THE U.S. ENVIRONMENTAL PROTECTION AGENCY'S WATER QUALITY TRADING POLICY: NEW OPPORTUNITIES FOR ENVIRONMENTAL ADVOCACY GROUPS?

Environmental non-profit organizations in the United States (U.S.) are in the early stages of reacting to a revolutionary water pollution control policy. In January 2003, the U.S. Environmental Protection Agency (EPA), with the support of the U.S. Department of Agriculture, announced its Water Quality Trading Policy (the Policy) encouraging the trading of surplus water pollutant reduction credits. In doing so, the federal government, in essence, created a mechanism for environmental non-profit organizations to reduce water pollution by paying directly for wastewater treatment plant upgrades and runoff best management practices. In addition to providing a review of the history of water quality trading in the U.S. and an analytical trading model, this paper presents the results of a survey that evaluates how conventional environmental advocacy groups throughout the nation perceive the Policy. Conclusions are to be drawn on these groups' awareness of the Policy, their stated or anticipated endorsement of trading between regulated entities, and their anticipated willingness and/or ability to purchase surplus water pollutant reduction credits themselves under a variety of alternative contractual arrangements.