Point Source Credit Buyers


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Point Source Credit Buyers

  1. 1. National Roundtable on Water Quality Trading Perspective of Point Source Credit Buyers Dave Taylor Director of Special Projects Madison Metropolitan Sewerage District Phone: 608-222-1201, ext. 276 Email: davet@madsewer.org
  2. 2. Background • Traditional regulatory focus is on point sources • New and/or increasingly stringent regulatory requirements • Potential limitations with “brick and mortar” approaches • Limited financial resources • Holistic, watershed based approaches needed • Trading needs to be in the toolbox
  3. 3. Phosphorus  Current MMSD effluent: 0.30 mg/l  New TP regs in 2010: 0.075 mg/l  Target design criterion: 0.05 mg/l  Filtration required: $124 M Increasing Regulatory Pressure
  4. 4. Water Quality Trading  Potential for lower cost  Engages multiple sources  Watershed focus  Potential for improved environmental outcomes  Value added  Without trading, some WQS may not be affordable or attainable
  5. 5. What Do Point Sources Need?  Market certainty  Stable, reliable market-market certainty!  Long term-we plan in 20+ year increments  Verifiable credits  Broker  Regulatory certainty  Includes legal framework  Regulatory flexibility  Time needed to see real water quality improvements can be lengthy and project/location specific  Example-longer permit cycles or compliance schedules  Watershed based permitting
  6. 6. What Do Point Sources Need? Barriers Minimized  Trade ratios that don’t remove economic incentive  Explicit + “hidden”  Trade ratios that are based on sound science and consider ancillary benefits  Baselines driven by regulatory requirements  Geographic scope that isn’t artificially constrained  Credit lifespan not artificially constrained PI = 10 PI = 4 Ag Performance Standard (PI = 6) Baseline example
  7. 7. Some Closing Thoughts  POTWs will only support WQT markets that are environmentally- effective  POTWs need permit assurances-”risky” to rely on a 3rd party  Watershed-based permitting approaches help achieve goals  Outcomes matter  Need for standards, based on science, that can be applied universally  Policies need to remain flexible to cater to the unique needs and characteristics of each market and watershed