied to more than one objective. Finally, accountability mandates appropriate monitoring and oversight to ensure proper implementation of all program require- ments. Performance and design monitoring and reporting may satisfy this criterion. Otherwise, conservatively setting 20 CBOD is the amount of dissolved oxygen that is needed for the breakdown of carbon-based organic molecules into CO2 and water. 21 NBOD is the amount of dissolved oxygen that is needed for the breakdown of nitrogen-based protein molecules and ammonia into nitrate and nitrite. Nitrogen conversions use four times as much oxygen as carbon conversions. 22 Sediment oxygen demand is the amount of dissolved oxygen that is needed for biological and chemical processes in the sedi- ment. 61 ------- the conversion and trading ratios could satisfy this criterion by overshooting expected requirements to offset uncertainty in performance (Fang and Easter, 2003; Jaksch, 2000). The following sections describe how, the four criteria for a successful WQT program were optimized through scientific research, cooperation by all those involved and assurances of financially viability, this laid the foundation forthe program's success. A quasi-independent five-person board was set up to select sites for trading consideration. A technical con- sultant with a member on the board calculated trading units. For a trade to be pursued, MPCA needed first to approve it, followed by a positive vote by the board, followed again by final MPCA approval (Jaksch, 2000). Common objectives to conservatively protect and even improve the environment, reliable science, and the social and financial commitment by Rahr and MPCA supported the WQT program. Rahr offset the wastewater load that it planned to add to the river by funding BMPs to decrease NPS loads upstream of the facility. After careful consideration of several types of BMPs, four trades were chosen for their ability to achieve the four criteria, particularly equivalence and accountability. Despite the overall success of the program, some challenges were encountered. As demonstrated in the following sec- tions, complexities involved in the determination of conversion and trading ratios hindered the certainty of equivalency. Furthermore, efforts to develop scientifically-based ratios burdened the program, particularly MPCA, with transaction costs. Another limitation was the lack of necessity of NPSs, which are generally not regulated, to work within set credits. Although they did not have the market-based incentives to trade with Rahr, they were motivated by financial compensa- tions and improvements to their property. Still, Rahr was fortunate to have contracted with those that it did. However, future trading partners, either to allow for growth or if further reductions are necessary, may be more challenging to convince. Finally, being one of the first in the nation to trade nutrients, and the first to do so trading pollutants other than that targeted by the TMDL, made additional research and negotiation necessary which added another obstacle, and thus time and money. 7.4 Technical Performance MPCA and Rahr agreed on a trading credit system where one credit unit is equivalent to one pound per day of CBODs. A critical component of the trading program was the determination of reasonable ef uent levels from their planned PS. The concentrations of CBODs, phosphorus, nitrogen, and TSS in 24-hour composite samples of their treated waste were analyzed three times per week. Monthly concentrations of CBODs for average (1 million gallons per day [mgd]) and maximum (2.5 mgd) ows could not exceed 12 mg/L and 18 mg/L, respectively. These limits were enforced year-round, more stringent than the typical increase during October through May. Also more stringent was the limit for phosphorus, set at 2 mg/L, compared to the more common limit of 3 mg/L. Ef uent limits were 30 mg/L and 45 mg/L of TSS for average and maximum ows. Ef uent limits for nitrogen depended not on ows but on the time of year, decreasing in warmer months, and with a yearly average of 9 mg/L. So for every unit discharged by Rahr, BMPs had to control an equal number of units of NPS discharges upstream of the facility. After treating its waste, Rahr would still need to discharge 54,750 pounds of CBODs per year into the TMDL zone (Jaksch, 2000), equivalent to 150 units. The permit specifies that BMPs use soil erosion control; livestock management to exclude cattle from stream or riparian zones either with or without rotational grazing; critical area set-asides; and/or constructed/restored wetlands (MPCA, 1997). The nature of CBOD challenges the certainty of equivalency in that nutrient and sediment loads relate accord- ing to site-specific factors to the oxygen demand. To select the appropriate BMPs to pursue, the permit prescribes the relationships between loads of phosphorus, nitrogen, sediment, and CBODs. Furthermore, the program incorporated several safety factors to provide accountability by reducing risks to equivalency. Conservative ratios used to determine equivalency made it unnecessary to monitor BMP load reductions, thereby saving MPCA time and money. Equation 7-1 calculates the number of units traded to offset the PS discharge. CR trade_unitCBOD5 =pounds_per_daypollutant_reduced.— (7-1) where trade_unitOBOD5 = trading units (defined as pounds of CBODs per day) pounds_per_daypollutant reduced = pounds per day of the pollutant reduced by BMPs CR = conversion ratio' TR = trading ratio Conversion ratios for phosphorus relied on research relating phosphorus with chlorophyll concentrations, which in turn relate to CBOD. Therefore, calculated ratios of phosphorus loads to CBOD determine the trading ratios. This ratio varies with biological activity, ow rate, turbidity, phosphorus bioavailability, and concentrations of other nutrients. Approximately 15 miles upstream of the facility, at Jordan, 1 pound of phosphorus reduced from the NPS was worth 8 pounds of CBODs per day, i.e., 8 units. Although this ratio varied between 1:8 and 1:17, as determined presumably by measured concentrations of phosphorus and chlorophyll and an average stream correlation between chlorophyll and CBOD, the ratio was conservatively established as 1:8 (Jaksch, 2000). Unfortunately, this conversion does not directly address the differences in phosphorus bioavailability of loads from various sources, i.e., dissolved or bound to sediment. The impacts 62 ------- on oxygen demand and river conditions differ according to complex dynamics that conservative assumptions may not always manage. It was assumed that use of the most conservative ratio would adequately offset uncertainty associated with site-to-site differences. This assumption was not explicitly validated through performance monitoring. Some critics consider this failure to validate the performance a critical fault in the program, while others worry that overly conservative assumptions eliminate otherwise viable potential NPS trading participants. In all fairness, WQT should not be required to satisfy a higher degree of technical rigor, in terms of modeling and monitoring than was originally applied in the first place during development of the TMDL and individual load allocations. Conversion ratios for nitrogen relied on stoichiometry, which dictates 4.6 pounds of oxygen for every pound of TN. However, nitrogen exerts oxygen demand more rapidly than does phosphorus. Additionally, nitrogen leaves the system through volatilization, leaving less to demand oxygen. Therefore, nitrogen upstream of mile 25 trades for less than it does downstream of mile 25. Conservatively, the ratio was established as 1:4 downstream and 1:1 upstream, i.e., 1 pound per day of reduced nitrogen was worth four units downstream and one unit upstream (Jaksch, 2000). Sediment was related to CBODs on a 1:0.5 ratio. Reducing the sediment load by 1 pound per day counted as reducing 0.5 pounds of CBODs (Jaksch, 2000). This conversion re ects that sediment demands much less oxygen than do the nutrients. Finally, measured CBODs was traded variably depending on the location along the river, with a 1:1 ratio at mile 25 and downstream, decreasing to 1:0.01 at mile 107 (Jaksch, 2000). The decrease is justified by the CBOD upstream exerting its oxygen demand before the TMDL zone. Load reductions for each BMP proposed for implementation were not measured but were instead estimated according to several assumptions. Safety factors aim to counter the uncertainty that these assumptions bring. Trades defaulted to a trading ratio of 2:1, so that two units of NPS reduction were needed for every unit that the PS discharged (Kieser and Fang, 2005). As appropriate, additional safety factors were multiplied into the trading ratios. Phosphorus reductions from soil erosion were estimated based on analyses of phosphorus contents of soil and measured soil loss reductions. This estimation incorporated an additional safety factor of 0.75 for samples that indicated relatively high phosphorus concentrations, thus reducing the amount of CBODs that would be credited for each pound of offset phosphorus. For livestock exclusion approaches, pollutant loadings into the river are calculated as the product of the area's delivery ratio, the time livestock spend on the land, and the size of the herd. The offset is thus the difference of these estimates from before and after the controls are implemented. Typically, depending on the time of year, cattle spend 25 percent to 36 percent of their time in the riparian zone. Delivery ratios are 100 percent within the riparian zone, 20 percent out- side the riparian zone but within 0.25 miles of the stream, and 10 percent beyond that (Jaksch, 2000). Rahrand MPCA agreed through negotiation to use conservative conversion and trading ratios to provide accountability, supplanting the need to validate these load reductions through onsite monitoring of CBODs load reductions. Based on an optimization of the four criteria, the board identified and MPCA verified four NPSs for trading: (1) Cotton- wood River, (2) Minnesota River, (3) the Fruhwirth site along Eight Mile Creek, and (4) the Hathaway site along Rush River (Fang and Easter, 2003). Figure 7-2 identifies approximate locations of these sites relative to the Rahr facility. BMP approaches included critical area set-asides with revegetation, erosion control, and livestock management. The chosen BMPs at these sites would not have been implemented were it not for the trades, satisfying the additionality criterion. A contract with Rahr for long-term commitment to these BMPs, the ability to monitor these sites, and oversight by the board and MPCA added a greater level of accountability. To assure accountability, Rahr must submit monthly monitoring reports, as well as annual reports of reductions of CBODs from the NPSs. While the permit stipulates the conversion and safety factors for nitrogen, sediment, and CBODs, the BMPs pursued for trading achieved all the necessary credits by reducing only phosphorus input to the TMDL zone. According to the 1:8 ratio for phosphorus:CBODs, the reduction of 97,730 pounds of phosphorus measured over five years is equivalent to reducing 781,830 pounds of CBODs over the same time period, which averages to 428.4 pounds of CBODs per day (Fang and Easter, 2003). Using the trading ratio of 2:1, this equates to 214.2 units, far exceeding the 150 units man- dated in the permit. Table 7-1 itemizes the pounds of phosphorus and consequently CBODs over the five-year permitted timeframe. Table 7-2 itemizes the resulting credits that these sources earned for Rahr within that period. 63 ------- Minnesota River site Eight Mils Creek sits in New Ulm The Minnesota River Basin Rahr facility in Shakopee (Mile 25) __t Wfotonwan Rivff / Watershed Cottonwood River site/ near New Ulm ^*™ Rush River site near Henderson Note: Labeled site locations are approximate. Figure 7-2 The Minnesota River Basin with sites of NFS sellers identified (base map taken from http://wrc. coafes. umn.edu/lowermn/maps/mnbasin. htm). Along the Cottonwood River, which ows east to the con uence with the Minnesota River near New Ulm, Minnesota, and the Minnesota River at approximately mile 150, also near New Ulm, Minnesota, easements set aside approximately 105 acres of critical areas from crop production to prevent ood scouring. These areas were, in essence, 105 acres of restored wetlands. Plowing for crop production contributed to coding, which resulted in the removal of several feet of soil (Jaksch, 2000). Restoring native wetland vegetation on farmland along the rivers protected these critical areas from further scouring. Together, these wetlands removed 45,944 pounds of phosphorus over five years, generating approxi- mately 100 units of credit. Rahr ultimately donated these restored wetlands to the city of New Ulm to be used as a park, and to the Coalition for a Clean Minnesota River, a local environmental organization, to be used as an environmental education site (Breetz et a/., 2004). Restoring these wetland sites also created habitat for wildlife. The effectiveness of these restored wetlands for reducing nutrient loading was assumed based on conservative performance ratios and was not validated by performance monitoring data (Fang and Easter, 2003). Soil erosion controls restored stream banks along Eight Mile Creek at New Ulm, Minnesota, and along Rush River in Henderson, Minnesota. Controls included bioengineered banks with vegetation and J-hooks in the river to de ect ow energy. The former also managed livestock by re-grading the feedlot for wastes to ow away from the water, and fencing in the cattle to exclude them from the riparian zone, which had been overgrazed (Jaksch, 2000). Aerial photographs spanning 36 years and periods of high and low ows were used to estimate the average bank recession rate. The lifetime of the control structures is comparable to this duration, rendering the estimates of the credits more reliable. In addition to offsetting sediment loads, the landowners of these source control sites received the added benefit of preserving the land against erosion. Since 1988, they had unsuccessfully sought financial means to control bank erosion. The erosion was sometimes so extreme that it impacted adjacent land, destroying houses and barns (Breetz et a/., 2004; Fang and Easter, 2003). The BMPs for Rahr's permit were able to stabilize the banks within two years for the Eight Mile Creek site and four years for the Rush River site. 64 ------- Table 7-1 Pounds of Phosphorus and CBODs Reduced over Five Years Pounds of CBODS Pounds of phosphorus Cottonwood 105,490 13,190 Minnesota 262,070 32,760 8-Mile Creek 54,020 6,750 Rush River 360,260 45,030 Total 781,840 97,730 Table 7-2 Traded Units From Each Controlled Nonpoint Source Traded units CBODS pounds per day Phosphorus pounds per day Cottonwood 28.9 57.8 7.2 Minnesota 71.8 143.6 17.9 8-Mile Creek 14.8 29.6 3.7 Rush River 98.7 197.4 24.7 Total 214.2 428.4 53.5 7.5 Economic Performance At MPCA's instruction, Rahr established a trust fund of $250,000 to secure monies to develop and maintain BMPs. The five-person board charged with selecting sites also managed this fund, offering credibility and unbiased views to plan- ning and implementation. However, the inclusion of one executive from Rahr communicated to the public the company's commitment to the environment while advancing the company's interests in decisions. The fund was to cover all expenses of designing and implementing the trades, barring transaction costs (Kieser and Fang, 2005). If costs exceeded the fund's capability, Rahr was responsible for the difference. Transaction costs added an estimated $105,000, or 35 percent, to the cost of the controls, for a total cost of $405,100, most of which MPCA and Rahr incurred. The product of the median salary rates of Rahr and MPCA staff members and their estimated time spent on transaction activities provided an estimate of their respective transaction costs (Fang and Easter, 2003). Engineering, material, and consulting costs were not considered transaction costs and were instead covered by the trust fund. The relatively small number of trades, as compared to other trading programs, such as the Southern Minnesota Beet Sugar Cooperative in Minnesota, with over 100 trades, simplified the process somewhat. However, the complexities of trading ratios for equivalency and safety factors for accountability added significant costs. The permit phase spanned from the initial negotiations to when the permit was issued. This phase also included the search for trading partners, administration, and communications between Rahr and state and federal authorities. As this was one of the first of its kind, this phase took about two years and amounted to approximately 65 percent of the transaction costs. Following permitting, implementation was the phase during which the trades occurred and credit re- quirements were fulfilled with implementation of nutrient control measures. Costs went to credit verification and project management. As MPCA took charge of the design on the BMP and trading structure, their transaction costs accounted for 81 percent of the total, leaving Rahr responsible for less than 20 percent of the total (Jaksch, 2000). The cost of credits was estimated based on the capital and O&M costs of the project, the estimated pounds of offset nutrients it could deliver, trading ratios, and safety factors. Without transaction costs, the critical area set-asides with restored vegetation along the Cottonwood and Minnesota Rivers were most cost-effective. By reducing phosphorus load- ings into the TMDL zone, these restored wetlands cost $4.44 per pound of phosphorus over the five years of the permit. The cost per pound of reduced phosphorus at the Fruhwirth site along Eight Mile Creek and the Hathaway site along Rush River were $5.28 and $4.49 per pound, respectively. Accounting for the 1:8 conversion ratio with CBODs, credits averaged $0.77 per pound of CBODs removed. However, the BMPs will likely survive and remain effective far beyond the five years of the permit. Reasonably assuming a 20-year lifetime, with an 8 percent discount rate, the average cost of reduction decreases to $0.20 per pound of CBODs and $1.56 per pound of phosphorus. Adding transaction costs, these reductions increase to $1.03 per pound of CBODs, equivalent to $0.26 per pound of CBODs over 20 years, and $8.26 per pound of phosphorus, equivalent to $2.10 per pound of phosphorus over 20 years. The long-term measures such as easements and re-vegetation are the most efficient of the BMPs because they provide greater nutrient reduction with low investment. Furthermore, the lifetime of these controls is comparable to the lifetime of the nutrient reduction estimation, minimizing the uncertainties associated with the trade (Fang and Easter, 2003). In contrast, a comparable municipal WWTP designed for permitted discharge of 1.5 mgd would have to meet 1 mg/L phosphorus if only PSs were responsible for phosphorus load reductions. Over 20 years, and at an 8 percent interest rate, the capital and operational costs associated with implementing these controls would be between $4 and $18 per pound of phosphorus. The NPS controls are thus more cost-effective than PS controls even when transaction costs are 65 ------- considered. In fact, the savings afforded to Rahr for not using Blue Lake's services, accounting for the cost of its new facility and the $250,000 to fund the trust, will amount to more than $300,000 per year over 30 years (Jaksch, 2000). 7.6 Administrative Performance The five-person board was involved in every step of the process, from recommending preliminary NPSs for review to selecting the final projects to implement. MPCA framed the trade within the NPDES structure, thereby underscoring accountability. To ensure legal enforceability of the selected controls, the NPDES permit prescribed the types of BMPs, selection process, reporting, and goals. MPCA was charged with verifying each trade and confirming annual pollutant reductions prescribed in the permit (Breetz et a/., 2004). While the credits must be achieved within five years of permit issuance, Rahr must continue O&M of BMPs for as long as it discharges within the TMDL zone. Administration of the trade provided exibility to encourage success. Credits from the NPS controls were awarded on a partial basis as projects progressed (Breetz et al., 2004). Moreover, MPCA offered Rahr 30 units of credits from the yearly cumulative load reductions for CBODs and another 30 units of credit for phosphorus for consenting to the more stringent point discharge ef uents of each. These credits started with 2001, the year of permit expiration, and continued yearly thereafter, provided the point ef uent levels were met. As such, if Rahr accepted all of these offered credits, NPS controls would only need to offset 90 units. Rahr was also offered 10 units of phosphorus credit to be used in 1998, 1999, or 2000 to make up for any deficit in those years. Finally, 20 units of credit were issued to Rahr for starting up its facility after 1997. The permit offered financial incentives to Rahr to efficiently achieve the mandated 150 units of credit through BMPs within the permit's five-year life. MPCA would give the company an additional five years to completely spend any of the remaining $250,000 (Fang and Easter, 2003). 7.7 Summary According to the conservative assumptions, but not through validated monitoring, the program successfully reduced the NPS load by more and in less time than the permit required. Cooperation by farmers, landowners, grass-roots environ- mental organizations, and eagerness of Rahr to work with, not against, all stakeholders, contributed to the program's success. The nutrient offset achieved by the NPS controls allowed the Rahr facility in Shakopee to grow according to Rahr's original treatment facility design. Rahr has become the largest producer of malt at a single site in the world. In the process, it has earned the reputation of working with and for the community. The NPS controls also provided environ- mental and social benefits. The public became aware of the unregulated nutrients discharged by NPSs. Involving public interest groups early during the negotiation phase educated many on the challenges and significance of equivalency, additionality, and accountability. The controls also served to create wildlife habitat. The trading program benefited the financial and social standing of Rahr, water quality, and the community. Even with its success, the program encountered some limitations. As one of the first of its kind, this trading program faced new challenges. Fortunately, lessons learned from Rahr's trade could be extrapolated to other programs. A pri- mary gap hindering the full potential of NPS trades was the inability to accurately quantify differences in nutrient load reduction associated with dynamic complexities that vary from site to site. Such uncertainties were offset by increasing the scale of each BMP (e.g., restore a larger wetland area to offset uncertainty in performance). The expenses incurred in efforts to conservatively overcome these uncertainties further burdened the program. Another limitation is that NPSs typically lack regulatory incentive to engage in trading. Rahr will have to overcome this for any future reductions it may need. Nonetheless, the benefits far outweighed the limitations, rendering this trading case a success. On December 1, 2005, MPCA issued a general NPDES permit (MNG420000) to all authorized parties within the Min- nesota River Basin, which included Rahr, who may apply for a permit to discharge phosphorus. This permit aims to achieve the renewed TMDL there. Moreover, the permit specifically authorizes WQT according to specified units of credit. Individual permits must still be obtained and remain valid for another five years, through November 30, 2010 (MPCA, 2005). The general permit is consistent with the continued impairment for oxygen deficiency, albeit with indications of some improvement, and the significant blame that falls on phosphorus discharge (MPCAef a/., 2003). Moreover, it gives credence to the validity of trading for which Rahr was a pioneer. 66 ------- 8.0 Case Study - Lower Boise River, Idaho 8.1 Overview The LBR Ef uent Trading Demonstration Project is the first WQT project in the Pacific Northwest (USEPA, 2002c). The project is a start-up program for phosphorus trading in the LBR watershed in Idaho. The goal of the project is to create a business-like trading framework that can be implemented to help achieve the nutrient reduction goals set by CWA Section 303(d). The project is designed to be environmentally and legally sound, consistent with existing regula- tory programs, allow trades to occur in a dynamic, market-based manner, and grounded in environmentally protective requirements. Furthermore, project participants hoped the WQT framework developed by the LBR project could guide similar programs in other areas in the region and throughout the country. 8.1.1 Location The LBR Watershed is located in the southwestern part of Idaho and encompasses 1,290 square miles (Figure 8-1). The LBR ows through the watershed for 64 miles, crossing through Ada County, Canyon County, and the city of Boise. The river ows to the northwest from its origin at Lucky Peak Dam to its con uence with the Snake River near Parma, Idaho. Nine cities are located within the watershed, most adjacent to Boise River. The watershed is home to about one- third of Idaho's population and is growing rapidly (Ross and Associates, 2000). Major land uses in the subbasin include forestry, agriculture, gazing, and urban development. There are 15 subwatersheds within the watershed, and 4 stream segments are listed on the 303(d) list for pollutants of concern, including ow alteration, sediment, dissolved oxygen, oil and grease, nutrients, bacteria, and temperature. The trading demonstration project is designed to address one of the nutrient pollutants of concern - phosphorus. The project is proposed to help comply with the current policy of "no net increase" in TP established in the sediment and bacteria TMDL for LBR completed in 1998 and approved by USEPA in 2000 (IDEQ, 2005a). An LBR phosphorus TMDL is anticipated now that the downstream Snake River-Hells Canyon (SR-HC) TMDL has been issued (September 2004). This LBR phosphorus TMDL was expected to be completed by IDEQ for review by USEPA in March 2006 (Schary, 2005). Ltqend Stream Interstate MgOroy courty WatenfM Boundary Figure 8-1. Lower Boise, Idaho river watershed site map. 67 ------- 8.1.2 Participants USEPA started collaborating with Idaho, Oregon, and Washington in late 1997 to examine how WQT could reduce the cost of meeting TMDL requirements in the Pacific Northwest USEPA Region 10 (excluding Alaska) (Ross and Associates, 2000). USEPA worked with IDEQ to launch the LBR Ef uent Trading Demonstration Project as the first pilot project for the region (Breetz et a/., 2004). IDEQ assumed responsibility for the project from USEPA on April 21, 2000 by signing an interagency agreement (IDEQ, 2001). Other agencies participating in the interagency agreement included USEPA, ISCC, NRCS, Ada Soil and Water Conservation District (ASWCD), Canyon Soil and Water Conservation District (CSCD), Southwest Idaho Resource Conservation & Development Council, and the US Bureau of Reclamation. This interagency agreement outlined the various responsibilities of the agencies for continuing to support the demonstration project. Idaho LBR was selected as the first demonstration project based on several criteria and support from interested parties (Ross and Associates, 2000). The project began in January 1998 with the assessment of the market feasibility of phos- phorus trading. Starting in August 1998, the trading structure and protocols were developed and tested on two trading simulations. The results of this development and testing were summarized in September 2000 (Ross and Associates, 2000). Trading is scheduled to begin following completion of the LBR phosphorus TMDL and issuance of new NPDES permits, which are still pending. 8.1.3 Administration The trading project is set up to be administered by the Idaho Clean Water Cooperative (ICWC), a newly created non- profit association (ICWC, 2000). The concept for giving administrative responsibility to a non-profit non-governmental group was generated to reduce the fears of trading partners of government intervention (Kieser and Fang, 2005). A Memorandum of Understanding (MOU) between USEPA, IDEQ, and ISCC signed April 27, 2001 also governs the proj- ect. This MOU defines the roles of the agencies in verifying credits purchased and used by NPDES-permitted sources that choose to participate in the WQT project. 8.2 Background The LBR is highly enriched with phosphorus, especially at the downstream cities of Middleton and Parma. Water high in nutrients such as phosphorus can cause eutrophication.This condition can lead to algal blooms, which can harm fish by reducing oxygen levels within the water when the algae dies and decomposes. This reduction in oxygen is caused by the heavy oxygen demand from microorganisms as they decompose the organic material. Algal blooms can also interfere with water use for recreation as the vegetation disrupts equipment and swimming. The foul smell of decomposi- tion also disrupts recreation. Consequently, nutrients like phosphorus contained in runoff and erosion from NPSs, such as agriculture, create a resource management concern. In general, phosphorus bound to sediment contributes 60 to 90 percent of the phosphorus in runoff from most cultivated land (NRCS, 2001). Recent analysis by IDEQ indicated that the phosphorus level is not currently high enough in LBR to cause algal blooms, but contributes to the high phosphorus loads downstream in the Snake River (IDEQ, 2005b).The phosphorus loads in Snake River are problematic and require reduction by more than 78 percent. Because LBR is the largest contributor of phosphorus to the Snake River, phosphorus loads in LBR will need to be reduced by the same amount (IDEQ, 2005b). The SR-HC TMDL targets each tributary to contribute less than or equal to 0.070 mg/L phosphorus as measured at the mouth of the tributary between May and September. Studies in the LBR watershed found that phosphorus concentra- tions along LBR increase by more than 10-fold, from over 0.02 mg/L near Boise to 0.26 mg/L near the LBR's con uence with the Snake River (IDEQ, 2005b). 8.2.1 Phosphorus Movement Within the LBR and Snake River, phosphorus is the limiting nutrient, and any increase can result in greater growth of aquatic vegetation. The amount of phosphorus in the system depends on the transport of phosphorus to the water body; the source and form of phosphorus; and management factors such as application, timing, and placement in the landscape. Dissolved phosphorus is readily available to plants, while particulate phosphorus (attached to sediment) can be a long- term source of phosphorus within a system (NRCS, 2001). The ability of a water body to handle inputs of phosphorus depends on the volume of water present, the temperature of the water to promote algal blooms, and the turbidity of water (phosphorus tends to bind to sediment particles). Typically highest concentrations of phosphorus happen during low- ow conditions, which typically occur during the winter when aquatic plant growth is less of a concern. However, in the LBR and Snake River low- ow conditions can also occur during summer droughts, allowing algae to thrive. The LBR is the greatest contributor of phosphorus to the Brownlee Reservoir via the Snake River. This reservoir suffers from excessive nutrient loading and nuisance aquatic growth. Idaho law requires surface waters of the state to be free from excess nutrients that can cause visible slime growths or other nuisance aquatic growths, impairing designated beneficial uses (Idaho Administrative Procedures Act [IDAPA] 16.01.02.200.06). The nutrient data of Boise River and productivity in the lower Snake River indicate that a cap on phosphorus is needed for the LBR. Thus, the LBR sediment 68 ------- and bacteria TMDL established a policy of "no net increase" of TP as an interim measure until the Snake River basin- wide nutrient goals are set (IDEQ, 1999). Now that the phosphorus TMDL is completed for SR-HC, the phosphorus reduction goal for a LBR's phosphorus TMDL will be adjusted and finalized (Breetz et a/., 2004). This goal is expected to be approximately an 80 percent reduction in phosphorus at the mouth of LBR (Schary, 2005). 8.2.2 Trading Exploring a WQT program as a water quality management tool was jointly supported by USEPA and by Idaho, Oregon, and Washington water quality programs. Motivation for this innovative tool was generated by the considerable chal- lenges produced during the development and implementation of TMDLs on court-order schedules (Ross and Associates, 2000). WQT was considered a exible and cost-effective option to meet the policy of "no net increase" in phosphorus established by the LBR sediment and bacteria TMDL and expected in the LBR phosphorus TMDL. 8.2.3 Regulations There are several regulatory drivers for the LBR WQT project. In addition to the CWA and Idaho law mentioned before, Idaho state rules call for "no net increase" in phosphorus for the LBR (IDAPA 16.01.02.054). These rules also specifi- cally allow WQT as a tool for meeting the "no net increase" requirement. The rules establish a source-specific cap on phosphorus discharges to the Boise River. PSs are allocated phosphorus reductions based on TMDL requirements within their NPDES permit. Since Idaho is not a delegated state for NPDES permits, these permits are issued by USEPA Region 10. It is expected that NPSs may also be subject to a load allocation for phosphorus in the future (Ross and Associates, 2000). 8.2.4 Trading Framework The Idaho LBR Ef uent Trading Demonstration Project is an example of interagency collaboration to produce a trading framework that can be used for WQT in LBR. The lessons learned during this framework development and the frame- work itself can apply to other areas of Idaho, the Pacific Northwest, and the United States, although local and regional conditions, regulations, needs, and acceptance will affect its applicability. The LBR project participants agreed on several objectives during the process of developing a trading framework for LBR. These objectives were to create a framework that: • Is legally defensible and enforceable; • Protects water quality; • Maximizes market exibility and minimizes transaction costs; • Ensures trading activities are apparent to the public; • Does not create or exacerbate other environmental problems; and • Supports robust participation. The project also developed a set of design principles that promoted trade and cost-effective implementation of TMDL reductions. These principles are as follows: • Avoid trade-by-trade changes to the TMDL; • Avoid trade-by-trade changes to the NPDES permits; • Minimize trades through private contracts; • Create environmentally equivalent (or better) reductions; • Work with existing programs and processes; and • Provide clear and predictable permit compliance and enforcement. Features of the Idaho LBR trading framework and demonstration project include: • Regulatory guidance by USEPA's Final Water Quality Trading Policy (2003); • Regulatory guidance by IDEQ's Pollutant Trading Guidance (2003); • Trading project administration by non-profit association: ICWC; • Preparation of TMDLs, implementation plans, and trading ratios by IDEQ; • Issuance of NPDES permits and approval of TMDLs by USEPA; 69 ------- • Approved list of BMPs with effectiveness calculations and uncertainty discounts by ISCC (2002); • Guidance for ICWC provided by council from NRCS; and • Purchasers include seven POTWs, three industrial dischargers, and eight irrigation districts. No trades have yet been made using the LBR Ef uent Trading Project because of delays in finalizing the LBR phosphorus TMDL. Therefore, no information is available yet on what portion of the project is composed of PS or NPS trades. The expected purchasers and the abundance of agriculture create an environment favorable for producing trading partners. Furthermore, the stringent target set by the SR-HC phosphorus TMDL will be difficult for PSs to meet without seeking trades, especially for the final portion of phosphorus reduction (Schary, 2005). Consequently, once the regulatory driv- ers are in place, trading should commence relatively quickly. 8.3 Program Performance The LBR Ef uent Trading Demonstration Project set up a framework for trading pollutant discharges among sources. The framework allows for trades among point and nonpoint pollutant generators. Elements of a trading process were developed by the project team, including permit conditions, necessary forms, agencies' roles, and generation of credits. To understand the estimated cost savings of implementing a trading program, municipalities were asked to consider the impacts of phosphorus reductions on their programs and estimated a unit cost of $12 to $178 per pound of phosphorus reduction. Project participants estimated the cost for NPSs to reduce phosphorus through BMPs ranged from $2 to $20 per pound. Thus, the estimated cost savings from implementing the trading project in LBR are estimated to be $10 to $158 per pound of phosphorus reduction. 8.3.1 Trading Process The framework established by the demonstration project generated a straightforward process to complete a trade. Steps for PS to NPS trade include: 1. Trading parties are identified; 2. Water quality contribution is calculated or measured for NPS participants; 3. Trading parties negotiate and sign trade contract; 4. Seller installs phosphorus reduction measure (if not already in place); 5. NPS BMP installation inspection/buyer signs and submits first "Reduction Credit Certificate;" 6. Buyer and seller parties sign and submit official "Trade Notification Form;" 7. Trade information is entered into Trade Database (monthly); and 8. The ICWC tracks trading activity and USEPA audits trades though NPDES permits. The ISCC inspects BMPs installed by NPSs to document proper design, monitoring, and maintenance. These inspection reports are reviewed by USEPA and IDEQ to verify the BMP implementation. The agencies may also visit BMP sites to confirm their performance. NPDES permit holders are ultimately responsible for ensuring proper implementation of BMPs. Consequently, they inspect the BMP installation and receive copies of ISCC's inspection reports. USEPA and IDEQ take up any compliance matters or enforcement actions with the NPDES permit holder, not the BMP installer (USEPA, 2002c). The ICWC is responsible for tracking trading activity and maintaining a trade tracking database (USEPA, 2002c). The major functions of the ICWC are to: • Set a submittal time for trade notification forms and reduction credit certificates; • Accept and review trades to ensure completeness and consistency with trading project requirements, and not ac- cept trades that do not meet the project requirements; • Track all trades in a central database and determine how trades impact ef uent limits and account balances of buyers and sellers; • Reconcile all trades in the market area to ensure credits are not used more than once; • Make trading information and adjusted ef uent limits readily available to regulatory agencies and the public; and • Produce Trade Summary Reports required for NPDES permit compliance and provide them to the PSs involved in trades. 70 ------- 8.3.2 BMPs The ISCC, in collaboration with IDEQ, developed eligible BMPs for the LBR Pollution Trading Project (ISCC, 2002). The BMPs listed in the state-level Idaho Pollutant Trading Guidance were broken down by region because the "effective- ness" of the BMP would be different in each region (IDEQ, 2001). Several NPS BMPs are eligible for offsetting a PS discharge. Eligible BMPs available to trading contracts are listed in Table 8-1: Table 8-1 Currently Eligible BMPs for Trading in LBR WQT Project3 BMP Sediment basins Filter strips Underground outlet Straw in furrows Crop sequencing Polyacrylamide Sprinkler irrigation Microirrigation Tailwater recovery Surge irrigation Nutrient management Constructed wetland Effectiveness (%)b 65-85c 55 85-65d Not listed 90 95 100 100 100 50 NA Not recommended - 90e Uncertainty Discount (%)b 10-15C 15 15-25d Not listed 10 10 10 2 5 5 NA Not recommended-5e Life span 20 years 1 season 20 years 1 season 1 season 1 irrigation 15 years 10 years 15 years 15 years 1 years 15 years a Source: http://www.envtn.org/docs/boise_bmp_manual_DRAFT.doc. b These discounts are applied during calculation of WQT credits; the uncertainty is subtracted from the effectiveness. Effectiveness is a measure of the efficiency of a BMP at improving water quality by removing phosphorus. c Range depends on scale (field, farm, or watershed). d This BMP's effectiveness drops off after two years. e This BMP is not recommended for calculating credit at the watershed scale; the number listed is for a farm-scale BMP. This is the current list of BMPs, but additional BMPs may be incorporated over time or can be proposed by sources (ISCC, 2002). At the first annual meeting in May 2001, it was decided that wetlands, individually or in combination, would be added to the initial BMP list generated by ISCC and IDEQ (IDEQ, 2001). Ross and Associates (2000) state that wetlands are the best "natural system" method to remove phosphorus. This BMP list was finalized during 2002 (IDEQ, 2002). The life span for BMPs eligible for trading varies depending on effectiveness and endurance. Agricultural NPSs desiring to develop credits are encouraged to work with either the ASWCD or the CSCD, depending on which county (Ada or Canyon) the source is located in. By working with the appropriate district, farmers develop a conservation plan in cooperation with NRCS and ISCC. BMPs are designed as part of these conservation plans to ad- dress water quality concerns. After the BMPs are installed and included in the plan, they can be certified as installed according to NRCS and meeting applicable laws and regulations. Once the BMP is certified and operational, phosphorus reduction credits can be generated and traded. Typically, within the LBR, the BMPs will operate to reduce phosphorus during the irrigation season (April 15 through October 15); thus, credits are available for trade during this season. For- tunately, the beneficial reduction during the irrigation season coincides with the needed phosphorus reductions required by the SR-HC TMDL. BMPs must be inspected prior to their seasonal operation and periodically during the monitoring period throughout the life span of the BMP. The BMP list developed by ISCC also includes procedures for generating credits. To generate credits that can be traded in a market, there must be an equal and beneficial reduction in phosphorus beyond the regulatory requirements of the source. This reduction is calculated or measured in pounds of phosphorus by either of two methods. The reduced poundage of phosphorus is then converted to credits for trading purposes. The selection of the method used to generate the amount of phosphorus reduction depends on data availability. The amount of phosphorus reduced by a BMP is calculated if adequate data are available or measured if data is limiting. Calculated phosphorus reduction is the estimated average reduction with a BMP, discounted due to the potential un- 71 ------- certainty in the effectiveness of the BMP and other management factors (discussed below). Measured reductions are quantified from grab samples taken during implementation of the BMP to quantify actual reductions, which requires an in ow and out ow for comparison. 8.3.3 Discount Factors The calculated reduction of phosphorus from eligible BMPs must be discounted based on the effectiveness of the BMP and uncertainties in the effectiveness determination. These discounts are provided at the field, farm, and watershed scale. The nutrient management BMP does not have efficiency data, but use of this BMP in combination with other BMPs allows the other BMPs' uncertainty discounts to be reduced by 50 percent. Currently, constructed wetlands are lacking sufficient data to determine efficiency or uncertainties and, therefore, are not recommended by ISCC for calcu- lating credits. Consequently, use of constructed wetland BMPs requires actual measurement of phosphorus reduction to determine credits. To determine the actual credit given for reducing phosphorus by employing BMPs, three factors have been developed to adjust the reduction calculation: site location, drainage delivery ratio, and river location ratio. Factors were developed to address the net impacts at Parma of a trade between sources elsewhere in the watershed. These trades have the potential to cause local water quality impacts in the areas where trading occurs. The localized impacts are smallest when the BMP implementor is upstream of the PS generator because water quality is improved by the BMP before it reaches the PS generator. However, water diversions between the trading parties may produce impacts in the river far below the PS generator if the irrigation diversion of water containing high levels of phosphorus is returned to the river. This would result in a net increase in phosphorus between the diversion and the returned irrigation drain. A site location factor is included because of the transmission loss that may occur between the location where the phos- phorus reduction takes place and the location of the discharge to a water body. To account for this transmission loss, three site location factors were developed using common scenarios as follows: • Site factor of 0.6 for when land runoff ows to a canal that is likely to be reused by a downstream canal user; • Site factor of 0.8 for when land runoff does not ow directly to a drain, but through or around other fields prior to entering drain; • Site factor of 1.0 for when land runoff ows directly to a drain or stream through a culvert or ditch. In addition to transmission loss between the source and the receiving water body, transmission loss can occur within the water body. However, no data are currently available to develop local transmission models. In the absence of data, a simpler linear calculation that represents this loss was developed. This equation is: Drainage delivery ratio = (100 - distance in miles to the mouth of drain from the project's point of discharge to drain) •*• 100 Distance is estimated using a CIS. The third discount ratio, river location ratio, attempts to take into account the in uence of diversions that prevent phos- phorus from reaching the LBR mouth. This ratio provides a means to determine equivalent loads between sources along the LBR (Ross and Associates, 2000). Ratios are calculated and provided for each source of hydrologic input (municipality or tributary/drain) owing into LBR. 8.3.4 Calculating Credits Calculating credits begins with determining the amount of phosphorus produced at a location. To estimate the current phosphorus loads from a cropland, the SISL tool is currently the most accurate and simple method to estimate soil loss from surface-irrigated croplands. This tool is used to calculate the tons per acre of soil loss per irrigation season. The SISL uses a baseline soil loss. ISCC established agricultural baseline loads for the project using 1996 as the base year (IDEQ, 2001). Phosphorus reduction is compared against the phosphorus loads in 1996 because this is the baseline used for the TMDL (ISCC, 2002). The total amount of phosphorus load is calculated by multiplying the soil loss by the amount of acres being irrigated. The amount of soil loss can be converted to phosphorus loads by multiplying soil loss by 2 pounds of applied phos- phorus per ton of soil. Phosphorus loads with irrigation vary by season. Typically, more phosphorus is generated during the beginning of the irrigation season (April 15 through October 15) due to erosion and less uptake by crop plants. The phosphorus reduction from the calculated loads is based on the effectiveness of the BMP selected, minus the uncertainty factor. Because NPS would also be assigned a share of the nutrient reduction under the TMDL, the nutrient reduction generated, and available for sale, is calculated by subtracting the individual NPS share of nutrient reduction from the total nutrient reduction created by a BMP (baseline load multiplied by the BMP effectiveness ratio. "Parma Pounds," 72 ------- which are the unit of credit available for the trading project can then be calculated by multiplying the "saleable" the nutri- ent reduction by the site location factor, drainage delivery ratio, and river location ratio. The concept of "Parma Pounds" recognizes that all pounds are not equal due to water reuse within the basin. The Parma Pounds are allocated over the months of the irrigation season to re ect the phosphorus load variability over the season. This season coincides with the seasonal TMDL reduction requirements. 8.3.5 Example Trade The LBR Ef uent Trading Demonstration Project conducted a trading simulation for a PS-to-NPS trade. This simula- tion used a combination of two eligible BMPs—sediment basin and constructed wetland—installed in sequence. The model included a conceptual design, sample permit conditions, completed forms documentation, cost estimates, and performance evaluation (Ross and Associates, 2000). The conceptual design for the sediment basin and wetland system consisted of running phosphorus-containing water though the several treatment features by percent of total area (Table 8-2). Designs differ for treatment of continuous agricultural runoff versus treatment of intermittent stormwater runoff and for phosphorus removal versus removal of other pollutants. Conventional constructed wetland wastewater systems have tertiary treatment and polishing of municipal or industrial ef uent. Vegetation in these wetlands helps facilitate nutrient uptake and transformation into basic elements, compost, and plant biomass. Table 8-2 Example Design of Sediment Basin and Wetland System Design Feature Sediment basin Primary Grass filter Vegetated wetland Deep Water pond Polishing filter Percent of Total Area 3 23 23 41 10 The conceptual design took into account the maintenance requirements, such as roads for accessing portions of the system. The wetlands depth was designed to provide for accumulation of biomass and the sediment basins could store six years of sediment at 2 feet of depth. More than one sediment basin was provided in the design to allow for one basin to be shut down for maintenance while the other continued to treat ows. Plants used for the design consisted of wetland grasses like redtop (Agrostis spp.) for the primary filter, emergent plants like bulrush (Schoenoplectus spp.) for the vegetated wetland, and herbaceous and woody species for the polishing filter. The system was designed to func- tion with minimal ows through the operation of control gates to keep plants alive and minimize decay, which can lead to remobilization of phosphorus. Finally, the conceptual design had inlets and outlets to allow for the measurement of phosphorus concentrations and ows. The performance of wetlands in removing phosphorus depends on the design, maintenance, and the concentration and ow rate of ef uent phosphorus through the wetland. The efficiency of wetlands to remove phosphorus depends on the ow rate. Based on mass balance models, the fraction of TP removal is approximately 90 percent at 1 cubic foot per second (cfs) and 15 percent at 15 cfs. However, the amount of phosphorus removal in pounds increases with the ow rate, with diminishing returns at higher ow rates (Ross and Associates, 2000). Analysis of the LBR simulated design showed that phosphorus removal can be optimized for a site by increasing ow rates, without regards to the efficiency of the removal process (i.e., fraction of phosphorus removed). The ability of the system to remove phosphorus was based on the equations developed by Kadlec and Knight (1996) (Ross and Associates, 2000). The design used in the simulation predicted phosphorus removal at a different amount for each BMP using a ow rate of 15 cfs and concentration of 0.366 mg/L. Over a 30-year life span, the sediment basins would remove 1,040 pounds of TP per season; the constructed wetland would remove 980 pounds of TP per season; and the combined sediment basins and constructed wetland BMPs would remove 2,020 pounds of TP per season, or 60,600 pounds over 30 years. This removal rate would vary within an expected SD derived from other studies. The Shop Creek facility in the Cherry Creek Reservoir study showed an SD of 22 to 25 percent for annual average phosphorus removal. The LBR simulated design was expected to perform better (i.e., 20 percent SD) than the Shop Creek facility because the LBR design would not be subject to storms and increased ow variability, which reduces TP removal due to the controlled ows. A compila- tion of data from 60 studies of 57 natural wetlands in 16 countries reported a mean SD of 27 percent for nitrogen and an SD of 23 percent for phosphorus (Fisher and Acreman, 2004). Analysis of 44 wetlands in 17 locations throughout the United States concluded an SD of 30 percent for phosphorus (USERA, 1999). 73 ------- The simulated design provided a detailed estimate of probable cost for the proposed system. The cost estimate was based on a public bid process and included material, equipment, and labor in year-2000 dollars, assuming a 30-year operation. The estimate was broken down into capital, including engineering, construction, contingency (20 percent), and land acquisition ($10,000 per acre), and O&M. Capital and O&M were estimated at $3,004,000 and $145,800, respectively. The cost for O&M was composed of $71,800 for annual O&M and $74,000 for harvesting wetlands plants every five years. Using these costs and a 3 percent in ation rate, annualized cost for removal of TP was $118 per pound. If public funds were borrowed through issued bonds, then the cost would be $161 per pound. The cost for constructing wetland systems for treating stormwater has been estimated at $10,000 to $30,000 per acre (Zentner, 1995; Reed, 1991). This simulation, based in year-2000 dollars, is close to $67,000 per acre. Because of the high cost of using a constructed wetland BMP, the value of the phosphorus reduction (i.e., "Parma Pound") will need to be high to justify implementing this BMP practice. A stringent TMDL and/or other mechanisms to partially recover costs would be necessary for use of this BMP to be cost-effective. The high cost of using a constructed wetland BMP represented by this simulation emphasizes the need to find lower cost engineering solutions to construction wetland design and maintenance. A summary of the features and results of the simulated scenario that combined the sediment basin and constructed wetland BMPs is provided in Table 8-3. Table 8-3 Summary of Sediment Basin and Wetland System Simulation Simulation Feature Amount of wetland Life span Flow rate Ef uent concentration Capital cost O&M cost TP removed by the wetlands per irrigation season TP removed per irrigation season TP removed per life span Annualized cost per pound of TP removed Quantity 54 acres 30 years 15cfs 0.366 mg/L $3,004,000 $145,800 980 Ibs 2,020 Ibs 60,600 Ibs $118 Credits are generated on a monthly basis. However, the life span of a BMP varies depending on the BMP. Life spans for BMPs provide assurance to credit buyers that credits will be available and to credit sellers that opportunities to market their credits will persist for at least the designated life span of the BMP they choose to implement. In the LBR case study, the life span assigned to BMPs re ected the professional judgments of scientists, regulators, and field practitioners. Constructed wetlands were originally assigned a 5-year life span, but this was increased to 15 years based on discus- sion within a technical focus group (Koberg, 2006). Therefore, the NPS could implement this BMP and sell credits for 15 years following the completion of the BMP, assuming maintenance and monitoring was carried out and demonstrated effectiveness. Because the TMDL reduction goals are seasonal (May through September), the credits would only be needed and available during these seasonal periods. Monitoring is required to determine if a BMP is operating properly and actually reducing phosphorus. In the BMP guid- ance, constructed wetlands require evaluation from an inspection before and during the middle of the season of use. Consequently, during the 15 year life span of a wetland, a minimum of 30 evaluations would be necessary to continue generating tradable credits. Monitoring is the responsibility of the NPDES permit holder who is involved in WQT The permit holder documents the monitoring on trade tracking forms and uses this documentation to comply with his NP- DES permit. 8.4 Summary It is too early to determine whether the LBR Ef uent Trading Demonstration Project is a success. The framework has been established, but no trades have occurred because of delays in providing the phosphorus reductions required by an LBR phosphorus TMDL. The project simulation generated a scenario using a constructed wetland that could be duplicated by sources along LBR. This simulation produced a total of 2,020 pounds of TP removal using a combination of two BMPs: sediment basins and constructed wetlands. Theoretically, these pounds could be converted to tradable "Parma Pounds" following discounts applied based on the location of the BMPs and trading partners. The approach the LBR Project took towards the application of the TMDL facilitates NPS participation because they are not required to 74 ------- satisfy their assigned share of the phosphorus load reduction for their entire property before they are able to participate in trading. The experiences recovered from the LBR Ef uent Trading Demonstration Project highlight keys to success for a WQT project as well as some limitations to this approach to water quality improvement. These successes and limitations can be applied to other trading programs within the United States. One of the fundamental components of a successful trading program is the need to have drivers for trading. These drivers include: regulatory requirements within a defined water body, high costs for PS to reduce pollutant levels, and the ability of NPSs or other PSs to reduce pollutants more cost-effectively than certain PSs (Kramer, 2000). It is critical that a trading program generate sufficient publicity that sources are aware the program exists and how they can benefit from participating. The parties involved in trades must be able to find each other and execute a meaningful agreement or contract. Effective BMPs need to be identified, and must be practical and cost-effective to implement. The framework for trading credits needs to be established and simple to use. This includes being able to calculate the credit, complete required documentation, and effectively monitor and audit performance. Estimation techniques for calculating NPS nutrient reductions must be reliable. A trading market should enable PS and NPS reductions to be achieved at a lower cost than the individual PSs could accomplish within their own operations (ISCC, 2002; Kramer, 2000). Additionally, there are spatial components to a successful trading program. This geographic issue consists of the need for a larger number of PSs and NPSs within the drainage basin requiring nutrient reductions (Kramer, 2000). There must be en- forcement and penalties for non-compliance to ensure that BMPs are installed and performing as expected and trades are occurring equitably. Finally, the trading approach must result in a reduction in pollutants that is measurable and meets the objectives of the TMDL. There are several limitations or challenges to a successful WQT program. Trading could be hampered by the lack of an established or known trading framework. Additionally, trading would fail to be effective if it is viewed as, or in practice actually is, too cumbersome fortraders to use or regulators to evaluate. Similarly, transaction costs must be minimized to ensure utility of the program (Kramer, 2000). Trading needs to avoid hot spots or localized areas in a watershed with high levels of nutrients (Kieser and Fang, 2005); otherwise, the local water loads could become worse instead of improving. Ultimately, WQT is unsuccessful if it fails to create environmentally equivalent nutrient reductions. Equivalency can be difficult to demonstrate or calculate when there are uctuations in phosphorus generation within a given timeframe. For example, irrigation produces more phosphorus earlier in the irrigation season due to erosion and less uptake by crops (ISCC, 2002). This variability may not necessarily coincide with variable or constant phosphorus loading by PSs. Obstacles to developing the trading program include incurring high expenses and intensive use of resources to develop the trading framework. Furthermore, the irrigation districts (PSs) and farmers (NPSs) in the LBR demonstration project were leery about losing water rights by participating in a program. NPSs are also wary that their participation in generating credits by reducing phosphorus loads might encourage or facilitate their being subjected to regulations, requiring them to reduce their phosphorus loads to the LBR (King, 2005; Environomics, 1999). Currently, NPSs are not regulated and trading is voluntary. Public comments by environmental interest groups on pollutant trading expressed concerns about the ability to hold PSs fully accountable for trades, the verifiability of NPS trades, and the need to obtain trade-by-trade regulatory approval. The participants in the demonstration project felt that the LBR framework established highly effec- tive and locally tailored solutions to CWA liabilities. The LBR Ef uent Trading Demonstration Project identified several additional data and investigational needs of trading programs and use of constructed wetlands as BMPs to remove phosphorus. For example, the forms used for documenting trading activity generated in a trading program need to conform to the Paper Reduction Act. A simple but formal audit plan is necessary for a trade tracking system. In the LBR case study, there were no deadlines by which a trade must be completed in order for it to be included in a given month's monitoring report. This relationship needs to be explicit. The support for discounts developed to generate credits is incomplete. For example, the transmission losses and the fate and transport of nutrient uptake capacity between the trading partners need additional study to refine discounts. Further watershed analysis on the effects of diversion on localized water quality impacts could strengthen the discount relationships. Additionally, more evaluation is needed on the use of "total mass" caps for PSs to prevent localized im- pacts. These analyses could be part of ongoing review and evaluation of an operating program, this would distribute the study and analysis costs over a period of years and would leverage the additional BMP monitoring and verification requirements required to validate credits. The ISCC determined there is insufficient data for deriving efficiency or uncertainty values for calculating phosphorus removal of constructed wetlands. Consequently, phosphorus reduction from constructed wetlands must be measured, which requires incorporation of in ow and out ow structures in wetland design, which creates a design limitation for the use of constructed wetland BMPs. Wetland design, including the way water ows into and out of a wetland, is critical to the effectiveness of a constructed wetland at removing phosphorus. For example, ow delivery or departure could be by sheet ow or infiltration, which makes measuring phosphorus content more difficult. The variability in designs and 75 ------- their ability to remove phosphorus from PSs or NPSs needs additional investigation. Through this investigation, various scenarios and calculated credits could be generated to guide sources in the selection of this BMP. Another area needing investigation is the appropriate life span assigned to BMPs. In the LBR BMP list, the life span for a constructed wetland BMP is 15 years based on a technical focus group decision among participants during develop- ment of the WQT project (Koberg, 2006). However, the example simulation used a 30-year BMP life span. Due to the high cost of constructing a wetland for phosphorus treatment, it is more cost-effective for these BMPs to be used for trading programs for as long as they are functional. This would be similar for any BMP that is maintained and performs phosphorus removal. Adjustments in the life span of BMPs or a discount for the age of the BMP should be considered as a part of WQT program review and evaluation. This would avoid the necessity of making long-range assumptions during the initial stage of program implementation. Finally, information and planning are lacking on the long-term fate of phosphorus removed using BMPs such as con- structed wetlands. If sediment or plants are harvested containing large concentrations of phosphorus, the ultimate disposition of this harvested material may only transfer the environmental problem to another location or medium, such as groundwater used for drinking water. 76 ------- 9.0 Case Study -Tar-Pamlico River and Neuse River, North Carolina The Tar-Pamlico and Neuse rivers ow parallel to each other approximately 50 miles apart and empty into the Pamlico Sound, an estuary in which the circulation of water is slowed by a string of islands between it and the Atlantic Ocean. In the mid-1980s, fish kills and algal blooms in the Tar-Pamlico and Neuse River Estuaries due to eutrophication cre- ated public concern regarding water quality. Subsequently, the NCEMC declared the upper portion of the Neuse River Basin NSW in 1983, the entire Neuse River Basin NSW in 1988, and the entire Tar-Pamlico Basin NSW in 1989. In addition, each river basin was added to the state's 303(d) list for chlorophyll a (USEPA, 2005b). As required by North Carolina state law, the NSW designation initiated a process to develop and implement nutrient management strategies for each river basin. The strategies developed over the next decade included measures to address both PSs and NPSs of nutrients, in- cluding WQT programs. The trading model for both these programs can best be described as an exceedance tax or a group cap-and-trade program. PSs are assigned a baseline maximum nutrient load and nutrient reduction goals, which cumulatively set the overall nutrient loading goals for the water body. PS entities are provided the option to form an as- sociation so that they are able to collaborate to meet those goals. In the event that the collective exceeds the nutrient limits, each program developed a nutrient offset fee for each additional pound of nutrient discharged that is paid to a state-administered fund for implementing BMPs to reduce the nutrient load from NPSs. In this case study, the Tar-Pamlico Nutrient Reduction Trading Program and the Neuse River Basin Sensitive Waters Management Strategy are described in separate sections and then compared. Figure 9-1 Watersheds in North Carolina. 9.1 Tar-Pamlico Nutrient Reduction Trading Program The Tar-Pamlico Nutrient Reduction Trading Program was initiated in 1990. During Phase I (1990-1994) of the program, the Association was assigned an interim cap for combined discharges, which required a 44,092-lb/yr reduction in TN and phosphorus (Kerr et a/., 2000), and a 20 percent reduction in nutrients over five years. In addition, the Association was tasked with the following: (1) develop an estuarine model; (2) perform an optimization study for capital improve- ments to WWTPs; (3) fund the initial design and administration of the WQT program ($150,000 was provided over a two-year period); (4) make minimum payments into the offset fund if cap was not exceeded (these payments amounted to $850,000 at the end of Phase I); and (5) perform water quality monitoring to document compliance with the cap (Breetz et a/., 2004; Kerr et a/., 2000). The offset fee was set at $25.40 per pound, and credits expire after 10 years. The fees are paid to the North Carolina Agriculture Cost Share Program, administered by the DSWC, a pre-existing program that funds 75 percent of the capital costs associated with voluntary implementation of agricultural BMPs. 77 ------- Throughout Phase I, the association was able to meet the nutrient reduction goals collectively through improvements in operational efficiencies. During Phase II (1995 through 2004), the focus of the nutrient management strategy shifted to include NPSs based on the recognition that NPSs contribute the majority of nutrient loading to the watershed. The modeling completed by the Association in Phase I estimated that NPSs accounted for 92 percent of the nutrient loads (Gannon, 2005b). A goal of 30 percent reduction was set for both PSs and NPSs and the limit for discharge of phosphorus was set at 1991 levels. An interim target of 60 percent progress towards these goals by 1999 was set. If progress was inadequate, the NCDWQ and NCEMC would evaluate whether additional regulatory requirements were necessary (Kerr et al., 2000). When adequate progress had not been made, mandated rules on riparian buffers, fertilizer application, stormwater, and agriculture were adopted by the NCEMC and went into effect in 2000 and 2001 (Gannon, 2005b). The Phase II agreement reduced the price of NPS credits to $13 per pound. Throughout Phase II, the Association has maintained discharges well below the caps assigned without needing NPS offsets (Breetz et al., 2004). The Phase III agreement spans an additional 10 years (2005 through 2014), with an amendment after 2 years to ad- dress potential needs for improvements. The Phase III Agreement updates Association membership and maintains the nutrient caps established in Phase II. It also proposes actions over the first two years that will improve the offset rate, resolve related temporal issues (life span of offset credits), and evaluate alternative offset options. The offset credit life span, what happens after 10 years when the credits expire, and how to handle credits that have been banked by the Association, but not used within 10 years, are issues that participants in the Phase III agreement are currently working to resolve (Huisman, 2006). It also establishes 10-year estuary performance objectives and alternative management options. If water quality in the estuary worsens by 2008, a process to re-model the estuary and revise TMDLs will be initiated (Gannon, 2005b). 9.1.1 Background The Tar-Pamlico River Basin is located north of Neuse River Basin and encompasses 5,400 square miles (Figure 9-2). When the NCEMC designated the Tar-Pamlico basin NSW in 1989, the DENR developed an initial management strategy, as required by state law, which focused reductions of nutrients in the discharges from PSs. The Water Quality Control Commission proposed discharge limits of 2 mg/L TP and 6 mg/L TN (4 mg/L TN in summer and 8 mg/L TN in winter); total nutrient (e.g., tons of TN) load reductions were not specified. It was estimated that to meet these standards, it would cost PSs between $50 and $100 million in capital costs for technology upgrades. PSs opposed the strategy due to the costs and because they believed that discharges from NPSs were also responsible for eutrophication. Environmental groups also opposed the strategy because of the lack of a strategy for NPS reductions and the lack of a goal for PS reductions. Phase I of the NSW implementation strategy, which includes the WQT program, was adopted in December 1989 and was the result of a cooperative stakeholder process with the Association, the state, and the North Carolina Environmental Defense Fund (NCEDF) (Kerr ef al., 2000). Partners involved in the effort were NCDWQ, Soil and Water Conservation Districts, North Carolina DSWC, North Carolina Cooperative Extension, USDA's NRCS, North Carolina Department of Agriculture, North Carolina Farm Bu- reau, North Carolina State University, the Association, the agricultural community, and commodity groups. Fourteen dischargers equaling about 90 percent of all PS ows to the river joined the Association (Gannon, 2005b). The NCEMC brought together stakeholder groups of affected parties and provided the participants with a chance to express differing viewpoints. Stakeholders involved in the process included environmental groups, municipalities, developers, businesses, and the public (USERA, 2005c). A TMDL for nitrogen and phosphorus was developed late in Phase I, assisted by the estuarine modeling initiative conducted as a part of the Phase I agreement, and approved in 1995 (Environomics, 1999). The model predicted that a 45 percent reduction would be necessary to meet in-stream water quality goals; however, due to the uncertainty as- sociated with the modeling, a 30 percent reduction in nitrogen loading for all sources was established by the Phase II agreement (Kerr et al., 2000). The trading program is one element of the implementation strategy of the Tar-Pamlico nutri- ent TMDL; as previously described, it also charged NPSs with a 30 percent reduction. The environmental organizations Environmental Defense and Pamlico-Tar River Foundation (PTRF) were participants in the Phase I and III agreements (Gannon, 2005b). However; they chose to not participate in the Phase II agreement because they disagreed with the 30 percent reduction goal that was established. Phase III of the NSW implementation strategy was adopted as a continuation and update of the Phase II strategy with specific goals to improve and refine the program. Two years into the implementation of the Phase II agreement, regulations modeled after the Neuse nutrient reduction regulation were developed in conjunction with stakeholder consultation (Gannon, 2005b). These regulations include: buffer protection rules (15A North Carolina Administrative Code [NCAC] 2B.0259, .0260 and .0261); nutrient manage- ment rule (15A NCAC 2B.0257); stormwater rule (15A NCAC 2B.0258); and agriculture rules (15A NCAC 2B.0255 and .0256) (NCDWQ, 2005). 78 ------- Stream I | State Boundary Freeway Pamlico Watershed Figure 9-2 Tar-Pamlico River Basin. The trading program was designed so that fees for offset credits would be paid to the NC Agriculture Cost Share Program. The NC Agriculture Cost Share Program is responsible for allocating those funds to the Tar-Pamlico Basin, targeting projects geographically for the most cost-effective nutrient reductions to the estuary. Once PSs have purchased credits, they are no longer liable for ensuring NPS BMPs are implemented and successful. The state assumes responsibility for the monitoring and verification of BMPs. The DSWC has final authority over BMP implementation and the NCDWQ has final authority over nutrient tradeoffs and allocations (Breetz et al., 2004). The primary focus of the Agriculture Cost Share Program is to provide farmers with assistance implementing agricultural BMPs aimed at reducing nutrients (Research Triangle Institute & USERA, undated). 9.1.2 Program Performance The Tar-Pamlico Nutrient Trading Program has been part of a successful strategy to reduce nutrients in the Tar-Pamlico Basin although, to date, no trades have occurred. Thanks to the exibility of the collective discharge goals afforded the Association, members of the Association have been able to improve treatment efficiencies and time technology upgrades with planned expansions so that improvements in treatment efficiency are cost-effective (Allen and Taylor, 2000). As opportunities for cost-effective technology upgrades are exhausted, trading will likely occur in the future. The Association also provided up-front funding of almost $1 million worth of agricultural BMPs, in large part through a federal USERA grant, and have been able to bank the credits toward future cap exceedances (Gannon, 2005b). By the end of Phase II, the Association successfully met the nutrient reduction goals and by 2003 had decreased nitro- gen and phosphorus discharges by 45 percent and 60 percent, respectively, even though ows increased by 30 percent. The agriculture community was also successful in meeting its nutrient reduction goals; it collectively reduced nitrogen discharges by 45 percent by 2003 (Gannon, 2005b), as estimated by land-based accounting methods that estimate TN and TP percentage reduction with implementation of BMPs. The land-based accounting methods are discussed further in Section 9.1.3.2. As a result of watershed-wide efforts, impaired acreage in the estuary has been reduced by 90 percent (from 36,200 to 3,450 acres) (Gannon, 2005a), and one segment of the Pamlico estuary has been removed from the 303(d) list for 79 ------- chlorophyll a (USEPA, 2005b). Trends in nutrient loading in the Tar-Pamlico Basin from 1991 to 2002 were evaluated using the Seasonal Kendall test, a nonparametric trend test that is a generalization of the Mann-Kendall test (Kennedy, 2003). The results indicate significant, negative trends in ow-adjusted concentrations for both TP and TN. Over the selected study period of 1991 through 2002, the estimated decreases in TP and TN concentration over the 12 years are 0.046 mg/L and 0.203 mg/L, respectively. This represents a reduction ofTP and TN through 2002 of 33 percent and 18 percent, respectively (see Figure 9-3 and Figure 9-4) (Kennedy, 2003). Grimesland SEASONAL KENDALL (SKWC) Slope = -0.01686 2xP = 0.0197 Signif95% 90 91 92 93 94 95 96 97 98 99 100 101 102 103 Figure 9-3 Estimated TN concentration decrease using Seasonal Kendall test. Grimesland » ALL SEASONS ^— Seasonal Sen Slope SEASONAL KENDALL (SKWC) Slope = -0.00378 2xP = 0.0006 Signif99% 92 93 94 95 96 97 98 99 100 101 102 103 YEAR Figure 9-4 Estimated TP concentration decrease using Seasonal Kendall test. A key factor that hampered the progress of NPS nutrient reduction activities during the early part of Phase II was lim- ited funding/lack of resources to facilitate accounting for progress on NPS BMP implementation (NCDWQ, 1999). In addition, unknowns associated with atmospheric deposition of nitrogen make it difficult to address this source of NPS nutrients (Gannon, 2005b). 9.1.3 Technical Performance The NSW implementation strategy established a fixed fee per pound of TN discharged above the discharge limit. A nutrient source budget (an accounting of all nutrient sources in the watershed) was prepared for the Tar-Pamlico basin in 1986 and revised in 1988 to re ect significant changes in the watershed. The researchers who developed the budget determined that nitrogen was likely the limiting factor in plant growth. There were uncertainties in the estimates, but with ongoing development in the basin it was crucial that initial goals be established. The NCDWQ projected the 1994 ow for all the Association members at 30.55 mgd. Assuming no nutrient reductions from pre-strategy conditions, NCDWQ estimated that total nutrient loading in 1994 would reach 1,278,000 Ib/yr. Under the original NSW proposal, which re- quired mandatory phosphorus and nitrogen limits for PSs, projected loadings for 1994 would decrease to an estimated 80 ------- 936,965 Ib/yr, a reduction of 440,924 Ib/yr. Subsequently, NCDWQ, the Association, NCEDF, and the PTRF together established 440,924 Ib/yr as the nutrient reduction goal for Phase I of the WQT program. Of this, 396,832 Ib/yr is for nitrogen and 44,092 Ib/yr is for phosphorus (Research Triangle Institute & USEPA, undated). 9.7.3.7 Methods for Defining Caps and Measuring Baseline Nutrient Loading During Phase I, HydroQual developed a two-dimensional, laterally averaged hydrodynamic water quality model to predict the impacts of nutrient loading in the estuary. The model extends from Greenville to Pamlico Point, a distance of approximately 60 miles. 1991 was chosen as the calibration year for the model because it represented when typical impairment of the estuary was evident. It was also the baseline year when PSs in the Association were required to perform nutrient monitoring (Gannon, 2005b). A water quality station near the town of Washington was chosen as the point at which management strategies would be evaluated because modeling results indicated that this was where the greatest number of chlorophyll a and dissolved oxygen violations occur, and the magnitude of the violations was the greatest. Thus, it is the critical portion of the river (Gannon, 2005b). TMDL targets were set in Phase II at 2,778,000 Ib/yr of TN and 397,000 Ib/yr of TP at Greenville based on the relatively low ow year 1991. Given that Washington is downstream and additional loading would occur between those points, TN load delivered to Washington was calculated to be 4,280,000 Ib/yr. Therefore, the 30 percent TN reductions goal for all sources was set at 1,285,000 Ib/yr (Gannon, 2005b). PSs were allocated 8 percent of the total nutrient load reductions, and NPSs 92 percent. For Phase III, these load reductions translate to a cap of 891,271 Ib/yr for TN and 161,070 Ib/yr forTP for PSs (Gannon, 2005b), and a cap of 2,109,220 Ib/yr TN and approximately 1,851,883 Ib/yr TP for NPSs. The modeling results predicted that a 30 percent reduction in TN would significantly reduce the frequency and severity of algal blooms in the estuary. To prevent exceedances of the chlorophyll a standard of 40 ug/L, the model predicted that a 45 percent reduction in TN would be needed. However, given that the level of uncertainty in the modeling increases the further conditions are from baseline conditions, 30 percent was selected at the target for reducing TN. There were plans to recalibrate the model to lower nutrient loading conditions after 30 percent reductions were achieved in order to more accurately determine whether additional reductions are needed. However, recalibration has been postponed pending the results of other estuary evaluations (Gannon, 2005b). 9.7.3.2 Methods for Quantifying Nutrient Load Reductions Point Sources. Assessing compliance of PSs within the trading program is relatively simple. Since July 1991, Association facilities have been performing weekly ef uent monitoring forTP, TN, and ow. The Association reports monitoring data to NCDWQ annually. NCDWQ has developed a set of guidelines for estimating ow and concentration if this information is not provided. Water quality monitoring is performed according to monitoring protocols defined or referenced in their NPDES permits (Gannon, 2005b). Nonpoint Sources. Although wetlands have not been a primary method used to reduce nutrient loads, the methodolo- gies developed for assessing the progress of NPSs towards nutrient reduction goals are applicable to assessing the effectiveness of constructed and restored wetlands as NPS BMPs. This is relevant to a general discussion of how to account for the reductions in NPS nutrients. The NCDWQ determined that measuring compliance with instream loading targets would have required a combination of complex modeling of processes occurring between edge of manage- ment unit (e.g., a given property or unit area of land bordering a body of water) and the water column instream (which would have significant uncertainty), and a substantial amount of quantitative water quality monitoring to support that modeling (Gannon, 2005b). As a result, they have developed methods to assess compliance with load reduction targets based on land-based accounting methods that estimate nitrogen and phosphorus percentage reduction based on BMP implementation. The NCDWQ has developed estimates of nutrient removal efficiencies based on "model local stormwater programs" developed under the Neuse and Tar-Pamlico stormwater rules and agency research. Table 9-1 is the latest table devel- oped by NCDWQ of typical nutrient removal efficiencies. It is being used to calculate NPS nutrient reductions for both of these programs (Bennett and Gannon, 2004). Two other tools have been developed; the Nitrogen Loss Evaluation Worksheet (NLEW) and the Phosphorus Loss Assessment Tool (PLAT). Both tools were developed for nitrogen and phosphorus accounting under the Tar-Pamlico agriculture rule. The NLEW was developed by a multi-agency task force to meet the need for a scientifically valid ni- trogen loss accountability method for use in the Neuse and Tar-Pamlico nutrient strategies. It is an empirically-derived spreadsheet model that estimates nitrogen export from agricultural management units. It was developed to estimate relative reduction in nitrogen export through a pre- and post-BMP implementation calculation, rather than estimating delivery to surface waters (Gannon, 2003). The NLEW uses crop and soil acreages, fertilization rates, and areas of BMP implementation to estimate nutrient uxes from agricultural land.To estimate BMP implementation before implementation 81 ------- of the Agriculture Rule, the Local and Basin Committees (LAC)23 used cost-share records, if they existed, and relied on best professional judgment where unassisted BMP implementation was significant (Gannon, 2003). Table 9-1 New Nutrient Removal Efficiencies for Stormwater BMPs Used Under the Neuse and Tar-Pamlico Storm- water Rules Practice Wet pond Stormwater wetland Sand filter Bioretention Grass swale Vegetated filter strip with level spreader 50-foot restored riparian buffer with level spreader Dry detention TN efficiency (%) 25 40 35 35 20 20 30 10 TP efficiency (%) 40 35 45 45 20 35 30 10 From Bennett and Gannon (2004). 9.1.4 Economic Performance 9.1.4.1 Calculating Offset Credit Value When the Phase I agreement was developed, the estimated cost of achieving the 440,925 Ib/yr nutrient reduction goal using agricultural BMPs alone was $11.8 million: $10 million on the ground and $1.8 million in administration. These values were determined by multiplying the reductions by a factor of $25.40 per Ib/yr, the estimated cost for removing 1 pound of nutrient per year using BMPs. The rate was drawn from BMP funding experience in the adjoining Chowan River basin. The calculation of the cost factor included a margin of safety by multiplying by a factor of three for cropland BMPs and by a factor of two for animal BMPs (Research Triangle Institute & USERA, undated). The offset fee was refined when the Phase II agreement was developed. The base offset fee takes into account farm- ers' capital costs, maintenance costs, BMP effectiveness, area affected, and BMP life expectancy. BMP effectiveness values were based on a literature review that included empirical studies of conservation tillage, terracing, and buffer strip BMPs in the Chesapeake Bay. The fee also includes a trading ratio that re ects a 10 percent increase for administrative costs and a 200 percent margin of safety. Credits for structural BMPs have a useful life of 10 years, while non-structural BMPs have a credit life of 3 years (Breetz et a/., 2004; Gannon, 2005b). The type of BMP eligible for generating nutri- ent reduction credits was left broad: any BMP included within the NC Agriculture Cost Program that is associated with nutrient reduction can be used to generate credits (Huisman, 2006). The key limitation is that nutrient reductions from BMP projects designed to satisfy the 30 percent TN reduction required of all agricultural operations cannot also be used to generate nutrient offset credits. The following equation illustrates how the offset fee was calculated. 2($5.90/lb N) + 0.1[2($5.90/lb N)] = $13/lb N Where 2 accounts for uncertainty in BMP effectiveness, $5.90/lb N high-end cost effectiveness for nitrogen removing BMPs, and 0.1 adds in administration costs (Gannon, 2005a). The offset payments made by the Association to the Agriculture Cost Share Program are used to fund voluntary BMP implementation (75 percent state/25 percent producer) and pay for staff resources to track and target contracts and verify compliance. The NCDWQ plans to work to refine the offset credit calculations further during the first two years of Phase III, and NCDWQ plans to work in consultation with signatories to the Phase II agreement to develop improvements to the offset rate that address the following issues: • Develop an offset rate for exceedances of the phosphorus cap. • Update cost-effectiveness data developed in the 1995 RTI report. • Add current BMPs not addressed in the 1995 RTI report. 23 LACs were established as a part of the agriculture rules to develop plans for meeting the 30 percent reduction goal, and pro- vide technical assistance to farmers reporting on progress to the EMC. 82 ------- • Project BMP implementation for the foreseeable future, including relative numbers and geographic distribution if possible. • Include uncertainty estimates with all cost effectiveness values. • Replace the current value with single nitrogen and phosphorus values weighted for projected BMP implementation. Include spatial weighting if possible to account for differences in estuary delivery due to BMP distribution within the basin. Evaluate the use of uncertainty bounds to replace the current safety factor. • Revisit the administrative cost factor. • Resolve understanding on payment longevity and credit life initiation (Gannon, 2005b). As a part of this work, NCDWQ determined the cost-effectiveness of implementing various BMPs in reducing nutrient loads (Table 9-2). Table 9-2 Nitrogen Removal Cost-Effectiveness Comparison Practice Agriculture • Water control structure • Nutrient management • Vegetated filter strip • Conservation tillage Stormwater/bioretention Riparian wetland restoration $ per Pound (30-year life equivalent) $1.20 $7- $9 $7- $8 $20 - $80 $57 - $86 $11 -$20 Source: Gannon, 2005a. 9.1.4.2 Program Costs The trading program has yielded substantial savings forthe Association, which originally estimated costs fortechnology upgrades at $50 - 100 million, although a revised estimate of costs to the Association without trading puts potential costs at $7 million to achieve a comparable level of nutrient reduction that a $1 million investment in NPS controls yielded (DeAlessi, 2003). According to the USERA Office of Water (2005), in addition to costs to the Association, the overall costs of the NSW implementation strategy24 have been as follows: • The North Carolina Agriculture Cost Share Program, administered by the DSWC, contributed $12.5 million between 1992 and 2003. • Another DSWC-administered program, the federal Conservation Reserve Enhancement Program, has obligated approximately $33.1 million in the Tar-Pamlico River Basin since 1998. • Between 1995 and 2003, approximately $2.67 million in CWA section 319 expenditures supported a variety of NPS projects in the Tar-Pamlico Basin, including BMP demonstration and implementation, technical assistance and education, CIS mapping, development and dissemination of accounting tools, and monitoring. 9.1.5 Administrative Performance PSs and NPSs are required to achieve environmental goals and provide sufficient information to document compliance. The NCEMC, NCDWQ, and Soil and Water are the key administrative bodies for the NSW management strategy. The government agencies retain the ability to take enforcement actions against PSs and NPSs in the event that they are not able to demonstrate compliance. 9.7.5.1 Point Source Accountability The Agreement signed by the Association, NCEMC, NCDWQ, and Soil and Water is the primary mechanism used to assure accountability. The NPDES permits of the Association members do not contain limits for nitrogen, which means that if they overperform, they are not subject to the antibacksliding requirements in the federal CWA (which would result 24 The trading program is just one part of the overall strategy developed for the Basin. 83 ------- in adjustments in permit limits if association members showed they could meet more stringent requirements).25 This would effectively penalize environmental performance. The NPDES permits do, however contain a "reopener" clause stating that if conditions in the agreement are violated, then permits would be revised to impose new discharge limits (Kerr et a/., 2000). The Association documents its nitrogen loading for the year in an annual report (Gannon, 2005b). Non-Association members (the remaining 10 percent of the PS dischargers) are subject to slightly different rules. They are regulated by traditional PS permitting requirements. In addition, they are required to offset new nutrient loading by funding BMPs at an offset ratio of 1.1:1 (Kerr et a/., 2000). 9.7.5.2 Nonpoint Source Accountability The performance of NPSs on nutrient reduction goals is tracked using three methods: tracking activities, computer modeling, and sampling. Tracking Activities. The NCDWQ and EMS use annual reports submitted by LACs to verify progress of NPSs on BMP implementation plans developed by LACs. LACs were created to develop agriculture BMP implementation strategies. LACs are required to submit annual reports on progress (Gannon, 2005a). Modeling. Computer modeling efforts have included improving the Tar-Pamlico Estuarine Water Quality Model used to develop the basin-wide strategy. In addition to the NLEW and PLAT modeling tools developed for agriculture, an Excel- based model was developed to calculate nitrogen and phosphorus loading associated with stormwater runoff from new developments before and after BMP implementation (Gannon, 2005a). Monitoring. The Soil and Water Conservation Districts perform compliance monitoring on BMP implementation; they inspect 5 percent of all contracts for cost share projects per year and all animal waste systems twice per year; and review all local programs every five years (Gannon, 2005a). The NLEW is also used to track progress. 9.2 Neuse River Basin Nutrient Sensitive Waters Management Strategy The 1997 Neuse River Basin NSW Management Strategy (Neuse NSW Strategy) established nitrogen allocations and control options to improve water quality in the Neuse River Basin. The strategy included elements of PS-NPS trading for nitrogen allocations and PS-NPS offsets for nitrogen loading (Breetz et a/., 2004). It set a 30 percent TN reduction target for all sources (including PSs and NPSs) that would need to be achieved within five years, by 2003 (15A NCAC 2B.0234). The strategy also established a group compliance option, which PS dischargers over 5.0 mgd have the op- tion to join. In 2004, the NRCA included 22 members. It issued a single, collective NPDES permit for nitrogen based on the sum of the members' individual nitrogen allocations. PS-PS transactions for nitrogen allocations can occur either internally within the NRCA or between members of the NRCA and non-members (Breetz et a/., 2004). The system established for PS-NPS trades is similar to that of the Tar-Pamlico Nutrient Reduction Program and can best be described as an exceedance tax, rather than a traditional trading program. Potential trading parties include: members of the NRCA, any discharger holding an allocation, and landowners. Trades with NPSs are conducted indirectly through the North Carolina Wetlands Restoration Fund. Landowners receiving grants from the Wetlands Restoration Fund are indirect trading partners. As with the Tar-Pamlico Program, responsibility rests with the state for ensuring nutrient offset projects are implemented and successful (Breetz et a/., 2004). A fixed, per-pound price has been established forthe purchase of TN offset credits. Credits may be purchased if new or expanding dischargers cannot secure nitrogen allocations from other PSs or if the NRCA exceeds its annual nitrogen allocation. In addition to the offset payments, the NRCA is subject to penalties and other enforcement action for any exceedance. In that event, the NRCA members are also subject to enforcement if they exceed their individual allocations as listed in the NRCA's permit. Non-members with TN limits are not required to make offset payments, but are subject to enforcement for any exceedance of their TN limits (15A NCAC 2B.0234) (Breetz et a/., 2004). The Neuse NSW Strategy also created a mechanism for NPS-NPS trades. The Neuse NSW Stormwater Requirements (15A NCAC 2B.0235) set a nitrogen export standard for local governments identified within the regulation based on population and growth rate. Local governments subject to this regulation are required to develop stormwater management program plans and have them approved by the NCEMC. Local governments that do not submit stormwater management program plans or fail to implement them will be subject to NPDES permitting requirements. The plans are tailored to help the local government ensure nutrient reduction goals are met. A key component of the plans is review and approval of stormwater management plans of new developments to ensure they will comply with a nitrogen export standard of 3.6 pounds per acre per year. Developers have the option of installing stormwater BMPs to satisfy this standard or may 25 The USEPA Water Quality Trading Policy (2003) has since addressed this issue directly, stating, "ant/backsliding provisions will also generally be satisfied where a point source generates pollution reduction credits., .and it later decides to discontinue generating credits, provided that the total pollutant load to the receiving water is not increased, or is otherwise consistent with state or tribal antidegradation policy." 84 ------- choose to implement stormwater BMPs that will attain maximum allowable nitrogen export rates and purchase offsets for the remainder of the nitrogen export rate above the rate set for local governments. An initial focus on education is another aspect of Neuse NSW Strategy that is different than the Tar-Pamlico Program. At the outset of the 1997 strategy, the Neuse River Education Team (NRET) was created (and funded) with a mandate to educate NPSs of nutrients (agricultural producers, homeowners, and cities) (Newport, 2004). 9.2.1 Background The Neuse River Basin is located directly to the south of the Tar-Pamlico River Basin and covers 6,192 square miles (Figure 9-5). It was not until 1997 that a WQT program was included in the Neuse River Basin NSW Management Strategy. When the NCEMC developed the original Nutrient Management Strategy (Neuse NSW Strategy) for the Neuse River Basin in 1988, most of the nutrient problems in the lower Neuse region were occurring in the lower freshwater portion of the river near Street's Ferry, and phosphorus was considered the most important nutrient (NCDENR, 1998); thus the focus of the Strategy was on reducing TP The strategy gave PS dischargers with ows greater than 0.5 mgd and all new facilities a TP limit of 2.0 mg/L. Specific goals were not established forTN, although the NCDWQ also stated that nitrogen loading from NPSs should be controlled. The Agricultural Cost Share Program was identified as the primary mechanism for reducing nitrogen from NPSs. The first Basin Wide Plan for the Neuse River was developed in 1993. At this point, TN was becoming a concern in the Neuse because monitoring and modeling in the Tar-Pamlico Basin were showing that nitrogen appeared to be the more important nutrient for brackish estuarine waters. The plan recommended that the Neuse NSW Strategy be reevaluated before it was updated in 1998 (NCDENR, 1998). Major fish kills in 1995 provided further impetus to revise and update nutrient controls. In 1997, the Neuse NSW Strategy was updated by the NCDWQ. It focused on nitrogen and established the Neuse NSW Rules, which were crafted to meet and maintain a 30 percent nitrogen reduction goal within five years, and retained the technology-based concentration limits forTP. Nutrient impacts also led to listing the basin on the 303(d) list and to the development of TMDLs, which USEPA Region 4 approved in 2001 (USERA, 2002b and Environomics, 1999). Legend Stream Freeway I | Slate Boundary Meuse Watershed _A Shaw CLIENT NAME CLENT LOCATION FIGURE 9-5 Neuse River Basin Figure 9-5 Neuse River Basin. 85 ------- The Neuse NSW Rules (Rules .0232, .0234, and .0240 of 15A NCAC 2B) were developed by the state in an effort to address the major known sources of nutrients in a exible, fair, and reasonable fashion (NCDENR, 1998). PSs were estimated to contribute approximately 24 percent of the nitrogen and phosphorus loading to the estuary (Brookhart, 2003, Gannon, 2006). There were 111 dischargers in 1995 (the baseline year); it was estimated the largest 32 discharg- ers accounted for over 95 percent of the TP loading from PSs to the estuary (Breetz et al., 2004). Thus, more than 600 people participated in the public hearing process. The group compliance option came about as a result of suggestions from PSs. They were concerned that stringent nutrient allocations would have been burdensomely expensive, and they were interested in more cost-effective and exible regulatory structures (Breetz et al., 2004). The Tar-Pamlico Nutrient Trading Program, which had entered into Phase II at that point, was used as a template for the Neuse Trading Program. The draft rules were brought to the public for comment before being adopted in December 1997. According to Breetz et al. (2004), participants in the Neuse NSW Implementation Strategy include the following orga- nizations: • NCDWQ: issues NPDES permits to individual dischargers and a group NPDES permit to the NRCA; provides regu- latory oversight for the group nitrogen allocation. • NCEMC: responsible for developing and adopting the Neuse River Nutrient Management Strategies and associ- ated rules. • NRCA: association of PS dischargers, primarily large municipal WWTPs, with a common nutrient cap. • Lower Neuse Basin Association (LNBA): a nonprofit coalition of dischargers that conducts instream monitoring; preceded the NRCA by several years and served as the starting point for the development of the NRCA. Many LNBA members became NRCA members. • Wetlands Restoration Fund (administered by the Ecosystem Enhancement Program [EEP]). • USEPA, Region IV. • Neuse River Foundation and Neuse Riverkeepers: environmental advocates. NCDWQ oversees compliance with the group nitrogen cap. The NRCA manages the individual nitrogen discharge of members through an internal fee system. The NRCA has been successful at meeting the nutrient discharge limits and has not needed to purchase any offsets. However, approximately $5 million in offset fees has been collected from Neuse stormwater projects (Gannon, 2005a). Payments to the Wetlands Restoration Fund are allocated to wetland construction and restoration projects. There are currently numerous projects in design; most are constructed wetlands (Gannon, 2005a). Currently, the focus of the Wetlands Restoration Fund is shifting to include stormwater BMPs, including constructed wetlands. Since 1999, the EEP has struggled to find good wetland sites for restoration (Rich Gannon, telephone interview Dec. 9, 2005). These difficulties are reminiscent of the challenges encountered by wetland mitigation banking fee-in-lieu programs. 9.2.2 Program Performance The Neuse NSW Strategy has been a success and has produced results similar to the Tar-Pamlico Program. The goal of the trading program was to provide another option for achieving compliance with nitrogen allocations (Breetz et al., 2004). As shown in Figure 9-6, the NRCA has been able to surpass the 30 percent TN reduction goal by more than 100 percent. NPS TN loads from agriculture have been reduced by 37 percent and 177 acres of riparian buffers have been preserved (Gannon, 2005b). One PS-PS trade that would raise the NRCA's nitrogen cap was considered in 2004, but was rejected because it was found that the trade could potentially result in a hot spot (localized water quality problems) in Falls Lake, which is the major drinking water supply for the City of Raleigh (Breetz et al., 2004; Gannon 12/2005). 9.2.3 Technical Performance The Neuse Rules established a fixed fee-per-pound of TN discharged above the discharge limit allocated to the NRCA and municipalities. In 1998, PSs were discharging 4.1 million pounds of nitrogen per year into the Neuse River Estuary. In order to achieve a 30 percent reduction, PSs had to reduce their nitrogen contribution by 2.8 million Ib/yr. Nitrogen allocated to individual dischargers was based on the ratio of their permitted ow to the total permitted ow of all PSs (NCDENR, 1998). NPS loading for the Neuse River Basin was originally estimated using export coefficients26 for different land cover types. Land cover classifications were interpreted from LANDSAT imagery for 1993- 1995 (NCDENR, 1998). The modeling and 26 Export coefficient refers to the amount of substance, such as nitrogen, expected to be transported from land by stormwater runoff. Expressed as amount of loading per acre per year (e.g., pounds/ac/yr). 86 ------- Ł III 000 800 600 400 200 000 800 600 400 200 000 Estuary TN Flow (MGD) Limit 1.073 M Ib/yr -f 80 -^ g) 70 i 60 S 50 120 110 100 90 Q O 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Figure 9-6 Neuse River NRCA performance, 1995 - 2004. Point sources 24% Agriculture 52% Forest 14% Figure 9-7 Sources of Nitrogen in the Neuse River Basin (1995). information on PS loading determined that nutrient loads from agricultural operations account for more than 50 percent of the nutrient load in the Neuse River Basin and PSs account for 24 percent; the remaining nutrient sources include forest land, air, and urban areas (Figure 9-7). The 30 percent nitrogen reduction goal was established before theTMDL process was concluded. Modeling to evaluate the effects of various nutrient reduction scenarios was completed during the TMDL process to determine whether an adjustment needed to be made to the 30 percent TN reduction target established by the Neuse Rules. Three models were developed: 1. Neuse Estuary Eutrophication Model, a CE-Qual W2 application to the Neuse estuary; 2. Neuse Estuary Bayesian Ecological Response Network, a probability network model; and 3. Water Analysis Simulation Program, application to the Neuse Estuary. Two scenarios of this model were run (NCDENR, 2001). The results of these models confirmed that a 30 percent reduction in nitrogen from the 1995 baseline forTN is a rea- sonable initial target (NCDENR, 2001). 87 ------- Based on the 30 percent reduction target, local governments were assigned a nitrogen export standard of 3.6 pounds/ acre/year. As previously discussed, new developments are required to implement on-site stormwater controls at least to assure that nitrogen export from residential and commercial/industrial developments does not exceed 6 and 10 pounds/acre/year, respectively. Offset payments are required to meet the remainder of the requirement (Shabman and Scodari, 2004; and Rules .0232, .0234, and .0240 of 15A NCAC 2B). 9.2.3.7 Nutrient Removal by Constructed Wetlands Wetlands are recognized as playing a valuable role in the removal of nutrients from stormwater runoff in the Neuse NSW program. As shown in Table 9-1, the standard TN and TP removal efficiencies of stormwater wetlands (also known as constructed wetlands) developed by the NCDWQ for the purpose of monitoring progress toward nutrient reduction goals is 40 and 35 percent, respectively. The Neuse NSW program has also generated several case studies on the performance of constructed wetlands in various types of conditions. In one such example, the NRET and Smithfield-Selma High School built a demonstration stormwater wetland to treat runoff from parking lots, buildings, and the soccer field on the 70-acre school property in 1999. The created wetland covers % acre in an area that was once a ditch. Students from the school participated in planting wetland plants and continue to be involved in monitoring the performance of the wetland. The project cost $14,280 (NRET, 2004). Water quality was tested using grab samples each August and December and following every storm event for a year and a half. (An automatic monitoring system was not installed due to concerns regarding the potential for vandalism.) The wetland has been very effective at removing nutrients and lowering water temperature: TN was lowered 85 percent, TP was lowered by 93 percent, and average temperature decreased 3 degrees Fahrenheit. No seasonal variability was observed in the level of nutrients removed from the wetland (Bill Lord, telephone interview December 9, 2005). Assuming a linear relationship between construction costs and size of wetland, the unit cost of this wetland was $42,840 per acre. Another example provided by the NRET illustrates nutrient removal efficiencies and also other factors that need to be included in the selection of constructed wetlands versus other stormwater BMPs.This project was developed in conjunc- tion with a plant nursery in Johnston County. A constructed wetland was built to reduce nutrients reaching the Neuse River in 1998 and 1999. Because there was a growing demand for wetland plans, the constructed wetland was built to double as a nursery for wetland plants. Preliminary water tests showed that the wetland was removing approximately 50 percent of the nitrate-nitrogen (NOs-N) (NRET, undated); however, the wetland attracted snakes and the project was discontinued (Bill Lord, telephone interview December 9, 2005). Demonstration projects have also revealed that constructed wetlands can have mixed results. Prior to the adoption of the 1997 Neuse NSW Strategy, a pilot project was completed in the South River, located near the mouth of the Neuse River. Residential, forestry, and agricultural land uses are dominant in the watershed. A constructed wetland was de- veloped on a 10-acre parcel of converted cropland adjacent to Southwest Creek. Blocked in ow ditches were opened and an out ow structure put in place to reestablish the wetland hydroperiod and raise water tables of approximately 300 acres of upgradient cropland.27 The restored wetland removed more than 90 percent of the NH4-N and 97 percent of the NOs-N from the field out ow; however, phosphate phosphorus increased by 30 percent, possibly due to a reduc- tion in pH (NCDENR, 1998). Similar results were observed in another wetland project in the Chowan River Basin in the northeastern part of North Carolina (Figure 9-1), in the Town of Edenton. A two-year study was conducted by Kristopher Bass (2000) as a part of a Masters thesis to quantify impacts of an in-stream constructed wetland on water quality. The 2.4-acre in-stream wetland was built to intercept drainage waters from approximately 600 acres of agricultural and urban watershed, which resulted in a wetland-to-watershed area ratio of 0.004:1. During the project, NOs-N concentrations were reduced through the wetland by 60 percent; NH4-N concentrations by 30 percent, and TKN levels by 9.5 percent.This resulted in a 20 percent drop in TN concentration. TP levels increased 55 percent between the wetland inlets and outlet. Seasonality of wetland performance was also evaluated. Bass (2000) found that NH4-N concentrations decrease by 10 percent more during the growing season; TKN concentrations decreased 15 percent during the winter and not at all during the summer; and TP was higher during the summer than in winter. In summary, he found that nutrient reductions were generally associ- ated with temperature changes, and higher temperatures resulted in greater NH4-N and NOs-N reductions and larger increases in TKN and TP (Bass, 2000). The results reported by Bass (2000) indicate a relationship between nutrient removal efficiencies and temperature/sea- sonality. However, seasonality in nutrient removal efficiencies was not observed at the Smithfield-Selma High School. An evaluation in the relationship between the effects of seasonality/temperature and the wetland-to-watershed areas ratio may provide insight into design of more effective constructed wetlands. 27 If 300 acres is the total area serviced by the wetland, the ratio of area to wetland is 1:0.033. 88 ------- 9.2.4 Economic Performance The unit offset payment adopted by the Neuse Rules was originally set at $11 per pound (15A NCAC 2B.0240). Offset payments are required to include money for 30-year O&M, which is undertaken by a government entity such as a lo- cal government or community college (Gannon, 2005a). In addition, new or expanding PSs or offsets purchased by the NRCA are multiplied by 200 percent to account for uncertainty (15A NCAC 2B.0240). However, under the urban stormwater rules, developers are not required to multiply offset payments by 200 percent. As a result, a discharger needing to purchase an offset for 1 pound of nitrogen would pay an effective fee of $660 per pound, and a developer would pay $363 per pound. The $11-per-pound offset was based on the cost of restoring degraded wetlands. However, revisions to the offset rate, which would raise it to $57 per pound, are currently being made to 15A NCAC 2B.0240. The change in the offset fee is due to a shift in the focus of the EEP to stormwater BMPs. Over the past years, the EEP has struggled to find appropriate sites for wetland restoration. The $57-per-pound offset rate re ects the higher price of this sort of BMP (Table 9-2). In addition to the revision to the offset rate, the applicability of the regulation will be expanded to apply to the entire state (including Tar-Pamlico), and the Neuse River Basin nutrient reduction goal (15A NCAC 2B.0232) will be expanded to include a reduction target forTP (Rich Gannon, telephone interview, December 9, 2005). The draft revisions to the regulations also proposed revisions in calculating the total offset fee. The revised offset fee calculation is presented below: EEP Offset Rate: N offset (Fee) = [$57/lb (lb/yr)(30 years) + $/ac(1/35)(ac developed)] x 1.1 Where $57 is stormwater BMP cost (?)-effectiveness, (Ib/yr) is reduction needed, 30 years is the BMP life span, $/acre is cost of developed land, 1/35 is the BMP/drainage ratio, and 1.1 is an administrative cost factor. Phosphorus (Fee) = $45/0.1 Ib x same as above Note: for wastewater load offsets, the land cost factor = 0 (Gannon, 2005a) There is no trading ratio for PS-PS trades, nor is the NPS offset fee paid to the Wetlands Restoration Fund (Breetz et al., 2004). 9.2.4.7 Constructed Wetland Construction Costs Wetland construction costs fall into three main categories: land, construction, and maintenance. Land cost is, of course, the most variable, depending on location, but is often the largest single cost associated with wetlands in North Carolina, especially in urbanizing areas. (Hunt and Doll, 2000). Research completed by Hunt and Doll (2000) and Wossink and Hunt (2003a) developed the following cost estimates for various components of wetland construction based on a series of case studies: • Excavation and grading: this category of costs for wetlands constructed in the Piedmont and Coastal Plain of North Carolina have ranged from $4 to $9 per cubic yard, with a tendency toward economies of scale. Hauling costs dramatically increase with the distance the excavated soil needs to be carried (Hunt and Doll, 2000). • Land: (1) undeveloped land for commercial use with an average opportunity cost of $5 per square feet ($217,800 per acre); (2) undeveloped land for residential use with an average opportunity cost of $50,000 per acre; and (3) unde- veloped land with zero opportunity cost because of the requirement for open space (Wossink and Hunt, 2003a). • Vegetation: the species of wetland vegetation can greatly affect costs. Costs have ranged from as low as $0.30 per square foot where plants came from selective harvesting and natural establishment to $1 per square foot where nursery vegetation was used (Hunt and Doll, 2000). • Outlet and drawdown structures: costs of the principal outlet and drawdown device depend on the size of the wetland and have ranged from $0.25 to $1 per square foot of wetland area (Hunt and Doll, 2000). Costs for constructing wetlands and other stormwater BMPs in North Carolina are compared in Table 9-3. 89 ------- Table 9-3 Summary of Construction Cost Curves, Annual Maintenance Cost Curves, and Surface Area for Five Stormwater BMPs in North Carolina Range of BMP size (acres) Cost Construction 20-year maintenance Surface area Residential development: • Piedmont • Coastal Plain Highly impervious area (CN80) • Piedmont and Coastal Plain 100% impervious Wet ponds 0.75-67 C= 13,909 x 0.672 C = 9,202 x 0.269 SA= 0.015 x SA = 0.0075 x SA = 0.02 x SA = 0.05 x Constructed wetlands 4-200 C = 3,852 x 0.484 C = 4,502 x 0.153 SA = 0.020 x SA = 0.01 x SA = 0.03x SA = 0.065 x Sand filters 0.5-9 C = 47,888 x 0.882 C = 1 0,556 x 0.534 SA = 0.017 x Bioretention in clay soils 0.3-9.2 C = 10,162x 1088 C = 3,437x0.752 SA = 0.025 x SA = 0.015 x SA=0.03x SA = 0.070 x Bioretention in sandy soils 0.3-9.2 C = 2,861 x 0.438 C = 3,437x0.752 SA = 0.025 x SA = 0.015 x SA = 0.03 x SA = 0.070 x Source: Wossink and Hunt (2003a). Note: C = cost in $. x = size of watershed in acres. SA = surface area in acres. This table illustrates that stormwater wetlands are less expensive to construct and maintain than wet ponds, but wet ponds require a much smaller surface area to effectively treat stormwater runoff. Bioretention is the least expensive option for treating stormwater from smaller sized watersheds. The cost curves do not include land costs; as the cost of land increases, wet ponds would become more cost-effective than stormwater wetlands. Table 9-4 provides a cost comparison for four stormwater BMPs for a 10-acre watershed and the nutrient removal ef- ficiencies of each BMP. Table 9-4 Cost Comparison of Four BMPs for 10-Acre Watershed (CN 80a) Practice Construction cost Annual maintenance cost Opportunity cost of land ($217,800/acre) Present value of total cost Annualized cost per acre watershed Wet pond $ 65,357 $ 4,411 $ 43,560 $ 146,474 $ 1,721 Wetland $ 11,740 $ 752 $ 65,340 $ 83,486 $ 981 Bioretention in clay soils $ 124,445 $ 583 $ 65,340 $ 194,751 $ 2,288 Bioretention in sandy soils $ 7,843 $ 583 $ 65,340 $ 78,137 $ 918 Annualized cost per 1 percent of pollutant removal TSS TN $26 $61 $15 $45 N/A $51 N/A $20 Source: Wossink and Hunt (2003b). N/A = not applicable. a Curve Number (CN) reflects the ability of a watershed to store water through initial storage and subsequent infiltration. A high CN indicated a watershed with limited storage capacity. 9.2.4.2 Program Costs There is incomplete information available on the total costs of the Neuse NSW Strategy. Aside from the initial funding of $500,000 annually for the NRET, which has been reduced in recent years, information on other costs associated with the program is not readily available. The state, rather than the NRCA, assumes most of the transaction costs associated with NPS offsets (Breetz et a/., 2004).The $11-per-pound offset payment can be compared to the $25- to $30-per-pound nitrogen control costs estimated for PSs elsewhere in North Carolina (Environomics, 1999); however, the requirement that credits be purchased for a 30-year period pushes the total cost higher than state-wide average costs. 90 ------- 9.2.5 Administrative Performance The NCDWQ, NCEMC, and EEP administer the Neuse NSW Strategy. As with the Tar-Pamlico, it is the responsibility of PSs and NPSs to demonstrate compliance with the Neuse Rules. The NPDES permits of PSs within the NRCA do not contain a discharge limit for TN; the TN limit for the NRCA is specified in the group compliance NPDES Permit (USEPA, 2002b). Each co-permittee has been assigned a TN allocation, but that is subject to change due to purchases, sales, trades, leases, and other transaction among the NRCA members. Furthermore, if the membership of the NRCA changes, the group TN allocation is changed in the group compliance NPDES permit accordingly. Members of the NRCA monitor discharges and report results to the NCDWQ, as specified in their NPDES permits, and to the NRCA. The NRCA com- piles the co-permittee reports for its own reporting. As a group, the NRCA submits mid-year, year-end, and five-year reports (USEPA, 2002b). Offset payments are paid to the EEP and tracked by an "In-Lieu Fee Coordinator," a staff position created to administer the program. North Carolina State University and local governments assist the EEP in identifying potential projects. The offset BMP projects are located no farther from the estuary than the loading being offset (Gannon, 2005a). Offset BMP projects are awarded to an on-call EEP contractor pool. The contractors are responsible for design, construction, and one year of performance monitoring (Gannon, 2005a). There are currently numerous projects in design (Gannon, 2005a). 9.3 Summary The Tar-Pamlico and Neuse River Basin NSW implementation strategies were both successful at reducing nutrient loads. By 2003, nitrogen had been reduced in the Tar-Pamlico and Neuse River basins by 34 percent over 10 years and 37 percent over 7 years, respectively (Gannon, 2003). Furthermore, the associations of PSs created by both pro- grams have successfully attained nutrient reduction targets. Although no PS-NPS trades have occurred, the structure is in place so that this option is available if needed in the future. As a result of these efforts, water quality has been improving in the Pamlico Estuary. The Neuse NSW Strategy may have been successful at reducing nutrient loads faster than the Tar-Pamlico due to two key factors. 1. By the end of 2002, the target year for full implementation of the Neuse Rules was nearing (the rules were adopted in 1997). NPSs had been legally required to meet nutrient reduction goals for over four years, whereas the Tar-Pamlico Rules did not take effect until 2000-2001. 2. From the outset, the Neuse was allocated significant new resources in the form of field staff to facilitate BMP implementation and NPS education programs. It also received significant new cost-share funding for the entire period. No new resources were allocated to the Tar-Pamlico program between 1997 and 2002 (Gannon, 2003). Education of the agricultural community on their role in NPS nutrients was important in both programs. The NSW strategies for both basins were developed concurrently and relied heavily on public and stakeholder input. The key goals of both strategies were to reduce eutrophication and to provide sources of nutrients with exible options for achieving nutrient reduction goals. Each program developed innovations that the other adapted: Tar-Pamlico developed the WQT program for PSs first and Neuse developed regulations to address NPSs of nutrients first. There are several key differences between the two programs: • The Tar-Pamlico has not adopted rules to allow NPS-NPS trading. • Tar-Pamlico targeted agricultural BMPs for offset projects to reduce NPS nutrient loads. Neuse River Basin targeted wetland restoration and (recently) stormwater BMPs. Adoption of the Tar-Pamlico Agriculture Rule likely raised the stakes with respect to the potential offset BMPs projects - the rules do not allow double counting of nutrient reduc- tion, so agricultural offset projects would need to be in addition to what agricultural producers were already required to do. Given that the least expensive BMPs are likely to be implemented first, this is likely one of the reasons the offset rate paid to the EEP is being increased. • The methods used to calculate offset fees and the estimated life span of BMPs is very different between the two programs. A 10-year life span is assigned in the Tar-Pamlico program compared to a 30-year life span in the Neuse. There appears to be a need for further research into the life span of the nutrient removal BMPs and how they change over time. Work is currently being done in the Tar-Pamlico program to address uncertainty regarding the life span of credits and how to deal with temporal issues related to when credits are generated versus when they are used. The one failed PS-PS trade between an NRCA member and a non-NRCA member in the Neuse River Basin dem- onstrates the strength of regulatory checks and balances, but a potential weakness in both programs. The trade was 91 ------- not approved due to the potential for localized water quality impacts. However, trading among NRCA members does not require NCDWQ approval. This may be resulting in localized water quality impacts that neither program seems to address. Other lessons learned from the Tar-Pamlico Program relate to development of the initial baseline estimates of nutrient loads from various sources and program funding. Farmers perceived that the baseline for Phase II reductions did not adequately account for BMPs that had already been implemented voluntarily. Some believed better documentation of voluntary progress might have precluded the need for regulations (Breetzef a/., 2004). Administering trades through the Cost-Share Program streamlined the program in many ways, but Cost-Share staff ran into difficulty predicting available funds and staffing needs in Phase II, when the NRCA was no longer required to make minimum payments for these purposes (Breetz et a/., 2004). 9.3.1 Unanswered Questions • Seasonality and the nutrient removal efficiency of wetlands: The Bass study (2000) provided some information on the effects of season; however, given that the constructed wetland monitored during this study was undersized, it is unclear whether the same results would have been observed in a wetland that was appropriately sized. • Nutrient removal efficiency of wetlands over time: wetland monitoring data available for this case study spanned short time periods (approximately two years), but the information is inconclusive regarding how wetland nutrient removal changes over time. • What is the life span of the nutrient removal BMPs? • What is the effect of BMP maintenance on nutrient removal efficiencies? • Does nutrient removal efficiency of a BMP change as the concentration of nutrients in the in owing water increases or decreases? Are some BMPs better than others for removing nutrients at higher or lower concentrations? • How were the land-based accounting methods developed? How accurate are they?28 28 This has a much broader application than just WQT. 92 ------- 10.0 Synthesis/Summary of Findings The information provided by the literature review and case studies is summarized here into key observations illustrated by comparisons among the case studies. These observations integrate the scientific, economic, and regulatory elements of trading to identify opportunities, potential hurdles, and unknowns for a very select set of trading pilot projects and programs attempted to date in the United States. 10.1 Performance Monitoring versus Conservatism Most of the evaluated trading programs bypass performance monitoring for quantifying NPS load reductions and instead use conservative estimates (i.e., underestimates) of effectiveness to determine the amount of wetland required to achieve the desired nutrient load reduction. Safety factors are used to increase confidence in performance. The Cherry Creek trading program, a notable exception, requires direct measurement of nutrient load reduction, but creating an in ow point and an out ow point for the constructed wetland accommodates this. For the other program examples, implementation of BMPs was documented, but actual performance in reducing nutrient loads was presumed based on estimates and safety factors not substantiated with monitoring data. The rationale for using this approach stated that monitoring was either not feasible or prohibitively costly to the degree that it was more cost-effective to grossly oversize the wetlands to overcome uncertainty about performance. While there is a wealth of scientific information on the function of various types of wetlands in removing nutrients, the literature does not report that anyone has yet compiled the available information into a comprehensive tool that can be used to assess the many interrelated factors affecting wetland performance that makes each wetland unique. Such a tool would provide confidence in designing or determining the performance of constructed wetlands in reducing nutrient loads. In Idaho, for example, the ISCC recommended against using constructed wetlands for calculated credit because currently there are not enough data to determine efficiency or uncertainties at a scale larger than a single site (ISCC, 2002). A primary challenge is to quantify baseline conditions, i.e., the site load prior to BMP application. The degree to which headwater wetlands may treat pollutants and contribute to the baseline should be considered. Many interrelated parameters, including seasonality, changes in retention rates with varying loads and overtime, drainage patterns, rela- tive location of a wetland within the watershed, and type of wetland, drive wetland performance according to system dynamics. The incorporation of safety factors, which increase the amount of wetland required to produce the necessary perfor- mance, may mitigate the limitations due to these uncertainties. Therefore, in the absence of monitoring data, performance is presumed based on gross conservatism. Unfortunately, not only is this approach potentially cost-prohibitive, it also fails to manage uncertainty regarding non-target pollutants. Specifically, the management of one stressor affects the fate and transport of other contaminants, potentially releasing them from wetlands. For example, a wetland's role as a greenhouse gas and methyl mercury sink or source affects its benefit to the ecosystem. There may be an opportunity to reduce uncertainty and increase program potential by establishing objective and reliable means of determining performance of constructed wetlands. One approach would be to develop more cost-effective and adaptable guidelines for collecting monitoring data. Another solution would use a combination of existing information and new research to develop general performance data to inform the creation of generalized calculation guidelines for estimating performance. For this strategy to succeed, it must acknowledge the wetland's dynamics and resulting changes in retention rates within the context of the larger geographic scale. Establishing baseline nutrient levels and mapping the wetlands in the watershed will serve to more accurately quantify these rates. Finally, historical contamination in the wetland may also justify monitoring of non-target pollutants. 10.2 Motivations for Nonpoint Source Participation NPS contributors are difficult to regulate due to the challenges in isolating and quantifying the contributions of individual parties. Nevertheless, for many watersheds, NPS nutrient load contributions exceed PS contributions, as illustrated by the case studies documented in this report. WQT programs may be used to create an economic incentive for NPSs to control their contributions through trading the load reductions fora profit. This is feasible in certain circumstances based on the significant difference in costs. 93 ------- NPS contributors have a subtle disincentive to participate in trading programs. While they may benefit financially by reducing nutrient loads, the financial gains may be offset by potential liabilities associated with new compliance require- ments, or strict enforcement of existing compliance requirements they currently do not meet. "Additionality" stipulates that any offset that would have occurred regardless of the trading program cannot count toward a trade—e.g., BMPs that are already required of farmers cannot be used to create trade value. Presumably, if reliable methods are developed to isolate and quantify NPS load reductions, those same methods may be used to facilitate more effective regulation of NPSs. Ultimately, a thorough understanding of nutrient loading on a watershed scale is necessary to align the right incentives for NPS contributors to participate. WQT programs may provide a viable mechanism to increase the partici- pation of NPSs in implementing BMPs to improve water quality. Trading programs may provide a platform for education and means by which landowners receive outside funds to make improvements to their properties by implementing BMPs and to generate more valuable data for better scientific assessment of water quality conditions. Ancillary benefits to property owners may be enough to motivate participation in NPS load reduction actions. In the Rahr nutrient trade, bank stabilization and riparian habitat restoration were used to reduce nutrient and sediment loads. The property owners received the benefit of a stabilized riverbank that protected their property from future loss. Cooperation among stakeholders is essential to success. Rahr established collaborative relationships with environmen- tal organizations, MPCA, and the NPSs so that everyone perceived that all parties were working together for the best interest of the environment. 10.3 Effects of Compliance Thresholds and Enforcement The "maturity" of the trading market is a strong determinant for the feasibility of trades. The Cherry Creek trading program illustrates this point clearly. The load allocations were assigned to PSs allowing for projected growth capacity. Since the PSs are, at current capacity, easily able to operate within their compliance limits, there is no demand for trades. As PSs grow and increase their capacity, it will become more difficult for them to operate within the same load allocation limits. At some future point, nutrient trades will become economically preferable in comparison to facility upgrades. In contrast, Rahr was unable to obtain a permit to discharge into the Minnesota River unless its contribution was entirely offset by trades. Based on the success of the Rahr trade, a general permit was established following the same form to guide future applicants. Enforcement of discharge limits will also affect participation in trading. If the discharge limits are strict enough they necessitate trading, but if the likelihood of enforcement when limits are not met is remote, dischargers may decide to game the system instead of participating in trading. Therefore, stringent permit limits with strict enforcement significantly motivates PS demand for trading. The four case studies suggest that NPS participation eventually follows, matching supply to the demand. 70.4 Comparison of Program Structure Trading programs vary among the case studies in terms of how the structure guides and regulates trades. The Rahr example in Minnesota illustrates how a single set of trades can be incorporated into the terms of an NPDES permit for a single PS. The Tar-Pamlico program in North Carolina established an association of PS and NPS contributors who were collectively regulated and allowed to trade among themselves to achieve group compliance. No trades have oc- curred in either of the North Carolina case studies. The exibility afforded by the group compliance option has allowed members within the Tar-Pamlico and Neuse compliance associations to informally trade amongst themselves (Breetz et a/., 2004). As opportunities for cost-effective technology upgrades are exhausted, trading will likely occur in the future. The Cherry Creek program in Colorado establishes two entities that accomplish NPS reductions and build up a credit bank for sale. The LBR program in Idaho allows for trades to occur freely between trading partners required to report the trade to the regulatory authority for review, monitoring, and approval. 70.5 Credit Life Considerable work has been completed evaluating time limits orthe useful life of BMPs. In general, a life span of 10 years for structural and 3 years fornonstructural BMPs has been the norm in trading programs; however, the Idaho and Neuse River programs extend credit life beyond that to 15 and 30 years, respectively. There are still questions regarding what happens after credits expire; how to deal with temporal differences between when the credits were generated and when they are applied; what happens if credits are generated and not used; and how to better understand and predict the short- and long-term assimilative capacities for a given wetland considering seasonal variation in performance. 70.6 Economic Challenges to Trading As discussed in Section 4.0, efficiency requires that at least one source be able to more cost-effectively reduce its discharges than another source; otherwise, the program would not be financially attractive nor marketable (Fang and Easter, 2003; Jaksch, 2000). 94 ------- It is essential that economic considerations support WQT for it to be a viable tool to achieve water quality standards. Economic trading challenges suppress WQT by making net economic value of trading less attractive than alternate compliance management strategies due to risks and uncertainties. Four economic challenges threaten the development of robust, sustainable WQT programs because they reduce the DCFROI, the future return on investment in relation to capital costs associated with generating credits, of trading. These are: (1) simplified modeling of natural system impacts which leads to overly conservative trading ratios, (2) costly environmental protection, (3) high transaction costs, and (4) ill-defined property rights. These challenges hinder efficient and fair deal making, usually because they make the risk and/or return on investments in WQT high to the buyer, the seller, or both. There are a number of potential solutions to address the economic gaps and challenges that complicate the value and risks associated with trading, such as: • Improving the efficiency of regulatory activities: this could include special training for agency staff, dedicated WQT agency staff, clarification of legal issues that reduce disputes, improved system modeling, and simplified data management. Implementing these measures is both technically and economically feasible. However, it would require upfront investment by regulatory agencies in improving staff, policies, practices and equipment. Some of these costs could be recaptured by administrative costs built into offset fees. Limiting regulatory involvement to setting the minimum rules of engagement would maximize regulatory efficiency. • Increase the command and control compliance liability for PS: stricter PS discharge limits should increase the economic attractiveness of WQT, encouraging more trades and better environmental protection. However, very careful consideration and justification would be required before selecting this option. PSs and other stakeholders could potentially argue these changes are unfair in light of the NPS contribution to watershed nutrients in many watersheds. • Market and non-market economic valuation of natural systems: establishing market and non-market economic valuation of a natural system, such as a watershed, would take into account the economic value of the system or system components (e.g., ood control, drinking water, fisheries) and the parties that derive value from those com- ponents (municipal government, commercial fishermen, tourism industry, etc.). The outcome of this analysis would furnish a more comprehensive understanding of the economic values of these systems and the key stakeholders, yielding more informed decisions. For example, the analysis could provide potential traders with an understanding of how else they benefit directly from implementing a BMP. In addition, this analysis could identify other potential markets for the ecological services delivered by wetlands. Suppliers would realize a greater return for their invest- ment, thereby encouraging their participation. Methods for determining economic values are well established and can be useful in informing long-term policy, and they could provide potential traders with additional information on the benefits that they may derive from participation in trading. Other than the generated credits for sale, other returns may also add value for the seller, thereby promoting WQT. Ironically, the non-market value of ecosystem components is considered less important unless and until natural events occur that make value more "real" to residents within a watershed. For example, fish kills in the Neuse and Tar-Pamlico provided the impetus for bringing about changes in how those watersheds are managed. Likewise, coding in the wake of hurricanes Katrina and Rita raised the profile of the utility of levees and dikes and coastal wetlands that protect the shores of Louisiana. • Economic Analysis Tools: Many economic analysis tools already exist and they could be applied specifically to WQT. These tools include: economic investment decision methods, which could employ techniques for calculating DCFROI to demonstrate long-term value of WQT and support decisions of potential WQT participants; and proba- bilistic analysis, which would allow a thorough evaluation of risk. For example, World Resource Institute's "Nutrient Net" allows PS and NPSs to evaluate cost-benefits of trading specific to their watershed application. Such analyses could be used to compare the value of wetlands versus other BMPs. If regulators develop platforms for performing this type of analysis, then individuals can use them to perform their own analyses of the risks and opportunities associated with participation. With respect to risk, credit prices in WQT programs have not tended to be structured to compensate sellers for their risk in implementing BMPs and engaging in WQT, presumably because the opportunity to create private value is sub- stantial relative to the risk to engage in activities for the purpose of improving water quality. For example, in Idaho, while the NPSs were not driven by regulation, they recognized the opportunity to improve their property free of charge without acknowledging measurability of their loads. In ideal markets, investors build their cost of risk into the price of their goods and services. Not pricing credits to include the cost of investor risk might be an important reason that WQT supply and trading are suppressed if the NPS feel they are not getting enough of a return for their risk. Likewise, not pricing credits to include the opportunities associated with investor risk might also suppress WQT supply. At a minimum, efforts to increase the awareness of the value generated beyond credit prices, e.g., market and non-market economic valuations, may increase the attractiveness of participating in trading to potential credit sellers. Complicating matters, credit prices are also affected by investor risk, and opportunities on the supply curve will in uence the intersection with the demand curve. 95 ------- Prices of credits will re ect risk if the market is allowed to function without too many restrictions. 70.7 Property Rights and Transfer of Liability WQT programs have taken different approaches to issues associated with property rights and transfer of liability. In all cases, NPDES liability remains with the PS discharger. However, the question of who would be contractually liable if a BMP project fails is addressed slightly differently in each of the WQT programs included in the case studies. In the Cherry Creek, Rahr, and Idaho programs, the credit purchaser is not offered a release from liability if the mitigation is ineffective and may be faced by the need to continuously monitor and maintain the mitigation measures implemented to generate credits. In the Tar-Pamlico and Neuse programs, a third party takes on the liability for BMP maintenance. The transfer of liability from the credit purchaser to the third-party mitigator was identified as critical to making wetland mitigation banking work: credit purchasers are interested in rapid permitting and avoidance of liability if a mitigation site fails; creating healthy wetlands is secondary to the decision to purchase nutrient credits from the mitigation bank. The lingering liability attached to trades in the first three programs exposes the buyer to risk. Making a nutrient trade does not eliminate the possibility that the same discharge issue could arise again some time in the future. As a result, the unknown risk associated with trading plus additional costs and logistics associated with monitoring BMPs implemented on the credit seller's property make WQT less attractive to PSs. As previously discussed, many trading programs put time limits on the useful life of credits. If a wetland has been restored or enhanced to generate credits for a WQT trading program, there may be regulatory implications associated with what happens to the wetland after the credits expire. The wetland could become regulated under the CWA, thereby limiting potential uses of the land. This could serve as a deterrent to using constructed wetlands as a BMP in WQT programs. There may also be implications to drinking water supply issues. If the USERA and states would like to encourage the use of constructed wetlands in WQT programs, then the long-term regulatory implications of building constructed wetlands to generate credits for WQT programs will need to be clarified. 96 ------- 11.0 Research Recommendations The literature review and case studies in this report illustrate the need for additional research for WQT programs to successfully integrate NPS nutrient load reduction through the use of constructed wetlands. Specific research topics are grouped into three categories that mirror the structure of the study: (1) technical research needs, (2) economic re- search needs, and (3) regulatory and administrative research needs. Many of the specific recommendations integrate components across the range of these categories. 11.1 Technical Research Needs While several examples illustrate the feasibility of WQT programs involving wetland creation for NPS trades, there are several elements of such programs where uncertainty is mitigated by applying conservative factors of safety. The case studies illustrate that in practice, program participants presume it is more cost-effective to create larger wetlands than to directly measure the effectiveness of the constructed wetland. These areas of uncertainty present opportunities for improving trading program efficiency and economic viability. There are two distinct areas of uncertainty associated with the performance of wetlands in reducing NPS nutrient loads. The first involves the ability to quantify the performance of a discrete wetland in reducing nutrient load. Many factors in uence nutrient removal efficiency, and these factors relate to one another in complex ways. The dynamic nature of the system compounds these complexities. The second area of uncertainty involves the ability to translate nutrient load reductions spatially throughout a watershed. 11.1.1 Individual Wetland Performance Some trading programs concluded that performance monitoring was either not feasible or prohibitively costly to the degree that it was more cost-effective to grossly oversize the wetlands to overcome uncertainty about performance. Literature does not re ect a compilation of the abundance of scientific information pertaining to the function of various types of wetlands in removing nutrients into a comprehensive tool that can be used to consistently and confidently design or determine the performance of constructed wetlands in reducing nutrient loads. This limitation does not prevent NPS nutrient trades involving wetlands. Instead of precisely determining the load reduction associated with wetland creation, the uncertainty associated with estimating techniques is mitigated by incorporating safety factors. This approach greatly multiplies the amount of wetland required to ensure the necessary performance. Several possible research topics emerge to address uncertainty in wetland performance: • Define the minimum performance monitoring data requirements to determine water quality credits and determine the optimum distance downstream of the wetland for monitoring. Accordingly, collect data to satisfy these data requirements for a few pilot projects to validate presumed load reductions. • Collect performance data documenting the effect of various maintenance activities on prolonging optimal performance in removing nutrients. Determine the deterioration of performance with time in the absence of maintenance. • Gather additional data on the cyclical and long-term trajectory of nutrient removal by various types of constructed and restored wetlands. • Compile scientific information pertaining to the function and effectiveness of various types of wetlands in removing nutrients and the long-term trajectory of nutrient removal overtime. Use these data to create a comprehensive tool that can be used to assess the many interrelated factors affecting wetland performance. Such a tool would provide confidence in designing or determining the performance of constructed wetlands in reducing nutrient loads. This information would also facilitate nutrient removal modeling and aid calculation of nutrient credits. • Perform additional literature review and analysis focused on the effects of seasonality on the nutrient removal ef- ficiency of wetlands. Consider the reliability of annual nutrient removal to suitably re ect wetland performance. • Perform additional literature review and analysis to comprehensively assess the variability of nutrient removal by ecoregion. 97 ------- • Research effects of atmospheric deposition of nutrients, particularly NOx, and how to incorporate them into wetland design. • Determine the effect of in ow nutrient concentration on removal efficiency of various BMPs. Does nutrient removal efficiency of a BMP change as the concentration of nutrients in the in owing water increases or decreases? How do upland land uses affect pollutant inputs? Are some BMPs better than others for removing nutrients at higher or lower concentrations? • Develop better models, methods, and tools to cost-effectively predict and monitor performance of nutrient removal BMPs to eliminate having to measure performance to generate credits and to allow for design exibility. • Gain insight into how to optimally locate a wetland within the landscape and into how an existing wetland's location affects its utility as a nutrient reducer with which to trade credits and thus the value of those credits. Administrators could then assemble a list of potential sites from which PSs seeking an NPS trading partner could choose. Ad- ditionally, the design and performance would benefit from this insight. • Conduct research on the long-term fate of nutrients removed using constructed wetlands. • Refine the current body of knowledge on transmission losses and uptake capacity of nutrients between the trading partners. Develop standard methods for discounting credits as the distance between the buyer and seller increases and as the distance of the BMP from the water body increases. This would help administrative bodies to ensure that localized water quality impacts do not occur as a result of a trade and determine whether "total mass" caps for PSs need to be set to prevent localized impacts. • Refine methods to accurately account for differences in constituent speciation or even the type of constituent. The inability to do so results in overwhelmingly conservative safety factors, which can sti e trading or at least limit trad- ing participants. • Review how land-based accounting methods were developed and assess their relative accuracy compared to direct measurement. Determine the key areas of uncertainty and design research programs to address them. • Establish quality assurance/quality control of monitoring. 11.1.2 Watershed-Scale System Dynamics Describing the integration of multiple PSs and NPSs and transport processes requires sophisticated tools. Character- ization of spatial and temporal effects on nutrient loads is necessary to evaluate and document the effectiveness of transferring load reductions in time and space. Such comprehensive evaluations on system performance should consider the effects on other stressors and their impacts, e.g., the fate and transport of residual contaminants in the wetlands. Likewise, performance should assess the sensitivity of operational and engineering parameters on nutrient removal and, more generally, on ecosystem integrity. This knowledge is necessary to ensure that WQT contributes to meeting watershed-scale water quality management objectives without unduly compromising local water quality or introducing undesirable temporal effects. SDA can facilitate the success of WQT by reducing uncertainty and quantifying risk. The capabilities of this tool to evalu- ate the complex events and phenomena inherent in many systems are critical to achieving a thriving WQT market that is protective of the environment. SDA provides the platform to account for risk by (1) thoroughly modeling and analyzing complexity, (2) minimizing assumptions and simplistic functions, (3) allowing exibility in time and space, (4) allowing a stress test of baseline conditions, (5) facilitating sensitivity analyses, (6) modeling complicated feedback relations, and (7) allowing model upgrades to best available science, as better knowledge and information become available. This approach establishes expected values for each model input and the expected value of a given strategy. With SDA, conservative contingency factors and trading ratios are minimized or obsolete. For example, trading ratios are replaced with analyzed values that represent break-even values; i.e., ratios which realistically balance nutrient loads into a water- shed, for regulators. SDA is a very effective tool for evaluating how complex systems will behave as a result of change. This tool can provide insight into how factors interrelate. Ultimately, data for specific watersheds could be inputted, with literature values substituting for unknown data, into a general SDA model. 77.2 Economic Research Needs The following economic research recommendations focus on determining value and risk associated with strategies that use wetlands to reduce nutrient loads. • Perform complete economic valuations of strategic alternatives that involve WQT and develop tools that potential trading participants could use to quantify the value of investing in WQT as a nutrient management strategy of choice. Include environmental uncertainties in economic models for such valuations. 98 ------- • Determine the interaction of factors hindering participation in a WQT market; e.g., cost-prohibitive discount ratios, unlikelihood of enforcement, lack of incentives, or fear of future liability. Use comprehensive understanding of the system and clearer guidelines to overcome these challenges. • Quantify supply-demand curves and factors affecting them. Use this information to determine whether a WQT market is a viable solution in a de-regulated environment. • Search for evidence of free market applications of WQT. If available, compare benefits and challenges with regulated case studies reviewed for this report. • Identify additional economic incentives for BMPs when credits are not available (e.g., budgeting payments during seasonal needs for nutrient reduction) that would foster NPS participation. • Assess viability of designing wetlands in advance and banking credits to meet daily and monthly needs. • Investigate the feasibility of making trading credits available for multiple environmental amenities (e.g., water quality, endangered species, ood control) provided by BMPs such as restored or constructed wetlands. This would need to be supported by thorough public market valuations for the functioning BMPs overtime. Integrating multiple concurrent ecological values enhances the opportunity to improve the returns credit sellers are able to make by building BMPs on their property and the opportunity costs associated with not using that land for other purposes. The implementa- tion of the 2007 Farm Bill will test the feasibility of using Federal funds towards BMPs for credit generation. • Evaluate cost effectiveness of the wetlands design. Compare the effectiveness of more, but smaller, wetlands versus fewer, but larger, wetlands. Include among the various costs, those associated with monitoring and maintaining the wetlands. • Research how considerations of scale affect economic decisions and how related uncertainties can be ad- dressed. • Probe the sociological drivers affecting entry into the market and evaluate the feasibility of incorporating these into economic models. • Identify lower-cost engineering solutions for constructed and restored wetland design and maintenance. 11.3 Regulatory and Administrative Research Needs Regulations and policies steer the administration and performance of WQT programs, sometimes in unforeseen or un- desirable ways. The following research recommendations anticipate some such effects and target administrative steps or tools that could contribute to the success of WQT programs. • Optimize models for the administration of WQT programs to conform to the Paper Reduction Act and investigate opportunities to minimize transaction costs. • Provide protocol for minimum rules of engagement to specify interaction between programs and organizations. Develop guidelines based on science and lessons learned. • Develop a simple, but rigorous audit plan to formally track WQT and BMP implementation and compliance. • Assess federal and state compliance-based and voluntary programs to control NPS nutrient loads and evaluate program performance, participation levels, and overall success. Develop recommendations for how to improve NPS participation in WQT and quantitatively track existing BMPs in TMDL settings. Currently, the level of NPS regula- tion and enforcement shifts WQT from being a true market and forces buyers to provide some other incentive (e.g., financial compensation, improved property) to encourage participation of NPSs. • Perform additional research on gaming risks and how watershed management plans in general and WQT programs specifically can be designed to significantly increase the potential cost of this compliance strategy. • Investigate the regulatory feasibility of sharing liability between PS, NPS, and/or a third party, and the impact that may have on entry into the WQT market. 99 ------- 12.0 References 2nd National Water Quality Trading Conference, held May 23-25, 2006 in Pittsburgh, PA, http://www.envtn.org/WQT- conf_agenda.htm. 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Zentner, J., 1995, Meeting Flood Control and Wetland Needs, Public Works. 109 ------- ------- Appendix A Annotated Bibliography 111 ------- ------- # 1 2 3 4 5 6 7 8 9 Title Managing the Brisbane River and Moreton Bay: An Integrated Research/ Management Program to Reduce Im- pacts on an Australian Estuary. Biomass Production and NPK Reten- tion in Macrophytes from Wetlands of the Tingitan Peninsula Hydrologic Performance of a Large- Scale Constructed Wetland: The Ever- glades Nutrient Removal Project Ecological Issues Related to N Deposi- tion to Natural Ecosystems: Research Needs Nutrient Partitioning in a Clay-based Surface Flow Wetland Hydrologic Regime Controls Soil Phosphorus Fluxes in Restoration and Undisturbed Wetlands Framework for Surface Water Quality Management on a River Basin Scale: Case Study of Lake Iseo, Northern Italy South Nation Watershed Phosphorus Algorithm Report Phase II Proceedings of a Conference on Wet- lands for Wastewater Treatment and Resource Enhancement AAA Author Abal, E.G., WC. Dennison, and PF. Greenfield Abdeslam Ennabili, Mohammed Ater and Michel Radoux Abtew, Wossenu and Tim Bechtel Adams, Mary Beth Adcock, P.W., G. L. Ryan and P. L. Osborne Aldous, Allison, Paul McCormick, Chad Ferguson, Sean Gra- ham, and Chris Craft AI-Khudhairy, D. H. A., A. Bettendrof- fer, A. C. Cardoso, A. Pereira, and G. Premazzi Allaway, Chris (B.Sc.) Allen, G.H.and R.H. Pub. Date 2001 Sep-98 Aug-01 Jun-03 1995 Jun-05 Jul-01 Jan-03 1988 Type Paper Conference Proceeding Paper Abstract Abstract Paper Paper Publisher Water Sci Technol. 2001 ;43(9):57-70. PMID: 11419140 Aquatic Botany; 62(1): 45- 56 Sept 1 1998 Wetlands Engineering & River Restoration 2001 , Proceedings of the 2001 Wetlands Engineering & River Restoration Confer- ence, August 27-31 , 2001, Reno, Nevada. Section 36, Chapter 1 . Environment Interna- tional; 29(2-3): 189-199. June 2003. Water Science and Tech- nology; 32(3): 203-209. 1995. Restoration Ecology; 13(2): 341. June 2005. Lakes and Reservoirs: Research and Manage- ment: 6(2): 1 03-1 1 5. July 2001 South Nation Conserva- tion Clean Water Com- mittee Humbolt Sate University, Arcata CA Comments This report describes results of an interdisciplinary study of Moreton Bay to examine the link between sewage and diffuse loading with environmental degradation. The study includes examination of runoff and deposition of fine-grained sediments, sewage-derived nutrient enrichment, blooms of a marine cyano- bacterium, and seagrass loss. The study framework illustrates a unique integrated approach to water quality management whereby scientific research, community participation and the strategy development were done in parallel with each other. This collaborative effort resulted in a water quality management strategy which focuses on the integration of socioeconomic and ecological values of the waterways. This paper summarizes the hydrologic performance, mass bal- ance and treatment efficiency of one of the largest constructed wetlands in the world. Many wetland restoration projects occur on former agricultural soils that have a history of disturbance and fertilization, mak- ing them prone to phosphorus (P) release upon coding. We conclude that maintaining moist soil is the means to minimize P release from recently coded wetland soils. Alternatively, pro- longed coding provides a means of liberating excess labile P from former agricultural soils while minimizing continued organic P mineralization and soil subsidence. ------- # 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Title Treatment of Domestic Wastewater by Subsurface Flow Constructed Wetlands in Jordan South Nation River Conservation Authority: What has 57 years of Wa- tershed Management and Multi-Million Dollar Watershed Plans Taught Us? The Effects of Bird Use on Nutrient Removal in a Constructed Wastewater- Treatment Wetland Temporal and spatial development of surface soil conditions at two created riverine marshes Temporal Export of Nitrogen from a Constructed Wetland: In uence of Hydrology and Senescing Submerged Plants Modelling Nitrogen Removal in Poten- tial Wetlands at the Catchment Scale Oxygen diffusion from the roots of some British bog plants SWRRB: A Basin Scale Simulation Model for Soil and Water Resources Management Latitudinal characteristics of below- and above-ground biomass of Typha: a modelling approach Microbial Ecology: Fundamentals and Application Denitrification, N20 and C02 uxes in rice-wheat cropping system as af- fected by crop residues, fertilizer N and legume green manure Update on the Tradable Loads Program in the Grassland Drainage Area Treatment of Wastewater by Natural Systems Denitrification in Constructed Free- water Surface Wetlands: I. Very High Nitrate Removal Rates in a Macrocosm Study AAA Author Al-Omari, Abbas and Manar Fayyad American Society of Agricultural and Biological Engineers, St. Joseph, Michigan www.asabe.org Andersen, Douglas C., James J. Sartoris, Joan S. Thullen, and Paul G. Reusch Anderson, C.J., WJ. Mitsch, R.W Nairn Ann-Karin Thoren, Catherine Legrand, and Karin S. Tonder- ski Arheimer, Berit and Hans B. Wittgren Armstrong, W Arnold, J.G., J.R.Wil- liams, A.D. Nicks, and N.B. Sammons Asaeda, T, D.N. Hai, J. Manatunge, D. Wil- liams, and J. Roberts Atlas, R.M. and R. Bartha Aulakh, M.S., T.S. Khera, J.W Doran, and K.F. Bronson Austin, S. Ayaz, Selma C. and Liitfi Akca Bachand, Philip A.M. and Alex J. Home Pub. Date May-03 2004 Sep-02 Nov- Dec-05 Dec-04 Jul-02 1964 1990 Aug-05 1981 Dec-01 Aug-99 Jan-01 Sep-99 Type Abstract Paper Publisher Desalination; 155(1): 27- 39. May 30, 2003. American Society of Agricultural and Biological Engineers, St. Joseph, Michigan, www.asabe.org Wetlands; 23(2): 423-425. September 2002. Journal of Environmental Quality; 34(6): 2072-2081. Nov-Dec 2005. Ecological Engineering; 23(4-5): 233-239. Dec 30, 2004. Ecological Engineering; 19(1): 63-80. July 2002. Nature 204:801 -802. 2004 Texas A&M Univ. Press. College Station, TX. Annals of Botany; 96(2): 299-31 2. Aug 2005. Addison-Wesley, Read- ing, MA. Biology and Fertility of Soils; 34(6): 375-389. Dec 2001. Environment Interna- tional; 26(3): 189-195. January 2001. Ecological Engineering; 14(1 -2): 9-1 5. September 1999. Comments http://asae.frymulti.com/abstract.asp?aid=16399&t=2 This case study supports the concept that a constructed wetland can be designed both to reduce nutrients in municipal wastewater and to provide habitat for wetland birds. ------- # 24 25 26 27 28 29 30 31 32 33 34 Title Denitrification in Constructed Free- water Surface Wetlands: II. Effects of Vegetation and Temperature Holding the Line: Tampa Bay's Coop- erative Approach to Trading Nutrients and Zooplankton Composi- tion and Dynamics in Relation to the Hydrological Pattern in a Confined Mediterranean Salt Marsh (NE Iberian Peninsula) Nitrogen mineralization processes of soils from natural saline-alkalined wetlands, Xianghai National Nature Reserve, China Spatial variability of nitrogen in soils from land/inland water ecotones Spatial Distribution Characteristics of Organic Matter and Total Nitrogen of Marsh Soils in River Marginal Wetlands Introduction to Nonpoint Source Pollu- tion in the United States and Prospects for Wetland Use Evaluation of a Small In-Stream Con- structed Wetland in North Carolina's Coastal Plain Potential nitrification and denitrification on different surfaces in a constructed treatment wetland GLTN Comments to the EPA on Proposed Changes to the NPDES Program Growth of Phragmites australis (Cav.) Trin ex. Steudel in Mine Water Treat- ment Wetlands: Effects of Metal and Nutrient Uptake AAA Author Bachand, Philip A.M. and Alex J. Home Bacon, E. and H. Greening Badosa, Anna, Dani Boix, Sandra Brucet, Rocio Lopez-Flores, and Xavier D. Quin- tana Bai, J., W Deng, Q. Wang, H.Chen, C. Zhou Bai, J., W. Deng.Y. Zhu, and Q. Wang Bai, Junhong, Hua Ouyang, Wei Deng, Yanming Zhu, Xuelin Zhang, and Qinggai Wang Baker, Lawrence A. Bass, Kristopher Lucas Bastviken, S.K., PG. Eriksson, I. Mar- tins, J.M. Neto, L. Leonardson, and K. Tonderski Batchelor, David J. (Chair) Batty, Lesley C. and Paul L. Younger Pub. Date Sep-99 May-98 Feb-06 Aug-05 2004 Jan-05 Mar-92 Jun-05 Nov- Dec-03 Jan-99 Nov-04 Type Presentation Master Thesis Letter to Com- ment Clerk Publisher Ecological Engineering; 14(1-2): 17-32. Septem- ber 1999. Watershed '98 - Moving from Theory to Implemen- tation. Denver, CO. Estuarine, Coastal and Shelf Science; 66(3-4): 513-522. February 2006. Canadian Journal of Soil Science; 85(3): 359-367. Aug 2005. Communications in Soil Science and Plant Analy- sis; 35(5-6): 735-749. 2004. Geoderma; 124(1-2): 181-192. Jan 2005. Ecological Engineering; 1(1-2): 1-26. March 1992. Masters Thesis, North Carolina State University, Biological and Agricultural Engineering Department, Raleigh, North Carolina Journal of Environmental Quality; 32(6): 241 4-2420. Nov-Dec 2003. Environmental Pollution; 132(1): 85-93. Nov 2004. Comments ------- # 35 36 37 38 39 40 41 42 43 44 Title Stormwater Treatment: Do Constructed Wetlands Yield Improved Pollutant Management Performance Over a Detention Pond System? Progress in the Research and Dem- onstration of Everglades Periphyton- based Stormwater Treatment Areas Theoretical Consideration of Methane Emission from Sediments Incentives For Environmental Improve- ment: An Assessment Of Selected Innovative Programs In The States And Europe Feasibility of Using Ornamental Plants (Zantedeschia aethiopica) in Sub- surface Flow Treatment Wetlands to Remove Nitrogen, Chemical Oxygen Demand and Nonylphenol Ethoxylate Surfactants: A Laboratory-Scale Study Treatment of Domestic Wastewater in a Pilot-scale Natural Treatment System in Central Mexico Updates to Stormwater BMP Efficien- cies Rainfall-runoff Modeling: The Primer Quantification of oxygen release by bulrush (Scirpus validus) roots in a constructed treatment wetland pH, redox, and oxygen microprofiles in rhizosphere of bulrush (Scirpus validus) in a constructed wetland treating mu- nicipal wastewater AAA Author Bavor, H.J., C.M. Davies, and K. Sakadevan Bays, J.S., R.L. Knight, L. Wenkert, R. Clarke, and S. Gong Bazhin, N.M. Beardsley, Daniel P. Belmont, Marco A. and Chris D. Metcalfe Belmont, Marco A., Eliseo Cantellano, Steve Thompson, Mark Williamson, Abel Sanchez, and Chris D. Metcalfe Bennett, Bradley and Rich Gannon Seven, K.J. Bezbaruah, A.N. and T.C.Zhang Bezbaruah, A.N. and T.C.Zhang Pub. Date 2001 2001 Jan-03 Aug-96 Dec-03 Dec-04 Sep-04 2001 Feb-05 Oct-04 Type Report Memo Publisher Water Science Technol- ogy; 44(1 1 -1 2):565-70. 2001. Water Science Technol- ogy; 44(1 1 -1 2):1 23-30. 2001. Chemosphere; 50(2): 191-200. Jan 2003. Global Environmental Management Initiative Ecological Engineering; 21 (4-5): 233-247. Dec 31, 2003. Ecological Engineering; 23(4-5): 299-31 1 . Dec 30, 2004. Memorandum to Local Programs, Neuse and Tar-Pamlico Stormwater Rules, NC Division of Water Quality John Wiley and Sons, Ltd. Chichester, London Biotechnology and Bioen- gineering; 89(3): 308-318. Feb 2005. Biotechnology and Bio- engineering; 88(1): 60-70. Oct. 5, 2004. Comments This paper discussed a stationary theory of gas emission from sedimentary (active) layers of wetlands, which takes into ac- count methane generation in a sedimentary layer and its depth dependence, and the solubility and the mobility of methane molecules set by the methane diffusion coefficient. http://www.ncbi. nlm.nih.gov/entrez/query.fcgi?cmd=Retrieve&db =PubMed&list_uids=1 2653291 &dopt=Abstract http://www.gemi.org/! DE_003.pdf Memo notifying the Neuse and Tar-Pamlico Stormwater Programs of new nutrient removal efficiencies for Stormwater BMPs. ------- # 45 46 47 48 49 50 51 52 53 54 55 56 Title Hydrological Simulation Program - FORTRAN Version 12 User's Manual N storage and cycling in vegetation of a forested wetland: implications for watershed in processing Evaluation of Past and Potential Phos- phorus Uptake at the Orlando Easterly Wetland The effects of varied hydraulic and nutrient loading rates on water quality and hydrologic distributions in a natural forested treatment wetland Nitrogen as a Regulatory Factor of Methane Oxidation in Soils and Sedi- ments Hydraulic tracer study in a free-water surface ow constructed wetland sys- tem treating sugar factory wastewater in Western Kenya Pollutant Removal Capability of a Con- structed Melaleuca Wetland Receiving Primary Settled Sewage Metabolism of Compounds with Nitro- functions by Klebsiella pnuemoniae Isolated from a Regional Wetland Controlled drainage and wetlands to reduce agricultural pollution: a lysimet- ric study The biogeochemistry of nitrogen in freshwater wetlands Nutrient Removal from Ef uents by an Artificial Wetland: In uence of Rhizosphere Aeration and Preferential Flow Studied Using Bromide and Dye Tracers Salinity & Nutrient Trading in Australia AAA Author Bicknell, B.R., J.C. Imhoff, J.L. Kittle, Jr., T.H. Jobes, and A.S. Donigian, Jr. Bischoff, J.M., P. Bukaveckas, M.J. Mitchell, and T. Hurd Black, Courtney A. and William R.Wise Blahnik, T. and J. Day, Jr. Bodelier, Paul L. E. and Hendrikus J. Laanbroek Bojcevska, H. Bolton, Keith G.E. and Margaret Gre- enway Boopathy, Ramaraj and Earl Melancon Borin, M., G. Bonaiti, and L. Giardini Bowden, WB. Bowmer, Kathleen H. Brady, Katy Pub. Date 2001 May-01 Dec-03 Mar-00 Mar-04 2005 Mar-99 Dec-04 Jul-Aug- 01 1987 May-87 3/16- 18/2004 Type Presentation Publisher National Exposure Re- search Laboratory. U.S. Environmental Protection Agency. Athens, GA. Water, Air, and Soil Pol- lution; 128(1 -2): 97-1 14. May 2001 . Ecological Engineering; 21 (4-5): 277-290. Dec 31, 2003. Wetlands : the journal of the Society of the Wetlands Scientists. Mar 2000. v. 20(1) p. 48-61. FEMS Microbiology Ecol- ogy; 47(3): 265-277. Mar 1 5, 2004. IFM/Department of Biology, University of Linkbping, Linkbping, Sweden. Water Science and Tech- nology; 39(6): 199-206. March 1999. International Biodeteriora- tion & Biodegradation; 54(4): 269-275. Dec 2004. Journal of environmental quality. July/Aug 2001 . v. 30 (4) p. 1330-1340. Biogeochemistry 4:313- 348. Water Research, Volume 21, Issue 5, May 1987, Pages 591 -599 New South Wales Environment Protection Authority, Australia Comments This paper summarises and balances the data on the regula- tory role of nitrogen in the consumption of methane by soils and sediments with the intent of stimulating the scientific community to embark on experiments to close the existing gap in knowl- edge regarding the role of nitrogen in methan oxidation in soils and sediments. http://www.blackwell-synergy.eom/doi/abs/1 0.1 01 6/S01 68- 6496(03)00304-0 http://www.ifm. liu.se/~inuita/researchproposal_tracerstudy.doc http://www.inece.org/emissions/brady.pdf ------- # 57 58 59 60 61 62 63 64 65 Title Factors Affecting Nitrogen Retention in Small Constructed Wetlands Treating Agricultural Non-Point Source Pollution The impact of hydraulic load and aggregation on sedimentation of soil particles in small constructed wetlands Restoration of Lake Borrevannet - Self- purification of Nutrients and Suspended Matter through Natural Reed-belts A Mass Balance Method for Assessing the Potential of Artificial Wetlands for Wastewater Treatment Water Quality Trading and Offset Initia- tives in the U.S.: A Comprehensive Survey* A comparison of nutrient availability indices along an ombrotophic-minero- trophic gradient in Minnesota wetlands Application of Wastewater to Wetlands Nutrient Assimilative Capacity of an Alluvial Floodplain Swamp Gas Exchange through the Soil-at- mosphere Interphase and through Dead Culms of Phragmites australis in a Constructed Reed Bed Receiving Domestic Sewage AAA Author Braskerud, B.C. Braskerud, B.C., H. Lundekvam, and T Krogstad Rratli I I A QU-inla Dlalll, J.L., rt. oKlpIc and M Mielde Breen, Peter F. Breetz, Hanna L. and Karen Fisher-Vanden, Laura Garzon, Han- nah Jacobs, Kailin Kroetz, Rebecca Terry Bridgham, S.D., K. Updegraff, and J. Pastor Brinson, M.M. and F R Westall Brinson, M.M., H.D. Bradshaw, and E.S. Kane Brix, H. Pub. Date Jan-02 Nov~ Dec-00 1999 Jun-90 Aug-04 Jan- Feb-01 1983 Dec-84 Feb-90 Type Paper Report Publisher Ecological Engineering; 18(3): 351 -370. January 2002. Journal of environmental quality. Nov/Dec 2000. v. 29(6) p. 2013-2020. Water Science and Tech- nology, Volume 40, Issue 3, 1999, Pages 325-332 Water Research, Volume 24, Issue 6, June 1990, Pages 689-697 http://www.dartmouth. edu/~kfv/waterqualitytrad- ingdatabase.pdf Soil Science Society of America journal. Jan/Feb 2001. v. 65(1) p. 259-269. Rept. #5, Water Research Inst., Univ. of North Caro- lina, Raleigh, NC Journal of Applied Ecolo- gy Vol.21, No. 3, p 1041- 1057, December, 1984.9 Fig, 2 Tab, 45 Ref. OWRT project B-114-NC. Water Research, Volume 24, Issue 2, February 1 990, Pages 259-266 Comments This research was supported by the US Environmental Protec- tion Agency and the Rockefeller Center at Dartmouth College. Corresponding author: 6182 Steele Hall, Hanover, NH 03755; phone: 603-646-0213; email: kfv@dartmouth.edu Summarizes waterquality trading and offset initiatives in the U.S., including state-wide programs and recent proposals. The document provides background information on each program and provides specific information on each program for the following categories: trade structure (determination of credit, trading ratios and other mechanisms to deal with uncertainty, liabilities/penalties for non-complinace, approval process, ex post-verification/auditing, machanisms for trade identifica- tion and communication, market structure and types of trades allowed); outcomes (types and volumes of trades that have occured, adminiatrative costs, transaction costs, cost savings, program goals achieved, program obstacles, MPS inolvement and incentives to engage in trading, and other); and program/in- formation references. The capacity of the swamp for nutrient removal was highest for nitrate, intermediate for ammonium, and lowest for phosphate. Annual drydown of sediments would be required for sustained ammonium removal in swamps with prolonged coding, as in this case. It appears that swamps of this type could be man- aged for inorganic nitrogen removal from sewage ef uent, but their usefulness for tertiary treatment of phosphate is limited by the capacity of sediments for phosphorus storage. ------- # 66 67 68 69 70 71 72 73 74 75 76 77 Title Treatment of Wastewater in the Rhi- zosphere of Wetland PlantsuThe Root Zone Method Root-zone acidity and nitrogen source affects Typha latifolia L. growth and up- take kinetics of ammonium and nitrate The Use of Vertical Flow Constructed Wetlands for On-site Treatment of Domestic Wastewater: New Danish Guidelines Denitrification in a Natural Wetland Receiving Secondary Treated Ef uent Watershed Permitting in North Carolina: NPDES Permit NCC000001 Became Effective Jan 1 , 2003, Neuse River Compliance Association Watershed Permitting to Increase Ef- ficiency and Facilitate Trading Evaluating Constructed Wetlands Through Comparisons with Natural Wetlands A Simulation Model of Hydrology and Nutrient Dynamics in Wetlands Nutrient Removal and Plant Biomass in a Subsurface Flow Constructed Wetland in Brisbane, Australia Spatial variability of soil properties in created, restored, and paired natural wetlands Treatment of Potato Processing Waste- water with Engineered Natural Systems Nitrogen and Phosphorus Removal by Wetland Mesocosms Subjected to Dif- ferent Hydroperiods AAA Author Brix, H. Brix, H., K. Dyhr-Jen- sen, and B. Lorenzen Brix, Hans and Car- los A. Arias Brodrick, Stephanie J., Peter Cullen and W Maher Brookhart, Morris Brookhart, Morris Brown, M.T. Brown, MarkT. Browning, K. and M. Greenway Bruland, G.L. and C.J. Richardson Burgoon, Peter S., Robert H. Kadlec and Mike Henderson Busnardo, Max J., Richard M. Gersberg, Rene Langis, The- resa L. Sinicrope and Joy B. Zedler Pub. Date 1987 Dec-02 Dec-05 Apr-98 2003 Jul-03 1991 1988 2003 Jan- Feb-05 1999 Dec-92 Type Powerpoint PowerPoint Publisher Water Sci Technol., 19:107-118 Journal of experimental botany. Dec 2002. v. 53 (379) p. 2441-2450. Ecological Engineering; 25(5):491-500.Dec. 1, 2005. Water Research, Volume 22, Issue 4, April 1988, Pages 431 -439 Presented at the National Forum on Water Quality Trading, Chicago, IL, July 22-23, 2003. Retrieved Dec. 12, 2005 from www. epa.gov/owow/watershed/ trading/brookhart.ppt EPA/600\3-91-058. EPA Environmental Research Lab., Corvallis, OR Computers, Environment and Urban Systems, Vol- ume 12, Issue 4, 1988, Pages 221 -237 Water Science Technol- ogy. 2003;48(5): 183-9. Soil Science Society of America journal. 2005 Jan-Feb, v. 69, no. 1, p. 273-284. Water Science and Tech- nology, Volume 40, Issue 3, 1999, Pages 21 1-21 5 Ecological Engineer- ing, Volume 1 , Issue 4, December 1992, Pages 287-307 Comments 2003 National Forum on Water Quality Trading ------- # 78 79 80 81 82 83 84 85 86 Title Riparian Alder Fens - Source or Sink for Nutrients and Dissolved Organic Carbon? - 2. Major Sources and Sinks The Nitrogen Abatement Cost in Wetlands Economic Criteria for Using Wetlands as Nitrogen Sinks Under Uncertainty Defining the Mercury Problem in the Northern Reaches of San Francisco Bay and Designing Appropriate Regu- latory Approaches Pollutant Removal from Municipal Sew- age Lagoon Ef uents with a Free-sur- face Wetland Proposed BMPs to be Applied in Trad- ing Demonstration Stream Assessment and Constructed Stormwater Wetland Research in the North Creek Watershed Mechanisms of nutrient attenuation in a subsurface ow riparian wetland Effects of static vs. tidal hydrology on pollutant transformation in wetland sediments AAA Author Busse, Lilian B. and Gunter Gunkel Bystrom, Olof Bystrom, Olof, Hans Andersson, and Ing- Marie Gren California Environ- mental Protection Agency, San Fran- cisco Bay Regional Water Quality Control Board Cameron, Kimberly, Chandra Madramoot- oo, Anna Crolla, and Christopher Kinsley Carter, David L. (Ph. D., CPAgSSc) Carter, Melanie Dawn Casey, R.E., M.D. Taylor, S.J. Klaine Catallo, WJ. and T Junk Pub. Date May-02 Sep-98 Oct-00 Jun-98 Jul-03 Feb-02 Mar-05 Sep- Oct-01 Nov- Dec-03 Type Draft Staff Report BMP Proposal Ph.D. Disser- tation Publisher Limnologica - Ecology and Management of In- land Waters; 32(1): 44-53. May 2002. Ecological Economics, Volume 26, Issue 3, 1 September 1998, Pages 321-331 Ecological Economics, Volume 35, Issue 1 , Octo- ber 2000, Pages 35-45 California Environmental Protection Agency, San Francisco Bay Regional Water Quality Control Board Water Research; 37(1 2): 2803-2813. July 2003. North Carolina State University, Biological and Agricultural Engineering, URN:etd-031 42005- 1 03836 Journal of environmental quality. Sept/Oct 2001 . v. 30 (5) p. 1732-1737. Journal of environmental quality. 2003 Nov-Dec, v. 32, no. 6, p. 2421-2427. Comments Based on stormwater runoff concerns, two constructed stormwater wetlands (0.3 ac) were designed and installed on the North Creek oodplain. The purpose of this study was to measure stormwater treatment of sediment and nutrients during initial stabilization (three months). Suspended sediment was generated in both wetlands (W1 and W2) during the first two weeks. Total suspended sediment loads were reduced in W2 but not in W1 by the end of the study. Nutrients (TKN, NH4, NO3, TP) were all reduced in W1 throughout the study. Am- monium and total phosphorus were generated in W2 throughout the study. Differences between the two wetlands were due to several variables, including the larger sediment and nutrient concentrations entering W2. Polyacrylamide (PAM) was applied to W1 only (15 Ib/ac) during hydromulching after construction. The in uence of PAM was not clear, however, due to the numer- ous different variables between the two wetlands. http://www.lib.ncsu.edu/theses/available/etd-03142005-103836/ ------- # 87 88 89 90 91 92 93 94 95 96 Title Developing an Ef uent Trading Pro- gram to Address Nutrient Pollution in the Providence and Seekonk Rivers Master's Thesis Effects of sediment deposition on fine root dynamics in riparian forests. The Number Catchment and Its Coastal Area: From UK to European Perspectives The Practice of Watershed Protection: Techniques for Protecting and Restor- ing Urban Watersheds The Performance of a Multi-stage Sys- tem of Constructed Wetlands for Urban Wastewater Treatment in a Semiarid Region of SE Spain Sewage ef uent discharge and geothermal input in a natural wetland, Tongariro Delta, New Zealand The Use of Wetlands for Water Pollu- tion Control Water Quality Impacts of Climate and Land Use Changes in Southeastern Pennsylvania Removal of Endocrine Disrupters by Tertiary Treatments and Constructed Wetlands in Subtropical Australia Syntrophic-methanogenic associations along a nutrient gradient in the Florida Everglades AAA Author Caton, Patricia-Ann Cavalcanti, G.G., B.C. Lockaby Cave, R.R., L. Ledoux, K. Turner, T Jickells, J.E.Andrews, and H. Davies Center for Watershed Protection Cerezo, R. Gomez, M.L. Suarez, and M.R. Vidal-Abarca Chague-Goff, C., M. R. Rosen, and P. Eser Chan, E., T.A. Bunsz- tynsky, N. Hantzsche, and Y.J. Litwin Chang, Heejun Chapman, H. Chauhan, A., A. Ogram, and K.R. Reddy Pub. Date May-02 May- Jun-05 Oct-03 2000 Feb-01 Jan-99 1981 May-04 2003 Jun-04 Type Paper Paper Publisher Center for Environmental Studies Brown University Soil Science Society of America Journal. 2005 May-June, v. 69, no. 3, p. 729-737. Sci Total Environ. 2003 Oct 1;31 4-31 6:31 -52. Re- view. PMID: 14499525 Center for Watershed Protection Ecological Engineering; 16(4): 501 -51 7. February 1 , 2001 . Ecological Engineering, Volume 12, Number 1, January 1999, pp. 149- 170(22). EPA-600/S2-82-086. EPA Municipal Environmental Research Lab., Cincin- nati, OH The Professional Geogra- pher, Volume 56, Issue 2, Page 240-257, May 2004 Water Science Technol- ogy. 2003;47(9): 151-6. Applied and environ- mental microbiology. 2004 June, v. 70, no.6, p. 3475-3484. Comments http://envstudies.brown.edu/Thesis/2002/caton/ includes multiple case studies at the following link: http:// envstudies.brown.edu/Thesis/2002/caton/FRAMES/ Case%20Study%20Frame.htm This paper provides an overview of the current environmental and socio-economic state of the Number catchment and coastal zone, and broadly examines how socio-economic drivers affect the uxes of nutrients and contaminants to the coastal zone, using the driver-pressure-state-impact-response (DPSIR) ap- proach. Compilation by the Center for Watershed Protection of 150 articles on all aspects of watershed protection and represents a broad interdisciplinary approach to restoring and maintain- ing watershed health. Indexed for easy reference, this massive volume is an invaluable reference for anyone interested in the whys and hows of watershed protection practices. http://www. cwp.org/PublicationStore/practice.htm ------- # 97 98 99 100 101 102 103 Title Chesapeake Bay Program Nutrient Trading Fundamental Principles and Guidslinss Nutrient Trading in the Chesapeake Bay Watershed, Public Workshop Pro- ceedings (361 KB) Nutrient Trading to Maintain the Nutrient Cap in the Chesapeake Bay Watershed (128KB) Nutrient Trading for the Chesapeake Bay (109KB) Nutrient Trading in the Chesapeake Bay Watershed, Public Comments Summary (286 KB) Endorsement of the Nutrient Trading Fundamental Principles and Guide- lines (555 KB) Watershed Risk Analysis Model for TVA's Holston River Basin AAA Author Chesapeake Bay Program Chesapeake Bay Program Chesapeake Bay Program Chesapeake Bay Program Chesapeake Bay Program Chesapeake Bay Program Chew, C.W, J. Herr, R. A. Goldstsin, F. J. Sagona, K. E. Rylant, and GF HaiiQpfQ . c.. nuuocio Pub. Date Mar-01 Apr-01 Dec-98 Apr-01 Apr-01 Mar-01 Jul-96 Type Report Report Report Report Report Executive Council Action Paper Publisher Chesapeake Bay Pro- gram Chesapeake Bay Pro- gram Chesapeake Bay Pro- gram Chesapeake Bay Pro- gram Chesapeake Bay Pro- gram Chesapeake Bay Pro- gram Water, Air, & Soil Pollution (Histori- cal Archive), Springer Science+Business Media B.V., Formerly Kluwer Academic Publishers B.V. ISSN: 0049-6979 (Paper) 1573-2932 (Online), Volume 90, Numbers 1-2 Pages: 65 - 70 Comments This document presents fundamental principles and guidelines for nutrient trading in the Chesapeake Bay Watershed. This document is not a regulation. Rather, it is intended to be used on a voluntary basis as a guide for those Bay jurisdictions that choose to establish nutrient trading programs. The document is based on the Negotiation Team's comprehensive consideration of numerous other trading programs and approaches, substan- tial research, and corresponding lengthy negotiations. The Chesapeake Bay Program completed a document de- lineating nutrient trading guidelines entitled Nutrient Trading Fundamental Principles and Guidelines - Draft and made this document available to the public for review on September 8, 2000. A series of public meetings were held during the months of September and October in a variety of locations around the Chesapeake Bay watershed for the purpose of providing the public with an explanation of the meaning and purpose of the trading guidelines, and to give the public a chance to comment on them. This document is a compilation of the public meeting proceedings prepared for each of the 16 public meetings. This is the workshop proceedings held on December 1 4, 1 998. Its purpose, as delineated on the agenda (see Appendix I) was to initiate a process to develop nutrient trading policies and guidelines to achieve and maintain the Nutrient Cap in the Chesapeake Bay Watershed. This paper addresses the need for nutrient trading in the Chesapeake Bay, the process to develop baywide guidelines, and activities taken elsewhere in the Bay region. Following the release of the Nutrient Trading Fundamental Principles and Guidelines - Draft, sixteen public meetings were collectively held throughout the watershed in each of the signatory jurisdictions. All jurisdictions received numerous public comments during the meetings as well as written comments during the review period. This document is a summary of the comments (both during the public meetings as well as those written) received by the jurisdictions. ------- # 104 105 106 107 108 109 110 111 112 113 114 Title Seasonal changes of shoot nitrogen concentrations and 15N/14N ratios in common reed in a constructed wetland Nutrient Trading Advocated to Improve Water Quality Dissolved organic nitrogen in contrast- ing agricultural ecosystems Dimensionless Volatilization Rate for Two Pesticides in a Lake Chemical Characteristics of Soils and Pore Waters of Three Wetland Sites Dominated by Phragmites australis: Relation to Vegetation Composition and Reed Performance Role of Macrophyte Typha latifolia in a Constructed Wetland for Wastewa- ter Treatment and Assessment of Its Potential as a Biomass Fuel Role of macrophyte Typha latifolia in a constructed wetland for wastewater treatment and assessment of its poten- tial as a biomass fuel Nitrogen Pools and Soil Characteristics of a Temperate Estuarine Wetland in Eastern Australia Water quality changes from riparian buffer restoration in Connecticut Thermal Load Credit Trading Plan at Rock Creek and Durham wastewater treatment facilities, OR, Clean Water Services Ammonium Oxidation Coupled to Dissimilatory Reduction of Iron Under Anaerobic Conditions in Wetland Soils AAA Author Choi, W.J., S.X. Chang, H.M. Ro Christen, K. Christou, M., E.J. Av- ramides, J.P Roberts, D.L. Jones Ciaravino, Giulio and Carlo Gualtieri Cikova, Hana, Libor Pechar, t pan Husak, Jan Kv t, Vaclav Bauer, Jana Radova, and Keith Edwards Ciria, M.P., M.L. So- lano, and P. Soriano Ciria, M.P., M.L. So- lano, P. Soriano Clarke, PJ. Clausen, J.C., K. Guillard, C.M. Sig- mund, and K.M. Dors Clean Water Services Clement, Jean-Chris- tophe, Junu Shrestha, Joan G. Ehrenfeld, and Peter R. Jaffe Pub. Date 2005 Feb-02 Aug-05 Dec-01 Apr-01 Dec-05 Dec-05 Dec-85 Nov- Dec-00 Oct-03 Dec-05 Type Paper Paper Temperature Management Plan Publisher Communications in Soil Science and Plant Analysis. 2005, v. 36, no. 19-20, p. 2719-2731. Environ Sci Technol. 2002 Feb 1 ;36(3):53A-54A. PMID: 11871571 Soil Biology & Biochem- istry. 2005 Aug., v. 37, no. 8, p. 1560-1563. Lakes and Reservoirs: Research and Manage- ment, Volume 6, Issue 4, Page 297-303, Dec 2001 Aquatic Botany; 69(2-4): 235-249. April 2001 . Biosystems Engineering; 92(4): 535-544. Dec 2005. Biosystems Engineering. 2005 Dec., v. 92, no. 4, p. 535-544. Aquatic Botany, Volume 23, Issue 3, December 1 985, Pages 275-290 Journal of environmental quality. Nov/Dec 2000. v. 29(6) p. 1751-1761. Clean Water Services Soil Biology and Bio- chemistry; 37(12): 2323- 2328. Dec 2005. Comments No abstract available. http://www.sciencedirect.eom/science/journal/1 53751 1 0 ------- # 115 116 117 118 119 120 121 Title Search for the Northwest Passage: The Assignation of NSP (non-point source pollution) Rights in Nutrient Trading Programs Including Non-point Sources in a Water Quality Trading Permit Program Setting Permit Prices in a Transferable Discharge Permit (TOP) System for Water Quality Management Including Non-point Sources in a Water Quality Trading Permit Economic Modelling of Best Manage- ment Practices (BMPs) at the Farm Level Restoration of Wetlands from Aban- doned Rice Fields for Nutrient Re- moval, and Biological Community and Landscape Diversity Nitrogen Removal and Cycling in Restored Wetlands Used as Filters of Nutrients for Agricultural Runoff AAA Author Collentine, D. Collentine, D. Collentine, D. Collentine, Dennis Collentine, Dennis Comin, Francisco A. , Jose A. Romero, Oli- ver Hernandez, and Margarita Menendez Comin, Francisco A., Jose A. Romero, Valeria Astorga and Carmen Garcia Pub. Date 2002 2005 2005 2003 2002 Jun-01 1997 Type Paper Paper Paper Publisher Water Sci Technol; 45(9):227-34. 2002. PMID: 12079107 Water Sci Technol; 51(3- 4):47-53. 2005. PMID: 15850173 Paper prepared for presentation at the 99th seminar of the EAAE (European Association of Agricultural Economists), Copenhagen, Denmark August 24-27, 2005 Diffuse Pollution Confer- ence, Dublin 2003 In Steenvoorden, J.(ed.), Agricultural Effects on Ground and Surface Waters. IAHS Publication no. 273, 17-22. Restoration Ecology, Volume 9, Issue 2, Page 201-208, Jun2001 Water Science and Tech- nology, Volume 35, Issue 5, 1997, Pages 255-261 Comments Paper from the Department of Economics, Swedish University of Agricultural Sciences, Uppsala that analyzes the lack of success in nutrient trading programs. Tradable permit solutions are based on an assumption that the assignation of quantifi- able rights to both point and nonpoint sources, based on some predetermined ambient water quality measure, is possible. The conclusion here is that there are significant features particular to NSP that hinder the introduction of rights and significantly decrease the utility of tradable permit solutions. A paper that analyzes the problems with Transferable Dis- charge Permit (TOP) systems and describes a composite market system that may solve some of the common problems. Problems with TOP systems are transaction costs and in the case of non-point sources (NPS), undefined property rights. The composite market design specifically includes agricultural NPS dischargers and addresses both property rights and transaction cost problems. http://www.eaae2005.dk/CONTRIBUTED_PAPERS/S11_250_ Collentine.pdf This paper proposes an innovative design for a Transferable Discharge Permit (TOP) system, a composite market system. The composite market design is a proposal for a TDF system, which specifically includes agricultural non-point source (NPS) dischargers and addresses both property rights and transaction cost problems. http://www.em/tn. org/docs/EMM_WHITE_PAPERApri!04.pdf A number of experimental freshwater wetlands with different ages since they were abandoned as rice fields, were used to analyze the prospects of multipurpose wetland restoration for such degraded areas. Nitrogen and phosphorus removal rate of the wetlands was determined monthly during the coding season to estimate their efficiency as filters to remove nutrients from agricultural sewage. Both the temporal dynamics and changes in the spatial pattern of land use cover during the last 20 years were determined from aerial photographs and field analysis. All the wetlands appeared to be very efficient in the removal of nitrogen and phosphorus exported from rice fields. ------- # 122 123 124 125 126 127 128 129 130 131 132 133 Title Comparison of Created and Natural Freshwater Emergent Wetlands in Con- necticut (USA) Watershed Economic Incentives Through Phosphorous Trading and Wa- ter Quality, Innovations in Watershed Stewardship Reducing Diffuse Pollution through Implementation of Agricultural Best Management Practices: A Case Study The Use of a Constructed Wetland for the Amelioration of Elevated Nutrient Concentrations in Shallow Groundwater Anthropogenic landscapes and soils due to constructed vernal pools Use of Constructed Wetland to Protect Bathing Water Quality Constructed Wetlands in Water Pollu- tion Control Water Quality: Implementing the Clean Water Act Stormwater Permits: Status of EPA's Regulatory Program Response of biogeochemical indicators to a drawdown and subsequent re ood Introduction: Assessing Non-point Source Pollution in the Vadose Zone with Advanced Information Technolo- gies Removal of Municipal Solid Waste COD and NH4-N by Phyto-reduction: A Laboratory-scale Comparison of Terrestrial and Aquatic Species at Dif- ferent Organic Loads AAA Author Confer, S.R. and WA. Niering Conservation Authori- ties of Ontario Cook, M.G., PG. Hunt, K.C. Stone and J.H. Canterberry Cook, Michael J. and Robert O. Evans Cook, T.D. and K. Whitney Coombes, C. and P. J. Collett Cooper, PR and B.C. Findlater Copeland, Claudia (Resources, Science, and Industry Division) Copeland, Claudia (Specialist in Re- sources and Environ- mental Policy Resources, Science, and Industry Division) Corstanje, R. and K.R. Reedy Corwin, D.L., K. League, and T.R. Ellsworth Cossu, Raffaell, Ketil Haarstad, M. Cristina Lavagnolo, and Paolo Littarru Pub. Date 1992 Jun-05 1996 2001 2002 1995 1990 Apr-05 Feb-05 Nov- Dec-04 1999 Feb-01 Type Briefing Briefing Publisher Wetlands Ecology & Man- agement. 2(3):1 43-1 56 Conservation Authorities of Ontario Water Science and Technology, Volume 33, Issues 4-5, 1996, Pages 191-196 Paper number 012102, 2001 ASAE Annual Meet- ing . @2001 Soil Survey Horizons. Fall 2002. v. 43 (3) p. 83-89. Water Science and Tech- nology, Volume 32, Issue 3, 1995, Pages 149-1 58 IAWPRC. Pergamon Press, Inc., Maxwell House, NY CRS Issue Brief for Congress Order Code IB89102 CRS Report for Congress 97-290 ENR Journal of environmental quality. 2004 Nov-Dec, v. 33, no. 6, p. 2357-2366. pg. 1-20. In D.L. Corwin, K. League, and T.R. Ells- worth (ed.). Assessment of non-point source pol- lution in the vadose zone. AGU. Washing ton, D.C. Ecological Engineering; 16(4): 459-470. February 1 , 2001 . Comments http://www.ncseonline.org/nle/crsreports/05apr/IB89102.pdf http://www.ncseonline.org/nle/crsreports/05Feb/97-290.pdf ------- # 134 135 136 137 138 139 140 141 Title Preliminary Investigation of an Inte- grated Aquaculture-wetland Ecosystem Using Tertiary-treated Municipal Waste- water in Los Angeles County, California Nutrient Removal from Eutrophic Lake Water by Wetland Filtration Rehabilitation of Freshwater Fisheries: Tales of the Unexpected? Forms and amounts of soil nitrogen and phosphorus across a longleaf pine- depressional wetland landscape Removal of metals in constructed wetlands Comparative Changes in Water Quality and Role of Pond Soil After Applica- tion of Different Levels of Organic and Inorganic Inputs The in uence of organic carbon on nitrogen transformations in five wetland soils Temporally Dependent C, N, and P Dynamics Associated with the Decay of Rhizophora mangle L. Leaf Litter in Oligotrophic Mangrove Wetlands of the Southern Everglades AAA Author Costa-Pierce, Barry A. Coveney, M.F., D.L. Stites, E.F. Lowe, L.E. Battoe, and R. Conrow Cowx, I. G., M. van Zyll de Jong Craft, C.B. and C. Chiang Crites, R.W, R.C. Watson, and C.R. Willams Das, Pratap Chandra, Subanna Ayyappan, and Joykrushna Jena Davidsson, T.E. and M. Stahl Davis, Stephen E., Ill, Carlos Corronado- Molina, Daniel L. Childers, and John W Day, Jr. Pub. Date Jul-98 Aug-02 Jun-04 Sep- Oct-02 1995 Jun-05 May- Jun-00 Mar-03 Type Paper Paper Publisher Ecological Engineering, Volume 10, Issue 4, July 1 998, Pages 341 -354 Ecological Engineering; 19(2): 141-1 59. Aug 2002. Fisheries Management and Ecology, Volume 1 1 , Issue 3-4, Page 243-249, Jun 2004 Soil Science Society of America journal. Sept/Oct 2002. v. 66 (5) p. 1 71 3- 1721. In: Proceedings of WEFTEC 1995, Miami, FL. Water Environment Federation, Alexandria, VI. Aquaculture Research, Volume 36, Issue 8, Page 785-798, Jun 2005 Soil Science Society of America journal. May/ June 2000. v. 64 (3) p. 1129-1136. Aquatic Botany; 75(3): 199-215. March 2003. Comments Changes in water parameters were studied in a yard experiment for 7 weeks after application of cow dung, poultry manure, feed mixture and inorganic fertilizers. To study the role of soil in the mineralization process, each treatment was divided into two groups - one with and the other without soil substrate. Higher degree of changes in water parameters was observed at higher input levels. Both organic amendment and inorganic fertilization caused significant reduction (P<0.05) in dissolved oxygen and increase in free CO2, dissolved organic matter, total ammo- nia, nitrite, nitrate and phosphorus contents of water. Organic inputs significantly decreased (P<0.05) water pH and increased total alkalinity and hardness. In contrast, inorganic fertilization caused a significant increase in pH; alkalinity and hardness increased significantly in the presence of soil, but reduced in its absence. In organic input, presence of soil substrate caused significantly lower value of pH, dissolved oxygen, dissolved or- ganic matter and phosphate-phosphorus and significantly higher free CO2, alkalinity, hardness, ammonia, nitrite and nitrate contents, compared with those in the absence of soil, revealing enhanced microbial mineralization in the presence of soil. ------- # 142 143 144 145 146 147 148 149 150 151 152 153 Title The Use of Wetlands in the Mississippi Delta for Wastewater Assimilation: A Review Nutrient uxes at the river basin scale. I: the PolFlow model Nutrient uxes in the Rhine and Elbe basins Nutrient Fluxes in the Po Basin Removing Muck With Markets: A Case Study on Pollutant Trading for Cleaner Water Nitrogen Cycling in Wetlands Nonpoint Source Pollution Reductions- Estimating a Tradable Commodity Benefits to Downstream Flood Attenu- ation and Water Quality As a Result of Constructed Wetlands in Agricultural Landscapes A Screening of the Capacity of Louisi- ana Freshwater Wetlands to Process Nitrate in Diverted Mississippi River Water The Banking Experience: Environmen- tal Performance Standards & Credit Release The Banking Experience: Environmen- tal Performance Standards & Credit Release Economic Instruments for Water Pol- lution AAA Author Day, J.W, Jr., Jae- Young Ko, J. Ryb- czyk, D. Sabins, R. Bean, G. Berthelot, C. Brantley, L. Cardoch and W Conner, et al. DeWit, M. DeWit, M. de Wit, M.and G. Bendoricchio DeAlessi, M. DeBusk, WF. Dedrick, Allen DeLaney, T.A. DeLaune, R.D., A. Jugsujinda, J.L.West, C.B. Johnson, and M. Kongchum Denisoff, Craig Wildlands, Inc. Denisoff, Craig Wildlands, Inc. Department for Environment, Food & Rural Affairs Pub. Date 2004 2001 1999 2001 Aug-03 1999 Jul-03 1995 Nov-05 7/11- 12/2005 7/11- 12/2005 Sep-99 Type PhD thesis Paper Policy Brief PowerPoint Presentation Presentation Report Publisher Ocean & Coastal Man- agement; 47(11-12): 671-691.2004. Hydrological Processes 15:743-759. Faculty of Geographical Sciences, Utrecht Uni- versity, Netherlands Geo- graphical Studies:259. The Netherlands. Sci Total Environ. 2001 Jun12;273(1-3):1 47-61. PMID: 11419598 Reason Foundations University of Florida, Institute of Food and Agricultural Science, Gainesville, FL. American Farmland Trust Ecological Engineering; 25(4): 31 5-321. Nov 1, 2005. Audio Recording PowerPoint Presentation Department for Environ- ment, Food & Rural Affairs Comments http://rppi.org/pb24.pdf 2003 National Forum on Water Quality Trading http://www.aftresearch.org/researchresource/caepubs/delaney. html (January 2006). Presented at National Forum on Synergies Between Water Quality Trading and Wetland Mitigation Banking. Describes framework for establishing banks, including outlines of perfor- mance standards, credit release, and monitoring. Draws on information from existing mitigation banks in CA. - http://www2. eli.org/research/wqtjnain.htm http://www.defra.gov.uk/environment/water/quality/econinst2/in- dex.htm ------- # 154 155 156 157 158 159 160 Title Water Pollution Discharges: Economic Instruments Nitrate dynamics in relation to lithology and hydrologic ow path in a river riparian zone Submerged Aquatic Vegetation-based Treatment Wetlands for Removing Phosphorus from Agricultural Runoff: Response to Hydraulic and Nutrient Loading Geographic Distribution of Endangered Species in the United States Economic Analysis as a Basis for Large-Scale Nitrogen Control Deci- sions: Reducing Nitrogen Loads to the Gulf of Mexico. Great Lakes Commission Point-Coun- terpoint on USEPA's Trading Policy HSPFParm:An Interactive Database for HSPF Model Parameters, Version 1.0 AAA Author Department for Environment, Food & Rural Affairs Devito, K.J., D. Fitzgerald, A.R. Hill, and R. Aravena Dierberg, F.E., T.A. DeBusk, S.D. Jack- son, M.J. Chimney, and K. Pietro Dobson, A. P., J.P Rodrigues, WM. Roberts, and D.S. Wlcove Doering O C M Ribaudo, F. Diaz-Her- melo, R. Heimlich, F. Hitzhusen, C. How- ard, R. Kazmierczak, J. Lee, L. Libby, W Milon M Peters and A Prato Donahue, Michael J.(Ph.D.) Donigian, A.S., Jr., J.C. Imhoff, and J.L. Kittle, Jr. Pub. Date Jan-98 Jul-Aug- 00 Mar-02 1997 Oct-01 Mar-Apr 2003 1999 Type Report Paper Publisher Department for Environ- ment, Food & Rural Affairs Journal of environmental quality. July/Aug 2000. v. 29 (4) p. 1 075-1 084. Water Resources. 2005 Mar;36(6): 1409-22. Science, 275: 550-555 ScientificWorldJournal. 2001 Oct 23;1 Suppl 2:968-75. PMID: 1 2805894 [PubMed- in- dexed for MEDLINE] Advisor, Great Lakes Trading Network, March/ April 2003Volume 16, No.2 EPA-823-R-99-004. U.S. EPA, Washington DC 38pp. Comments http://www.defra.gov.uk/environment/water/quality/econinst1 /in- dex, htm Note: Annex 3 International experience (http://www.defra.gov. uk/environment/water/quality/econinst1/eiwp09.htm) Economic analysis can be a guide to determining the level of actions taken to reduce nitrogen (N) losses and reduce envi- ronmental risk in a cost-effective manner while also allowing consideration of relative costs of controls to various groups. The biophysical science of N control, especially from nonpoint sources such as agriculture, is not certain. Wdespread precise data do not exist for a river basin (or often even for a water- shed) that couples management practices and other actions to reduce nonpoint N losses with specific delivery from the basin. The causal relationships are clouded by other factors in uenc- ing N ows, such as weather, temperature, and soil charac- teristics. Even when the science is certain, economic analysis has its own sets of uncertainties and simplifying economic assumptions. The economic analysis of the National Hypoxia Assessment provides an example of economic analysis based on less than complete scientific information that can still provide guidance to policy makers about the economic consequences of alternative approaches. One critical value to policy makers comes from bounding the economic magnitude of the conse- quences of alternative actions. Another value is the identification of impacts outside the sphere of initial concerns. Such analysis can successfully assess relative impacts of different degrees of control of N losses within the basin as well as outside the basin. It can demonstrate the extent to which costs of control of any one action increase with the intensity of application of control. ------- # 161 162 163 164 165 166 167 168 Title Modelling Nitrogen Transformations in Freshwater Wetlands: Estimating Nitro- gen Retention and Removal in Natural Wetlands in Relation to their Hydrology and Nutrient Loadings Pollution Diffuse et Gestion du Milieu Agricole: Transferts Compares de Phosphore et d'Azote dans un Petit Bassin Versant Agricole: Non-Point Pollution and Management of Agricul- tural Areas: Phosphorus and Nitrogen Transfer in an Agricultural Watershed Phosphorus saturation potential: a parameter for estimating the longevity of constructed wetland systems Evaluation of Total Nitrogen Pollution Reduction Strategies in a River Basin: A Case Study Phosphorus retention and sorption by constructed wetland soils in southeast Ireland The Three Rivers Project-Water Quality Monitoring and Management Systems in the Boyne, Liffey and Suir Catchments in Ireland Phosphorus Trade Credits for Non- Point Source Projects Design methdology of free water sur- face constructed wetlands AAA Author D0rge, Jesper Dorioz, J.M. and A. Ferhi Drizo, A., Y. Co- meau, C. Forget, R.P Chapuis Drolc, A., J.Z. Kon- dan, and M. Cotman Dunne, E.J., N. Culle- ton, G. O'Donovan, R. Harrington, K. Daly Earle, J.R. Earles, T. Andrew, Wayne F. Lorenz, and Wilbur L. Koger Economopoulou, M.A. and V.A. Tsihrintzis Pub. Date Sep-94 Feb-94 Nov-02 2001 Nov-05 2003 2005 Dec-04 Type Paper Paper Publisher Ecological Modelling, Vol- umes 75-76, September 1 994, Pages 409-420 Water Research, Volume 28, Issue 2, February 1 994, Pages 395-41 0 Environmental Science & Technology. Nov 1 , 2002. v. 36 (21 ) p. 4642-4648. Water Sci Technol. 2001 ; 44(6): 55-62. PMID: 11700664 Water Research. 2005 Nov., v. 39, issue 18, p. 4355-4362. Water Sci Technol. 2003;47(7-8):217-25. PMID: 12793683 World Water Congress 2005 Impacts of Global Climate Change World Water and Envi- ronmental Resources Congress 2005 Raymond Walton - Editor, May 15-19, 2005, An- chorage, Alaska, USA Water Resources Man- agement. 2004 Dec., v. 18, no. 6, p. 541-565. Comments In this paper, the methodology of the material ow analysis is presented and applied to develop a nitrogen balance in a river basin and to evaluate different scenarios for total nitrogen pollution reduction. Application of the methodology is illustrated by means of a case study on the Krka river, Slovenia. Different scenarios are considered: the present level of sewerage and treatment capacities, different stages of wastewater treatment and management of agricultural activities on land. The results show that beside ef uents from wastewater treatment plants, agriculture contributes significantly to the total annual nitrogen load. Therefore, in order to protect river water quality and drink- ing water supply, strategies to manage agricultural nitrogen will be needed in addition to reduction of point sources by means of wastewater collection and implementation of nutrient removal technology. http://scitation.aip. org/getabs/servlet/GetabsServlet?prog=norm al&id=ASCECP0001 7304079200021 4000001 &idtype=cvips&g ifs=yes Available for purchase http://www.kluweronline.com/issn/0920-4741/contents ------- CO o # 169 170 171 172 173 174 175 176 177 178 179 180 181 Title DUFLOW, a microcomputer pack- age for simulation of one-dimentional unsteady ow and water quality in open channel systems Effective Enforcement and Compli- ance in the EU ETS: A View from the Financial Sector Performance of Constructed Wetland System for Public Water Supply The Impact of a Riparian Wetland on Streamwater Quality in a Recently Af- forested Upland Catchment Nonpoint Source Pollution Control: Breaking the Regulatory Stalemate Background Information on Water Quality Trading and Wetland Mitigation Banking by the Environmental Law Institute Water Quality Trading Nonpoint Credit Bank Model Great Lakes Protection Fund - Final Report Market-Based Approach to Ecosystem Improvement - Grant #609 Fertile Ground: Nutrient Trading's Potential to Cost-effectively Improve Water Quality. 2002 Cost for Connecticut Nitrogen Trades Stormwater Trading Articles Using Tradable Credits to Control Excess Stormwater Runoff Prevention of Mosquito Production at an Aquaculture Wastewater Reclama- tion Plant in San Diego, California using an innovative sprinkler system AAA Author EDS. Edwards, Rupert Elias, J.M., E. Salati Filho, and E. Salati Emmett, B.A., J.A. Hudson, PA. Coward and B. Reynolds Environmental De- fense Environmental Law Institute Environmental Trad- ing Network Environmental Trad- ing Network Environmental Trad- ing Network Environmental Trad- ing Network EPA National Risk Management Re- search Laboratory EPA National Risk Management Re- search Laboratory Epibare, R., E. Hei- dig, and D.W Gibson Pub. Date 1998 3/16- 18/2004 2001 Nov-94 2003 2000 Ac- cessed Jan. 31, 2006 1993 Type Presentation Web page Paper Paper Attachment Articles Report Publisher Leidchendam, The Neth- erlands. Climate Change Capital Water Science Technol- ogy. 2001 ;44(1 1 -1 2):579- 84. Journal of Hydrology, Volume 162, Issues 3-4, November 1994, Pages 337-353 Environmental Trading Network Environmental Law Institute National Association of Conservation Districts Environmental Trading Network World Resources Insti- tute, Washington, DC. Environmental Trading Network EPA National Risk Management Research Laboratory EPA National Risk Management Research Laboratory In: Bulletin of the Society for Vector Ecology 18(1):40-44. Comments http://www.inece.org/emissions/edwards.pdf http://www.envtn.org/docs/TradingBankModelPaper.doc CREDIT SALE REVENUE SCENARIOS: http://www.envtn. org/docs/TradingBankModel-CreditScenarios.doc http://www.envtn.org/docs/finalGLPFreport.pdf Background information for the National Forum on Synergies Between Water Quality Trading and Wetland Mitigation Banking - http://www2.eli.org/research/wqt_main.htm ------- # 182 183 184 185 186 187 188 189 190 191 192 193 Title Concept Paper for a Nutrient Trading Policy, Revision 5 Ecological Engineering for Wastewater Treatment Cypress Swamps The Potential for Nutrient Trading in Minnesota: The Case of the Minnesota River Valley Market-Based Incentive and Water Quality The Use of Water Quality Trading and Wetland Restoration to Address Hypoxia in the Gulf of Mexico Nutrient Runoff Creates Dead Zone A Climate and Environmental Strategy for U.S. Agriculture Stable Isotope Dynamics of Nitrogen Sewage Ef uent Uptake in a Semi-arid Wetland Pollution Trading to Offset New Pol- lutant Loadings-A Case Study in the Minnesota River Basin Preliminary Analysis of Water Qual- ity Trading Opportunities in the Great Miami River Watershed, Ohio Point-Nonpoint Source Water Quality Trading: A Case Study in the Minnesota River Basin AAA Author Eskin, R. and V. Kearney Etnier, C. and B. Guterstam Ewel and Odum Faeth, P. Faeth, P. Faeth, Paul World Resources Institute Faeth, Paul and G. Tracy Mehan, III Faeth, Paul and Greenhalgh, Suzie Fair, Jeanne M. and Jeffrey M. Heikoop Fang, F. and K.W Easter Fang, F, M. S. Kieser, D. L. Hall, N. C. Ott, and S. C. Hippensteel Fang, Feng (Andrew), K. William Easter, and Patrick L. Brezonik Pub. Date Aug-97 1991 1985 Feb-98 1999 7/11- 12/2005 Jan-05 Nov-00 Oct-05 Jul-03 un- known 2005 Type Paper Draft Report Paper Presentation Paper Paper presentation Paper Journal Article Publisher Maryland Department of the Environment Bokskogen, Gothenburg, Sweden University of Florida Press, Gainesville, FL. 1985. World Resources Institute World Resources Institute PowerPoint Presentation WRI Features, Vol. 3, No. 1 . World Resources Insti- tute, Washington, DC. WRI Issue Brief, World Resources Institute, Washington, DC. Environmental Pollu- tion, In Press, Corrected Proof, Available online 4 October 2005 American Agricultural Economics Associa- tion Annual Meeting in Montreal, Canada, July 27-30, 2003 American Society of Agricultural and Biological Engineers, St. Joseph, Michigan www.asabe.org Journal of the Ameri- can Water Resources Association (JAWRA) 41(3):645-658. Comments http://www.igc.org/wri/incentives/faeth.html Background information for the National Forum on Synergies Between Water Quality Trading and Wetland Mitigation Banking - http://www2.eli.org/research/wqt_main.htm Background information for the National Forum on Synergies Between Water Quality Trading and Wetland Mitigation Banking - http://www2.eli.org/research/wqt_main.htm This paper provides a detailed overview of two water pollution trading projects in Minnesota and tries to answer the question: have these two projects been cost-effective and environmentally beneficial? Specific objectives of this paper include: (1) to pro- vide an in-depth examination of the two point-nonpoint source trading projects, (2) to conduct cost effectiveness analysis of the nonpoint source loading reduction practices used in the two projects for trading, (3) to evaluate the role of scientific un- certainty played in these two projects, and (4) to look for other social benefits that such offsetting pollution trading efforts can offer to a watershed. http://asae.frymulti.com/abstract.asp?aid=18044&t=2 ------- # 194 195 196 197 198 199 200 201 202 203 Title Physical and chemical characteristics of freshwater wetland soils Wetlands: the lifeblood of wildlife Seasonal and Storm Event Nutrient Removal by a Created Wetland in an Agricultural Watershed Wetland nutrient removal: a review of the evidence Phosphorus ux from wetland soils af- fected by long-term nutrient loading Capped and Non-capped Emissions Trading: Applying Lessons from Water Quality Trading The potential role of ponds as buffer zones Balancing Wildlife Needs and Nitrate Removal in Constructed Wetlands: The Case of the Irvine Ranch Water District's San Joaquin Wildlife Sanctu- ary Environmental Laws: Summaries of Statutes Administered by the Environmental Protection Agency Nitrate removal in a riparian wetland of the Appalachian Valley and ridge physiographic province AAA Author Faulkner, S.P and C.J. Richardson Feierabend, J.S. Fink, Daniel F. and William J. Mitsch Fisher, J. and M.C. Acreman Fisher, M.M. and K.R. Reddy Fisher-Vanden, K. and H. Jacobs, C. Schary Fleischer, S; Joels- son, A; Stibe, L Fleming-Singer, Maia S. and Alexander J. Home Fletcher, Susan (Coordinator Specialist in Environ- mental Policy Resources, Science and Industry Division) Flite, O.P III., R.D. Shannon, R.R. Schnabel, and R.R. Parizek Pub. Date 1989 1989 Dec-04 Aug-04 Jan- Feb-01 2002 Nov-05 Mar-05 Jan- Feb-01 Type Working paper Briefing Publisher In: Constructed Wetlands for Wastewater Treatment - Municipal, Industrial, and Agricultural. Lewis Publishers, Chelsea, Ml. In: D.A. Hammer (ed.) Constructed Wetlands for Wastewater Treatment, Municipal, Industrial and Agricultural. Lewis Pub- lishers, Chelsea, Ml. Ecological Engineering; 23(4-5): 31 3-325. Dec 30, 2004. Hydrology and earth sys- tem sciences. 2004 Aug., v. 8, no. 4, p. 673-685. Journal of environmental quality. Jan/Feb 2001 . v. 30(1) p. 261-271. Quest Environmental, PO BOX 45, Harpenden, Hertfordshire, AL5 5LJ (UK), pp. 140-146. 1997. Ecological Engineer- ing, In Press, Corrected Proof, Available online 28 November 2005 CRS Report for Congress Journal of environmental quality. Jan/Feb 2001 . v. 30(1) p. 254-261. Comments http://www.copernicus.org/EGU/hess/publishedjiapers.html Governmental programmes and international agreements to counteract eutrophication have largely not attained agreed goals (e. g. reduction by half of the anthropogenic nitrogen load on Swedish coastal waters, to be carried out between 1985 and 1995). To attain the agreed goal of a 50 percent reduction of the nitrogen transport in streams, decreased agricultural leaching must be combined with extensive pond and wetland construc- tion. http://www.ncseonline.org/nle/crsreports/05mar/RL30798.pdf ------- CO CO # 204 205 206 207 208 209 210 211 212 213 214 215 216 Title Nitrogen Removal from Domestic Wastewater Using the Marshland Up- welling System Point-Nonpoint Pollutant Trading Study Basinlink Watershed-Based Trading & The Law: Wisconsin's Experience A Test of Four Plant Species to Reduce Total Nitrogen and Total Phosphorus from Soil Leachate in Subsurface Wet- land Microcosms Nitrate Removal by Denitrification in Al- luvial Ground Water: Role of a Former Channel Detritus Processing and Mineral Cy- cling in Seagrass (Zostera) Litter in an Oregon Salt Marsh Design and Construction of Demon- stration/Research Wetlands for Treat- ment of Dairy Farm Wastewater The Making of a Regulatory Crisis: Restructuring New York City's Water Supply Ecosystem Structure, Nutrient Dynam- ics, and Hydrologic Relationships in Tree Islands of the Southern Ever- glades, Florida, USA Telephone Interview with Rich Gan- non, North Carolina Division of Water Quality WQC Item no. 3 EMC Item no. 03-38 Request for Approval of Local Nitrogen Strategies Tar-Pamlico Agriculture Rule: A Report to the NC Environmental Management Commission from the Tar-Pamlico Basin Oversight Committee Nutient Enrichment of Wetland Veg- etation and Sediments in Subtropical Pastures AAA Author Fontenot, Jeremy, Dorin Bolder, and Kelly A. Rusch Fordiani, R. Fox-Wolf Basin 2000 Fox-Wolf Basin 2000 Fraser, Lauchlan H., Spring M. Carty and David Steer Fustec, E., A. Mari- otti, X. Grille and J. Sajus Gallagher, John L., Harold V. Kibby and Katherine W Skirvin Gamroth, M.J. and J.A. Moore Gandy, Matthew Gann, Tiffany, G.Childers, Daniel L. Troxler, and Damon N. Rondeau Gannon, Rich Gannon, Rich Gathumbi, S.M., PJ. Bohlen, and D.A. Graetz Pub. Date Jan-06 Jun-96 2000 2000 Sep-04 Mar-91 Oct-84 Apr-93 Sep-97 Aug-05 09-Dec- 05 October 8-9, 2003 2005 Type Presentation Newsletter Report Paper Publisher Ecological Engineer- ing, In Press, Corrected Proof, Available online 6 January 2006 Water Environment Fed- eration and U.S. EPA Vol. 2, No.3. Bioresource Technology; 94(2): 185-192. Sept 2004. Journal of Hydrology, Volume 123, Issues 3-4, March 1991, Pages 337-354 Aquatic Botany, Volume 20, Issues 1 -2, October 1 984, Pages 97-1 08 EPA/600/R-93/105. EPA Environmental Research Laboratory, Corvallis, OR Transactions of the Institute of British Ge- ographers, Volume 22, Issue 3, Page 338-358, Sep 1997 Forest Ecology and Man- agement; 21 4(1 -3):1 1 -27. Aug 2005. North Carolina Division of Water Quality Soil Science Society of America Journal; 69: 539- 548. 2005. Comments Published in Proceedings of Watersheds '96. http://www.epa.gov/owowwtr1/watershed/Proceed/fordiani.html http://www.fwb2k.org/research/legalrpt/tradelaw.htm Report to the N.C. Environmental Management Comission (EMC) from the the Basin Oversight Committee (BOC) on the progress of the Nitrogen Reduction Program and to obtain EMC approval of fourteen local strategies for achieving the Agricul- ture rule's basinwide nitrogen goal of a 30% reduction in loading from baseline 1991 levels by 2006. http://h2o.enr.state.nc.us/nps/EMCRpt-LocStrtgs10-03prn.pdf ------- # 217 218 219 220 221 222 223 224 225 226 227 Title The use of mangrove wetland as a biofilter to treat shrimp pond ef uents: preliminary results of an experiment on the Caribbean coast of Colombia The Use of Free Surface Constructed Wetland as an Alternative Process Treatment Train to Meet Unrestricted Water Reclamation Standards Suitability of a Treatment Wetland for Dairy Wastewaters Horizontal Subsurface Flow Systems in the German Speaking Countries: Summary of Long-term Scientific and Practical Experiences; Recommenda- tions Nitrogen Transformations in a Wetland Receiving Lagoon Ef uent: Sequen- tial Model and Implications for Water Reuse Nitrogen Removal in Artificial Wetlands Role of Aquatic Plants in Wastewater Treatment by Artificial Wetlands The Removal of Heavy Metals by Artifi- cial Wetlands Mass Loss, Fungal Colonisation and Nutrient Dynamics of Phragmites aus- tralis Leaves During Senescence and Early Aerial Decay Environmental Flows and Water Quality Objectives for the River Murray A Comparison of Rain-related Phos- phorus and Nitrogen Loading from Ur- ban, Wetland, and Agricultural Sources AAA Author Gautier, D., J. Ama- dor, and F. Newmark Gearheart, R.A. Geary, P.M. and J.A. Moore Geller, Gunther Gerke, Sara, Law- rence A. Baker, and Ying Xu Gersberg, R.M., B.V. Elkins and C.R. Gold- man Gersberg, R.M., B.V. Elkins, S.R. Lyon and C.R. Goldman Gersberg, R.M., S.R. Lyon, B.Y. Elkins, and C.R. Goldman Gessner, Mark O. Gippel, C., T Jacobs, and T. McLeod Glandon, R.P, F.C. Payne, C.D. McNabb and T.R. Batterson Pub. Date Oct-01 1999 1999 1997 Nov-01 1983 Mar-86 1984 Apr-01 2002 1981 Type Paper Publisher Aquaculture research. Oct2001.v. 32 (10) p. 787-799. Water Science and Technology, Volume 40, Issues 4-5, 1999, Pages 375-382 Water Science and Tech- nology, Volume 40, Issue 3, 1999, Pages 179-185 Water Science and Tech- nology, Volume 35, Issue 5, 1997, Pages 157-166 Water Research; 35(1 6): 3857-3866. November 2001. Water Research, Volume 17, Issue 9, 1983, Pages 1 009-1 01 4 Water Research, Volume 20, Issue 3, March 1986, Pages 363-368 EPA-600/D-84-258. Robt. S. Kerr Env. Research Lab., Ada, OK Aquatic Botany; 69(2-4): 325-339. April 2001 . Water Sci Technol. 2002;45(11):251-60. MID: 121 71 360 [PubMed- in- dexed for MEDLINE] Water Research, Volume 15, Issue 7, 1981, Pages 881 -887 Comments This paper considers a plan for managing ows in the River Murray to provide environmental benefits. Described are four key aspects of the process being undertaken to determine the objectives, and design the ow options that will meet those objectives: establishment of an appropriate technical, advisory and administrative framework; establishing clear evidence for regulation impacts; undergoing assessment of environmental ow needs; and filling knowledge gaps. ------- CO en # 228 229 230 231 232 233 234 235 236 237 238 239 240 241 Title Ecological Considerations in Wetlands Treatment of Municipal Wastewaters Surmounting the Engineering Chal- lenges of Everglades Restoration Symbiont Nitrogenase, Alder Growth, and Soil Nitrate Response to Phospho- rus Addition in Alder (Alnus incana ssp. rugosa) Wetlands of the Adirondack Mountains, New York State, USA Freshwater Wetlands: Ecological Pro- cesses and Management Potential The Origins and Practice of Emissions Trading Modelling drainage practice impacts on the quantity and quality of stream ows for an agricultural watershed in Ohio Rule Enforcing Selenium Load Alloca- tion and Establishing a Tradable Loads Program for Water Year 1999 The Nutrient Assimilative Capacity of Maerl as a Substrate in Constructed Wetland Systems for Waste Treatment Second Semi-Annual Report to the Great Lakes Protection Fund 2nd Semi-Annual Report Categorization of Issues List of Issues Encountered Differences in wetland plant commu- nity establishment with additions of nitrate-N and invasive species (Phalaris arundinaceae and Typha xglauca) Constructed Wetlands for River Recla- mation: Experimental Design, Start-up and Preliminary Results AAA Author Godfrey, P.J., E.R. Kaynor, S. Pelczarski and J. Benforado (eds) Goforth, G.F. Gokkaya, Kemal, Todd M. Hurd, and Dudley J. Raynal Good, R.E., D.F. Whigham, and R.L. Simpson (eds) Gorman, H.S. and B.D. Solomon Gowda, PH., A.D. Ward, D.A. White, D.B. Baker, and T.J. Logan Grassland Basin Drainage Steering Committee Gray, Shalla, John Kinross, Paul Read, and Angus Marland Great Lakes Trading Network Great Lakes Trading Network Great Lakes Trading Network Great Lakes Trading Network Green, E.K. and S.M. Galatowitsch Green, Michal, Iris Safray and Moshe Agami Pub. Date 1985 2001 Jan-06 1978 2002 1998 Jan-99 Jun-00 Dec-98 Dec-98 Feb-01 Feb-96 Type Paper Draft rule Report Report Publisher Van Nostrand Reinhold Co., New York, NY Water Science Technol- ogy. 2001 ;44(1 1 -1 2):295- 302. Environmental and Ex- perimental Botany; 55(1- 2): 97-1 09. Jan 2006. Academic Press, New York, NY Journal of Policy History, 2002 In: Proceedings of the Seventh International Symposia of the ASAE, Orlando, FL. Grassland Basin Drain- age Steering Committee Water Research: 34(8): 2183-2190. June 2000. Great Lakes Trading Network Great Lakes Trading Network Great Lakes Trading Network Great Lakes Trading Network Canadian journal of bota- ny = Journal canadien de botanique Feb 2001 . v. 79 (2) p. 170-178. Bioresource Technol- ogy, Volume 55, Issue 2, February 1996, Pages 157-162 Comments http://www.deq.state.mi.us/swq/trading/htm/GLTNrept2.htm Includes a summary of trading programs in the Appendices ------- CO CD # 242 243 244 245 246 247 248 249 250 251 Title Standard Methods for the Examination of Water and Wastewater A Potential Integrated Water Quality Strategy for the Mississippi River Basin and the Gulf of Mexico Awakening the Dead Zone: An Invest- ment for Agriculture, Water Quality, and Climate Change Suitability of Macrophytes for Nutri- ent Removal from Surface Flow Constructed Wetlands Receiving Secondary Treated Sewage Ef uent in Queensland, Australia The Role of Constructed Wetlands in Secondary Ef uent Treatment and Water Reuse in Subtropical and Arid Australia Nutrient Content of Wetland Plants in Constructed Wetlands Receiving Mu- nicipal Ef uent in Tropical Australia Constructed Wetlands in Queensland: Performance Efficiency and Nutrient Bioaccumulation Indigenous Sediment Microbial Activ- ity in Response to Nutrient Enrich- ment and Plant Growth Following a Controlled Oil Spill on a Freshwater Wetland Wetland Functions and Values: The State of Our Understanding Cost-effective Nutrient Reductions to Coupled Heterogeneous Marine Water Basins: An Application to the Baltic Sea AAA Author Greenberg, A.E., L.S. Clescer, and A.D. Eaton, eds. Greenhalgh S, and P. Faeth Greenhalgh, Suzie and Amanda Sauer Greenway, M. Greenway, Margaret Greenway, Margaret Greenway, Margaret and Anne Woolley Greer, C.W, N. Fortin, R. Roy, L.G. Whyte, and K. Lee Greeson, P.E., J.R. Clark and J.E. Clark (eds) Gren, I-M, and F. Wulff Pub. Date 1992 Nov-01 Feb-03 Dec-05 1997 1999 Apr-03 1979 Dec-04 Type paper Paper Paper Publisher 18th ed. American Public Health Association. Water Environment Federation. Scientific World Journal; 1 (2):976-83. Nov 22, 2001. WRI Issue Brief, World Resources Institute, Washington, DC. Water Sci Technol. 2003;48(2):121-8. Ecological Engineering; 25(5): 501 -509. Dec. 1, 2005. Water Science and Tech- nology, Volume 35, Issue 5, 1997, Pages 135-142 Ecological Engineering, Volume 12, Issues 1-2, January 1999, Pages 39-55 Bioremediation Journal; 7(1): 69-80. Apr 15, 2003. Amer. Water Resources Assoc., Minneapolis, MN Regional Environmental Change, ISSN: 1436- 3798 (Paper) 1436-378X (Online), Issue: Volume 4, Number 4, pg 159-168 Comments http://www.ncbi. nlm.nih.gov/entrez/query.fcgi?cmd=Retrieve&db =PubMed&list_uids=1 2805841 &dopt=Citation Background information for the National Forum on Synergies Between Water Quality Trading and Wetland Mitigation Banking - http://www2.eli.org/research/wqt_main.htm In this paper, the role of nutrient transports between marine ba- sins is investigated for cost-effective solutions to predetermined marine basin targets. The interdependent advective nutrient transports as well as retentions among the seven major marine basins of the Baltic Sea are described by input-output analysis. This is in contrast to prior economic studies of transbound- ary water pollution that include only direct transport between the basins. The analytical results show that the difference in impacts between transport specifications depends mainly on the openness of the basins, that is, their transports with other basins. The application on Baltic Sea shows significant differ- ences in costs and policy design between the nutrient transport specifications. The reason is that the Sea is characterized by long water and nutrient residence times, so relatively large parts of nutrients are transported among basins. ------- CO --J # 252 253 254 255 256 257 258 259 260 261 262 263 264 Title The Advantages of a Constructed Reed Bed Based Strategy for Small Sewage Treatment Works Advanced Nitrogen Removal by Rotat- ing Biological Contactors, Recycle and Constructed Wetlands Hydraulic characteristics of a sub- surface ow constructed wetland for winery ef uent treatment Nutrient Removal Processes in Fresh- water Submersed Macrophyte Systems High nitrogen : phosphorus ratios reduce nutrient retention and second- year growth of wetland sedges Variation in Nitrogen and Phosphorus Concentrations of Wetland Plants Techniques of Water-resources Investi- gations of the United States Geological Survey: Laboratory Theory and Meth- ods for Sediment Analysis Bank Review and Certification Require- ments: A Third Party Auditor Perspec- tive Nitrogen mineralization in marsh mead- ows in relation to soil organic matter content and watertable level Carbon Source Utilization Profiles as a Method to Identify Sources of Faecal Pollution in Water Where Did All the Markets Go? An Analysis of EPA's Emissions Trading Program Marketable Permits: Lessons for Theory and Practice Tar-Pamlico River Basin Program in North Carolina AAA Author Griffin, P. and C. Pamplin Griffin, P., P. Jennings and E. Bowman Grismer, M.E., M. Tausendschoen, and H.L. Shepherd Gumbricht, Thomas Gusewell, S. Gusewell, Sabine and Willem Koerselman Guy, H.P. Habicht, Hank Global Environment & Technology Founda- tion Hacin, J., J. Cop, and I. Mahne Hagedorn, C., J.B. Crozier, K.A. Mentz, A.M. Booth, A.K. Graves, N.J. Nelson, and R.B. Reneau, Jr. Hahn, R.W and G.L. Hester Hahn, R.W. and G.L. Hester Hall and Howett Pub. Date 1998 1999 Jul-Aug- 01 Mar-93 May-05 2002 May-05 Jul-11- 12-05 Oct-01 May-03 1989a 1989b 1994 Type Presentation Paper Journal Article Article Paper Publisher Water Science and Tech- nology, Volume 38, Issue 3, 1998, Pages 143-150 Water Science and Technology, Volume 40, Issues 4-5, 1999, Pages 383-390 Water Environment Fed- eration. July/Aug 2001 . v. 73 (4) p. 466-477. Ecological Engineering, Volume 2, Issue 1 , March 1 993, Pages 1 -30 New Phytologist. 2005 May, v. 166, no. 2, p. 537-550. Perspectives in Plant Ecology, Evolution and Systematics; 5(1): 37-61. 2002. U. S. Government Print- ing Office. Washington, DC PowerPoint Presentation Journal of Plant Nutri- tion and Soil Science = Zeitschrift fur P anzen- ernahrung und Boden- kunde. Oct 2001. v. 164 (5) p. 503-509. Journal of Applied Microbiology, Volume 94, Issue 5, Page 792-799, May 2003 Yale Journal on Regula- tion, 6, 109-153 Ecology Law Quarterly, 16, 361-406. Comments http://www3.interscience.wiley.com/cgi-bin/jtoc?ID=1 0008342 ------- CO oo # 265 266 267 268 269 270 271 272 273 274 275 276 Title Guide to Establishing a Point/Nonpoint Source Reduction Trading System for Basinwide Water Quality Management: The Tar-Pamlico River Basin Experi- ence. Background: The History and Status of Wetland Mitigation Banking and Water Quality Trading Background: The History and Status of Wetland Mitigation Banking and Water Quality Trading Control of Denitrification in a Septage- treating Artificial Wetland: The Dual Role of Particulate Organic Carbon Nitrogen Balance and Cycling in an Ecologically Engineered Septage Treat- ment System Creating Freshwater Wetlands Constructed Wetlands for Wastewater Treatment - Municipal, Industrial & Agricultural Design Principles for Wetland Treat- ment Systems The Potential For Water Quality Trad- ing To Help Implement The Cheat Watershed Acid Mine Drainage Total Maximum Daily Load In West Virginia Exploring Trading to Reduce Impacts from Acid Mine Drainage Methylmercury formation in a wetland mesocosm amended with sulfate Treatment at Different Depths and Vertical Mixing Within a 1-m Deep Hori- zontal Subsurface- ow Wetland AAA Author Hall, J. and C. Howett, Kilpatrick & Cody Hall, Lynda U.S. EPA Hall, Lynda U.S. EPA Hamersley, M. Robert and Brian L. Howes Hamersley, M. Rob- ert, Brian L. Howes, David S. White, Susan Johnke, Dale Young, Susan B. Peterson, and John M.Teal Hammer, D.A. Hammer, D.A. (ed) Hammer, D.E. and R.H. Kadlec Hansen, E., M. Christ, J. Fletcher, J.T. Petty, P. Ziemkiewicz, and R.S. Herd Hansen, Evan Harmon, S.M., J.K.King, J.B. Glad- den, G.T. Chandler, and L.A. Newman Headley, Thomas R., Eamon Herity, and Leigh Davison Pub. Date Jul-95 7/11- 12/2005 7/11- 12/2005 Oct-02 Oct-01 1992 1989 1983 Apr-04 Jul-03 Jan-04 Dec-05 Type Paper Presentation Presentation Report PowerPoint Publisher North Carolina Depart- ment of Health and Natural Resources, Division of Environmen- tal Management, Water Quality Section EPA-904-95-900. Audio Recording PowerPoint Presentation Water Research; 36(1 7): 4415-4427. Oct 2002. Ecological Engineering; 18(1): 61 -75. October 2001. Lewis Publishers, Inc. Boca Raton, FL. Lewis Publ., Chelsea, Ml EPA- 600/S2-83-026. EPA Municipal Environmental Research Lab, Cincin- nati, OH Friends of the Cheat http://www.cheat.org/ Environmental Science & Technology. 2004 Jan. 15, v. 38, no. 2, p. 650-656. Ecological Engineering; 25(5): 567-582. Dec. 2005. Comments Presented at National Forum on Synergies Between Water Quality Trading and Wetland Mitigation Banking - http://www2. eli.org/research/wqt_main.htm Presented at National Forum on Synergies Between Water Quality Trading and Wetland Mitigation Banking - http://www2. eli.org/research/wqtjnain.htm http://downstreamstrategies.com/CheatReport.zip 2003 National Forum on Water Quality Trading ------- CO CD # 277 278 279 280 281 282 283 284 285 Title The Role of Marsh Plants in the Transport of Nutrients as Shown by a Quantitative Model for the Freshwater Section of the Elbe Estuary Agricultural Resources and Environ- mental Indicators, 2003, Agriculture Handbook No. (AH722) Fate of Physical, Chemical, and Microbial Contaminants in Domestic Wastewater Following Treatment by Small Constructed Wetlands Treatment of Primary-Settled Urban Sewage in Pilot-Scale Vertical Flow Wetland Filters: Comparison of Four Emergent Macrophyte Species Over a 12 Month Period Nutrient Farming and Traditional Re- moval: An Economic Comparison Nitrogen Farming: Using Wetlands to Remove Nitrogen From Our Nation's Waters Stimulating Creation of a Point/Non- Point Source Trading System on a Watershed Scale Nitrogen Farming: Harvesting a Differ- ent Crop Water Quality Improvement by Four Experimental Wetlands AAA Author Heckman, Charles W Heimlich, Ralph Hench, Keith R., Gary K. Bissonnette, Alan J. Sexstone, Jerry G. Coleman, Keith Garbutt, and Jeffrey G. Skousen Heritage, Alan, Pino Pistillo, K. P. Sharma and I. R. Lantzke Hey, D., J. Kostel, A. Hurter, R. Kadlec Hey, Donald The Wetlands Initiative Hey, Donald The Wetlands Initiative Hey, Donald L. (Ph. D.) Hey, Donald L., Ann L. Kenimer and Kirk R. Barrett Pub. Date 1986 Feb-03 Feb-03 1995 2005 May-02 7/11- 12/2005 Mar-02 Dec-94 Type Report Report Presentation Publisher Aquatic Botany, Volume 25, 1986, Pages 139-151 Economic Research Service, U.S. Department of Agriculture. February, 2003. The Science of The Total Environment, Volume 301, Issues 1-3, 1 Janu- ary 2003, Pages 13-21 Water Science and Tech- nology, Volume 32, Issue 3, 1995, Pages 295-304 Water Environmental Research Foundation doc#03-WSO-6CO The Wetlands Initiative, Chicago, IL. Audio Recording Restoration Ecology: The Journal of the Society for Ecological Restoration, Vol. 10, No. 1, March 2002 Ecological Engineer- ing, Volume 3, Issue 4, December 1994, Pages 381 -397 Comments This report identifies trends in land, water, and biological resources and commercial input use, reports on the condi- tion of natural resources used in the agricultural sector, and describes and assesses public policies that affect conserva- tion and environmental quality in agriculture. Combining data and information, this report examines the complex connections among farming practices, conservation, and the environment, which are increasingly important components in U.S. agriculture and farm policy. http://www.ers.usda.gov/publications/arei/ah722/dbgen.htm http://www.wetlands-initiative.org/images/03WSM6COweb.pdf Summary Report of Four Workshops. Background information for the National Forum on Synergies Between Water Quality Trading and Wetland Mitigation Banking - http://www2.eli.org/re- search/wqtjnain.htm Introduces the concept of "nutrient farming" , which would create wetlands for their water quality improvement function in order to create nutrient trading credits. The paper describes a potential market for credits due to wetland losses and nitrogen fertilizer use in the Mississippi River Basin. A cost comparison between waste water plants and potential "nutrient farms" is provided. http://www. wetlands-initiative. org/images/pdfs_pubs/vol4n01 .pdf ------- # 286 287 288 289 290 291 292 293 294 Title Nutrient Farming: The Business of Environmental Management Nutrient Farming: The Business of Environmental Management - Execu- tive Summary Removal Efficiency of Three Cold-cli- mate Constructed Wetlands Treating Domestic Wastewater: Effects of Tem- perature, Seasons, Loading Rates and Input Concentrations The use of microbial tracers to monitor seasonal variations in ef uent retention in a constructed wetland Nitrogen removal from waste treatment pond or activated sludge plant ef uents with free-surface wetlands The Ecology and Management of Wet- lands (2 vols.) Differences in Social and Public Risk Perceptions and Con icting Impacts on Point/Nonpoint Trading Ratios Policy Objectives and Economic Incentives for Controlling Agricultural Sources of Nnonpoint Pollution Point-nonpoint Nutrient Trading in the Susquehanna River Basin AAA Author Hey, Donald L, Laura S. Urban, and Jill A. Kostel Hey, Donald L., Laura S. Urban, and Jill A. Kostel Hlum, Trond M. and Per Stlnacke Hodgson, C.J., J. Perkins, and J.C. Labadz Home, Alexander J. Hook, D.D. et. al. Horan, R.D. Horan, R.D. and M.O. Ribaudo Horan, R.D., J.S. Shortle, and D.G. Abler Pub. Date Apr-05 Apr-05 1999 Nov-04 1995 1988 Nov-01 1999 2002 Type Paper Summary Paper Journal Article Publisher Ecological Engineering: The Journal of Ecosys- tem Restoration, Vol. 24, No. 4 (April 5, 2005), pp 279-287. Water Science and Tech- nology, Volume 40, Issue 3, 1999, Pages 273-281 Water Research. 2004 Nov., v. 38, issue 18, p. 3833-3844. Water Science and Tech- nology, Volume 31 , Issue 12, 1995, Pages 341 -351 Croom Held, Ltd., London/Timber Press, Portland, OR American Journal of Agri- cultural Economics; 83(4): 934. Nov 2001 . Journal of the American Water Resources Asso- ciation, 35(5), 1023-1035. Water Resources Re- search, 38(5), 1-13. Comments Available online at www.sciencedirect.com. http://www. wetlands-initiative. org/images/pdfs_pubs/EcoEng- Proof.pdf http://www. wetlands-initiative. org/images/pdfs_pubs/nfarm. busi- ness-envimgmt.pdf http://www. wetlands-initiative. org/images/pdfs_pubs/harvesting. diff.crop.pdf Most research on point-nonpoint trading focuses on the choice of trading ratio (the rate point source controls trade for nonpoint controls), although the first-best ratio is jointly determined with the optimal number of permits. In practice, program managers often do not have control over the number of permits — only the trading ratio. The trading ratio in this case can only be second-best. We derive the second-best trading ratio and, using a numerical example of trading in the Susquehanna River Basin, we find the values are in line with current ratios, but for different reasons than those that are normally provided. http://www.blackwell-synergy.eom/links/doi/10.1 1 1 1/0002- 9092.00220?cookieSet=1 ------- # 295 296 297 298 299 300 301 302 303 304 Title Differences in Social and Public Risk Perceptions and Con icting Impacts on Point/Nonpoint Trading Ratios When Two Wrongs Make a Right: Sec- ond-Best Point/Nonpoint Trading Ratios Field Examination on Reed Growth, Harvest and Regeneration for Nutrient Removal Background: The History and Status of Wetland Mitigation Banking and Water Quality Trading Water Quality Study Feedstuffs Nitrogen Removal in Constructed Wetlands Employed to Treat Domestic Wastewater Effect of design parameters in hori- zontal ow constructed wetland on the behaviour of volatile fatty acids and volatile alkylsulfides Assessment of Environmental and Economic Benefits Associated with Streambank Stabilization and Phosphorus Retention Use of oating vegetation to remove nutrients from swine lagoon wastewater Nitrogen and Phosphorus Removal from Plant Nursery Runoff in Vegetated and Unvegetated Subsurface Flow Wetlands AAA Author Horan, Richard D. Horan, Richard D. and James S. Shortle Hosoi,Y.,Y. Kido, M. Miki and M. Sumida Hough, Palmer U.S. EPA Howie, Michael Huang, J., R.B. Reneau, Jr., and C. Hagedorn Huang, Y, L. Ortiz, P. Aguirre, J. Garcia, R. Mujeriego, J.M. Bayona Hubbard, Lisa C., David S. Biedenharn, and Steven L. Ashby Hubbard, R.K., G.J. Gascho, G.L. Newton Huett, D.O., S.G. Morris, G. Smith, and N. Hunt Pub. Date Nov-01 May-05 1998 7/11- 12/2005 Jun-04 Jun-00 May-05 May-03 Nov- Dec-04 Sept-05 Type Paper Presentation Publisher American Journal of Agri- cultural Economics Volume 83 Issue 4 Page 934 - November 2001 doi:10.1 11 1/0002- 9092.00220 American Journal of Agricultural Economics, Volume 87 Issue 2 Page 340 - Water Science and Tech- nology, Volume 38, Issue 1 , 1 998, Pages 351 -359 Audio Recording Water Research; 34(9): 2582-2588. June 15, 2000. Chemosphere. 2005 May, v. 59, issue 6, p. 769-777. ERDCWQTN-AM-14 Transactions of the ASAE. 2004 Nov-Dec, v. 47, no. 6, p. 1963-1972. Water Resources, 39(14): 3259-72. Sept 2005. Comments If stochastic nonpoint pollution loads create socially costly risk, then an economically optimal point/nonpoint trading ratio the rate point source controls trade for nonpoint controls is adjusted downward (a risk reward for nonpoint controls), encouraging more nonpoint controls. However, in actual trading programs, ratios are adjusted upward in response to nonpoint uncertain- ties (a risk premium for nonpoint controls). This contradiction is explained using a public choice model in which regulators focus on encouraging abatement instead of reducing damages. The result is a divergence of public and social risk perceptions, and a trading market that encourages economically suboptimal nonpoint controls. http://www.blackwell-synergy.com/links/doi/10.11 1 1/J.1467- 8276.2005.00726.x Presented at National Forum on Synergies Between Water Quality Trading and Wetland Mitigation Banking - http://www2. eli.org/research/wqt_main.htm http://www.findarticles.com/p/articles/mi_go1470/is 200406/ ai_n6534686 Techincal notes provide the results of a creek enhancement project in Mass. A summary of bank stabilization treatments and the conditions of the banks at Year 9 are provided. Erosion estimates are made using aerial photo interpretation. Total P and biologically available P are sampled in the bed, bank, and top of bank. Cost of bank stabilization and cost for total P removal are estimated, http://el.erdc.usace.army.mil/elpubs/pdf/ wqtnam14.pdf ------- # 305 306 307 308 309 310 311 312 313 314 315 Title Constructed Treatment Wetland System Description and Performance Denitrification potential and carbon quality of four aquatic plants in wetland microcosms State of the Art for Animal Wastewater Treatment in Constructed Wetlands Denitrification in a coastal plain riparian zone contiguous to a heavily loaded swine wastewater spray field Designing Stormwater Wetlands for Small Watersheds Nitrogen, phosphorus, and organic carbon removal in simulated wetland treatment systems Perchlorate is Not a Common Contami- nant of Fertilizers Nitrogen sources in Adirondack wetlands dominated by nitrogen-fixing shrubs. Modeling of nitrogen sequestration in coastal marsh soils. Open-air Treatment of Wastewater from Land-Based Marine Fish Farms in Ex- tensive and Intensive Systems: Current Technology and Future Perspectives Methane Emission Rates from an Om- brotrophic Mire Show Marked Season- ality which is Independent of Nitrogen Supply and Soil Temperature AAA Author Humboldt University Hume, N.P, M.S. Fleming, and A.J. Home Hunt, PG. and M.E. Poach Hunt, P.G., T.A. Ma- theny, and K.C. Stone Hunt, William F. and Barbara A. Doll Hunter, R.G., D.L. Combs, D.B. George Hunter, W J. Hurd, T.M., K. Gok- kaya, B.D. Kiernan, D.J. Raynal Hussein, A.H. and M.C. Rabenhorst Hussenot, Jerome, Sebastien Lefebvre and Nicolas Brossard Hutchin, PR., M.C. Press, J.A. Lee and T.W. Ashenden Pub. Date 2000 Sep- Oct-02 2001 Nov- Dec-04 Apr-00 Oct-01 Nov-01 Mar-05 Jan- Feb-02 Jul-Aug- 98 Sep-96 Type Paper Publisher Humboldt University Soil Science Society of America journal. Sept/Oct 2002. v. 66 (5) p. 1 706- 1712. Water Science Technolo- gy. 2001 ;44(1 1-1 2): 19-25. Journal of environmental quality. 2004 Nov-Dec, v. 33, no. 6, p. 2367-2374. North Carolina Coop- erative Extension, North Carolina State University Archives of environmen- tal contamination and toxicology. Oct 2001 . v. 41 (3) p. 274-281 . Journal of Agronomy and Crop Science, Volume 187, Issue 3, Page 203- 206, Nov 2001 Wetlands : the journal of the Society of the Wetland Scientists. 2005 Mar., v. 25, no. 1, p. 192- 199. Soil Science Society of America journal. Jan/Feb 2002. v. 66 (1 ) p. 324-330. Aquatic Living Resourc- es, Volume 1 1 , Issue 4, July-August 1998, Pages 297-304 Atmospheric Environ- ment, Volume 30, Issue 17, September 1996, Pages 301 1-301 5 Comments http://firehole.humboldt.edu/wetland/twdb.html (January 2006). http://www.neuse.ncsu.edu/SWwetlands.pdf The present study developed methods for improving the HPLC analysis of perchlorate and used these methods to survey 15 US fertilizers for perchlorate. The study found no perchlorate in any of the fertilizers investigated. This paper reports methane uxes measured in an area of om- brotrophic mire at the Migneint in North Wales when nitrogen, in the form of ammonium and/or nitrate, was applied to plots on the mire surface. These applications of nitrogen had no effect on the methane emission rates at any date, with the exception of the measurement from November 1994. No correlation was found between methane ux and either soil temperature or water table. http://www.sciencedirect.com/science? ob=ArticleURL& udi=B6VH3-3Y45YRC-R&_coverDate=09%2F30%2F1996& _alid=375242647&_rdoc=1 &_fmt=&_orig=search&_qd=1 &_ cdi=6055&_sort=d&view=c&_acct=C000050221 &_version=1 &_ urlVersion=0& userid=1 0&md5=0ada691 875c6f090e70e1 8e5b ae684fe ------- # 316 317 318 319 320 321 322 323 324 325 326 327 Title Technology Assessment of Wetlands for Municipal Wastewater Treatment Proceedings of Wetlands Downunder, An International Specialist Conference on Wetlands Systems in Water Pollu- tion Control Characterization of microbial communi- ties and composition in constructed dairy wetland wastewater ef uent 1st Annual Status Report: Lower Boise River Ef uent Trading Demonstration Project 2nd Annual Status Report: Lower Boise River Ef uent Trading Demonstration Project Surface Water: Lower Boise River Sub- basin Assessment and Total Maximum Daily Loads Surface Water: TMDL Implementation Plans Surface Water: Snake River - Hells Canyon Subbasin Assessment and Total Maximum Daily Loads Best Management Practice (BMP) List for the Lower Boise River Pollution Trading Program Pretreatment Market System Develop- ment Market-Based Trading of Categorical Pretreatment Limits Market-Based Approaches to Reduce Water Pollution: A Pre-Feasibility Study AAA Author Hyde, H.C., R.S. Ross and F.C. Dem- gen IAWQ/AWWA Ibekwe, A.M., C.M. Grieve, S.R. Lyon Idaho Department of Environmental Quality Idaho Department of Environmental Quality Idaho Department of Environmental Quality Idaho Department of Environmental Quality Idaho Department of Environmental Quality Idaho Soil Conserva- tion Commission Illinois Environmental Protection Agency Illinois Environmental Protection Agency Illinois Environmental Protection Agency, Bureau of Water and Environmental Policy Office Pub. Date 1984 1992 Sep-03 May-01 Jun-02 Ac- cessed Ac- cessed Ac- cessed May-02 Undated Aug-96 Nov-95 Type Report Report Web-site Web-site Web-site BMP List Paper Discussion Paper Paper Report Publisher EPA 600/2-84-1 54. EPA Municipal Environmental Research Lab., Cincin- nati, OH Int'l. Assoc. of Water Quality/Australian Water & Wastewater Assoc., Univ. of New South Wales, Sydney, Australia Applied and Environ- mental Microbiology. 2003 Sept., v. 69, no.9, p. 5060-5069. Idaho Department of Environmental Quality Idaho Department of Environmental Quality Idaho Department of Environmental Quality Idaho Department of Environmental Quality Idaho Department of Environmental Quality Idaho Soil Conservation Commission Illinois Environmental Protection Agency Illinois Environmental Protection Agency Illinois Environmental Protection Agency, Bureau of Water and En- vironmental Policy Office Comments http://www.deq. state, id. us/water/data_reports/surface_water/tm- dls/boise_river_lower/boise_river_lower.cfm http://www.deq. state, id. us/water/data_reports/surface_water/tm- dls/implementation_plans.cfm http://www.deq. state, id. us/water/data_reports/surface_water/tm- dls/snake_river_hells_canyon/snake_river_hells_canyon.cfm Selected nonpoint source BMPs used to offset a point source's discharge in the Lower Boise River are described in this paper. The procedure for generating credits, as well as other trading program requirements, are described as well. Evaluation and measurment requirements for BMP monitoring are discussed. This document will be updated periodically and new BMPs added to the list of those currently eligible for trading. ------- # 328 329 330 331 332 333 334 335 336 337 338 339 Title Discussion Paper: Conference on Com- pliance and Enforcement for Emissions Trading Schemes Periphyton tissue chemistry and nitro- genase activity in a nutrient impacted Everglades ecosystem Hydrochemistry and Hydrology of For- est Riparian Wetlands The Tar-Pamlico River Basin Nutrient Trading Program The Tar-Pamlico River Basin Nutrient Trading Program Phosphorus adsorption characteristics of a constructed wetland soil receiving dairy farm wastewater Design and Performance of Experimen- tal Constructed Wetlands Treating Coke Plant Ef uents Lessons Learned from the Neuse River Basin Education Program The Potential of Natural Ecosystem Self-purifying Measures for Controlling Nutrient Inputs Evaluation of vegetation management strategies for controlling mosquitoes in a southern California constructed wetland Removal of N, P, BODS, and coliform in pilot-scale constructed wetland systems Microcosm Wetlands for Wastewater Treatment with Different Hydraulic Loading Rates and Macrophytes AAA Author INECE-Environment Agency (England and Wales), Worcester College, Oxford, England Inglett, P.W., K.R. Reddy, and PV. Mc- Cormick Jacks, G. and A.C. Norrstrbm Jacobcon, E.M., et al. Jacobson, E.M., L.E. Danielson, and D.L. Hoag Jamieson, T.S., R. Gordon, A. Madani Jardinier, N., G. Blake, A. Mauchamp, and G. Merlin Jennings, Greg, PhD. and Deanna Osmond, PhD. (NC State University) Jenssen, Petter D., Trond Mashlum, Roger Roseth, Bent Braskerud, Nina Syversen, Arnor Nj0s and Tore Krogstad Jiannino, J.A. and W.E.Walton Jin, G., T Kelley, M. Freeman, M. Cal- lahan Jin, S.R.,Y.F. Lin.T.W Wang, and D.Y. Lee Pub. Date 3/16- 18/2004 2004 Jul-04 Apr-94 1994 Feb-02 2001 Sep-05 1994 Mar-04 2002 2002 Type Presentation Paper Presentation Publisher INECE-Environment Agency (England and Wales), Worcester Col- lege, Oxford, England Biogeochemsitry 67:213- 233 Forest Ecology and Management; 196(2-3): 187-197. Jul 26, 2004. Applied Resource Economics and Policy, Department of Agricultur- al & Resource Econom- ics, North Carolina State University. Applied Resource Economics and Policy Group, Department of Agricultural and Resource Economics Canadian Journal of Soil Science. Feb 2002. v. 82 (1) p. 97-104. Water Science Technol- ogy. 2001 ;44(1 1-12): 485-91 . 13th National Nonpoint Source Monitoring Workshop Marine Pollution Bulletin, Volume 29, Issues 6-1 2, 1 994, Pages 420-425 Journal of the American Mosquito Control Asso- ciation. 2004 Mar., v. 20, no. 1, p. 18-26. International Journal of Phytoremediation. 2002. v. 4 (2) p. 127-141. Journal of Environmental Quality. 2002 Mar- Apr;31(2):690-6. Comments http://www.bae.ncsu.edu/program/extension/arep/tarpam.html http://www.bae. ncsu.edu/programs/extension/wqg/nmp_conf/ presentations.html ------- # 340 341 342 343 344 345 346 Title Nutrient Removal from Polluted River Water by Using Constructed Wetlands Methane emissions from a constructed wetland treating wastewater-seasonal and spatial distribution and depen- dence on edaphic factors Metamodelling Phosphorus Best Man- agement Practices for Policy Use: A Frontier Approach Watershed Nutrient Trading Under Asymmetric Information Reducing Hypoxia in Long Island Sound: The Connecticut Nitrogen Exchange Sediment and nutrient retention by freshwater wetlands: effects on surface water quality The cumulative effect of wetlands on stream water quality and quantity: a landscape approach AAA Author Jing, S.R., Y.F. Lin, D.Y. Lee, and T.W.' Wang Johansson, A.E., A.M. Gustavsson, M.G. Oquist, B.H. Svensson Johansson, R., PH. Gowda, D.J. Mulla, and B.J. Dalzell Johansson, R.C. Johnson, Gary Johnston, C.A. Johnston, C.A., N.E. Detenbeck, and G.J. Niemi Pub. Date Jan-01 Nov-04 2004 2002 Jul-03 1991 1990 Type Paper Paper PowerPoint Publisher Bioresources Technology. 2001Jan;76(2):131-5. Water Research. 2004 Nov., v. 38, issue 18, p. 3960-3970. Agricultural Economics, 2004 - ideas.repec.org Agricultural and Resource Economics Review, 2002. Critical Review in Environmental Control 12:491-565 Biogeochemistry 10:105- 141 Comments In this paper the authors discuss the results of a study to deter- mine the ux of methane from a constructed wetland over two growth seasons on a pilot scale wetland constructed to reduce nutrient levels in secondary treated wastewater. The emissions for the spring to autumn period averaged 141 mg CH4 m 2 d 1 (S.D.=187), ranging from consumption of 375 mg CH4 m 2 d 1 to emissions of 1739 mg CH4 m 2d 1 . The spatial and temporal variations were large, but could be accounted for by measured environmental factors. Among these factors, sedi- ment and water temperatures were significant in all cases and independent of the scale of analysis (r2 up to 0.88). http://www.sciencedirect.com/science? ob=ArticleURL& udi=B6V73-4D5JSHK-2&_coverDate=1 1 %2F01 %2F2004& _alid=375244849&_rdoc=1 &_fmt=&_orig=search&_qd=1 &_ cdi=5831 &_sort=d&view=c&_acct=C000050221 &_version=1 &_ urlVersion=0& userid=1 0&md5=e5a42ee72c1 Of538baOcfa882f 81 5c75 This article presents a modelling system for synthesising het- erogeneous productivity and nutrient loading potentials inherent in agricultural cropland for policy use. Phosphorus abatement cost functions for cropland farmers in a southeastern Minnesota watershed are metamodelled using frontier analysis. These functions are used to evaluate policies aimed at reducing non- point phosphorus discharges into the Minnesota River. Results indicate an efficiently targeted policy to reduce phosphorus discharge by 40% would cost US$ $167,700 or $844 per farm. This article presents a modelling system for synthesising het- erogeneous productivity and nutrient loading potentials inherent in agricultural cropland for policy use. Phosphorus abatement cost functions for cropland farmers in a southeastern Minnesota watershed are metamodelled using frontier analysis. These functions are used to evaluate policies aimed at reducing non- point phosphorus discharges into the Minnesota River. Results indicate an efficiently targeted policy to reduce phosphorus discharge by 40% would cost US$ $167,700 or $844 per farm. 2003 National Forum on Water Quality Trading ------- # 347 348 349 350 351 352 353 354 355 356 357 358 359 Title Nutrient dynamics in relation to geo- morphology of riverine wetlands Establishing a Framework for Nutrient Trading in Maryland - A Utility Perspec- tive Trading Opportunities and Challenges for the Wastewater Management Com- munity Legal and Financial Liability - Issues in Mitigation Banking and Water Qual- ity Trading: A Water Quality Trading Perspective Legal and Financial Liability - Issues in Mitigation Banking and Water Qual- ity Trading: A Water Quality Trading Perspective Nutrient and Sediment Removal by a Restored Wetland Receiving Agricul- tural Runoff Nutrient Chemistry and Hydrology of Interstitial Water in Brackish Tidal Marshes of Chesapeake Bay Nutrient Flux in the Rhode River: Tidal Exchange of Nutrients by Brackish Marshes The Dead Zones: Oxygen-Starved Coastal Waters Domestic Wastewater Treatment through Constructed Wetland in India The inadequacy of first-order treatment wetland models Phosphorus Removal in Emergent Free Surface Wetlands Wetlands and Water Quality IN: Wet- lands Functions and Values; The State of Our Understanding AAA Author Johnston, C.A., S.D. Bridgham, and J.P Schubauer-Berigan Jones, C. and E. Bacon Jones, Cyrus Jones, Cyrus Washington Subur- ban Sanitary Com- mission Jones, Cyrus Washington Subur- ban Sanitary Com- mission Jordan, T.E., D.F. Whigham, K.H. Hofmockel, and M.A. Pittek Jordan, Thomas E. and David L. Correll Jordan, Thomas E., David L. Correll and Dennis F. Whigham Joyce, S. Juwarkar, A.S., B. Oke, A. Juwarkar and S. M. Patnaik Kadlec, R. H. Kadlec, R.H. Kadlec, R.H. and J.A. Kadlec Pub. Date Mar- Apr-01 May-98 Jul-03 7/11- 12/2005 7/11- 12/2005 2003 Jul-85 Dec-83 Mar-00 1995 2000 2005 1979 Type Presentation PowerPoint Presentation Presentation Paper Publisher Soil Science Society of America journal. Mar/Apr 2001 . v. 65 (2) p. 557-577. Watershed '98 - Moving from Theory to Implemen- tation. Denver, CO. May 5, 1998. Audio Recording PowerPoint Presentation Journal of Environmental Quality. 2003 Jul- Aug;32(4):1 534-47. Estuarine, Coastal and Shelf Science, Volume 21, Issue 1, July 1985, Pages 45-55 Estuarine, Coastal and Shelf Science, Volume 17, Issue 6, December 1 983, Pages 651 -667 Environ Health Perspect. 2000 Mar;108(3):A1 20-5. PMID: 10706539 Water Science and Tech- nology, Volume 32, Issue 3, 1995, Pages 291 -294 Ecological Engineering 15:105-119. Journal of Environmental Science and Health Part A (2005) 40(6-7): 1293- 306. 2005. American Water Resourc- es Assoc., Bethesda, MD Comments 2003 National Forum on Water Quality Trading http://www2.eli.org/research/wqt_forum.htm Presented at National Forum on Synergies Between Water Quality Trading and Wetland Mitigation Banking. Describes some of the challenges involved with implementing waste water trading programs in light of the Clean Water Act. http://www2.eli. org/research/wqt_forum.htm ------- # 360 361 362 363 364 365 366 367 368 369 370 Title Temperature Effects in Treatment Wetlands Wetlands Treatment Database Deterministic and Stochastic Aspects of Constructed Wetland Performance and Design Overview: Surface Flow Constructed Wetlands Modeling Nutrient Behavior in Wetlands Treatment Wetlands Nitrogen Spiraling in Subsurface- ow Constructed Wetlands: Implications for Treatment Response Integrated Natural Systems for Treating Potato Processing Wastewater Wetland Use and Impact on Lake Victoria, Kenya Region Nitrogen Removal from a Riverine Wetland: A Field Survey and Simulation Study of Phragmites japonica Wastewater Treatment by Tropical Plants in Vertical- ow Constructed Wetlands AAA Author Kadlec, R.H. and K.R. Reddy Kadlec, R.H., R.L. Knight., S.C. Reed, and R.W Rubles (eds.). Kadlec, Robert H. Kadlec, Robert H. Kadlec, Robert H. and David E. Ham- mer Kadlec, Robert H. and Robert L. Knight Kadlec, Robert H., Chris C. Tanner, Vera M. Hally, and Max M. Gibbs Kadlec, Robert H., Peter S. Burgoon and Michael E. Hender- son Kairu, J. K. Kang, Sinkyu, Kang, Hojeong Walton, Dongwook Ko, and Dowon Lee Kantawanichkul, S.,S. Pilaila, W Tanapiyawanich, W. Tikampornpittaya, and S. Kamkrua Pub. Date Sep-Oct 2001 1994 1997 1995 Jan-88 1996 Nov-05 1997 Jul-01 Mar-02 1999 Type Paper Publisher Water Environment Research. 2001 Sep- Oct;73(5):543-57. EPA/600/C-94/200. Office of Research and Devel- opment, Cincinnati, OH. Water Science and Tech- nology, Volume 35, Issue 5, 1997, Pages 149-156 Water Science and Tech- nology, Volume 32, Issue 3, 1995, Pages 1-12 Ecological Modelling, Vol- ume 40, Issue 1 , January 1 988, Pages 37-66 CRC Press 893 pgs. Ecological Engineering; 25(4): 365-381 . Nov 2005. Water Science and Tech- nology, Volume 35, Issue 5, 1997, Pages 263-270 Lakes and Reservoirs: Research and Manage- ment, Volume 6, Issue 2, Page 117-125, Jul 2001 Ecological Engineering; 18(4): 467-475. March 1, 2002. Water Science and Tech- nology, Volume 40, Issue 3, 1999, Pages 173-178 Comments This article reports on a study of wetland use and impact on Lake Victoria conducted in March and April 1995. A field survey and interviews were used to study wetland use and their impact on Lake Victoria. This article identifies management issues and establishes a broad vision for the future. It also addresses the need to balance the competing demands for wetland use and development with the need to conserve a healthy and func- tional Lake Victoria. Investment proposals are made that would minimize destruction of the wetlands and negative impacts on the lake. General recommendations for planning and manage- ment issues, as well as suggestions of specific research needs that should form the basis of action and investment initiatives, are given. ------- # 371 372 373 374 375 376 377 378 Title Pollutant Sources Investigation and Remedial Strategies Development for the Kaoping River Basin, Taiwan Water Quality Management in the Kaoping River Watershed, Taiwan An Information-theoretical Analysis of Budget-constrained Nonpoint Source Pollution Control Constructed wetland technology and mosquito populations in Arizona Multi-Species Plant Systems for Wastewater Quality Improvements and Habitat Enhancement Management of Dairy Waste in the Sonoran Desert Using Constructed Wetland Technology Performance of a sub-surface ow con- structed wetland in polishing pre-treat- ed wastewater-a tropical case study The Dillon Bubble AAA Author Kao, C.M., F.C. Wu, K F Chen T F Lin YE Yen and PC Chiang Kao, C.M., K.F. Chen, YL. Liao, and C.W Chen Kaplan, J.D., R.E. Howitt YH. Farzin Karpiscak, M.M., K.J. Kingsley, R.D. Wass, FA. Amalfi, J. Friel, A.M. Stewart, J. Ta- bor, and J. Zauderer Karpiscak, Martin M., Charles P. Gerba, Pa- mela M.Watt, Kennith E. Foster and Jeanne A. Falabi Karpiscak, Martin M., Robert J. Freitas, Charles P. Gerba, Luis R. Sanchez and Eylon Shamir Kaseva, M.E. Kashmaniam et. al. Pub. Date 2003 2003 2003 Mar-04 1996 1999 Feb-04 1986 Type Paper Paper Paper Publisher Water Sci Technol. 2003;48(7):97-103. PMID: 1 4653639 Water Sci Technol. 2003;47(7-8):209-16. PMID: 12793682 Journal of Environmental Economics and Manage- ment, 2003 Journal of Arid Environ- ments. 2004 Mar., v. 56, no. 4, p. 681-707. Water Science and Tech- nology, Volume 33, Issues 10-11, 1996, Pages 231 -236 Water Science and Tech- nology, Volume 40, Issue 3, 1999, Pages 57-65 Water Research. 2004 Feb., v. 38, no. 3, p. 681- 687. Comments This paper analyzes budget-constrained, nonpoint source (NPS) pollution control with costly information acquisition and learning, applied to the sediment load management program for Redwood Creek, which ows through Redwood National Park in northwestern California. We simulate dynamic bud- get-constrained management with information acquisition and learning, and compare the results with those from the current policy. The analysis shows that when information acquisition in- creases overall abatement effectiveness the fiscally constrained manager can reallocate resources from abatement effort to information acquisition, resulting in lower sediment generation than would otherwise exist. In addition, with learning about pol- lution generation occurring over time the manager may switch from a high intensity of data collection to a lower intensity to further reduce sediment generation. Also, as sediment control proceeds at upstream sources, at some time in the future the marginal reduction in sediment for a given expenditure will equalize across the sources such that uniform abatement effort may occur across all sources. ------- # 379 380 381 382 383 384 385 Title Incentive Analysis for Clean Water Act Reauthorization: Point Source/Nonpoint Source Trading for Nutrient Discharge Reductions-Cherry Creek Contract-Based Trading Programs in Environmental Regulation Nitrogen and Bacterial Removal in Constructed Wetlands Treating Domes- tic Waste Water Adult Chloropidae (Diptera) associated with constructed treatment wetlands modified by three vegetation manage- ment techniques Economic and Environmental Benefits of Nutrient Trading Programs In situ ground water denitrification in stratified, permeable soils underlying riparian wetlands Indicators of nitrate in wetland surface and soil-waters: interactions of vegeta- tion and environmental factors AAA Author Kashmanian, Richard Apogee Research, temporary Economic Keffala, C. and A. Ghrabi Keiper, J.B., M. Stanczak, WE. Walton Keiser, M.S. and Feng Fang Kellogg, D.Q., A.J.Gold, P.M. Groff- man, K. Addy, M.H. Stolt, G. Blazejewski Kennedy, M.P. and Pub. Date 1992 Apr-04 Nov-05 Sep- Oct-03 undated Mar- Apr-05 Aug-04 Type Paper Draft paper Paper Publisher (Besthesda, MD: Apogee Research, Inc., 1992), 24-26. Office of Policy, Planning, and Evalua- tion, U.S. Environmental Protection Agency http://yosemite.epa. http://aae.agecon. uga.edu/~akeeler/ Keeler_home/ Working%20papers/Con- tract-based%20trading. pdf Desalination; 185(1-3): 383-389. Nov 2005. Entomological News. 2003 Sept-Oct, v. 1 1 4, no. 4, p. 205-210. Environmental Trading Network and Keiser As- sociates Journal of environmental quality. 2005 Mar-Apr, v. 34, no. 2, p. 524-533. Hydrology and earth sys- tem sciences. 2004 Aug., v. 8, no. 4, p. 663-672. Comments This report examines ef uent trading as one option to achieve water quality objectives at least cost. While several options are discussed, the paper focuses principally on trading schemes in which regulated point sources are allowed to avoid upgrading their pollution control technology to meet water quality-based ef uent limits if they pay for equivalent (or greater) reductions in nonpoint source pollution within their watersheds. The report identifies several conditions that appear necessary for an efficient and effective point/nonpoint source trading program. Reviews of three trading experiences to date-Cherry Creek and Dillon Reservoir in Colorado, Tar-Pimlico River Basin in North Carolina-indicate that the absence of one or more of these necessary conditions result in the delay of trading or will necessitate a shift in focus of the trading program to facilitate continued pollutant load reductions. The report also discusses the economic benefits and costs, the nationwide potential, and Clean Water Act implications of ef uent trading. http://www.envtn.org/docs/Japanjiaper.pdf http://www.copernicus.org/EGU/hess/published papers.html ------- en o # 386 387 388 389 390 391 392 393 394 395 396 Title Trend Analysis of Nutrient Loading in the Tar-Pamlico Basin Treatment of Domestic and Agricultural Wastewater by Reed Bed Systems Market-based Approaches and Trading- Conditions and Examples Nine Case Studies, Appendices A-l Cross Cutting Analysis of Trading Pro- grams: Case Studies in Air, Water and Wetland Mitigation Trading Systems Abundance of Alnus incana ssp. rugosa in Adirondack Mountain Shrub Wet- lands and Its In uence on Inorganic Nitrogen Ecosystem Multiple Markets Preliminary Economic Analysis of Wa- ter Quality Trading Opportunities in the Great Miami River Watershed, Ohio ETN Paper and Presentation Pre- sented at the Workshop on Urban Renaissance and Watershed Manage- ment, Japan Water Quality Trading in the United States: An Overview Economic and Environmental Benefits of Water Quality Trading- An Overview of U.S. Trading Programs AAA Author Kennedy, Todd Kern, Jurgen and Christine Idler Kerns, W and K. Stephenson Kerr, Robert L, Ste- ven J.Anderson, and John Jaksch Kerr, Robert L., Steven J.Anderson, John Jaksch (Kerr, Greiner, Anderson & April and Battelle Pacific Northwest Division) Kiernan, B.D., T.M. Hurd, and D. J. Raynal Kieser & Associates Kieser & Associates Kieser, Mark and "An- drew" Feng Fang Kieser, Mark S. and "Andrew" Feng Fang Kieser, Mark S. and "Andrew" Feng Fang Pub. Date May-23- 03 Jan-99 Jun-00 Jun-00 Jun-03 Apr-04 Jul-04 Feb-04 Ac- cessed Type Memo Paper Case Study Draft white paper Report Paper Web-site Publisher Memorandum to Michelle Woolfolf, NC Division of Water Quality Planning Branch Ecological Engineering, Volume 12, Issues 1-2, January 1999, Pages 13-25 Kerr, Greiner, Anderson & April, and Battelle Pacific Northwest Division Learning from Innova- tions in Environmental Protection, Research Paper Number 6 Environmental Pollution; 123(3): 347-354. June 2003. Environmental Trading Network Kieser & Associates Kieser & Associates The Katoomba Group's Ecosystem Marketplace The Environmental Trad- ing Network and Kieser & Associates Comments This analysis evaluates the trends in nutrient loading in the Tar-Pamlico Basin from 1991 to 2002 using the Seasonal Ken- dall test, which tends to perform better than other parametric methods for data sets that are commonly non-normal, vary sea- sonally, and contain outliers and censored values. The results indicate significant, negative trends in ow-adjusted concentra- tions for both TP and TN. Over the selected study period of 1991-2002, the estimated decrease in TP and TN concentration over the 12 years are 0.046 mg/L and 0.203 mg/L, respectively. This represents a reduction of in TP and TN through 2002 of 33% and 18%, respectively, http://h2o.enr.state.nc.us/nps/ TrendGrimesland91 -02prn.pdf http://www.epa.gov/owowwtr1/watershed/Proceed/kerns.html http://www.em/tn. org/docs/EMM_WHITE_PAPERApri!04.pdf Prepared for the Miami Conservancy District, Dayton, Ohio http://ecosystemmarketplace.com/pages/article. news.php?component_id=3954&component_version_ id=5625&language_id=12 http://www.em/tn. org/docs/Japan_paper.pdf mkieser@kieser-associates.com ------- # 397 398 399 400 401 402 403 404 405 406 Title Point/non-point Source Water Quality Trading for Phosphorus in the Kalama- zoo River Watershed: A Demonstration Project The Challenges of Point/Non-Point Source Trading The Challenges of Point/Non-Point Source Trading Crunch Time for Water Quality Trading Will Nutrient Credit Trading Ever Work? An Assessment of Supply and Demand Problems and Institutional Obstacles Science, Technology, and the Changing Character of Public Policy in Nonpoint Source Pollution The Potential for Nitrification and Nitrate Uptake in the Rhizosphere of Wetland Plants: A Modelling Study Seasonal Fluctuations in the Mineral Nitrogen Content of an Undrained Wet- land Peat Soil Following Differing Rates of Fertiliser Nitrogen Application Constructed Treatment Wetland: A Study of Eight Plant Species Under Saline Conditions Nutrient dynamics of freshwater river- ine marshes and the role of emergent macrophytes AAA Author Kieser, Mark S. and David J. Batchelor King, Dennis Univer- sity of Maryland King, Dennis Univer- sity of Maryland King, Dennis M. and Peter J. Kuch King, Dennis M. and Peter J. Kuch King, J.L. and D.L. Corwin Kirk, G.J.D. and H.J. Kronzucker Kirkham, F.W and R.J.Wilkins Klomjeck, P. and S. Nitisoravut Klopatek, J. M. Pub. Date 1998 7/11- 12/2005 7/11- 12/2005 2005 2003 Sep-05 Jan-15- 93 Feb-05 1978 Type Presentation Presentation Paper Paper Publisher published in the pro- ceedings for the Water Environment Research Foundation Conference Workshop #1 1 5: Water- shed-based ef uent trad- ing demonstration proj- ects: Results achieved and lessons learned. Audio Recording PowerPoint Presentation Choices. 20(1): 71 -75. Environmental Law Reporter, 33 ELR 10352. Environmental Law Insti- tute, Washington, DC. pg 309-322. In D.L. Cor- win, K. League, and T.R. Ellsworth (ed.). Assess- ment of non-point source pollution in the vadose zone. AGU. Washington, D.C. Annals of botany. 2005 Sep., v. 96, no. 4, p. 639- 646. Agriculture, Ecosystems & Environment, Volume 43, Issue 1,15 January 1993, Pages 11-29 Chemosphere, 58(5): 583-93. Feb 2005 In: Freshwater Wetlands: Ecological Processes and Management Potential. R.E. Good, D.F. Whigham, and R.L. Simpson, eds. Academic Press, New York, NY. Comments Presented at National Forum on Synergies Between Water Quality Trading and Wetland Mitigation Banking - http://www2. eli.org/research/wqtjnain.htm Background information for the National Forum on Synergies Between Water Quality Trading and Wetland Mitigation Banking - http://www2.eli.org/research/wqt_main.htm Background information for the National Forum on Synergies Between Water Quality Trading and Wetland Mitigation Banking - http://www2.eli.org/research/wqt_main.htm http://aob.oupjournals.org/ ------- # 407 408 409 410 411 412 413 414 415 416 417 Title Ancillary benefits and potential problems with the use of wetlands for nonpoint source pollution control Constructed Wetlands for Livestock Wastewater Management CREAMS: A Field Scale Model for Chemicals, Runoff and Erosion from Agricultural Management Systems Personal Communication with Scott Koberg, Idaho Association of Soil Con- servation Districts Nutrient, Metal, and Pesticide Removal During Storm and Nonstorm Events by a Constructed Wetland on an Urban Golf Course Role of Plant Uptake on Nitrogen Removal in Constructed Wetlands Located in the Tropics Comparison of the Treatment Perfor- mances of Blast Furnace Slag-based and Gravel-based Vertical Flow Wet- lands Operated Identically for Domestic Wastewater Treatment in Turkey Effectiveness of constructed wetlands in reducing nitrogen and phosphorus export from agricultural tile drainage Assessing Denitrification Rate Limit- ing Factors in a Constructed Wetland Receiving Landfill Leachate The Role of Tradable Permits in Water Pollution Control Analysis of Phosphorus Control Costs and Effectiveness for Point and Non- point Sources in the Fox-Wolf Basin AAA Author Knight, R.L. Knight, Robert L, Victor W E. Payne, Jr., Robert E. Borer, Ronald A. Clarke, Jr., and John H. Pries Knisel, WG. Koberg, Scott Kohler, E.A., V.L Poole, Z.J. Reicher, and R.F. Turco Koottatep, Tham- marat and Chongrak Polprasert Korkusuz, E. Asuman, Meryem Bekliolu and Goksel N. Demirer Kovacic, D.A., M.B. David, L.E. Gentry, K.M. Starks, and R.A. Cooke Kozub, D.D. and S.K. Liehr Kraemer, R.A., E. Kampa, and E. Interwies Kramer, J., Resource Strategies, Inc. Pub. Date 1992 Jun-00 1980 31-Jan- 06 Dec-04 1997 Feb-05 Jul-Aug- 00 1999 Undated 2003+ Jul-99 Type Report Paper Publisher Ecological Engineering 1:97-113. Ecological Engineering; 15(1 -2): 41 -55. June 2000. USDA Conservation Re- search Rept. No. 26. Ecological Engineering; 23(4-5): 285-298. Dec 30, 2004. Water Science and Tech- nology, Volume 36, Issue 12, 1997, Pages 1-8 Ecological Engineering; 24(3): 185-198. Feb 20, 2005. Journal of environmental quality. July/Aug 2000. v. 29 (4) p. 1 262-1 274. Water Science and Tech- nology, Volume 40, Issue 3, 1999, Pages 75-82 Ecologic, Institute for In- ternational and European Environmental Policy Fox-Wolf Basin 2000 Comments This paper explores the use of market-based incentives such as tradable permits to improve water quality in Chile. http://www. iadb.org/sds/inwap/publications/Tradable_Permits_in_Water_Pol- lution_Control.pdf ------- en CO # 418 419 420 421 422 423 424 425 426 427 Title Analysis of Phosphorus Control Costs and Effectiveness for Point and Non- point Sources in the Fox-Wolf Basin Using a wetland bioreactor to remedi- ate ground water contaminated with nitrate (mg/L) and perchlorate (m/L) Cost-Effective NOx Control in the East- ern United States Annual Cycle of Nitrogen Removal by a Pilot-scale Subsurface Horizontal Flow in a Constructed Wetland Under Moderate Climate Wetland Creation and Restoration: The Status of the Science A Comparative Study of Cyperus papyrus and Miscanthidium violaceum- based Constructed Wetlands for Waste- water Treatment in a Tropical Climate Two Strategies for Advanced Nitrogen Elimination in Vertical Flow Constructed Wetlands Application of Constructed Wetlands for Wastewater Treatment in Hungary Applying Lessons Learned from Wetlands Mitigation Banking to Water Quality Trading Potential Nitrate Removal from a River Diversion into a Mississippi Delta For- ested Wetland AAA Author Kramer, Joseph M. Resource Strategies, Inc. Krauter, PW Krupnick, A., V. Mc- Connell, M. Cannon, T Stoessell, and M. Batz Kuschk, P., A. Wieliner, U. Kappel- meyer, E. Weilibrodt, M. Kastner, and U. Stottmeister Kusler, J.A. and M.E. Kentula (eds) Kyambadde, Joseph, Frank Kansiime, Lena Gumaelius, and Gun- nel Dalhammar Laber, Johannes, Reinhard Per er and Raimund Haberl Lakatos, Gyula, Magdolna K. Kiss, Marianna Kiss and Peter Juhasz Landry, Mark, Antje Siems, Gerald Stedge, and Leonard Shabman Lane, Robert R., Hassan S. Mashriqui, G. Paul Kemp, John W Day, Jason N. Day, and Anna Hamilton Pub. Date Jul-99 2001 2000 Oct-03 1990 Jan-04 1997 1997 Feb-05 Jul-03 Type Report Discussion Paper White paper Publisher Fox-Wolf Basin 2000 International Journal of Phytoremediation.2001. v. 3(4) p. 415-433. Resources for the Future Water Research; 37(1 7): 4236-4242. Oct 2003. Island Press, Washington, DC Water Research; 38(2): 475-485. Jan 2004. Water Science and Tech- nology, Volume 35, Issue 5, 1997, Pages 71 -77 Water Science and Tech- nology, Volume 35, Issue 5, 1997, Pages 331 -336 Abt Associates Inc., Bethesda, MD. Ecological Engineering; 20(3): 237-249. July 2003. Comments A report of a study of the P control costs for non-point (agricul- tural operations) and point source (municipal treatment plants) in the Fox-Wolf Basin, Wisconsin. Cost estimates made by MTP managers. For non-point source, current P loads are estimated, BMPs are described, and cost estimates are made for P load reductions. Trading zones recommended because of non-uniform mixing of P in water bodies. Favorable conditions for successful trading program include: wide variation in point source control costs, large number of point sources, availabil- ity of low cost non-point source reductions. http://www.rs-inc. com/FWB2K_Final_Report.pdf Background information for the National Forum on Synergies Between Water Quality Trading and Wetland Mitigation Banking - http://www2.eli.org/research/wqt_main.htm ------- # 428 429 430 431 432 433 434 435 436 437 438 Title Changes in Stoichiometric Si, N and P Ratios of Mississippi River Water Diverted Through Coastal Wetlands to the Gulf of Mexico The 1994 Experimental Opening of the Bonnet Carre Spillway to Divert Missis- sippi River Water into Lake Pontchar- train, Louisiana The Role of Plant Uptake on the Re- moval of Organic Matter and Nutrients in Subsurface Flow Constructed Wet- lands: A Simulation Study Stormwater Quantity and Quality in a Multiple Pond-wetland System: Flem- ingsbergsviken Case Study Quantification of Biofilms in a Sub-Sur- face Flow Wetland and Their Role in Nutrient Removal An Introduction to Water Quality Trad- ing Surface Water Nutrient Concentrations and Litter Decomposition Rates in Wetlands Impacted by Agriculture and Mining Activities Performance of Subsurface Flow Constructed Wetland Taking Pretreated Swine Ef uent Under Heavy Loads Effects of marshes on water quality Chapter 5: The Pesticide Submodel Basis for the Protection and Manage- ment of Tropical Lakes AAA Author Lane, Robert R., John W Day, Dubravko Justic, Enrique Reyes, Brian Marx, Jason N. Day and Emily Hyfield Lane, Robert R., John W, Day, Jr., G. Paul Kemp, and Den- nis K. Demcheck Langergraber, G. Larm, Thomas Larsen, E. and M. Greenway Leatherman, J., C. Smith, and J. Peter- son Lee, A.A. and PA. Bukaveckas Lee, C.Y., C.C. Lee, F.Y. Lee, S.K. Tseng, and C.J. Liao Lee, G.F., E. Bentley, and R. Amundson Leonard, R.A. and R.D. Wauchope Lewis, William M. Jr Pub. Date May-04 Aug-01 2005 Jun-00 2004 Aug-04 Dec-02 Apr-04 1975 1980 Mar-00 Type Paper Paper Publisher Estuarine, Coastal and Shelf Science; 60(1): 1- 1 0. May 2004. Ecological Engineering; 17(4): 41 1-422. August 2001. Water Science and Tech- nology, 51 (9): 21 3-23. 2005 Ecological Engineering; 15(1 -2): 57-75. June 2000. Water Science Technol- ogy. 2004; 49(11-12): 115-22. Department of Agricul- tural Economics Aquatic Botany; 74(4): 273-285. Dec 2002. Bioresources Technology. 2004 Apr;92(2): 173-9. In: Coupling of Land and Water Systems. A.D. Hasler, Ed., Springer-Ver- lag, New York, NY. p. 88-112. In WG. Knisel (ed.). CREAMS: A field- scale model for chemi- cals, runoff and erosion from agricultural manage- ment systems. USDA Conservation Research Rept. No. 26. Lakes and Reservoirs: Research and Manage- ment, Volume 5, Issue 1, Page 35-48, Mar 2000 Comments Prepared for Agricultural Economies' "Risk and Profit" Confer- ence http://www.agmanager.info/events/risk_profit/2004/Leatherman- Peterson.pdf ------- en en # 439 440 441 442 443 444 445 446 447 448 Title Ocean Pollution from Land-based Sources: East China Sea, China Spatial Modeling on the Nutrient Reten- tion of an Estuary Wetland Roles of Substrate Microorganisms and Urease Activities in Wastewater Purification in a Constructed Wetland System Comparison of Nutrient Removal Ability Between Cyperus alternifolius and Vetiveria zizanioides in Constructed Wetlands Phosphorus removal in a wetland con- structed on former arable land Temporal and Seasonal Changes in Greenhouse Gas Emissions from a Constructed Wetland Purifying Peat Mining Runoff Waters The Effect of Heavy Metals on Nitrogen and Oxygen Demand Removal in Con- structed Wetlands Oxygen Demand, Nitrogen and Copper Removal by Free-water-surface and Subsurface- ow Constructed Wetlands Under Tropical Conditions Removal of solids and oxygen demand from aquaculture wastewater with a constructed wetland system in the tart- up phase Performance of a constructed wetland treating intensive shrimp aquaculture wastewater under high hydraulic load- ing rate AAA Author Li, D. and D. Daler Li, Xiuzhen, Duning Xiao, Rob H. Jong- man, W Bert Harms, and Arnold K. Bregt Liang, Wei, Zhen-bin Wu, Shui-ping Cheng, Qiao-hong Zhou and Hong-ying Hu Liao, X., S. Luo.Y. Wu, and Z.Wang Liikanen, A., M. Puustinen, J. Koski- aho, T Vaisanen, P. Martikainen, and H. Hartikainen Liikanen, Anu, Jari T. Huttunen, Satu Maaria Karjalainen, Kaisa Heikkinen, Tero S. Vaisanen, Hannu Nykanen, and Pertti J. Martikainen Lim, P.E., M.G. Tay, K.Y. Mak, and N. Mohamed Lim, P.E., T.F.Wong, and D.V. Lim Lin.Y.F, S.R. Jing, D.Y. Lee, T.W. Wang Lin.Y.F, S.R. Jing, D.Y. Lee, Y.F.Chang, YM. Chen, K.C. Shih Pub. Date Feb-04 Sep-03 Dec-03 Jan-05 May- Jun-04 Dec-05 Jan-03 May-01 Mar- Apr-04 Apr-05 Type Paper Publisher Ambio. 2004 Feb;33(1- 2):1 07-13. PMID: 1 5083656 Ecological Modelling; 167(1 -2): 33-46. Sept 1, 2003. Ecological Engineering; 21 (2-3): 191 -195. Dec 1, 2003. YingYong Sheng Tai Xue Bao, 16(1): 156-60. Jan 2005. Journal of environmental quality. 2004 May-June, v. 33, no. 3, p. 1124-1132. Ecological Engineer- ing, In Press, Corrected Proof, Available online 15 December 2005 The Science of The Total Environment; 301(1-3): 13-21. Jan 1,2003. Environment Interna- tional; 26(5-6): 425-431 . May 2001 . Water Environment Fed- eration. Mar/Apr 2002. v. 74(2) p. 136-141. Environmental Pollution. 2005 Apr., v. 134, no. 3, p. 411-421. Comments This paper describes the role that steady water discharge from the Yangtze River has on alleviating impacts from pollution in the East China Sea and that large-scale water transfer and dam constructions in the Yangtze River basin will change this process. The main challenge to restoring ecosystem balance is to integrate socioeconomic and environmental decision making in order to promote sustainable development. ------- en CD # 449 450 451 452 453 454 455 456 457 Title The Potential Use of Constructed Wet- lands in a Recirculating Aquaculture System for Shrimp Culture Nutrient Removal from Aquaculture Wastewater Using a Constructed Wet- lands System Effects of Macrophytes and External Carbon Sources on Nitrate Removal from Groundwater in Constructed Wetlands Air/water Exchange of Mercury in the Everglades II: Measuring and Model- ing Evasion of Mercury from Surface Waters in the Everglades Nutrient Removal Project Stimulation of microbial sulphate reduc- tion in a constructed wetland: microbio- logical and geochemical analysis In uence of Harvesting on Biogeo- chemical Exchange in Sheet ow and Soil Processes in a Eutrophic Flood- plain Forest Telephone Interview with Bill Lord, Neuse River Eduction Team, North Carolina State University 12/9/2005 Dissolved organic carbon and methane emissions from a rice paddy fertilized with ammonium and nitrate Early development of vascular vegeta- tion of constructed wetlands in north- west Ohio receiving agricultural waters AAA Author Lin, Ying-Feng, Shuh-Ren Jing, and Der-Yuan Lee Lin, Ying-Feng, Shuh- Ren Jing, Der-Yuan Lee, and Tze-Wen Wang Lin, Ying-Feng, Shuh- Ren Jing, Tze-Wen Wang, and Der-Yuan Lee Lindberg, S.E. and H. Zhang Lloyd, J.R., D.A. Klessa, D.L. Parry, P. Buck, N.L. Brown Lockaby, B.C., R.G. Clawson, K. Flynn, R. Rummer, S. Mead- ows, B. Stokes and J. Stanturf Lord, Bill Lu,Y, R.Wassa- mann, H.U. Neue, and C. Huang Luckeydoo, L.M., N.R. Fausey, L.C. Brown, and C.B. Davis Pub. Date May-03 Jun-02 Oct-02 2-Oct- 00 Apr-04 Feb-97 Nov- Dec-00 Jan-02 Type Publisher Environmental Pollution; 123(1): 107-113. May 2003. Aquaculture; 209(1-4): 169-184. June 28, 2002. Environmental Pollution; 1 19(3): 41 3-420. Oct 2002. Science of the Total Environment. 2000 Oct 2;259(1-3):1 35-43. Water Research. 2004 Apr., v. 38, no. 7, p. 1822- 1830. Forest Ecology and Management, Volume 90, Issues 2-3, February 1997, Pages 187-194 Journal of environmental quality. Nov/Dec 2000. v. 29 (6) p. 1733-1740. Agriculture, ecosystems & environment. Jan 2002. v. 88 (1 ) p. 89-94. Comments The effect of nitrogen fertilizers on methane (CH4) production and emission in wetland rice (Oryza sativa L.) is not clearly un- derstood. Greenhouse pot and laboratory incubation were con- ducted to determine whether the effect of N type (NH4)-N and NO3-N) and rate (30 and 120 kg N ha super(-1)) were related to the availability of carbon for CH4 production in coded rice soils. The inhibitory effect of NO3-N seemed not fully accountable for the prolonged reduction in CH4 production and emission in the fields. The root zone DOC that is enriched by plant-borne C appears to be a main source for CH4 production and the lower DOC concentrations with NO3-N application are accountable for the low CH4 emissions. http://www.csa. co m/partners/viewrecord.php?requester=gs&coll ection=TRD&recid=0516433EN&q=Dissolved+organic+carbon+ and+methane+emissions+from+a+rice+paddy+fertilized+with+a mmonium+and+nitrate&uid=1025630&setcookie=yes ------- # 458 459 460 461 462 463 464 465 466 467 468 469 470 Title Nutrient Removal Efficiency and Re- source Economics of Vertical Flow and Horizontal Flow Constructed Wetlands Estimating Denitrification in a Large Constructed Wetland Using Stable Nitrogen Isotope Ratios Efficacy of a Subsurface- ow Wetland Using the Estuarine Sedge Juncus kraussii to Treat Ef uent from Inland Saline Aquaculture Reducing Phosphorus Loads in Idaho's Lower Boise River: The Role of Trading from a State Perspective Importance of Compliance and En- forcement in International Emissions Trading Schemes Cold-Climate Constructed Wetlands The Use of Constructed Wetlands for the Treatment of Run-off and Drainage Waters: The UK and Ukraine Experi- ence mpacts of sedimentation and nitrogen enrichment on wetland plant commu- nity development Nitrogen and phosphorus ux rates from sediments in a southeastern US river estuary Point/non-point Source Trading of Pol- lution Abatement: Choosing the Right Trading Ratio Constructed Wetlands for Wastewater Treatment in Estonia Nutrient Dynamics of Riparian Eco- tones: A Case Study from the Porijogi River Catchment, Estonia Application of Constructed Wetlands for Domestic Wastewater Treatment in an Arid Climate AAA Author Luederitz, Volker, Elke Eckert, Martina Lange-Weber, An- dreas Lange, and Richard M. Gersberg Lund, L.J., A.J. Home, and A.E.Wil- liams Lymbery, Alan J., Robert G. Doupe, Thomas Bennett, and Mark R. Starcevich Mabe, David Mace, M. J. (Pro- gramme Director) Mashlum, T, P.O. Jenssen and W S. Warner Magmedov, Vy- acheslav G., Michael A. Zakharchenko, Ludmila I.Yakovleva and Margaret E. Ince Mahaney, W.M., D.H. Wardrop, R.P Brooks Malecki, L.M., J.R. White and K.R. Reddy Malick, A., D. Letson, and S.R. Crutchfield Mander, Ulo and Tonu Mauring Mander, Ulo, Valdo Kuusemets and Mari Ivask Mandi, L., K. Bouhoum and N. Ouazzani Pub. Date Dec-01 Sep-99 Jan-06 Jul-03 3/16- 18/2004 1995 1996 2004 2004 1997 Feb-95 1998 Type PowerPoint Presentation Publisher Ecological Engineering; 18(2): 157-171. Decem- ber 2001 . Ecological Engineering; 14(1 -2): 67-76. Septem- ber 1999. Aquacultural Engineering; 34(1): 1-7. Jan 2006. Foundation for Interna- tional Law and Develop- ment Water Science and Tech- nology, Volume 32, Issue 3, 1995, Pages 95-1 01 Water Science and Technology, Volume 33, Issues 4-5, 1996, Pages 315-323 Plant Ecology. 2004, v. 175, no. 2, p. 227-243. Journal of Environmental Quality American J. of Ag. Econ. 7:959-967. Water Science and Tech- nology, Volume 35, Issue 5, 1997, Pages 323-330 Landscape and Urban Planning, Volume 31, Is- sues 1-3, February 1995, Pages 333-348 Water Science and Tech- nology, Volume 38, Issue 1 , 1 998, Pages 379-387 Comments 2003 National Forum on Water Quality Trading http://www.inece.org/emissions/mace.pdf http://www.kluweronline.com/issn/1385-0237/contents ------- en oo # 471 472 473 474 475 476 477 478 479 480 481 482 Title Application of a Horizontal Subsurface Flow Constructed Wetland on Treat- ment of Dairy Parlor Wastewater Pollutant Monitoring of Ef uent Credit Trading Programs For Agricultural Nonpoint Source Control The Role of the Submergent Macro- phyte Triglochin huegelii in Domestic Greywater Treatment Final Report: Results of Water-Based Trading Simulations Results of Water-Based Trading Simu- lations Estimating Erosion in a Riverine Water- shed: Bayou Liberty-Tchefuncta River in Louisiana The Use of Extended Aeration and In-series Surface- ow Wetlands for Landfill Leachate Treatment Interaction and Spatial Distribution of Wetland Nitrogen Processes Fate of 15N-nitrate in Unplanted, Planted and Harvested Riparian Wet- land Soil Microcosms Periodic draining reduces mosquito emergence from free-water surface constructed wetlands Producing native and ornamental wetland plants in constructed wetlands designed to reduce pollution from agricultural runoff Effect of HRT on Nitrogen Removal in a Coupled HRP and Unplanted Subsur- face Flow Gravel Bed Constructed Wetland AAA Author Mantovi, Paolo, Marta Marmiroli, Elena Maestri, Simona Tagliavini, Sergio Piccinini, and Nelson Marmiroli March, D.J. Mars, Ross, Kuruvilla Mathew and Goen Ho Marshall, C. Marshall, Chuck QEP Philip Services Martin, A., J.T. Gunt- er, and J.L. Regens Martin, Craig D. and Keith D. Johnson Martin, Jay F. and K. R. Reddy Matheson, F.E., M. L.Nguyen, A.B. Cooper, T.P Burt, and D.C. Bull Mayhew, C.R., D.R. Raman, R.R. Ger- hardt, R.T Burns, and M.S. Younger Maynard, B.K. Mayo, A.W and J. Mutamba Pub. Date Jun-03 Nov-00 Jan-99 Sep-99 Sep-99 2003 Jun-05 Dec-97 Oct-02 Mar- Apr-04 2004 Type Masters Thesis Report Report Paper Publisher Bioresource Technology; 88(2): 85-94. June 2003. Virginia Polytechnic and State University Ecological Engineering, Volume 12, Issues 1-2, January 1999, Pages 57-66 Philip Services, Incorpo- rated EPA Environ Sci Pollut Res Int. 2003;10(4):245-50. PMID: 1 2943008 Water Science and Tech- nology, Volume 32, Issue 3, 1995, Pages 11 9-1 28 Ecological Modelling, Volume 105, Issue 1,14 December 1997, Pages 1-21 Ecological Engineering; 1 9(4): 249-264. Oct 2002. Transactions of the ASAE. 2004 Mar-Apr, v. 47, no. 2, p. 567-573. Sustainable Agriculture Research and Education (SARE) research proj- ects. Northeast Region. 2001, SARE PROJECT LNE98-100 Ecological Engineer- ing, Volume 21, Issues 4-5, 31 December 2003, Pages 233-247 Comments http://scholar.lib.vt.edu/theses/available/etd-02142001-091021/ unrestricted/FinalFinalThesisVersion0202.PDF This study uses spatial analysis techniques and a numerical modeling approach to predict areas with the greatest sheet ero- sion potential given different soils disturbance scenarios. ------- en CD # 483 484 485 486 487 488 489 490 491 492 493 494 Title Nitrogen Transformation in Horizontal Subsurface Flow Constructed Wetlands I: Model Development Nitrogen Transformation in Horizontal Subsurface Flow Constructed Wetlands II: Effect of Biofilm Modelling Nitrogen Removal in a Coupled HRP and Unplanted Hori- zontal Flow Subsurface Gravel Bed Constructed Wetland Comparative treatment of dye-rich wastewater in engineered wetland systems (EWSs) vegetated with differ- ent plants Habitat Quality Assessment of Two Wetland Treatment Systems in the Arid West-Pilot Study Habitat Quality Assessment of Two Wetland Treatment Systems in Missis- sippi-A Pilot Study Habitat Quality Assessment of Two Wetland Treatment Systems in Florida- -A Pilot Study Modelling Biofilm Nitrogen Transforma- tions in Constructed Wetland Meso- cosms with Fluctuating Water Levels Cost Effectiveness and Targeting of Agricultural BMPs for the Tar-Pamlico Nutrient Trading Program Nutrient Trading: Experiences and Lessons A Guide to Hydrologic Analysis Using SCS Methods Multiple Credit Types for a Single Project Site AAA Author Mayo, A.W and T Bigambo Mayo, A.W. and T. Bigambo Mayo, A.W. and T. Bigambo Mbuligwe, S.E. McAllister, L.S. McAllister, L.S. McAllister, L.S. McBride, Graham B. and Chris C. Tanner McCarthy, M., R. Dodd, J.P Tippett, and D. Harding McCatty, T. McCuen, R.H. McElwaine, Andrew Pennsylvania Envi- ronmental Council Pub. Date 2005 2005 2005 Jan- Feb-05 Jul-92 Nov-92 Nov-93 Sep-99 1996 Aug-99 1982 7/11- 12/2005 Type Pilot Study Report Pilot Study Report Proceedings Case Study Presentation Publisher Physics and Chemistry of the Earth, Parts A/B/C; 30(1 1-1 6): 658-667. 2005. Physics and Chemistry of the Earth, Parts A/B/C; 30(1 1-1 6): 668-672. 2005. Physics and Chemistry of the Earth, Parts A/B/C; 30(1 1-1 6): 673-679. 2005. Water Research. 2005 Jan-Feb, v. 39, issue 2-3 p. 271-280 EPA/600/R-93/117. EPA Environmental Research Laboratory, Corvallis, OR EPA/600/R-92/229. EPA Environmental Research Laboratory, Corvallis, OR EPA/600/R-93/222. EPA Environmental Research Laboratory, Corvallis, OR Ecological Engineering; 14(1 -2): 93-1 06. Septem- ber 1999. Watersheds '96. Water Environment Federation and U.S. EPA. Massachusetts Institute of Technology Printice-Hall, Inc. Engle- wood Cliffs, NJ. PowerPoint Presentation Comments This paper discusses some of the technical work that supports the Tar-Pamlico Nutrient Trading Program implementation. In order to help the Program participants set a reasonable cost for trading nitrogen or phosphorus between point and nonpoint sources and understand how cost effective different best man- agement practices (BMPs) are, the authors developed cost- effectiveness estimates (expressed as $/kilogram of nutrient load reduced) for cost-shared agricultural BMPs in the Basin. The data represent BMPs that were implemented from 1985 to 1994. http://www.epa.gov/owowwtr1/watershed/Proceed/mccarthy.html ------- CD O # 495 496 497 498 499 500 501 502 503 504 Title Estimating Inorganic and Organic Ni- trogen Transformation Rates in a Model of a Constructed Wetland Purification System for Dilute Farm Ef uents Modelling oxygen transport in a reed- bed-constructed wetland purification system for dilute ef uents Watershed-based Pollution Trading Development and Current Trading Programs Relating Net Nitrogen Input in the Mississippi River Basin to Nitrate Flux in the Lower Mississippi River: A Com- parison of Approaches Soil Organic Matter and Nitrogen Cycling in Response to Harvesting, Mechanical Site Preparation, and Fertilization in a Wetland with a Mineral Substrate Stakeholders' View of Watershed- Based Trading The Use of Water Quality Trading and Wetland Restoration to Address Hypoxia in the Gulf of Mexico Mosquito (Diptera: Culicidae) develop- ment within microhabitats of an Iowa wetland Water and Mass Budgets of a Verti- cal- ow Constructed Wetland used for Wastewater Treatment Nutrients in salmon hatchery wastewa- ter and its removal through the use of a wetland constructed to treat off-line settling pond ef uent AAA Author McGechan, M.B., S.E. Moir, G. Sym, and K. Castle McGechan, M.B., S.E. Moir, I.P.J. Smit, and K. Castle McGinnis, S. L. Mclsaac, G.F., M.B. David, G.Z. Gertner, and D.A. Goolsby Mclaughlin, James W, Margaret R. Gale, Martin F. Jurgensen, and Carl C. Trettin McNew, Todd Mehan, G. Tracy III, Cadmus Group Mercer, D.R., S.L. Sheeley, E.J. Brown Meuleman, Arthur F. M., Richard Van Logtestijn, Gerard B.J. Rijs, and Jos T A. Verhoeven Michael, J.H., Jr. Pub. Date May-05 Jun-05 Feb-01 Sept- Oct/ 2002 Apr-00 Jul-03 7/11- 12/2005 Jul-05 Mar-03 Oct-03 Type Paper Paper PowerPoint Presentation Publisher Biosystems Engineering; 91(1): 61 -75. May 2005. Biosystems Engineering. 2005 June, v. 91, no. 2, p. 1 91 -200. Springer-Verlag GmbH, ISSN: 1433-661 8 (Paper) 1434-0852 (Online), DOI: 10.1007/ s1 0022000001 8, Volume 2, Numbers, Pages: 161 -170 J Environ Qual. 2002 Sep-Oct;31(5):1610-22. PMID: 12371178 Forest Ecology and Man- agement; 129(1 -3): 7-23. April 17,2000. Audio Recording Journal of Medical Ento- mology. 2005 July, v. 42, no. 4, p. 685-693. Ecological Engineering; 20(1): 31 -44. March 2003. Aquaculture. 2003 Oct. 31, v. 226, no. 1-4, p. 213-225. Comments http://www.sciencedirect.eom/science/journal/1 53751 1 0 This paper describes the diversity of existing pollution trading programs and the exibility that exists in trading programs to manage nearly any site-specific watershed pollution problem. Although the use of watershed-based pollution trading is rela- tively unproven, observation of the existing trading programs indicates that trading has the potential to improve water quality in heavily impaired watersheds, http://www.springerlink.com/ app/home/contribution.asp The objective of this study was to compare recently published approaches for relating terrestrial N inputs to the Mississippi River basin (MRB) with measured nitrate ux in the lower Mis- sissippi River. Nitrogen inputs to and outputs from the MRB (1951 to 1996) were estimated from state-level annual agri- cultural production statistics and NOy (inorganic oxides of N) deposition estimates for 20 states that comprise 90% of the MRB. Modeling was used to analyze the data. 2003 National Forum on Water Quality Trading Presented at National Forum on Synergies Between Water Quality Trading and Wetland Mitigation Banking - http://www2. eli.org/research/wqt_main.htm http://www.elsevier.com/locate/issn/00448486 ------- # 505 506 507 508 509 510 511 512 513 Title Introduction to Market-Based Programs Market-Based Program Feasibility Saginaw Basin Modeling Water Quality Trading Workgroup Discussion Document. Part XXX. Water Quality Trading - Draft #20 Rahr Malting Company "Trading" Permit Watershed-Based Permitting Case Study: Final Permit Rahr Malting Company National Pollutant Discharge Elimination System and State Disposal System Permit No. MN0031917 A Framework for Trading Phosphorus Credits in the Lake Allatoona Water- shed The Use of Wetlands for Water Pollu- tion Control in Australia: An Ecological Perspective Nitrogen Biogeochemistry in the Adirondack Mountains of New York: Hardwood Ecosystems and Associated Surface Waters AAA Author Michigan Department of Environmental Quality, Surface Wa- ter Quality Division Michigan Department of Environmental Quality, Surface Wa- ter Quality Division Michigan Department of Environmental Quality, Surface Wa- ter Quality Division Michigan Department of Environmental Quality, Surface Wa- ter Quality Division Minnesota Pollution Control Agency Minnesota Pollution Control Agency Minnesota Pollution Control Agency Mitchell, D.S., A.J. Chick and G.W Raisin Mitchell, Myron J., Charles T Driscoll, Shreeram Inamdar, Greg G. McGee, Monday O. Mbila, and Dudley J. Raynal Pub. Date Sep-99 Mar-97 Jan-97 2003 1995 Jun-03 Type Web site Web site Modeling Discussion Fact sheet Case Study Project plan Publisher Michigan Department of Environmental Quality, Surface Water Quality Division Michigan Department of Environmental Quality, Surface Water Quality Division Michigan Department of Environmental Quality, Surface Water Quality Division Michigan Department of Environmental Quality, Surface Water Quality Division Minnesota Pollution Con- trol Agency Minnesota Pollution Con- trol Agency (MPCA) River Basin Center Insti- tute of Ecology, University of Georgia Water Science and Tech- nology, Volume 32, Issue 3, 1995, Pages 365-373 Environmental Pollution; 123(3): 355-364. June 2003. Comments http://www.deq.state.mi.us/swq/trading/htm/intro.htm http://www.deq.state.mi.us/swq/trading/htm/kzo.htm http://www.deq.state.mi.us/swq/trading/htm/wrimod.htm http://www.deq.state.mi.us/swq/trading/htm/Rule20.htm http://www.pca.state.mn.us/water/pubs/rahrtrad.pdf ------- # 514 515 516 517 518 519 520 521 522 Title Landscape design and the role of created, restored, and natural riparian wetlands in controlling nonpoint source pollution GLOBAL WETLANDS: OLD WORLD AND NEW Wetlands and Lakes as Nitrogen Traps : Kessler, E. and M. Jansson, eds. 1994. Special Issue of Ambio 23:319- 386. Royal Swedish Academy of Sci- ences, Stockholm. Wetlands 3rd Edition Nitrate-nitrogen Retention in Wetlands in the Mississippi River Basin Creating Riverine Wetlands: Ecological Succession, Nutrient Retention, and Pulsing Effects Water Quality Trading in the United States Biogeochemical Considerations for Water Quality Trading in Canada The Design and Performance of Averti- cal Flow Reed Bed for the Treatment of High Ammonia, Low Suspended Solids Organic Ef uents AAA Author Mitsch, WJ. Mitsch, WJ. (ed.) Mitsch, William J. Mitsch, William J. and James G. Gosselink Mitsch William J John W Day, Li Zhang, and Robert R. Lane Mitsch, William J., Li Zhang, Christopher J.Anderson, Anne E. Altor, and Maria E. Hernandez Morgan, Cynthia and Ann Wolverton Morin, Anne Morris, Michael and Robert Herbert Pub. Date 1992 1994 Oct-95 21-Jul- 00 Apr-05 Dec-05 Jun-05 2005 1997 Type Working Paper Publisher Ecological Engineering [ECOL. ENG.].Vol. 1, no. 1-2 pp 27-47 1992 Hardbound ISBN' 0- 444-81 478-7, 992 pages, publication date: 1994 Ecological Engineering, Volume 5, Issue 1 , Octo- ber 1995, Pages 123-1 25 John Wiley and Sons 936 pgs. Ecological Engineering; 24(4): 267-278. Apr 5, 2005 Ecological Engineering; 25(5)1/19/2006510-527. Dec. 1 , 2005. Working Paper # 05-07. U.S. EPA, National Center for Environmental Eco- nomics Policy Research Initiative Working Paper, Ottawa. Water Science and Tech- nology, Volume 35, Issue 5, 1997, Pages 197-204 Comments General design principles of wetland construction for nonpoint source (NPS) water pollution control emphasize self-design and minimum maintenance systems, with an emphasis on function over form and biological form over rigid designs. These wetlands can be located as instream wetlands or as oodplain ripar- ian wetlands, can be located as several wetlands in upstream reaches or fewer in downstream reaches of a watershed, and can be designed as terraced wetlands in steep terrain. Case studies of a natural riparian wetland in southern Illinois, an in- stream wetland in a downstream location in a northern Ohio wa- tershed, and several constructed riparian wetlands in northeast- ern Illinois demonstrate a wide range of sediment and phospho- rus retention, with greater efficiencies generally present in the constructed wetlands (63-96% retention of phosphorus) than in natural wetlands (4-10% retention of phosphorus). By itself, this could be misleading since the natural wetlands have much higher loading rates and actually retain an amount of nutrients comparable to constructed wetlands (1-4 g PI super(2)/year). Background information for the National Forum on Synergies Between Water Quality Trading and Wetland Mitigation Banking - http://www2.eli.org/research/wqt_main.htm ------- CD CO # 523 524 525 526 527 528 529 530 531 532 533 534 Title Off-set Banking-A way Ahead for Controlling Non-point Source Pollution in Urban Areas Off-set Banking: A Way Ahead for Controlling Non-point Source Pollution in Urban Areas in Georgia Constructed Wetland for Water Quality Improvement Modelling Nutrient Fluxes from Diffuse and Point Emissions to River Loads: The Estonian Part of the Transbound- ary Lake Peipsi/Chudskoe Drainage Basin (Russia/Estonia/Latvia) Do wetlands behave like shallow lakes in terms of phosphorus dynamics? The Response of a Freshwater Wet- land to Long-term "Low Level" Nutrient Loads - Marsh Efficiency Validation Approaches for Field-, Basin- , and Regional-scale Water Quality Models Effect of NH4+/NO3? Availability on Nitrate Reductase Activity and Nitrogen Accumulation in Wetland Helophytes Phragmites australis and Glyceria maxima Information on Water Quality Param- eters Simulation of Pollution Buffering Ca- pacity of Wetlands Fringing the Lake Victoria Soil development in phosphate-mined created wetlands of Florida, USA Report of the Conservation Innova- tions Task Force (CITF), Dec. 2003, Appendix III - Water Quality Trading - Nonpoint Credit Bank AAA Author Morrison, M. Morrison, Mark D. Moshiri, G.A. Mourad, D. and M. van der Perk Moustafa, M.Z. Moustafa, M.Z., M.J. Chimney, T.D. Fontaine, G. Shih and S. Davis Mulla, D.J. andT.M. Addiscott Munzarova, Edita, Bent Lorenzen, Hans Brix, Lenka Vojtiskova, and Olga Votrubova Murphy, S. Mwanuzi, F, H. Aalderink, and L. Mdamo Nair, V.D., D.A. Graetz, K.R. Reddy, and O.G. Olila National Associa- tion of Conservation Districts Pub. Date 2003 Jun-02 1993 2004 Feb-00 Sep-96 1999 Jan-06 2005 Apr-03 Jun-01 Dec-03 Type Paper Working Paper Draft Paper Report Publisher School of Marketing and Management, Charles Sturt University Georgia Water Planning and Policy Center CRC Press, Boca Raton, FL. 1993. Water Sci Technol. 2004;49(3):21-8. PMID: 1 5053095 Journal of the American Water Resources Asso- ciation / Feb 2000. v. 36 (1 ) p. 43-54. Ecological Engineer- ing, Volume 7, Issue 1, September 1996, Pages 15-33 In D.L. Corwin and T.R. Ellsworth (ed.). Assess- ment of non-point source pollution in the vadose zone. American Geoph- syical Union. Washington, D.C. pp. 63-78. Environmental and Ex- perimental Botany; 55(1- 2): 49-60. Jan 2006. USGS Water Quality Monitoring, BASIN Proj- ect, City of Boulder, CO Environmental Interna- tional. 2003 Apr; 29(1): 95-103. Wetlands : the Journal of the Society of the Wetlands Scientists. June 2001 . v. 21 (2) p. 232-239. National Association of Conservation Districts Comments http://www.h2opolicycenter.org/pdf_documents/water_working- papers/2002_004.pdf http://www.awra.org/jawra/index.html http://bcn.boulder.co.us/basin/data/BACT/info/ (January 2006). http://www.nacdnet.org/resources/CITF/app3.htm ------- # 535 536 537 538 539 540 541 542 543 544 545 546 Title Treatment of Freshwater Fish Farm Ef- uent Using Constructed Wetlands: The Role of Plants and Substrate Soil and Water Assessment Tool User's Manual Market and Bargaining Approaches to Nonpoint Source Pollution Abatement Problems Watershed Based Permitting Case Study: Final Permit Wetland Project Teaches Students How To Protect Our Water Supply Neuse Education Team Impacts: Agri- cultural Impacts 2: Novel Nursery Guidance for Phosphorus Offset Pilot Programs Seasonal Performance of a Wetland Constructed to Process Dairy Milk- house Wastewater in Connecticut An Environmental Big Stick The Effects of Stormwater Surface Runoff on Freshwater Wetlands: A Review of the Literature and Annotated Bibliography Organic Matter Composition, Micro- bial Biomass and Microbial Activity in Gravel-bed Constructed Wetlands Treating Farm Dairy Wastewaters A Guide to Market-Based Approaches to Water Quality AAA Author Naylor, S., J. Brls- son, M.A. Labelle, A. Drizo, andY. Comeau Neitsch, S.L., J.G. Arnold, J.R. Kiniry, and J.R.Williams Netusil, N.R. and John B. Braden Neuse River Compli- ance Association Neuse River Eduction Team Neuse River Eduction Team New York City De- partment of Environ- mental Protection, Bureau of Water Supply Quality and Protection Newman, Jana Majer, John C. Clausen, and Joseph A. Neafsey Newport, Alan Newton, R.B. Nguyen, Long M. Nguyen, T, R.T. Woodward, M.D. Mat- lock, and P. Faeth Pub. Date 2003 2001 1993 2002 winter 2004 undated Mar-97 Sep-99 Mar-04 1989 Nov-00 Oct-04 Type Online Journal Article Case Study Case study Case study Guidance Doc Article Paper Publisher Water Science Technol- ogy. 2003; 48(5): 215-22. Available at http://www. brc.tamus.edu/swat/swat- 2000doc.html. Water Science and Tech- nology, 28(3-5), 35-45. US Environmental Protec- tion Agency Neuse River Eduction Team, North Carolina State University website. Viewed on 1 2/05/2005 Neuse River Eduction Team, North Carolina State University website. Viewed on 1 2/05/2005 New York City Depart- ment of Environmental Protection, Bureau of Water Supply Quality and Protection Ecological Engineering; 14(1 -2): 181 -198. Sep- tember 1999. National Hog Farmer, PRIMEDIA Busienss Magazines and Media, Inc. 2004 Publ. #90-2. The Environ- mental Institute, Univ. of Massachusetts, Amherst, MA Ecological Engineering; 16(2): 199-221. Novem- ber 2000. World Resource Institute Comments http://www.epa. gov/npdes/pubs/wq_casestudy_factsht1 1 .pdf http://www.neuse.ncsu.edu/neusejetters/winter2004/story2.htm http://www.neuse.ncsu.edu/impact2b.pdf ------- CD cn # 547 548 549 550 551 552 553 554 555 556 Title Evidence of N2O emission and gas- eous nitrogen losses through nitrifica- tion-denitrification induced by rice plants (Oryza sativa L.) Inhibition kinetics of salt-affected wetland for municipal wastewater treat- ment Wetlands and Water Quality: A Re- gional Review of Recent Research in the U.S. on the Role of Freshwater and Saltwater Wetlands as Sources, Sinks, and Transformers of Nitrogen, Phosphorus, and Heavy Metals Inactivation of Indicator Micro-organ- isms from Various Sources of Fae- cal Contamination in Seawater and Freshwater A Pilot Study of Constructed Wetlands Using Duckweed (Lemna gibba L.) for Treatment of Domestic Primary Ef uent in Israel Report of the Proceedings on the Proposed Neuse River Basin Nutrient Sensitive Waters (NSW) Management Strategy Phase II of the Total Maximum Daily Load for Total Nitrogen to the Neuse River Estuary, North Carolina Neuse River Basinwide Water Quality Plan Report of the Proceedings on the Proposed Neuse River Basin Nutrient Sensitive Waters (NSW) Management Strategy. Environmental Management Commission Meeting Tar-Pamlico River Nutrient Manage- ment Plan for Nonpoint Sources of Pollution AAA Author Ni,WZ.,andZ.L. Zhu Nitisoravut, S. and P. Klomjek Nixon, S.W and V. Lee Noble, R.T., I.M. Lee, and K.C. Schiff Noemi Ran, Moshe Agami, and Gideon Oron North Carolina De- partment of Environ- ment and Natural Resources North Carolina De- partment of Environ- ment and Natural Resources North Carolina De- partment of Environ- ment and Natural Re- sources (NCDENR) North Carolina De- partment of Environ- ment, Health and Natural Resources. North Carolina Divi- sion of Environmental Management, Water Quality Section Pub. Date Aug-04 Nov-05 1986 Mar-04 May-04 Dec-97 Dec-01 1998 Jun-97 Dec-95 Type Abstract Paper Plan Plan Plan Publisher Biology and Fertility of Soils. 2004 Aug., v. 40, no. 3, p. 211-214. Water Research. 2005 Nov., v. 39, issue 18, p. 4413-4419. Technical Rept.Y-86- 2, U.S. Army Corps of Engineers Waterways Experiment Station, Vicksburg, MS Journal of Applied Microbiology, Volume 96, Issue 3, Page 464-472, Mar 2004 Water Research; 38(9): 2241-2248. May 2004. Environmental Man- agement Commission Meeting December 11, 1997. Printed November 26, 1997 North Carolina Depart- ment of Environment and Natural Resources, Dividion of Water Quality NC Division of Water Quality Reprinted July 1997. North Carolina Division of Environmental Manage- ment, Water Quality Section Comments http://h2o.enr. state, nc.us/ba si nwide/Neuse/neuse_wq_manage- ment_plan.htm ------- CD CD # 557 558 559 560 561 562 563 564 565 566 567 568 Title Implementation of the Conservation Partnership's Neuse River Basin Initia- tive Tar-Pamlico River Basinwide Water Quality Plan (July 1999) North Carolina Division of Water Qual- ity Nonpoint Source Management Pro- gram : Tar-Pamlico Nutrient Strategy Website Fiscal Analysis: Nonpoint Source Nutrient Rules Tar-Pamlico River Basin Nutrient Sensitive Waters Management Strategy First Annual Status Report to the Envi- ronmental Management Commission. Tar-Pamlico River Nutrient Manage- ment Plan for Nonpoint Sources Second Annual Status Report to the Environmental Management Commis- sion. Tar-Pamlico River Nutrient Man- agement Plan for Nonpoint Sources Point/nonpoint Trading Program for the Green Bay Remedial Action Plan The phosphorus index Evaluation of Phosphorus Retention in a South Florida Treatment Wetland Phosphorous Trading in the South Na- tion River Watershed, Ontario, Canada Lessons Learned from Point-Nonpoint Source Trading Case Studies Lessons Learned from Point-Nonpoint Source Trading Case Studies AAA Author North Carolina Divi- sion of Soil and Water Conservation North Carolina Divi- sion of Water Quality North Carolina Divi- sion of Water Quality North Carolina Divi- sion of Water Quality North Carolina Divi- sion of Water Quality, Water Quality Section North Carolina Divi- sion of Water Quality, Water Quality Section Northeast Wisconsin Waters For Tomorrow (now called Fox-Wolf Basin 2000) NRCS Nungesser, M.K. and M.J. Chimney O'Grady, D. and M.A. Wilson O'Grady, Dennis South Nation Conser- vation O'Grady, Dennis South Nation Conser- vation Pub. Date 1999 Date ac- cessed: 12/06/05 Jul. 1, 1999 Oct-97 Jul-98 1994 2001 2001 2002 7/11- 12/2005 7/11- 12/2005 Type Website Website Report Report Presentation Presentation Publisher North Carolina Divi- sion of Soil and Water Conservation, North Carolina Department of Environment and Natural Resources. Website ac- cessed 11/26/2005 North Carolina Division of Water Quality North Carolina Division of Water Quality North Carolina Division of Water Quality North Carolina Division of Water Quality, Water Quality Section North Carolina Division of Water Quality, Water Quality Section Northeast Wisconsin Wa- ters For Tomorrow (now called Fox-Wolf Basin 2000) NRCS. Agronomy Techni- cal Note 26 (revised). Portland, OR. Water Science Technol- ogy. 2001 ;44(1 1-1 2):1 09- 15. South Nation Conserva- tion Authority. Audio Recording PowerPoint Presentation Comments http://www.enr.state.nc.us/DSWC/pages/intitiative.html http://h2o.enr.state.nc.us/basinwide/tarpam_wq_management_ plan. htm http://h2o.enr.state.nc.us/nps/tarpam.htm http://www.envtn.org/wqt/programs/ontario.PDF. Presented at National Forum on Synergies Between Water Quality Trading and Wetland Mitigation Banking - http://www2. eli.org/research/wqtjnain.htm Presented at National Forum on Synergies Between Water Quality Trading and Wetland Mitigation Banking - http://www2. eli.org/research/wqtjnain.htm ------- CD --J # 569 570 571 572 573 574 575 576 577 Title Creating Markets for Nutrients and Other Water Pollutants Distribution of Nutrients and Heavy Metals in a Constructed Wetland System Mineral nutrition of three aquatic emergent macrophytes in a managed wetland in Venezuela Nonpoint Source-Stream Nutrient Level Relationships: A Nationwide Study Reducing Nitrogen from Agriculture at a River Basin Scale: Lessons Learned in the Neuse River Basin Microbial Characteristics of Construct- ed Wetlands FerryMon: Using Ferries to Monitor and Assess Environmental Conditions and Change in North Carolina's Albemarle- Pamlico Sound System Phytoplankton Photopigments as Indicators of Estuarine and Coastal Eutrophication Hydrologic In uence on Stability of Or- ganic Phosphorus in Wetland Detritus AAA Author O'Sullivan, D. Obarska-Pempkow- iak, Hanna and Katar- zyna Klimkowska Olivares, E., D. Vizcaino, and A. Gamboa Omernik, J.M. Osmond, Deanna, Bill Lord, and Mitch Woodward (NC State University) Ottova, Vlasta, Jarmila Balcarova and Jan Vymazal Paerl, Hans and Thomas Gallo (Institute of Marine Science, UNC-Cha- pel Hill); Christopher P. Buzzelli (Hollings Marine Lab); Joseph S. Ramus, presenter (Duke University) Paerl, HansW. Pant, H.K. and K.R. Reddy Pub. Date 2002 Jul-99 2002 1997 Sep-05 1997 Sep-05 Oct-03 Mar-Apr 2001 Type Presentation Presentation Publisher Coast-to-Coast 2002 Chemosphere; 39(2): 303-312. July 1999. Journal of plant nutrition. 2002. v. 25 (3) p. 475-496. EPA 600/3-79-1 05. Corvallis Environmental Research Laboratory, U.S. EPA, Corvallis, OR. 13th National Nonpoint Source Monitoring Workshop Water Science and Tech- nology, Volume 35, Issue 5, 1997, Pages 11 7-1 23 13th National Nonpoint Source Monitoring Workshop BioScience Journal of Environmental Quality. 2001 Mar- Apr;30(2):668-74. Comments http://www.bae. ncsu.edu/programs/extension/wqg/nmp_conf/ presentations.html http://www.bae. ncsu.edu/programs/extension/wqg/nmp_conf/ presentations.html http://www.findarticles.com/p/articles/mi_go1 679/is 20031 01 ai_n9292643 ------- CD 00 # 578 579 580 581 582 583 584 585 Title Planted Riparian Buffer Zones in New Zealand: Do They Live Up to Expecta- tions? Economic and Environmental Impacts of Nutrient Loss Reductions on Dairy and Dairy/poultry Farms Effect of different assemblages of larval foods on Culex quinquefasciatus and Culex tarsalis (Diptera: Culicidae) growth and whole body stoichiometry The use of design element in wetlands Hydraulic efficiency of constructed wetlands and ponds How Hydrological and Hydraulic Condi- tions Affect Performance of Ponds The Role of Plants in Ecologically Engi- neered Wastewater Treatment Systems Nitrogen and phosphorus transport in soil using simulated waterlogged conditions AAA Author Parkyn, Stephanie M., Rob J. Davies- Colley, N. Jane Hal- liday, Kerry J. Costley, and Glenys F. Croker Pease, J. and D.E. Kenyon Peck, G.W. and WE. Walton Persson, J. Somes, and T H. F. Wong Persson, Jesper and Hans B. Wttgren Peterson, Susan B. and John M. Teal Phillips, I.R. Pub. Date Dec-03 1998 Aug-05 2005 1999 Dec-03 May-96 2001 Type Paper Paper Publisher Restoration Ecology, Volume 1 1 , Issue 4, Page 436-447, Dec 2003 Pen State University and Virginia Tech Environmental entomol- ogy. 2005 Aug., v. 34, no. 4 p 767-774 Nordic Hydrology 36(2):113-120. Water Science and Tech- nology 40 (3): 291 -300. Ecological Engineering; 2 1(4-5): 259-269. Dec 31 , 2003. Ecological Engineer- ing, Volume 6, Issues 1 -3, May 1 996, Pages 137-148 Communications in soil science and plant analy- sis. 2001 . v. 32 (5/6) p. 821-842. Comments Study that assessed nine riparian buffer zone schemes in New Zealand that had been fenced and planted (age range from 2 to 24 years) and compared them with unbuffered control reaches upstream or nearby. Included in the study were macroinverte- brate community composition and a range of physical and water quality variables within the stream and in the riparian zone. Generally, streams within buffer zones showed rapid improve- ments in visual water clarity and channel stability, but nutrient and fecal contamination responses were variable. Significant changes in macroinvertebrate communities toward "clean water" or native forest communities did not occur at most of the study sites. Improvement in invertebrate communities appeared to be most strongly linked to decreases in water temperature, suggesting that restoration of in-stream communities would only be achieved after canopy closure, with long buffer lengths, and protection of headwater tributaries. Expectations of ripar- ian restoration efforts should be tempered by (1) time scales and (2) spatial arrangement of planted reaches, either within a catchment or with consideration of their proximity to source areas of recolonists. Study of potential N and P losses at edge of farm fields and root zones in Virginia. Describes details of existing farm- ing practices. Simulates farm income effects under current practices and 3 possible nutrient management policies; manure incorporation, restrict N application, restrict P application. Esti- mates made by agricultural engineers. http://www.entsoc.org/pubs/periodicals/ee/index.htm ------- CD CD # 586 587 588 589 590 591 592 593 594 595 Title Factors Affecting Nitrogen Loss in Experimental Wetlands with Different Hydrologic Loads The Interacting Effects of Temperature and Plant Community Type on Nutrient Removal in Wetland Microcosms Legal and Financial Liability - Issues in Mitigation Banking and Water Quality Trading: A Wetland Mitigation Banking Perspective Design Recommendations for Subsur- face Flow Constructed Wetlands for Nitrification and Denitrification Improved Nitrogen Treatment by Con- structed Wetlands Receiving Partially Nitrified Liquid Swine Manure Swine Wastewater Treatment by Marsh- pond-marsh Constructed Wetlands Under Varying Nitrogen Loads Ammonia volatilization from marsh- pond-marsh constructed wetlands treating swine wastewater Water Quality Trading II: Using Trading Ratios to Deal With Uncertainties Hydrodynamic Behavior and Nutrient Removal Capacity of a Surface-Flow Wetland Watershed Protection: Capturing the Benefits of Nature's Water Supply Services AAA Author Phipps, Richard G. and William G. Crumpton Picard, C.R., L.H. Fraser, and D. Steer Platt, George I. Wetlandsbank, Inc. Platzer, Christoph Poach, M. E., P.G. Hunt, M.B. Vanotti, K.C. Stone, T.A. Ma- theny, M.H. Johnson, and E.J. Sadler Poach, M.E., P.G. Hunt, G.B. Reddy, K.C. Stone, M.H. Johnson, and A. Grubbs Poach, M.E., P.G. Hunt, G.B. Reddy, K.C. Stone, T.A. Ma- theny, M.H. Johnson, E.J. Sadler Policy Research Initiative, Government of Canada Polychronopoulos, Michael and Bronwyn P. Chapman Postel, Sandra L., Barton H.Thompson, Jr. Pub. Date Dec-94 Jun-05 7/11- 12/2005 1999 May-03 Nov-04 May- Jun-04 2001 May-05 Type Presentation Conference Proceeding Paper Abstract Paper Publisher Ecological Engineer- ing, Volume 3, Issue 4, December 1994, Pages 399-408 Bioresources Technol- ogy, 96(9): 1039-47. June 2005. Audio Recording Water Science and Tech- nology, Volume 40, Issue 3, 1999, Pages 257-263 Ecological Engineer- ing; 20(2): 183-197. May 2003. Ecological Engineering; 23(3): 165-175. Nov 2004. Journal of environmental quality. 2004 May-June, v. 33, no. 3, p. 844-851 . Sustainable Development Briefing NOTE, Policy Research Initiative, Gov- ernment of Canada section 1 , chapter 205 World Water Congress 2001, Bridging the Gap: Meeting the World's Water and Environmental Resources Challenges, World Water and Envi- ronmental Resources Congress 2001 Natural Resources Fo- rum, Volume 29, Issue 2, Page 98-108, May 2005 Comments http://www2.eli.org/research/wqt_forum.htm http://policyresearch.gc.ca/doclib/R2 PRI%20SD%20BN WQII E.pdf This paper highlights the relationship between the wetland hydraulic characteristics and the overall treatment efficiency of the wetland. ------- --J o # 596 597 598 599 600 601 602 603 604 605 606 Title Relationship Between Phosphorus Lev- els in Three Ultisols and Phosphorus Concentrations in Runoff The Current Controversy Regarding TMDLs: Contemporary Perspectives "TMDLS And Pollutant Trading" Soil infiltration and wetland microcosm treatment of liquid swine manure National Spatial Crop Yield Simula- tion Using GIS-based Crop Production Model Science and the Protection of Endan- gered Species Phosphorus enrichment affects litter decomposition, immobilization, and soil microbial phosphorus in wetland mesocosms. Transformation of ef uent organic matter during subsurface wetland treat- ment in the Sonoran Desert Water Quality Trading: What Can We Learn From 10 Years of Wetland Mitiga- tion Banking? The Effectiveness of a Small Construct- ed Wetland in Ameliorating Diffuse Nutrient Loadings from an Australian Rural Catchment Groundwater In uence on the Water Balance and Nutrient Budget of a Small Natural Wetland in Northeastern Victoria, Australia The Use of Wetlands for the Control of Non-point Source Pollution AAA Author Pote, D.H..TC. Dan- iel, D.J. Nichols, A.N. Sharpley, P. A, Moore, Jr., D.M. Miller, and D.R. Edwards Powers, Ann Prantner, S.R., R.S. Kanwar, J.C. Lorimor, and C.H. Pederson Priva, Satya and Ryosuke Shibasaki Pullliam, H.R. and B. Babbitt Quails, R.G. and C.J. Richardson Quanrud, D.M., M.M. Karpiscak, K.E. Lan- sey, and R.G. Arnold Raffini, Eric and Mor- gan Robertson Raisin, G.W, D. S. Mitchell and R. L. Croome Raisin, G., J. Bartley and R. Croome Raisin, G.W. and D. S. Mitchell Pub. Date 1999 2003 Jul-01 Jan-01 1997 Mar- Apr-00 Feb-04 Jul- Sep-97 Jan-99 1995 Type Paper Abstract Newsletter Publisher J. Environ. Qual. 28:170- 175. VERMONT JOURNAL OF ENVIRONMENTAL LAW Volume Four 2002-2003 Applied Engineering in Agriculture. July 2001 . v. 1 7 (4) p. 483-488. Ecological Modelling; 136(2-3): 113-129. Jan 20, 2001 . Science, 275: 499-500. Soil Science Society of America journal. Mar/Apr 2000. v. 64 (2) p. 799-808. Chemosphere. 2004 Feb., v. 54, no. 6, p. 777-788. National Wetlands Newsletter; 27(4). Envi- ronmental Law Institute, Washington, DC. Jul-Aug 2005. In Press. Ecological Engineering, Volume 9, Issues 1-2, September 1997, Pages 19-35 Ecological Engineering, Volume 12, Issues 1-2, January 1999, Pages 133-147 Water Science and Tech- nology, Volume 32, Issue 3, 1995, Pages 177-1 86 Comments http://www.vjel.org/articles/pdf/powers.pdf http://www.ped.muni.cz/wgeo/staff/svatonova/AGNPS/ELSE- VIER/22.htm Background information for the National Forum on Synergies Between Water Quality Trading and Wetland Mitigation Banking. Discusses the opportunities presented by using wetlands in water quality trading programs and lessons learned from Wet- land Mitigation Banking that can be applied to development of nutrient trading programs that use wetlands to generate credits. http://www2.eli.org/research/wqt_main.htm ------- # 607 608 609 610 611 612 613 614 615 Title Incentive-Based Solutions to Agricul- tural Environmental Problems: Recent Developments in Theory and Practice Nitrogen-fixing Azotobacters from Mangrove Habitat and Their Utility as Marine Biofertilizers Aquatic Plants for Water Treatment and Resource Recovery Oxygen transport through aquatic macrophytes: the role in waster water treatment Biogeochemistry of Phosphorus in Wetlands Natural Systems for Waste Manage- ment & Treatment Wetlands for Wastewater Treatment in Cold Climates. IN: Future of Water Re- use, Proceedings of the Water Reuse Symposium III. Vol. 2:962-972. Phosphorus retention in small con- structed wetlands treating agricultural drainage water. Nutrient resorption in wetland mac- rophytes: comparison across several regions of different nutrient status AAA Author Randall, Allen and Michael A. Taylor Kathiresan, S. Thade- dus Maria Ignatiam- mal, M. Babu Selvam, and S. Shanthy Reddy, K.R. and WH. Smith (eds) Reddy, K.R., E.M. D'Angelo, and T.A. DeBusk Wetzel, and R. Kadlec Reed, S.C., E.J. Middlebrooks, and R.W C rites tian, S. Black, and R. Reinhardt, M., R. Gachter, B.Wehrli, B. Muller Rejmankova, E. Pub. Date Aug. 2000 Nov-04 1987 1989 2004 1988 1984 05 Aug-05 Type Paper Abstract Abstract Abstract Publisher Journal of Agricultural and Applied Economics, 32,2(August2000):221- 134, Southern Agricultur- al Economics Association Journal of Experimental Marine Biology and Ecol- ogy; 312(1): 5-17. Nov Magnolia Press, Inc., Orlando, FL Journal of Environmental Quality 19:261-267. In Phosphorus: Agricul- ture and the Environ- ment J. T Sims and A. N. Sharpley (eds), Soil Sci- ence Society of America (In press). McGraw Hill, New York, NY AWWA Research Foun- dation, Denver, CO Journal of environmental quality. 2005 July-Aug, v. 34, no. 4, p. 1251-1259. New phytologist. 2005 Aug., v. 167, no. 2 p. 471 -482. Comments Incentive-based regulatory instruments have the potential to reduce complinance costs by encouraging efficient resource allocation and innovation in environmental technology. Cost reductions from pollution permit trading often have exceeded expectations, but the devil is in the details: the rules matter. In recent years, IB instruments of many kinds, from permit trading to various informal voluntary agreements, have been introduced in many countries. Point-nonpoint trading programs have been established in th U.S., but recorded trades have been rare. This paper speculates about prospects for performance-based moni- toring of agricultural nonpoint pollution which, we believe, would encourage trading to the benefit of farmers and society. http://ideas.repec.0rg/a/jaa/jagape/v32y2000i2p221-34.html ------- # 616 617 618 619 620 621 622 623 624 Title TMDL Case Study: Tar-Pamlico Basin, North Carolina Nitrogen Sources and Gulf hypoxia: Po- tential for Environmental Credit Trading Least-cost Management of Nonpoint Source Pollution: Source Reduction Versus Interception Strategies for Con- trolling Nitrogen Loss in the Mississippi Basin Pollutant Trading in North Carolina's River Basins: Tar-Pamlico and Neuse River Basins EMC Agenda Item No. 051 1 : TarPam- lico Nutrient Sensitive Waters Implementa- tion Strategy: Phase III Mechanisms Controlling Phosphorous Retention Capacity in Freshwater Wetlands Use of rhodamine water tracer in the marshland upwelling system Lessons Learned from Point-Nonpoint Source Trading Case Studies Lessons Learned from Point-Nonpoint Source Trading Case Studies AAA Author Research Traingle Institute and USEPA, Office of Wetlands, Oceans, and Water- sheds, Watershed Management Section Ribaudo, Marc O., Ralph Heimlich, and Mark Peters Roger Claassen, and Mark Peters Rich Gannon (North Carolina Division of Water Quality) Rich Gannon (North Carolina Division of Water Quality) Richardson, C.J. Richardson, S.D., C.S.Willson, K.A. Rusch Ringhausen, Alley Great Rivers Land Trust Ringhausen, Alley Great Rivers Land Trust Pub. Date undated 2005 May-01 Dec. 7, 2005 Apr-05 1985 Sep-04 7/11- 12/2005 7/11- 12/2005 Type Case study Paper PPt Implementa- tion Strategy Abstract Presentation Presentation Publisher Total Maximum Daily Load Program (TMDL), EPA Office of Water Quality. Site viewed on 1 1 /9fi/rw Ecological Economics. 52 (2005) 159-168. Ecological Economics; 37(2): 183-1 97. May 2001. Presentation to the Uni- versity of Pennsylvania IES Seminar North Carolina Division of Water Quality Science; 228:1 424-1 427. Ground water. 2004 Sept-Oct, v. 42, no. 5, p. 678-688. Audio Recording PowerPoint Presentation Comments In recent years, low dissolved oxygen levels, sporadic fish kills, loss of submerged vegetation, and other water quality problems have plagued North Carolina's Tar-Pamlico basin. The North Carolina Division of Environmental Management (NCDEM) responded by developing stricter nitrogen and phosphorus ef u- ent standards for dischargers in the basin. However, discharg- ers were concerned about the high capital costs that might be required to achieve the nutrient reduction goals. Consequently, a coalition of dischargers, working in cooperation with the En- vironmental Defense Fund, the Pamlico-Tar River Foundation, and NCDEM, proposed a nutrient trading framework through which dischargers can pay for the development and implemen- tation of agricultural best management practices (BMPs) to achieve all or part of the total nutrient reduction goals. The EMC approved the program in December 1989, at the time this paper was written, the implementation phase (Phase 1) was currently under way. http://www.epa.gov/owow/tmdl/cs1 0/cs1 0.htm Background information for the National Forum on Synergies Between Water Quality Trading and Wetland Mitigation Banking - http://www2.eli.org/research/wqt_main.htm Outlines and contrasts the Tar-Pamilco and Neuse River Basin Nutrient Trading programs. http://h2o.enr.state.nc.us/nps/documents/PhlllAgreementFinal4- 05.pdf This document establishes the third phase of a nutrient control Agreement for point source discharges in the TarPamlico River Basin, reaffirms loading goals set in Phase II for all sources in the basin, and proposes timeframes for restoration of nutrient- related estuarine use support. Presented at National Forum on Synergies Between Water Quality Trading and Wetland Mitigation Banking - http://www2. eli.org/research/wqt_main.htm Presented at National Forum on Synergies Between Water Quality Trading and Wetland Mitigation Banking - http://www2. eli.org/research/wqt_main.htm ------- --J CO # 625 626 627 628 629 630 631 632 633 634 635 636 637 Title In uence of Various Water Quality Sampling Strategies on Load Estimates for Small Streams Restored Wetlands as Filters to Re- move Nitrogen Lake Allatoona Phase I Diagnostic-fea- sibility Study Report for 1992-1997 Lower Boise River Ef uent Trading Demonstration Project: Summary of Participant Recommendations For a Trading Framework Rainfall Simulation Study on the Ef- fectiveness of Continuous No-till in Virginia Constructed Wetlands in Flanders: A Performance Analysis Nitrate Removal from Drained and Re coded Fen Soils Affected by Soil N Transformation Processes and Plant Uptake Nutrient Removal in Subsurface Flow Constructed Wetlands for Application in Sensitive Regions Nitrate removal in riparian wetlands: interactions between surface ow and soils Ammonium production in submerged soils and sediments: the role of reduc- ible iron Organic matter and reducible iron control of ammonium production in submerged soils Nutrient Removal Mechanisms in Constructed Wetlands and Sustainable Water Management Impact of Heavy Metals on Denitrifica- tion in Surface Wetland Sediments Receiving Wastewater AAA Author Robertson, D.M. and E.D. Roerish Romero, Jose A., Francisco A. Comin, and Carmen Garcia Rose, P. Ross & Associates Environmental Con- sulting, Ltd. Ross, B.B., PH. Da- vis, and V.L. Heath Rousseau, Diederik P. L, Peter A. Vanrol- leghem, and Niels De Pauw Ruckauf, Ulrike, Jurgen Augustin, Rolf Russow and Wolf- gang Merbach Rustige, H. and C. Platzer Rutherford, J.C. and M.L. Nguyen Sahrawat, K.L. Sahrawat, K.L. and L.T Narteh Sakadevan, K. and H.J. Bavor Sakadevan, K., Huang Zheng and H.J. Bavor Pub. Date 1999 Jul-99 1999 Sep-00 Jun-01 Nov-04 Jan-04 2001 May- Jun-04 2004 2001 1999 1999 Type Report Final Report Publisher Water Resources Re- search 35(1 2):3747-3759. Chemosphere, Volume 39, Issue 2, July 1999, Pages 323-332 A.L. Burruss Institute of Public Service. Kennesaw State University. Ken- nesaw, GA. Idaho Division of Environ- mental Quality Ecological Engineering; 23(3): 151-1 63. Nov 2004. Soil Biology and Bio- chemistry; 36(1): 77-90. Jan 2004. Water Science Technol- ogy. 2001 ;44(1 1-1 2):1 49- 55. Journal of environmental quality. 2004 May-June, v. 33, no. 3, p. 1133-1143. Communications in Soil Science and Plant Analy- sis. 2004, v. 35, no. 3-4, p. 399-41 1 . Communications in Soil Science and Plant Analy- sis. 2001 . v. 32 (9/10) p. 1543-1550. Water Science and Tech- nology, Volume 40, Issue 2, 1999, Pages 121 -128 Water Science and Tech- nology, Volume 40, Issue 3, 1999, Pages 349-355 Comments http://www.deq. state, id. us/water/data_reports/surface_water/tm- dls/boise_river_lower/boise_river_lower_ef uent_report.pdf ------- # 638 639 640 641 642 643 644 645 646 647 Title Nutrient dynamics and eutrophication patterns in a semi-arid wetland: the effects of uctuating hydrology Greenhouse-gas-trading Markets The impact of wetland vegetation dry- ing time on abundance of mosquitoes and other invertebrates Effects of inorganic nitrogen enrich- ment on mosquitoes (Diptera: Cu- licidae) and the associated aquatic community in constructed treatment wetlands. Shrimp Pond Ef uent: Pollution Prob- lems and Treatment by Constructed Wetlands Response of an Alaskan Wetland to Nutrient Enrichment Investigation of Nitrogen Transforma- tions in a Southern California Con- structed Wastewater Treatment Wetland Performance of a constructed wetland treating intensive shrimp aquaculture wastewater under high hydraulic load- ing rate Biological diversity versus risk for mosquito nuisance and disease transmission in constructed wetlands in southern Sweden A New Approach to Water Quality Trad- ing: Applying Lessons from the Acid Rain Program in the Lower Boise River Watershed AAA Author Sanchez-Carrillo, S. and M. Alvarez-Co- belas Sandor, R., M.Walsh, and R. Marques Sanford, M.R., J.B. Keiper, W.E.Walton Sanford, M.R., K. Chan, W.E.Walton Sansanayuth, P., A. Phadungchep, S. Ngammontha, S. Ngdngam, P. Sukasem, H. Hoshino and M.S. Ttabucanon Sanville, William Sartoris, James J., Joan S.Thullen, Larry B. Barber, and David E. Salas Schaafsma, Jennifer A., Andrew H. Bald- win, and Christopher A. Streb Schafer, M.L., J.O. Lundstrom, M. Pfef- fer, E. Lundkvist, J. Landin Schary, C. and K. Fischer-Vanden Pub. Date Oct-01 Aug-02 Dec-03 Sep-05 1996 Mar-88 Sep-99 Sep-99 Sep-07 2004 Type Paper Publisher Water, air, and Soil Pollu- tion Oct2001. v. 131 (1/4) p. 97-118. Philos Transact A Math Phys Eng Sci. 2002 Aug 15;360(1 797): 1889-900. Journal of the American Mosquito Control Asso- ciation. 2003 Dec., v. 19, no. 4, p. 361-366. Journal of medical ento- mology. 2005 Sept., v. 42, no. 5, p. 766-776. Water Science and Tech- nology, Volume 34, Issue 11, 1996, Pages 93-98 Aquatic Botany, Volume 30, Issue 3, March 1988, Pages 231 -243 Ecological Engineering; 14(1 -2): 49-65. Septem- ber 1999. Ecological Engineering; 14(1 -2): 199-206. Sep- tember 1999. Medical and Veterinary Entomology. 2004 Sept., v. 18, no. 3, p. 256-267. Environmental Practice 6, no. 4:281-295. Comments This paper summarizes the extension of new market mecha- nisms for environmental services, explains of the importance of generating price information indicative of the cost of mitigat- ing greenhouse gases (GHGs) and presents the rationale and objectives for pilot GHG-trading markets. It also describes the steps being taken to define and launch pilot carbon markets in North America and Europe and reviews the key issues related to incorporating carbon sequestration into an emissions-trading market. ------- --J en # 648 649 650 651 652 653 654 655 656 657 658 Title Nitrogen Renovation by Denitrification in Forest Sewage Irrigation Systems Cost Minimization of Nutrient Reduc- tion in Watershed Management Using Linear Programming Salt Tracer Experiments in Constructed Wetland Ponds with Emergent Vegeta- tion: Laboratory Study on the Forma- tion of Density Layers and Its In uence on Breakthrough Curve Analysis Inverse estimation of parameters in a nitrogen model using field data Water Quality Characteristics of Veg- etated Groundwater-fed Ditches in a Riparian Peatland The Use of Constructed Wetlands to Upgrade Treated Sewage Ef uents Before Discharge to Natural Surface Water in Texel Island, The Netherlands: Pilot Study Phosphorus Loss in Runoff from Grasslands Related to Soil Test Phos- phorus and Poultry Litter Application Market Incentives and Nonpoint Sourc- es: An Application of Tradable Credits to Urban Stormwater Management Treatment of Rainbow Trout Farm Ef uents in Constructed Wetland with Emergent Plants and Subsurface Hori- zontal Water Flow Effectiveness of a constructed wet- land for retention of nonpoint-source pesticide pollution in the lourens river catchment, South Africa Nonpoint Source Pollution, Uniform Control Strategies, and the Neuse River Basin AAA Author Schipper, L.A., WJ. Dyck, PG. Barton and PD. Hodgkiss Schleich, J. and D. White Schmid, B.H., M.A. Hengl, and U. Stephan Schmied, B. and K. Abbaspour, and R. Schulin Scholz, Miklas and Michael Trepel Schreijer, M., R. Kampf, S. Toet and J. Verhoeven Schroeder, P. Schultz, Pati Schulz, Carsten, Jbrg Gelbrecht, and Bernhard Rennert Schulz, R. and S.K.C. Peall Schwabe, K.A. Pub. Date 1989 1997 Apr-04 Mar- Apr-00 Oct-04 1997 2002 Mar-03 Jan-01 2001 Type Paper Report Paper Publisher Biological Wastes, Vol- ume 29, Issue 3, 1989, Pages 181-187 Water Resources Bulletin; 33(1): 135-1 42. Febru- ary 1997. Paper Number 95127 Water Resources. 2004 Apr;38(8):2095-102 Soil Science Society of America Journal. Mar/Apr 2000. v. 64 (2) p. 533-542. Science of The Total Environment; 332(1-3): 109-122. Oct 2004. Water Science and Tech- nology, Volume 35, Issue 5, 1997, Pages 231 -237 Ph.D. Thesis. University of Georgia. Athens, GA. USEPA Aquaculture; 217(1-4): 207-221. Mar 17, 2003. Environmental science & technology. Jan 15, 2001. v. 35 (2) p. 422-426. Review of Agricultural Economics, 2001 - black- well-synergy.com Page 1 . Review of Agricultural Economics — Volume 23, Number 2 — Pages 352- 369 Comments No abstract available, http://awra.org/~awra/jawra/papers/ J95127.html Information sheet This research investigates various policy options considered by the state of North Carolina for reducing nonpoint source pollution. Focusing on nitrogen runoff from cropping activi- ties, we estimate and compare the control costs and estuarine nutrient loadings under both the initial proposed rules, which were quite uniform, and the more exible final proposed rules. We then illustrate the magnitude to which the outcomes from models and policies can diverge depending upon the treatment of the application-specific environmental heterogeneity. Such an analysis illustrates the relative importance of certain types of heterogeneity associated with the environment on policy design and real-world outcomes. ------- --J CD # 659 660 661 662 663 664 665 666 667 668 669 670 Title Case Study: Minnesota - Pollutant Trad- ing at Rahr Malting Co. Pollutant Trading for Water Quality Improvement. A Policy Evaluation Suitability of Constructed Wetlands and Waste Stabilisation Ponds in Wastewa- ter Treatment: Nitrogen Transformation and Removal Phosphorus retention capacity of filter media for estimating the longevity of constructed wetland A Summary of U.S. Ef uent Trading and Offset Projects Nutrient Removal from Piggery Ef uent Using Vertical Flow Constructed Wet- lands in Southern Brazil Past, Present, and Future of Wetlands Credit Sales Carbon supply and the regulation of enzyme activity in constructed wetlands Nitrogen accumulation in a constructed wetland for dairy wastewater treatment Subsurface ow constructed wetland performance at a Pennsylvania camp- ground and conference center Determining the Economic Costs of Fish Kills for Recreational Users of the Tar-Pamlico River The In uence of Rainfall on the Inci- dence of Microbial Faecal Indicators and the Dominant Sources of Faecal Pollution in a Florida River AAA Author Senjem, N. Senjem, N. Senzia, M.A., D.A. Mashauri, and A.W Mayo Seo, D.C., J.S. Cho, H.J. Lee, J.S. Heo Sessions, S. and M. Leifman. Sezerino, PH., V. Reginatto, M.A. Santos, K. Kayser, S. Kunst, L.S. Philippi, and H.M. Scares Shabman, Leonard and Paul Scodari Shackle, V.J., C. Freeman, and B. Reynolds Shamir, E., T.L. Thompson, M.M. Kar- piscak, R.J. Freitas, and J. Zauderer Shannon, R.D., O.P Flite, III., and M.S. Hunter Sharratt, Jo Shehane, S.D., V.J. Harwood, J.E.Whit- lock, and J.B. Rose Pub. Date 11/5- 7/1 997 1997 2003 Jun-05 1999 2003 Dec-04 Nov-00 Apr-01 Nov- Dec-00 Dec-98 May-05 Type Case Study Paper Report Paper Publisher Environmental Regulatory Innovations Symposium Minnesota Pollution Con- trol Agency, Water Quality Division Physics and Chemistry of the Earth, Parts A/B/C; 28(20-27): 11 17-1 124. 2003. Water Research. 2005 June, v. 39, issue 11 , p. 2445-2457. Prepared for Dr. Mahesh Podar, U.S. Environmen- tal Protection Agency, Office of Water Water Science Technol- ogy. 2003; 48(2): 129-35. Discussion Paper 04-48 Resources for the Future, Washington DC Soil Biology & Biochemis- try. Nov2000. v. 32(13) p. 1935-1940. Journal of the American Water Resources As- sociation / Apr 2001 . v. 37 (2) p. 315-325. Journal of environmental quality. Nov/Dec 2000. v. 29 (6) p. 2029-2036. Department of Eco- nomics, East Carolina University Journal of Applied Microbiology, Volume 98, Issue 5, Page 1127-1136, May 2005 Comments http://www.pca.state.mn.us/hot/es-mn-r.html http://www.epa.gov/owow/watershed/hotlink.htm Not peer reviewed http://www.rff.org/documents/rff-dp-04-48.pdf http://www.awra.org/jawra/index.html Results of a survey of recreational river users. The results of the survey are used to make an estimate of the decrease in consumer surplus (monetary value of river recreation) as a result of declining water quality. The report describes the results as being similar to the published results of other studies. http://www.ecu.edu/econ/ecer/sharratt.pdf ------- --J --J # 671 672 673 674 675 676 677 678 679 680 681 Title Treatment of high-strength winery wastewater using a subsurface- ow constructed wetland Stability of phosphorus within a wetland soil following ferric chloride treatment to control Eutrophication Planning to Protect Water Resources and Natural Areas: A Comparison of the Water Basin Management Strate- gies of the Chesapeake Bay and the Netherlands Simulation of nitrogen and phos- phorus leaching in a structured soil using GLEAMS and a new submodel, "PARTLE." Seasonal Effect on Ammonia Nitrogen Removal by Constructed Wetlands Treating Polluted River Water in South- ern Taiwan An Examination of Key Elements and Conditions for Establishing a Water Quality Trading Bank Assessing the Efficacy of Dredged Materials from Lake Panasoffkee, Florida: Implication to Environment and Agriculture. Part 1 : Soil and Environ- mental Quality Aspect Ammonium Removal in Constructed Wetlands with Recirculating Subsurface Flow: Removal Rates and Mechanisms Vegetation is the main factor in nutri- ent retention in a constructed wetland buffer Microbial Immobilisation of Added Ni- trogen and Phosphorus in Constructed Wetland Buffer Nutrient requirements of seven plant species with potential use in shoreline erosion control AAA Author Shepherd, H.L., M.E. Grismer, and G. Tchobanoglous Sherwood, L.J. and R.G. Quails Shingara, Erica Shirmohammadi, A., B. Ulen, L. F. Bergstrom, and W G. Knisel Shuh-Ren Jing and Ying-Feng Lin Siems, Antje, Jenny Ahlen, and Mark Landry Sigua, G.C., M.L. Holtkamp, and S.W Coleman Sikora, F.J., Zhu Tong, L. L. Behrends, S. L. Steinberg and H. S. Coonrod Silvan, N., H.Va- sander, J. Laine Silvan, Niko, Harri Vasander, Marjut Karsisto, and Jukka Laine Sistani, K.R. and D.A. Mays Pub. Date Jul-Aug- 01 Oct-01 Apr-01 1998 Jan-04 Mar-05 2004 1995 Jan-04 Oct-03 2001 Type Master's Project White paper Paper Publisher Water environment research : a research publication of the Water Environment Federation. July/Aug 2001 . v. 73 (4) p. 394-403. Environmental science & technology. Oct 15, 2001. v. 35(20) p. 4126-4131. Department of City and Regional Planning, Uni- versity of North Carolina at Chapel Hill Transactions of the ASAE, 41 (2):353-360. Environmental Pollution; 127 (2): 291 -301. Jan 2004. Abt Associates Inc., Bethesda, MD. Environ Sci Pollut Res Int. 2004; 11 (5): 32 1-6. PMID: 1 5506635 Water Science and Tech- nology, Volume 32, Issue 3, 1995, Pages 193-202 Plant and soil. 2004 Jan., v. 258, no. 1-2, p. 179-187. Applied Soil Ecology; 24(2): 143-1 49. Oct 2003. Journal of plant nutrition. 2001 . v. 24 (3) p. 459-467. Comments Both the Chesapeake Bay and the Neatherlands face similar threats and challenges with respect to water quality and man- agement planning. This paper compares management strate- gies used to protect water resources and natural areas in both locations, http://www.planning.unc.edu/carplan/mpshingara.pdf Background information for the National Forum on Synergies Between Water Quality Trading and Wetland Mitigation Banking - http://www2.eli.org/research/wqt_main.htm Study to quantify the effect of applied lake dredged materials on soil physico-chemical properties (soil quality) at the disposal site. The experimental treatments that were evaluated consisted of different proportions of lake dredged materials at 0, 25, 50, 75, and 100%. The study demonstrated that when lake dredged materials were incorporated into existing topsoil they would have the same favorable effects as liming the field. http://www.kluweronline.com/issn/0032-079X/contents ------- --J oo # 682 683 684 685 686 687 688 689 690 691 Title Ancillary benefits of wetlands con- structed primarily for wastewater treatment Constructed Wetlands as Nitrogen Sinks in Southern Sweden: An Empiri- cal Analysis of Cost Determinants Constructed wetlands as a sustainable solution for wastewater treatment in small villages The Origins, Practice, and Limits of Emissions Trading Seasonal and Annual Performance of a Full-Scale Constructed Wetland Sys- tem for Sewage Treatment in China Role of Scirpus lacustris in Bacterial and Nutrient Removal from Wastewater Nutrient Cycling at the Sediment-Water Interface and in Sediments at Chirica- hueto Marsh: A Subtropical Ecosystem Associated with Agricultural Land Uses S-1004: 2003 Annual Meeting Soil Phosphorus in Isolated Wetlands of Subtropical Beef Cattle Pastures The Effects of Season and Hydro- logic and Chemical Loading on Nitrate Retention in Constructed Wetlands: A Comparison of Low- and High-Nutrient Riverine Systems AAA Author Slather, J.H. Sbderqvist, Tore Solano, M.L., P. So- riano, M.P Ciria Solomon, Barry D. (Barry David) Song, Zhiwen, Zhaopei Zheng, Jie Li, Xianfeng Sun, Xiaoyuan Han, Wei Wang, and Min Xu Soto, R, M. Garcia, E. de Luis and E. Becares Soto-Jimenez, M. R, R. Paez-Osuna, and H. Bojorquez-Leyva Southern Asso- ciation of Agricultural Experiment Station Directors Sperry, C.M. Spieles, Douglas J. and William J. Mitsch Pub. Date 1998 Aug-02 Jan-04 1995 Jan-06 1999 Reb-03 2003 2004 Sep-99 Type Paper Minutes Abstract Publisher In: D.A. Hammer (ed.) Constructed Wetlands for Wastewater Treatment, Municipal, Industrial and Agricultural. Lewis Pub- lishers, Chelsea, Ml. Ecological Engineering; 19(2): 161-1 73. Aug 2002. Biosystems engineering. 2004 Jan., v. 87, no. 1, p. 109-118. Journal of Policy History; 14(3):293-320. 2002. Ecological Engineer- ing, In Press, Corrected Proof, Available online 4 January 2006 Water Science and Tech- nology, Volume 40, Issue 3, 1999, Pages 241 -247 Water Research; 37(4): 719-728. Re b 2003. Southern Association of Agricultural Experiment Station Directors Master's Thesis, Univer- sity of Rlorida. 2004. Ecological Engineering; 14(1 -2): 77-91. Septem- ber 1999. Comments http://www.sciencedirect.eom/science/journal/1 53751 1 0 This paper is an examination of how emissions trading pro- grams evolved as an unintended consequence of the Clean Air Act of 1970. Despite some early theoretical work by economists, most precedent-setting decisions were made as regulators, firms, environmental groups, and policy analysts struggled to address practical issues of implementation associated with the Clean Air Act. Today, after almost three decades of practice and theory having refined one another, the ability of program design- ers and policy analysts to anticipate and address the challenges of specific trading applications has significantly improved. However, some early decisions resulted in precedents that have never received the level of deliberation and debate they warrant. http://www.lgu. umd.edu/lgu_v2/pages/reportMeet/1 58_min.doc http://www.archbold-station.org/ABS/publicationsPDR/Sperry- 2004-thesis.pdf ------- --J CD # 692 693 694 695 696 697 698 699 700 701 Title Emissions of Greenhouse Gases from Ponds Constructed for Nitrogen Removal Monitoring and modeling lateral trans- port through a large in situ chamber Pollutant Trading Guidance Nonpoint Source Management Plan Transaction Costs and Tradable Permits The Next Generation of Market-Based Environmental Policies SCS Runoff Equation Revisited for Variable Source Runoff Areas Does Batch Operation Enhance Oxidation in Subsurface Constructed Wetland? In uence of Nutrient Supply on Growth, Carbohydrate, and Nitrogen Metabolic Relations in Typha angustifolia Toward an Effective Watershed-Based Ef uent Allowance Trading System: Identifying the Statutory and Regula- tory Barriers to Implementation AAA Author Stadmark, Johanna and Lars Leonardson Starr, J.L., A.M. Sa- deghi, Y.A. Pachepsky State of Idaho, De- partment of Environ- mental Quality State of Idaho, Divi- sion of Environmental Quality Stavins, Robert N. Stavins, Robert N.and Bradley W Whitehead Steenhuis, T.S., M. Winchell, I. Rossing, J.A. Zollweg, and M.F. Walter Stein, O.R., PB. Hook, J.A. Bieder- man, W.C.Allen, and D.J. Borden Steinbachova- Vojtiskova, Lenka, Edita Tylova, Ales Soukup, Hana Hana Novicka, Olga Votrubova, Helena Lipavska, and Hana i kova Stephenson, K., L. Shabman, and L.L. Geyer Pub. Date Dec-05 Nov- Dec-05 Nov-03 Dec-99 1995 Nov-96 1995 2003 Aug-05 1999 Type Draft Report Paper Paper Publisher Ecological Engineer- ing;25(5):542-551. Dec. 1 , 2005. Soil Science Society of America journal. 2005 Nov-Dec, v. 69, no. 6, p. 1871-1880. State of Idaho, Depart- ment of Environmental Quality State of Idaho, Division of Environmental Quality Journal of Environmental Economics and Manage- ment, 29, 133-148. Resource Economics, 1 1 , 571-585. Discussion Paper 97-10 Prepared for Environ- mental Reform: The Next Generation Project, Daniel Esty and Marian Chertow, editors, Yale Center for Environmental Law and Policy. J. of Irrigation and Drain- age Eng. ASCE 121:234- 238. Water Science Technol- ogy. 2003;48(5): 149-56. Environmental and Experimental Botany, In Press, Corrected Proof, Available online 2 August 2005 Environmental Lawyer, Vol.5, Pp. 775-815, 1999 Comments http://www.deq. state. id. us/water/prog_issues/waste_water/pollut- antjrading/polluta nt_tradingjguidance_entire.pdf http://www.deq. Idaho. gov/water/data_reports/surface_water/nps/ management_plan_entire.pdf http://www.rff.org/rff/Documents/RFF-DP-97-10.pdf ------- oo o # 702 703 704 705 706 707 708 Title Market Based Strategies and Nutrient Trading: What You Need to Know (563 KB) Freshwater Wetlands, Urban Storm- water, and Nonpoint Pollution Control: A Literature Review and Annotated Bibliography (2nd Ed.) Spatial variability in palustrine wetlands Comparison of soil and other environ- mental conditions in constructed and adjacent palustrine reference wetlands Marsh-Pond-Marsh Constructed Wet- land Design Analysis for Swine Lagoon Wastewater Treatment Assessing TMDL Effectiveness Us- ing Flow-adjusted Concentrations: A Case Study of the Neuse River, North Carolina The Use of Wetlands for Controlling Stormwater Pollution AAA Author Stephenson, Kerns and Shabman Stockdale, E.G. Stolt, M.H., M.H. Genthner, WL. Dan- iels, and V.A. Groover Stolt, M.H., M.H. Genthner, WL. Daniels, V.A. Groover, S. Nagle, and K.C. Haering Stone, K.C., M.E. Poach, PG. Hunt, and G.B. Reddy Stow, C.A. and M.E. Borsuk ^trprkpr F W 1 M OUClslxCI, Q.VV., J.lvl. Kersnar, E.D. Driscoll and R.R. Horner Pub. Date Nov-95 1991 Mar- Apr-01 Dec-00 Oct-04 May-15- 03 Apr-92 Type Report Bibliography Paper Abstract Publisher Department of Agri- cultural and Apprlied Economics, Virginia Tech, Blacksburg, VA and Virginia Division of Soil and Water Conservation, Department of Conserva- tion and Recreation WA Department of Ecol- ogy, Olympia, WA Soil Science Society of America journal. Mar/Apr 2001 . v. 65 (2) p. 527-535. Wetlands : the journal of the Society of the Wetlands Scientists. Dec 2000. v. 20 (4) p. 671 -683. Ecological Engineering; 23(2): 127-133. Oct 1, 2004 Environ Sci Technol. 2003 May 15;37(10):2043-50 The Terrene Inst., Wash- ington, DC Comments Addresses policy tools that can be used to better achieve the dual objectives of improved environmental quality and more exible, cost-effective environmental policies. In this paper, the authors propose the use of" ow-adjusted" pollutant concentrations to evaluate the effectiveness of man- agement actions taken to meet approved TMDLs. Pollutant con- centrations are usually highly correlated with stream ow, and ow is strongly weather-dependent. Thus, pollutant loads, which are calculated as pollutant concentration multiplied by stream- ow, have a large weather-dependent variance component. This natural variation can be removed by calculating ow-adjusted concentrations. While such values are not a direct measure of pollutant load, they make it easier to discern changes in stream- water quality. Additionally, they are likely to be a better predic- tor of pollutant concentrations in the receiving waterbody. We demonstrate the use of this technique using long-term nutrient data from the Neuse River in North Carolina. The Neuse River Estuary has suffered many eutrophication symptoms, and a program to reduce nutrient loading has been in place for several years. We show that, in addition to revealing recent reductions in nutrient inputs, annual ow-adjusted riverine nutrient concen- trations show a more pronounced relationship with estuarine nutrient concentrations than do annual nutrient loads. Thus, we suggest that the calculation of ow-adjusted concentrations is a useful technique to aid in assessment of TMDL implementation. http://www.ncbi. nlm.nih.gov/entrez/query.fcgi?cmd=Retrieve&db =PubMed&list_uids=12785506&dopt=Abstract ------- # 709 710 711 712 713 714 715 716 717 718 719 720 721 Title Aquaculture Sludge Removal and Sta- bilization within Created Wetlands Enhanced Removal of Organic Matter and Ammoniacal-nitrogen in a Column Experiment of Tidal Flow Constructed Wetland System Watershed-scale simulation of sediment and nutrient loads in Georgia Coastal Plain streams using the an- nualized AGNPS model Natural Wastewater Treatment in Hungary Characterization of oxidation-reduction processes in constructed wetlands for swine wastewater treatment Seasonal dynamics of nutrients and physico-chemical conditions in a con- structed wetland for swine wastewater treatment Water Quality Trading: Nonpoint Credit Bank Model Charting the Course: The Comprehen- sive Conservation and Management Plan for Tampa Bay The Tampa Bay Nitrogen Management Consortium Action Plan 1995 - 1999 Plants as Ecosystem Engineers in Sub- surface- ow Treatment Wetlands Growth and nutrient dynamics of soft- stem bulrush in constructed wetlands treating nutrient-rich wastewaters. Plants for constructed wetlands -A comparison of the growth and nutrient uptake characteristics of eight emer- gent species Linking Pond and Wetland Treatment: Performance of Domestic and Farm Systems in New Zealand AAA Author Summerfelt, Steven T, Paul R.Adler, D. Michael Glenn and Ricarda N. Kretschmann Sun, Guangzhi, Yaqian Zhao and Stephen Allen Suttles, J.B., G.Vel- lidis, D.D. Bosch, R. Lowrance, J.M. Sheri- dan, E.L. Usery Szabo, A., A. Oszto- ics, and F. Szilagyi Szogi, A.A., PG. Hunt, E.J. Sadler, D.E. Evans Szogi, A.A., PG. Hunt, F.J. Humenik, K.C. Stone, J.M. Rice, and .E.J. Sadler Talbert, Gerald Tampa Bay National Estuary Program Tampa Bay Nitrogen Management Consor- tium. Partnership for Progress. Tanner, C.C. Tanner, C.C. Tanner, C.C. Tanner, C.C. and J.P Sukias Pub. Date Jan-99 Jan-06 Sep- Oct-03 2001 Mar-04 1994 No date Dec-96 Mar-98 2001 2001 1996 2003 Type Paper Plan Plan Publisher Aquacultural Engineer- ing, Volume 19, Issue 2, January 1999, Pages 81-92 Journal of Biotechnology; 115(2): 189-197. Jan 26, 2005. Transactions of the ASAE. 2003 Sept-Oct, v. 46, no. 5, p. 1325-1335. Water Science Technolo- gy. 2001 ;44(1 1 -1 2):331 -8. Applied Engineering in Agriculture. 2004 Mar., v. 20, no. 2, p.1 89-200. ASAE Paper #94-2602. National Association of Conservation Districts. Tampa Bay National Estuary Program Tampa Bay Nitrogen Management Consortium. Partnership for Progress. Water Science Technol- ogy. 2001 ;44(1 1 -1 2):9-1 7. Wetlands Ecology and Management. 9: 49-73 Ecological Engineering 7: 59-83. Water Science Technol- ogy. 2003;48(2): 331-9. Comments Background information for the National Forum on Synergies Between Water Quality Trading and Wetland Mitigation Banking - http://www2.eli.org/research/wqt_main.htm ------- # 722 723 724 725 726 727 728 729 730 731 732 Title Constructed wetlands in New Zealand- Evaluation of an emerging "natural" wastewater treatment technology Relationships between loading rates and pollutant removal during matura- tion of gravel-bed constructed wetlands Using Constructed Wetlands to Treat Subsurface Drainage From Intensively Grazed Dairy Pastures in New Zealand Nutrient Removal by a Constructed Wetland Treating Subsurface Drainage from Grazed Dairy Pasture Plants for Constructed Wetland Treat- ment Systems - A Comparison of the Growth and Nutrient Uptake of Eight Emergent Species Effect of Water Level Fluctuation on Nitrogen Removal from Constructed Wetland Mesocosms Effect of Loading Rate and Planting on Treatment of Dairy Farm Wastewaters in Constructed Wetlands-ll. Removal of Nitrogen and Phosphorus Nitrogen Processing Gradients in Subsurface- ow Treatment Wetlands: In uence of Wastewater Characteristics Tradable Discharge Permits System for Water Pollution of the Upper Nanpan River, China Developing Cost-Effective Geographic Targets for Nitrogen Reductions in the Long Island Sound Watershed An Evaluation of Pollutant Removal from Secondary Treated Sewage Ef- uent Using a Constructed Wetland System AAA Author Tanner, C.C., J.P.S. Sukias, and C. Dall Tanner, C.C., J.P.S. Sukias, and M.P Upsdell Tanner, C.C., M.L. Nguyen, and J.P. Sukias Tanner, C.C., M.L. Nguyen, and J.P.S. Sukias Tanner, Chris C. Tanner, Chris C., Joachim D'Eugenio, Graham B. McBride, James P. S. Sukias and Keith Thompson Tanner, Chris C., John S. Clayton and Martin P. Upsdell Tanner, Chris C., Robert H. Kadlec, Max M. Gibbs, James PS. Sukias, and M. Long Nguyen Tao, Wendong, WeiminYang, and Bo Zhou Tedesco, M. and P. Stacey Thomas, PR., P. Glover and T Kala- roopan Pub. Date 2000 1998 2003 Jan-05 Sep-96 Jan-99 Jan-95 Mar-02 May-03 Jun-96 1995 Type Proceedings of Water 2000: Guarding the Global Resource Conference, Auckland, March 19-23. Paper Proceedings Publisher CD ROM ISBN 1-877134- 30-9, New Zealand Water and Wastes Association. Journal of Environmental Quality 27: 448-458. Water Science Technol- ogy. 2003;48(5):207-1 3. Agriculture, Ecosystems & Environment; 105(1-2): 145-162. Jan 2005. Ecological Engineer- ing, Volume 7, Issue 1, September 1996, Pages 59-83 Ecological Engineering, Volume 12, Issues 1-2, January 1999, Pages 67-92 Water Research, Volume 29, Issue 1 , January 1 995, Pages 27-34 Ecological Engineering; 18(4): 499-520. March 1, 2002. Watersheds '96. Water Environment Federation and U.S. EPA Water Science and Tech- nology, Volume 32, Issue 3, 1995, Pages 87-93 Comments http://www.idrc.org.sg/uploads/user-S/10536118430ACF64.pdf . http://www.epa.gov/owowwtr1 /watershed/Proceed/tedesco.htm ------- oo CO # 733 734 735 736 737 738 739 740 741 Title Denitrification in an estuarine head- water creek within an agricultural watershed Managing Vegetation in Surface- ow Wastewater-treatment Wetlands for Optimal Treatment Performance Effects of Vegetation Management in Constructed Wetland Treatment Cells on Water Quality and Mosquito Produc- tion Tradable Permit Approaches to Pollu- "Introduction." Pp. xi-xxviii in Emissions Trading Programs. Volume I. Implemen- tation and Evolution Constructed Wetlands as Recirculation Filters in Large-scale Shrimp Aquacul- The Utilization of a Freshwater Wetland for Nutrient Removal from Secondarily Treated Wastewater Ef uent Cost-Effectiveness of Agricultural BMPs for Nutrient Reduction in the Tar- Pamlico Basin Cost-Effectiveness of Agricultural BMPs for Nutrient Reduction in the Tar- Pamlico River Basin (NC) AAA Author Thompson, S.P, M.F. Piehler, and H.W Paerl Thullen, Joan S., James J. Sartoris, and S. Mark Nelson Thullen, Joan S., James J. Sartoris, and William E.Walton Tietenberg, T Tietenberg, T. Tilley, David Rogers, Harish Badrinaray- anan, Ronald Rosati, and Jiho Son Tilton, D.L. and R.H. Kadlec Tippet, J. and R. Dodd Research Triangle Institute Tippett, John P. and Randall C. Dodd Pub. Date Dec-00 Dec-05 Mar-02 2000 2001 Jun-02 1979 Jan-95 Jul-95 Type Abstract Paper Summary of a Paper Publisher Journal of environmental quality. Nov/Dec 2000. v. 29(6) p. 1914-1923. Ecological Engineering; 25(5): 583-593. Dec 2005. Ecological Engineering; 18(4): 441 -457. March 1, 2002. In: Kaplowitz, M.D. (ed.) Property Rights, Econom- ics, and the Environment. JAI Press Inc., Stanford, Connecticut. Aldershot, England: Ash- gate Publishing Limited. Aquacultural Engineering; 26(2): 81 -109. June 2002. Journal of Environmental Quality; 8:328-334. 1979. North Carolina Depart- ment of Environment, Health, and Natural Resources Project Spotlight, NWQEP Noted, The NCSU Water Quality Group Newsletter. North Carolina Cooperative Extension Service, North Carolina State University, College of Agricultural and Life Sciences. Num- ber 72, July 1995, ISSN 1062-9149 Comments This paper discusses some of the technical work that supports the Tar-Pamlico Nutrient Trading Program implementation. In order to help the Program participants set a reasonable cost for trading nitrogen or phosphorus between point and nonpoint sources and understand how cost effective different best man- agement practices (BMPs) are, the authors developed cost- effectiveness estimates (expressed as $/kilogram of nutrient load reduced) for cost-shared agricultural BMPs in the Basin. The data represent BMPs that were implemented from 1985 to 1994. Evaluates the cost-effectiveness of Agricultural BMPs. The authors did not include the cost-effectiveness of restoring and protecting riparian areas and wetlands in their analysis and indicated additional research is needed on this subject. http://www.bae.ncsu.edu/programs/extension/wqg/issues/72. html ------- # 742 743 744 745 746 747 748 749 750 751 752 753 754 Title Nitrogen Fixation Associated with Juncus balticus and Other Plants of Oregon Wetlands Nutrient Removal through Autumn Harvest of Phragmites australis and Typha latifolia Shoots in Relation to Nutrient Loading in a Wetland System Used for Polishing Sewage Treatment Plant Ef uent The Functioning of a Wetland System Used for Polishing Ef uent from a Sew- age Treatment Plant Biological Control of Water Pollution Quantifying Nitrogen Retention in Sur- face Flow Wetlands for Environmental Planning at the Landscape-scale Hydrologic characterization of two prior converted wetland restoration sites in eastern North Carolina The Effects of NH4+ and NO3? on Growth, Resource Allocation and Nitrogen Uptake Kinetics of Phragmites australis and Glyceria maxima Natural Wetlands and Urban Stormwa- ter: Potential Impacts and Management Subsurface Flow Constructed Wetlands for Wastewater Treatment: A Technol- ogy Assessment Process Design Manualu Constructed Wetlands and Aquatic Plant Systems for Municipal Wastewater Treatment Report on the Use of Wetlands for Municipal Wastewater Treatment and Disposal Freshwater Wetlands for Wastewater Management Environmental Assess- ment Handbook The Effects of Wastewater Treatment Facilities on Wetlands in the Midwest AAA Author Tjepkema, J.D. and H.J. Evans Toet, S., M. Bouw- man, A. Cevaal, and J.T.A. Verhoeven Toet, Sylvia, Richard S.P van Logtestijn, Michiel Schreijer, Ruud Kampf, and Jos T.A. Verhoeven Tourbier, J. and R.W Pierson (eds) Trepel, Michael and Luca Palmeri Tweedy, K.L. and R.O. Evans Tylova-Munzarova, Edita, Bent Lorenzen, Hans Brix, and Olga Votrubova U.S. EPA U.S. EPA U.S. EPA U.S. EPA U.S. EPA U.S. EPA Pub. Date 1976 2005 Jul-05 1976 Aug-02 Sep- Oct-01 Apr-05 Feb-93 Jul-93 Sep-88 Oct-87 Sep-85 1983 Type Abstract Abstract Abstract Abstract Abstract Abstract Abstract Publisher Soil Biology and Bio- chemistry, Volume 8, Issue 6, 1976, Pages 505-509 Journal of Environmental Science and Health Part A (2005) 40(6-7): 11 33- 1156 Ecological Engineering; 25(1 ): 101-1 24. Jul 20, 2005. Univ. of Pennsylvania Press, Philadelphia, PA Ecological Engineering; 19(2): 127-1 40. Aug 2002. Transactions of the ASAE. Sept/Oct 2001 . v. 44 (5) p. 1135-1142. Aquatic Botany; 81 (4): 326-342. Apr 2005. EPA843-R-001 . Office of Wetlands, Oceans and Watersheds, Washington, DC EPA832-R-93-001 . Office of Water, Washington, DC EPA 625/1 -88/022. Center for Environmental Research Information, Cincinnati, OH EPA 430/09-88-005. Of- fice of Municipal Pollution Control, Washington, DC EPA 904/9-85-1 35. Re- gion IV, Atlanta, GA EPA 905/3-83-002. Re- gion V, Chicago, IL Comments ------- oo en # 755 756 757 758 759 760 761 762 763 764 765 766 Title Constructed Wetlands for Wasterwater Treatment and Wildlife Habitat: 17 Case Studies The Ecological Impacts of Wastewater on Wetlands, An Annotated Bibliogra- phy Preliminary Review for a Geographic and Monitoring Program Project: A Review of Point Source-Nonpoint Source Ef uent Trading/Offset Systems in Water Sheds Health Threats Grow from Tons of Manure The Phosphorus Index: A Phosphorus Assessment Tool Bank Review and Certification Require- ments: A Wetland Mitigation Banking Perspective Constructed wetlands bibliography Assessing a Neural Network Modeling Approach for Predicting Nutrient Loads in the Mahantango Watershed Water Quality Training Water Quality Trading Assessment Handbook: EPA Region 10's Guide to Analyzing Your Watershed National Water Quality Trading Assess- ment Handbook Water Quality Trading Assessment Handbook: EPA Region 10's Guide to Analyzing Your Watershed AAA Author U.S. EPA U.S. EPA/U.S. F&WL Service U.S. Geological Service Unger, H. United States Depart- ment of Agriculture, Natural Resources Conservation Service Urban, David T Land and Water Resources, Inc. US Department of Agriculture US Department of Agriculture: Agri- cultural Research Service US Environmental Protection Agency US Environmental Protection Agency US Environmental Protection Agency US Environmental Protection Agency Pub. Date 1993 1984 Jun-05 2002 Aug-94 7/11- 12/2005 2000 Ac- cessed Aug-00 Jul-03 Nov-04 Jul-03 Type Abstract Open file report 03-79 Report Presentation Web-site fact sheet Handbook Handbook Publisher EPA 832-R-93-005. Office of Wastewater Manage- ment, Washington, DC. EPA 905/3-84-002. Region V, Chicago, IL and U.S. F&WL Service, Kear- neysville, WY U.S. Geological Service Atlanta Journal Constitu- tion. November 24, 2002. United States Department of Agriculture, Natural Resources Conservation Service PowerPoint Presentation Ecological Sciences Division of the Natural Resources Conserva- tion Service and the Water Quality Information Center at the National Agricultural Library US Department of Agriculture: Agricultural Research Service US Environmental Protec- tion Agency EPA910-B-03-003, 100 pgs EPA841-B-04-001 EPA910-B-03-003, 100 pgs Comments http://pubs.usgs.gov/of/2003/of03-079/WoodjDFR03-79.pdf http://www.nrcs.usda.gov/technical/ECS/nutrient/pindex.html http://www.nal. usda.gov/wqic/Constructed_Wetlands_all/index. html (January 2006). http://www.ars.usda.gov/research/projects/projects.htm7accn no=410035 A newsletter acknowledging the importance of nutrient trading in meeting reduction goals, the process the nutrient trading negotiation team underwent to reach consensus, and a listing of the recommended fundamental principles and elements of a trading program. http://www.epa.gov/OWOW/watershed/trading.htm http://yosemite.epa.gov/R10/OI.NSF/ 34090d07b77d50bd88256b79006529e8/ 642397cf31d9997388256d66007d53a7?OpenDocument http://www.epa.gov/owow/watershed/trading/handbook/ http://yosemite.epa.gov/R10/OI.NSF/ 34090d07b77d50bd88256b79006529e8/ 642397cf31d9997388256d66007d53a7?OpenDocument ------- oo CD # 767 768 769 770 771 772 773 774 775 776 777 778 Title National Water Quality Trading Assess- ment Handbook Shepherd Creek, OH Case Study National Management Measures to Protect and Restore Wetlands and Riparian Areas for the Abatement of Nonpoint Source Pollution Sharing the Load: Ef uent Trading for Indirect Dischargers The Twenty Needs Report: How Research Can Improve the TMDL Program Improving Air Quality with Economic Incentive Programs Better Assessment Science Integrating Non-Point Sources (BASINS) Polluted Runoff (Nonpoint Source Pol- lution): Clean Water Act Section 319 Introduction to the Clean Water Act Guiding Principles for constructed Treatment Wetlands: Providing for Wa- ter Quality and Wildlife Habitat Manual: Constructed Wetlands Treat- ment of Municipal Wastewaters Free Water Surface Wetlands for Wasterwater Treatment: A Technology Assessment AAA Author US Environmental Protection Agency US Environmental Protection Agency US Environmental Protection Agency US Environmental Protection Agency, New Jersey Depart- ment of Environmen- tal Protection, and Passaic Valley Sewer- age Commissioners US Environmental Protection Agency, Office of Water US EPA US EPA US EPA US EPA US EPA US EPA US EPA Pub. Date Nov-04 Jul-05 May-98 2002 2001 2003 Oct-05 Mar-03 Oct-00 2000 1999 Type Handbook Web page Paper Report Website Website Publisher EPA841-B-04-001 US Environmental Protec- tion Agency EPA841-B-05-003, US Environmental Protection Agency Office of Water, Washington, DC. July 2005. U.S. EPA, Office of Policy Planning and Evaluation, with New Jersey Depart- ment of Environmental Protection and Passaic Valley Sewerage Com- missioners. EPA-231-R-98-003 EPA841-B-02-002, US Environmental Protection Agency Office of Water, Washington DC (43 pp). 2002. Office of Air and Radia- tion. EPA-425/R-01 -001 . US EPA US EPA, Office of Water. October, 2005. US EPA, Watershed Academy Web. March 2003. Office of Wetlands, Oceans and Watersheds. Washington, DC, EPA 843-B-00-003, October 2000. EPA/625/R-99/010. Office of Research and Devel- opment, Cincinnati, OH. EPA832-S-99-001.0ffice of Wastewater Manage- ment, Washington, DC. Comments http://www.epa.gov/owow/watershed/trading/handbook/ http://www.epa.gov/owow/nps/wetmeasures/ http://www.epa. gov/owow/tmdl/20needsreport_8-02.pdf http://www.epa.gov/ostwater/BASINS/index.html. http://www.epa.gov/owow/nps/cwact.html. Home page for the Clean Water Act Section 319 with links and information on grants, case studies and policy directions. http://www.epa.gov/watertrain/cwa/index.htm. Online tutorial on the Clean Water Act. Introduces guiding principles for planning, sitting, design, con- struction, operation, maintenance and monitoring of constructed treatment wetlands. Provides information on current Agency policies, permits, regulations and resources. ------- # 779 780 781 782 783 784 785 786 787 788 789 790 791 792 Title Section 319 Nonpoint Soucre Program Success Story, North Carolina, Tar- Pamlico Basin Agricultural Manage- ment Strategy Endenton Stormwater Wetland Project: Wetland Systems Reduce Nitrogen Concentrations Nutrient Profiles in the Everglades: Examination Along the Eutrophication Gradient Simulation of the Effects of Nutrient Enrichment on Nutrient and Carbon Dynamics in a River Marginal Wetland A Model of Carbon, Nitrogen and Phosphorus Dynamics and Their Inter- actions in River Marginal Wetlands Carbon, nitrogen and phosphorus cy- cling in river marginal wetlands; model examination of landscape geochemical ows Soil nitrogen dynamics in organic and mineral soil calcareous wetlands in eastern New York Nitrogen Removal in Constructed Wet- lands Treating Nitrified Meat Process- ing Ef uent An Operational Survey of a Natural Lagoon Treatment Plant Combining Macrophytes and Microphytes Basins Emergent Plant Decomposition and Sedimentation: Response to Sediments Varying in Texture, Phosphorus Content and Frequency of Deposition Impact of drying and re-wetting on N, P and K dynamics in a wetland soil Nutrient Dynamics in Minerotrophic Peat Mires Evolving Environmental Policies and Asset Values: Nutrient Trading Schemes In The Netherlands Horizontal Sub-surface Flow and Hy- brid Constructed Wetlands Systems for Wastewater Treatment AAA Author US EPA, Office of Water Quality US EPA, Office of Water Quality Vaithiyanathan, P. and C.J. Richardson Van der Peijl, M. J., M.M.P Van Oorschot, and J.T.A. Verhoeven Van der Peijl, M.J. and J.T.A. Verhoeven van der Peijl, M.J. and J.T.A. Verhoeven Van Hoewyk, D., P.M. Groffman, E. Kiviat, G. Mihocko, and G. Stevens van Oostrom, A.J. Vandevenne, Louis Vargo, Sharon M., Robert K. Neely and Stephen M. Kirkwood Venterink, H., T.E. Davidsson, K. Kiehl, L. Leonardson Verhoeven, J.T.A. Vukina, T. and A. Wossink Vymazal, Jan Pub. Date Jul-05 Ac- cessed 7-Oct- 97 Oct-00 Jun-99 Jul-00 Nov- Dec-00 1995 1995 Aug-98 Jun-02 1986 6/25- 27/1 998 Dec-05 Type Case Study Publisher US EPA, Office of Water Quality, EPA841-F-05- 0048 Section 319 Success Stories, Vol. Ill Science of the Total Environment. 1997 Oct 7;205(1):81-95. Ecological Modelling; 134(2-3): 169-1 84. Octo- ber 30, 2000. Ecological Modelling; 11 8(2-3): 95-1 30. June 15, 1999. Biogeochemistry. July 2000. v. 50(1) p. 45-71. Soil Science Society of America journal. Nov/Dec 2000. v. 64 (6) p. 2168- 2173. Water Science and Tech- nology, Volume 32, Issue 3, 1995, Pages 137-1 47 Water Science and Tech- nology, Volume 32, Issue 3, 1995, Pages 79-86 Environmental and Experimental Botany, Vol- ume 40, Issue 1 , August 1 998, Pages 43-58 Plant and soil. June 2002. v. 243(1) p. 119-130. Aquatic Botany, Volume 25, 1986, Pages 117-137 World Congress of Envi- ronmental and Resource Economists, Venice, Ecological Engineering; 25( 5): 478-790. Dec. 1 , 2005. Comments http://www.epa.gov/nps/Success319/state/ncJar.htm http://www.kluweronline.com/issn/0032-079X/contents no copy or abstract found ------- oo oo # 793 794 795 796 797 798 799 800 801 Title The Use of Sub-surface Constructed Wetlands for Wastewater Treatment in the Czech Republic: 10 Years Experi- ence Constructed Wetlands for Wastewater Treatment in the Czech Republic the First 5 Years Experience Constructed Wetlands for Wastewater Treatment in the Czech Republic: State of the Art Nutrient Trading: Harnessing Com- merce as a Tool to Control Water Pollution Vegetation management to stimulate denitrification increases mosquito abundance in multipurpose constructed treatment wetlands Phosphorus Credit Trading in the Cherry Creek Basin: An Innovative Approach Phosphorus Credit Trading in the Kal- amazoo River Basin: Forging Nontradi- tional Partnerships Phosphorus Credit Trading in the Fox- Wolf Basin: Exploring Legal, Economic, and Technical Issues Nitrogen Credit Trading in Maryland: A Market Analysis for Establishing a Statewide Framework AAA Author Vymazal, Jan Vymazal, Jan Vymazal, Jan Wall, Roland Walton, WE. and J.A. Jiannino Water Environment Research Foundation Water Environment Research Foundation Water Environment Research Foundation Water Environment Research Foundation Pub. Date Jun-02 1996 1995 un- known Mar-06 2000 2000 2000 2002 Type Report Paper Paper Paper Paper Publisher Ecological Engineering; 18(5): 633-646. June 2002. Water Science and Tech- nology, Volume 34, Issue 11, 1996, Pages 159-164 Water Science and Tech- nology, Volume 32, Issue 3, 1995, Pages 357-364 Academy of Natural Sci- ences Web site Journal of the American Mosquito Control Asso- ciation. 2005 Mar., v. 21, no. 1 , p. 22-27. Water Environment Re- search Foundation 1 30 pages. Soft cover. Water Environment Re- search Foundation 282 pages. Soft cover. Water Environment Re- search Foundation 1 1 0 pages. Soft cover. Water Environment Re- search Foundation 90 pages. Soft cover. Comments http://www.acnatsci.org/education/kye/pp/kye7152004.html Comprehensively documents the development and implementa- tion of the Cherry Creek Basin Water Quality Authority's trading program in Denver, Colorado, while highlighting several other trading programs. By identifying the similarities and differences in program design and linking those key elements to scien- tific, economic, and institutional conditions in the watershed community, this report examines some lessons, guidelines, and patterns emerging from the growing field of trading. Paper available for purchase at: http://www.werf.org/AM/Template. cfm?Section=Research_Profile&Template=/CustomSource/Re- search/PublicationProfile.cfm&id=97-IRM-5a Describes a program of watershed-based trading intended to reduce phosphorus and sediment loading in selected reaches of the Kalamazoo River in Michigan. Examines the environmental and economic benefits of trading between point and nonpoint sources. Identifies policy issues and technical design elements vital to the design of a statewide water quality trading program. Describes the pursuit of watershed-based trading by Fox -Wolf Basin 2000, a nonprofit watershed alliance in northeastern Wis- consin. Examines the region's history of water quality problems, analyzes legal and economic issues connected with trades, and describes preliminary work commenced in each basin toward establishment of total maximum daily loads. This report explores whether a market for nitrogen credits could help wastewater treatment plants in Maryland achieve cost-ef- fective water quality objectives. The results of this study indicate that, compared with approaches that require all plants to attain equal nitrogen concentrations, trading options could achieve the same environmental objectives while saving millions of dollars. Non-WERF subscribers can order hard copies of this report for $65.00 each plus postage and handling. To order copies, contact David Morroni at 703-684-2470. ------- oo CD # 802 803 804 805 806 807 808 809 810 811 Title Nitrogen Credit Trading in the Long Island Sound Watershed Phosphorus Credit Trading in the Kal- amazoo River Basin: Forging Nontradi- tional Partnerships Modelling the Impact of Historical Land Uses on Surface-water Quality Using Groundwater Flow and Solute-transport Models Laboratory assessment of atrazine and uometuron degradation in soils from a constructed wetland In situ removal of dissolved phosphorus in irrigation drainage water by planted oats: preliminary results from growth chamber experiment Fundamental Processes Within Natural and Constructed Wetland Ecosystems: Short-term Versus Long-term Objec- tives Impacts of Freshwater Wetlands on Water Quality: A Landscape Perspec- tive Nitrification and denitrification rates of everglades wetland soils along a phosphorus-impacted gradient In uence of selected inorganic electron acceptors on organic nitrogen mineral- ization in Everglades soils In uence of phosphorus loading on organic nitrogen mineralization of everglades soils AAA Author Water Environment Research Foundation Water Environmental Research Foundation Wayland, Karen G., David W Hyndman, David Boutt, Bryan C. Pijanowski, and David T Long Weaver, M.A., R.M. Zablotowicz, M.A. Locke Wen, L. and F. Reck- nagel Wetzel, R.G. Whigham, D.F., C. Chitterling, and B. Palmer White, J.R. and K.R. Reddy White, J.R. and K.R. Reddy White, J.R. and K.R. Reddy Pub. Date 2002 2000 Sep-02 Nov-04 Jun-02 2001 1988 Nov- Dec-03 May- Jun-01 Jul-Aug- 00 Type Paper Paper Abstract Publisher Water Environment Re- search Foundation 1 32 pages. Soft cover. Water Environmental Re- search Foundation. 2000. 282 pages. Lakes and Reservoirs: Research and Manage- ment, Volume 7, Issue 3, Page 189-199, Sep 2002 Chemosphere. 2004 Nov., v. 57, issue 8, p. 853-862. Agriculture, Ecosystems & Environment. June 2002. v. 90(1) p. 9-15. Water Science Technol- ogy. 2001 ;44(1 1-1 2):1 -8. Environmental Manage- ment 12:663-671 Journal of environmental quality. 2003 Nov-Dec, v. 32, no. 6, p. 2436-2443. Soil Science Society of America journal. May/ June 2001 . v. 65 (3) p. 941 -948. Soil Science Society of America Journal. Jul/Aug 2000. v. 64 (4) p. 1 525- 1534. Comments Part of the Water Environment Research Foundation's ongoing Watershed-Based Trading Demonstration Project, this study tracks a watershed-based trading program in the Long Island Sound in Connecticut, U.S.A. to help other municipalities devel- op and implement trading programs of their own. Nitrogen ef u- ent credit trading offers an equitable and cost-saving approach for major point sources to meet nitrogen reduction requirements and Total Maximum Daily Load (TMDL) limits. Describes a program of watershed-based trading intended to reduce phosphorus and sediment loading in selected reaches of the Kalamazoo River in Michigan. Examines the environmental and economic benefits of trading between point and nonpoint sources. Identifies policy issues and technical design elements vital to the design of a statewide water quality trading program. Published by WERF. 2000. 282 pages. Soft cover https://www.werf.org/acb/showdetl.cfm?st=0&st2=0&st3=0&DID =7&Product_ID=186&DS_ID=3 ------- CD O # 812 813 814 815 816 817 818 819 820 821 822 Title In uence of hydrologic regime and vegetation on phosphorus retention in Everglades stormwater treatement area wetlands Enhancement of Nitrogen Removal in Subsurface Flow Constructed Wetlands Employing a 2-stage Configuration, an Unsaturated Zone, and Recirculation Rapid Removal of Nitrate and Sulfate in Freshwater Wetland Sediments Sulphate Reduction and the Removal of Carbon and Ammonia in a Labora- tory-scale Constructed Wetland In uence of the redox condition dy- namics on the removal efficiency of a laboratory-scale constructed wetland Denitrification enzyme activity of fringe salt marshes in New England (USA) Tissue nutrient signatures predict her- baceous-wetland community responses to nutrient availability Simulating ow in regional wetlands with the mod ow wetlands package First Annual Report to the Governor on Wisconsin Pollutant Trading Pilot Studies Second Annual Report to the Governor on Wisconsin Pollutant Trading Pilot Studies Agricultural Nutrient Inputs to Rivers and Groundwaters in the UK: Policy, Environmental Management and Re- search Needs AAA Author White, J.R., K.R. Reddy and M.Z. Moustafa White, Kevin D. Whitmire, S.L. and S.K. Hamilton Wiessner, A., U. Kap- pelmeyer, P. Kuschk, and M. Kastner Wiessner, A., U. Kap- pelmeyer, P. Kuschk, M. and Kastner Wigand, C., R.A. McKinney, M.M. Chintala, M.A. Charpentier, and P.M. Groffman Willby, N.J., I.D. Pul- ford, and T.H. Flowers Wilsnack, M.M., D.E. Welter, A.M. Montoya, J.I. Restrepo, and J. Obeysekera Wisconsin Depart- ment of Natural Resources Wisconsin Depart- ment of Natural Resources Withers, PJ. and El Lord Pub. Date 2004 1995 Oct-05 Nov-05 Jan-05 May- Jun-04 Dec-01 Jun-01 Sep-98 Sep-99 Jan-02 Type Report Report Report Paper Publisher Hydrological Processes, 1 8, 343-355 Water Science and Tech- nology, Volume 32, Issue 3, 1995, Pages 59-67 Journal of Environmental Quality, 34 (6): 2062-71 . Nov-Dec 2005 Water Research; 39(1 9): 4643-4650. Nov 2005. Water Research. 2005 Jan., v. 39, issue 1, p. 248-256. Journal of Environmental Quality. 2004 May-June, v. 33, no. 3, p. 1144-1151. New phytologist. Dec 2001.V. 152 (3) p. 463- 481. Journal of the American Water Resources Asso- ciation/June 2001. v. 37 (3) p. 655-674. Wisconsin Department of Natural Resources Wisconsin Department of Natural Resources Sci Total Environ. 2002 Jan 23;282-283:9-24. PMID: 11852908 Comments http://www.awra.org/jawra/index.html This paper discusses agricultural nutrient inputs to rivers in the UK through description of resent field research on nutrient loss, the need for integrated management approaches which include both N and P, the vulnerability of land use and adoption of safe management options in relation to landscape characteristics and the sensitivity of the watercourse along its reach. For P, the identification of vulnerable zones represents a step forward to the management of the river basin in smaller definable units, which can provide a focus for safe management practices. This requires a better understanding of the linkages between nutrient sources, transport and impacts and is considered an urgent research priority. ------- # 823 824 825 826 827 828 829 830 831 832 833 834 835 836 Title Nitrogen Removal from Pretreated Wastewater in Surface Flow Wetlands Adaptation of wastewater surface ow wetland formulae for application in constructed stormwater wetlands Preliminary Preview for a Geographic and Monitoring Program Project: A Review of Point Source-Nonpoint Source Ef uent Trading/Offset Systems in Watersheds Market-Based Solutions to Environ- mental Problems Market Structures for U. S. Water Qual- ity Trading The Structure and Practice of Water Quality Trading Markets Trading Research of Richard T Woodward, Department of Agricultural Economics Texas A&M University Flax Pond ecosystem study: exchange of phosphorus between as salt marsh and the coastal waters of Long Island Sound Emergence patterns of Culex mosqui- toes at an experimental constructed treatment wetland in southern Califor- nia Effect of Pond Shape and Vegetation Heterogeneity on Flow and Treatment Performance of Constructed Wetlands Emissions Trading: An NGO Perspec- tive An Evaluation of Cost and Benefits of Structural Stormwater Best Manage- ment Practices The Economics of Structural Stormwa- ter BMPs in North Carolina Natural Systems for Wastewater Treat- ment; Manual of Practice FD-16 AAA Author Wittgren, Hans B. and Scott Tobiason Wong.T. H. F. and W F. Geiger Wood, Alexander and Richard Bernknopf Woodward, R.T Woodward, R.T. and R.A. Kaiser Woodward, R.T, R.A. Kaiser, and A.B. Wicks Woodward, Richard T. Woodwell, G.M. and D.E.Whitney Workman, PD. and W.E.Walton Wbrman, Anders and Veronika Kronnas Worthington, Bryony Wossink, Ada and Bill Hunt Wossink, Ada and Bill Hunt WPCF Pub. Date 1995 1997 2003 Feb-00 2002 2002 1977 Jun-00 Jan-06 3/16- 18/2004 Nov-05 2003 1990 Type Paper Invited paper Paper List of Publica- tions Presentation Fact Sheet Paper Abstract Publisher Water Science and Tech- nology, Volume 32, Issue 3, 1995, Pages 69-78 Ecological Engineering 9:187-202. Open-File Report 03-79 2003 U.S. Department of the Interior U.S. Geologi- cal Survey Southern Agricultural Economic Association, Annual Meeting Review of Agricultural Economics, 2002 Journal of the American Water Resources Asso- ciation; 38: 967-979. 2002 Texas A&M University, Department of Agricul- tural Economics Marine Biology 41:1-6. Journal of the American Mosquito Control Asso- ciation. June 2000. v. 16 (2) p. 124-130. Journal of Hydrology; 301(1-4): 123-138. Jan 2005. Senior Campaigner, Friends of the Earth North Carolina Coopera- tive Extension Service WRRI Research Report Number 344 Water Pollution Control Federation, Alexandria, VA Comments This is a USGS report that reviews the factors affecting the potential for instituting watershed-based trading to improve water quality. An overview of successful and failed programs is provided, as is a description of an offset feasibility study for mercury TMDLs in the Sacramento watershed. Three case studies are reviewed; Dillon, Tar-Pamlico, Clear Creek. Optimal conditions for water quality trading are listed and described. http://pubs.usgs.gov/of/2003/of03-079/WoodjDFR03-79.pdf http://agecon2.tamu.edu/people/faculty/woodward-richard/paps/ SAEA-MB.pdf http://www.findarticles.eom/p/articles/mi qa4038/is 200208/ ai_n91 18352 http://www.inece.org/emissions/worthington.pdf http://www2. ncsu.edu/unity /lockers/users/g/gawossin/stormwa- terBMPFactsheet.pdf http://www.ag-econ.ncsu.edu/faculty/wossink/outreach.html. ------- # 837 838 839 840 841 842 843 844 845 846 847 848 849 Title Decomposition of Emergent Macro- phyte Roots and Rhizomes in a North- ern Prairie Marsh Development of a Constructed Subsur- face- ow Wetland Simulation Model Removal Efficiency of the Constructed Wetland Wastewater Treatment System at Bainikeng, Shenzhen Estimating the Effectiveness of Vegetat- ed Floodplains: Wetlands as Nitrate-ni- trite and Orthophosphorus Filters Non-Point Pollution from China's Rural Areas and Its Countermeasures The Nutrient Retention by Ecotone Wetlands and their Modification for Baiyangdian Lake Restoration Plowing New Ground: Using Economic Incentives to Control Water Pollution from Agriculture Protecting a Wildlife Refuge Through Selenium Reductions Nitrous oxide and methane emissions from different soil suspensions: effect of soil redox status A Framework for Pollutant Trading Dur- ing the TMDL Allocation Phase Practical Case Studies of Actual Water Pollutant Trading Programs. Market Based Trading for Water & Wetlands Optimal Trading Between Point and Nonpoint Sources of Phosphorus in the Chatfield Basin, Colorado Air/Water Exchange of Mercury in the Everglades I: The Behavior of Dis- solved Gaseous Mercury in the Ever- glades Nutrient Removal Project AAA Author Wrubleski, Dale A., Henry R. Murkin, Arnold G. van der Valk and Jeffrey W Nelson Wynn, Theresa Maria and Sarah K. Liehr Yang, Yang, Xu Zhencheng, Hu Kangping, Wang Junsan and Wang Guizhi Yates, P. and J.M. Sheridan Yin, C.Q., C.F.Yang, B.Q. Shan, G.B. Li, and D.L.Wang Yin, Chengqing and Zhiwen Lan Young, T. and C. Congdon Young, Terry Yu, K.W, Z.P.Wang, A. Vermoesen, WH. Patrick, Jr., and O. van Cleemput Zaidi, A.Z., S.M. deMonsabert, R. EI-Farhan, and S. Choudhury Zander, B. Zander, B. and K. Little Zhang, H. and S.E. Ling berg Pub. Date Sep-97 Feb-01 1995 May-83 2001 1995 1994 Jul-03 Jul-01 2004 7/15- 16/1996 Jun-96 2-Oct- 00 Type Paper PowerPoint Conference Paper Case Study Proceedings Publisher Aquatic Botany, Volume 58, Issue 2, September 1997, Pages 121 -134 Ecological Engineering; 16(4): 51 9-536. February 1 , 2001 . Water Science and Tech- nology, Volume 32, Issue 3, 1995, Pages 31 -40 Agriculture, Ecosystems & Environment, Volume 9, Issue 3, May 1983, Pages 303-314 Water Science Technol- ogy. 2001 ;44(7):1 23-8. Water Science and Tech- nology, Volume 32, Issue 3, 1995, Pages 159-1 67 Environmental Defense Fund Biology and fertility of soils. July 2001. v. 34(1) p. 25-30. George Mason University, Fairfax, VA. 2004. U.S. EPA; Denver Watersheds '96. Water Environment Federation and U.S. EPA Science of the Total Environment. 2000 Oct 2;259(1-3):1 23-33. Comments 2003 National Forum on Water Quality Trading Paper for the American Society of Agricultural Engineers Annual Conference http://mason.gmu.edu/~azaidi/ASAE04.pdf http://www.epa.gov/owowwtr1/watershed/Proceed/little.html ------- CD CO # 850 851 852 853 854 855 856 857 Title Effects of Plants on Nitrogen/Phospho- rus Removal in Subsurface Construct- ed Wetlands Sulfur: Limestone Autotrophic Deni- trification Processes for Treatment of Nitrate-contaminated Water: Batch Experiments A water chemistry assessment of wastewater remediation in a natural swamp Purification Capacity of a Highly Load- ed Laboratory Scale Tidal Flow Reed Bed System with Ef uent Recirculation Nitrogen retention and release in Atlan- tic white cedar wetlands Exploring Trading to Restore Base Flow in the Charles River Aspects of methane ow from sedi- ment through emergent cattail (Typha latifolia) plants Review and assessment of methane emissions from wetlands. AAA Author Zhang, R.S., G.H. Li, Z. Zhou, and X. Zhang Zhang, Tian C. and David G. Lampe Zhang, X., S.E. Feagley, J.W Day, WH. Conner, I.D. Hesse, J.M. Rybczyk, andWH.Hudnall Zhao, Y.Q., G. Sun, and S.J. Allen Zhu, WX. and J.G. Ehrenfeld Zimmerman, Robert Yavitt, J. B. & Knapp, A. K. Bartlett, KB and Har- riss, RC Pub. Date Jul-05 Feb-99 Nov- Dec-00 Sep-04 Mar- Apr-00 Jul-03 Jul-98 1993 Type PowerPoint Paper Paper Publisher Huan Jing Ke Xue,26(4): 83-6. July 2005 Water Research; 33(3): 599-608. February 1999. Journal of environmental quality. Nov/Dec 2000. v. 29(6) p. 1960-1968. Science of The Total En- vironment; 330(1-3): 1-8. Sept 2004. Journal of environmental quality. Mar/Apr 2000. v. 29(2) p. 612-620. New Phytologist Volume 139 Page 495 -July 1998 doi:1 0.1 046/j. 1469- 8137.1998.00210.x Volume 139 Issue 3 Chemosphere. Vol. 26, no. 1-4, pp. 261-320. 1993 Comments 2003 National Forum on Water Quality Trading In this paper, the ow of methane is measured in Typha latifolia L. (cattail)-dominated wetlands from microbial production in anoxic sediment into, through, and out of emergent T. latifolia shoots (i.e. plant transport). The purpose was to identify key en- vironmental and plant factors that might affect rates of methane ef ux from wetlands to the Earth's atmosphere. http://www.blackwell-synergy.eom/doi/abs/1 0.1 046/j. 1469- 8137.1998.00210.x In this report, we review progress on estimating and under- standing both the magnitude of, and controls on, emissions of CH sub(4) from natural wetlands. We also calculate global wet- land CH sub(4) emissions using this extensive ux data base and the wetland areas compiled and published by Matthews and Fung (1987). http://www.csa. com/pa rtners/viewrecord.php?requester=gs&coll ection=ENV&recid=2883945 ------- # 858 859 860 861 862 863 864 865 866 867 868 Title Global carbon exchange and methane emissions from natural wetlands: Ap- plication of a process-based model Economic Linkages Between Coastal Wetlands and Water Quality: A Review of Value Estimates Reported in the Published Literature Using Surveys to Value Public Goods: The Contingent Valuation Method The economic value of wetland ser- vices: a meta-analysis Getting paid for stewardship: An agri- cultural community water quality trading guide Nutrient Trading: Improving Water Qual- ity Through Market-Based Incentives Lessons About Ef uent Trading from a Single Trade Lessons Learned from the Trading Pilots: Applications for Wisconsin Water Quality Trading Policy A Feasibility Analysis of Applying Water quality Trading in Georgia Watersheds Water Quality Trading in the Lower Delaware River Basin: A Resource for Practitioners Trading on Water AAA Author Cao, Mingkui; Marshall, Stewart; Gregson, Keith Kazmierczak, R.F. Mitchell, R.C. and R.T. Carson Woodward, RT and Wui.Y. Conservation Tech- nology Information Center World Resources Institute Woodward, R.T and R.C. Bishop Kranmer, J. M. and Resource Strategies, Inc. gia Water Planning and Policy Center Institute for Environ- mental Studies Greenhalgh, S. and P. Faeth Pub. Date Jun-96 2001 1989 2000 2006 2004 2003 Jul-03 Jun-05 Mar-06 2001 Type Paper Paper Paper Paper Journal Article Paper Working Paper Report Article Publisher Journal of Geophysical Research, Volume 1 01 , Issue D9, p. 14399-14414 Unpublished Research Paper, 22 p. Resources for the Future, Washington, DC p. 4-5. Ecological Economics 37 (2001) p. 257-270. Conservation Technology Information Center WRI Annual Report 2003. World Resources Institute. Review of Agricultural Economics, 2003. Resource Strategies, Inc. Georgia Water Planning and Policy Center Institute for Environmen- tal Studies Forum for Applied Re- search and Public Policy Comments This study used a methane emission model based on the hypothesis that plant primary production and soil organic matter decomposition act to control the supply of substrate needed by methanogens; the rate of substrate supply and environmental factors, in turn, control the rate of CH4 production, and the balance between CH4 production and methanotrophic oxidation determines the rate of CH4 emission into the atmosphere. The model was used to calculate spatial and seasonal distributions of CH4 emissions at a resolution of 1 ° latitudex! ° longitude. The calculated net primary production (NPP) of wetlands ranged from 45 g C m-2yr-1 for northern bogs to 820 g C m-2yr-1 for tropical swamps. Sensitivity analysis showed that the response of CH4 emission to climate change depends upon the com- bined effects of soil carbon storage, rate of decomposition, soil moisture and activity of methanogens. http://adsabs.harvard.edu/cgi-bin/nph-bib query?bibcode =1996JGR...10114399C&db key=PHY&data type=HTML&format= ------- CD cn # 869 870 871 872 873 874 Title Policy Options for Reducing Phospho- rus Loading in Lake Champlain: Final Report to the Lake Champlain Basin Program Economic and Environmental Implica- tions of Phosphorus Control at North Bosque River (Texas) Wastewater Plants Implementation of the EPA 's Water Quality Trading Policy for Storm Water Management and Smart Growth The Economics of Total Maximum Daily Loads National Forum on Synergies Between Water Quality Trading and Wetland Mitigation Banking The Potential for Water Quality Trading in Ohio AAA Author Winsten, J.; Green- wood, K.; Hession, C.; Johnstone, S.; Jokela, W; Klein- man, P.; Meals, D.; Michauld, A.; Parsons, R.; Pease, J.; sharpley, A. and E. Thomas Keplinger, K. Trauth, K.M.andYee- Sook Shin Keplinger, K. Environmental Law Institute Sohngen, B. Pub. Date 2004 Jul-03 Dec-05 Feb-03 Jan-06 2005 Type Report Report Journal Article Report Report Publisher Lake Champlian Basin Program Texas Institute for Applied Environmental Research Journal of Urban Plan- ning and Development, Volume 131, Issue 4, pp. 258-269. Texas Institute for Applied Environmental Research Environmental Law Institute Ohio Environment Report: Volume 3, Issue 1. OSU Extension Program. Comments This report describes the processes and outcomes of the project titled 'Developing and Assessing Policy Options for Reducing Phosphorus Loading in Lake Champlain.' The goal of this project was to facilitate the achievement of the long-term P reduction goals set for Lake Champlain through the develop- ment of innovative policy strategies for agricultural land. The National Forum on Synergies Between Water Quality Trading and Wetland Mitigation Banking report summarizes the discussions from the Forum, held July 11-12, 2005, in Washing- ton DC. ------- ------- vvEPA United States Environmental Protection Agency National Risk Management Research Laboratory Cincinnati, OH 45268 Official Business EPA/600/R-06/155 July 2007 ------- |