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Water: Water Quality Trading

Water Quality Trading Toolkit for Permit Writers

Aug. 2007, EPA-833-R-07-004

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The Water Quality Trading Toolkit for Permit Writers is EPA’s first “how-to” manual on designing and implementing water quality trading programs. The Toolkit helps National Pollutant Discharge Elimination System (NPDES) permitting authorities incorporate trading provisions into permits. It will help improve the quality and consistency of all trading programs across the nation.


Water Quality Trading Toolkit for Permit Writers

How to use this document
The Fundamentals of Water Quality Trading section should be read first to help explain water quality trading policy concepts and technical issues. Understanding these concepts will help prevent inadequate trading conditions in permits.

After reading the Fundamentals, move on to the water quality trading Scenario sections of interest. Each Scenario section stands alone, so all the relevant information will be contained in the selected scenario.

The following diagram will help you navigate the trading scenario sections of the Toolkit:


For example, a permitting authority developing NPDES permit provisions for trading between two single point sources would first:

  • Review the Fundamentals of Water Quality Trading for important policy and technical information; and then
  • Review the Single Point Source - Single Point Source Trading Scenario for specifics pertaining to trading between two point sources

Fundamentals of Water Quality Trading
The first section of the Toolkit, Fundamentals of Water Quality Trading, addresses broad water quality trading policy issues; this section applies to all Toolkit users. Within the Fundamentals of Water Quality Trading section, the Overview of Water Quality Trading section addresses the role of NPDES permitting authorities in and the legal and policy framework for water quality trading. The Essential Trading Information for Permit Writers section discusses specific water quality trading issues relevant to NPDES permitting authorities. Issues addressed in this section include the type of pollutants to be traded, definition of a pollutant reduction credit, circumstances conducive to trading, baselines for water quality trading, trading ratios, timing and duration of credits, and the geographic scope of trades.

Water Quality Trading Scenarios
Water quality trading scenarios fall into two major categories, point source-point source trading and point source-nonpoint source trading.  For each scenario, the Toolkit describes how to develop a NPDES permit and shows you how to incorporate water quality trading into that process. To illustrate the concepts, each scenario includes one comprehensive hypothetical example and short, specific real world examples. Each example type is presented in a unique format to ensure easy identification.


Keys to Success Poster
Incorporated in the Fundamentals of Water Quality Trading are EPA’s Keys to Success for Water Quality Trading Programs. This one-page insert is designed to illustrate valuable components that can contribute to the success of a trading program and builds upon EPA’s 2003 National Water Quality Trading Policy’s “Common Elements of a Credible Program.”

You may submit comments and questions. Comments will be considered for future updates. For more information contact Ginny Kibler via phone at (202) 564-0596.

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