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WQ Market Monthly

October 13, 2010    

Water Photo

From the Editors

 

The world of water has seen another tumultuous few months with new water quality challenges in the Danube watershed, more strict pollution rules for the Chesapeake Bay watershed and low water levels in Lake Mead threatening the energy supply in the blistering desert southwest. 

 

On the upside, we are pleased to share that the issue of ecosystem services and market-based approaches such as PES/PWS were discussed during the main plenary sessions and on thematic panels at this year’s World Water Week in Stockholm; a marked improvement over last year’s treatment of the subject. It seems as if the technology sector is providing new, potentially valuable tools to aid in the development of the infrastructure to support the emerging water and watershed markets around the globe. 

 

The next time we write this newsletter, the world will have taken up again the issues of climate change at the COP16 meeting in Cancun, Mexico and we remain optimistic that a productive outcome will be reached and that the strong connection between climate change, healthy forests and water will factor into those critical discussions.

 

— The Ecosystem Marketplace Team

For questions or comments, please contact newsletter@ecosystemmarketplace.com


News

DOMESTIC MARKETS

EPA Puts States on Notice with Draft TMDL for the Chesapeake Bay

 

After decades of voluntary-driven actions to clean up the Chesapeake Bay, the Bay and its rivers are still listed as impaired under the Clean Water Act. Now the EPA, following the Chesapeake Bay Executive Order has stepped in and put states in the Chesapeake Bay watershed on a strict ‘pollution diet’, with violators facing federal sanctions. The rules place a Total Maximum Daily Load (TMDL) on pollutants entering the water, specifically nitrogen, phosphorus, and sediment loads. States must meet 60% of their pollution reduction targets by 2017 and be in full compliance by 2025. EPA will monitor progress by the states along the way with a series of two-year performance milestones. and may withhold NPDES (National Pollutant Discharge Elimination System) permits, effectively capping allowable pollutant discharge levels at zero, if performance targets are not met. The draft TMDL, which was released in September, will be finalized by the end of the year. (Click here to read and comment on the draft.)

 

Read the EPA press release here.

 

 

 
Public Meetings on Bay TMDL Unleash a Torrent of Concern and Opposition

 

EPA and state environmental officials are convening a series of eighteen public meetings this fall in the Chesapeake Bay watershed to discuss the draft TMDL and hear the public’s concerns. At meetings in Virginia, the agricultural community voiced its worries about the cost to farmers of complying with the new rules. Agriculture is the source of the largest share of nutrient pollution in the Bay watershed. However, in the current economic climate sources of funding to implement restoration actions are slim, though federal agencies have pledged as much as $72 million to farmers undertaking actions to limit nutrient runoff in high-priority watersheds (see the Chesapeake Bay Executive Order Action Plan). The issue has been also taken up by Congressional representatives Bob Goodlatte (R-VA) and Tim Holden (D-PA), who have introduced legislation in the House to curtail EPA’s ability to regulate the agricultural community in the Bay region.

 

Read more at the Chesapeake Bay Journal’s blog

View the EPA public meeting schedule here

 

 
WRI Investigates Benefits of WQT for Bay-area Farmers

 

The World Resources Institute (WRI) has issued a series of working papers analyzing how a Baywide nutrient trading program could benefit farmers in VirginiaMaryland, and Pennsylvania.  In August, WRI receieved a $600,000 USDA National Resources Conservation Service Conservation Innovation Grant, to begin developing an online water quality trading platform and carbon estimation tool in the Chesapeake Bay watershed.

Read the WRI press release about the new working paper series. 

 

 
Record Low Levels in Lake Mead Threaten Both Water and Energy Supply in the US Southwest

 

Water levels in Lake Mead, the reservoir feeding the Hoover Dam, have dropped to record lows, posing a serious threat to both water and energy supply in the US Southwest. As of late September the water line stood at 1,084 feet, only fifteen inches above the all-time low in 1956. The US Bureau of Reclamation anticipates that within a month, water levels will have dropped another two feet, to levels not seen since Lake Mead was being filled in the 1930s. Water scarcity has long been a problem in the Colorado River lower basin states – exacerbated by a period of prolonged drought in the region and allocations of the Colorado River’s water that exceed its actual average flows – but the current situation in Lake Mead highlights how water shortages also threaten the region’s energy supply. The Hoover Dam provides electricity to about 29 million people in the Southwest, but its turbines were not designed to operate at such low lake levels. Already generating capacity has been reduced by about 23% and dam managers find themselves considering the possibility of a shutdown.

 

Temporary relief might be granted by a larger-than-normal release of water from Lake Powell upriver, as well as a shortage sharing agreement taking effect among the seven Colorado basin states, with Arizona and Nevada bearing the brunt of the pain. But the situation has sharpened the long-term problem facing water managers in the region: how to meet ever-growing demand for a resource with a limited supply.

 

Read the full story about water scarcity in the Colorado basin states at the New York Times

More information about the threat to energy supply is available at Circle of Blue

 

 
PERC’s ‘Water as a Crop’ Series Highlights Payoff from Better Resource Management

 

The Property and Environment Research Center (PERC)’s new Water as a Crop series examines case studies where landowners have found ways to profit from the outputs of land improvement, by selling increased water quality or quantity to non-agricultural buyers through market-based approaches. Case studies include farmers in the Flint River Basin in Georgia receiving payments for implementing less-water intensive agricultural methods, Kansas farmers managing their land for better water quality for nearby residents and wildlife, and ranchers in Western Colorado establishing a bank for water to enable conservation efforts and better future water security. 

 

 
USDA CIG Awards to Support Development of Water Quality Markets

 

The USDA National Resources Conservation Service has announced the recipients of its 2010 Conservation Innovation Grants, with three projects selected that support the development of water quality markets in the US. The American Farmland Trust was awarded $524,970 to develop approaches to nutrient reduction in the Upper Salt Fork in Champaign County, Illinois. In California, the National Fish and Wildlife Foundation will receive $384,000 to engage agricultural producers in ecosystem service markets with the goal of restoring flow benefits in aquatic ecosystems and protecting salmonids and other species. The World Resources Institute, based in Washington DC, was awarded $600,000 to develop an online water quality trading platform and carbon estimation tool in the Chesapeake Bay watershed.

 

Read the details in the CIG press release.

 

 
SEC Calls for Attention to Water Risk in Corporate Reporting on Climate Change

 

The US Security and Exchange Commission’s (SEC) new guidance for including climate change risks in corporate disclosures includes a focus on water risks. Although corporate reporting related to climate change issues is often limited to energy and emissions data, the SEC’s guidance includes looking at exposure to impacts of climate change like water scarcity, and salt-water intrusion from rising sea levels. The new guidance may have a global impact in the form of a ‘ripple effect’ along a business’ supply chain, as firms subject to SEC regulation require similar reporting from their suppliers and distributors. However, this may also mean heavy reporting requirements for businesses - identifying and measuring water risks will be highly industry- and location-specific, and the concept of water risk is still relatively undeveloped and unstandardized.

 

Read more about what the new SEC guidance means from the point of view of corporate compliance

The SEC’s Interpretive Release can be read here

 

 
Why Denver Spends Water Fees on Trees

 

Like many cities around the world, Denver gets its drinking water from rivers and reservoirs, which in turn get their water from forests. Many of those forests, however, are in trouble – thanks to funding cuts, climate change, and a horde of opportunistic beetles. That puts the city's water supply at risk as well, so Denver teamed up with the US Forest Service to funnel money it collects from water fees into forest restoration, all of which is packaged in a new PWS scheme to the tune of $33 million.

 

Read the full story here.

 

 

POLICY UPDATES

Report finds that MOUs with States to Administer CWA Outmoded

 

Most of EPA’s Memoranda of Understanding (MOU) with states that administer the NPDES system are incomplete and fail to include key regulatory requirements. Uneven enforcement of the Clean Water Act is effectively putting states that enforce the rules at a disadvantage to others, where violations go unpenalized.

 

Read the full report on EPA’s website.

 

 
Can Footprinting Stomp Out Water Waste?

 

Carbon trading promotes good behavior by creating a standardized currency representing a verifiable environmental benefit.  Payments for watershed services do the same for cutbacks in water pollution, albeit on a smaller scale.  Now, the Nature Conservancy and the Coca-Cola Company are experimenting with a new method of “water footprinting” that could do the same for total water use – a key component in the development of a market-based scheme that would promote responsible water usage.

 

Read the full Ecosystem Marketplace article

Read TNC and Coca-Cola's Product Water Footprint Assessments report here

 

 

GLOBAL MARKETS

Emerging Market for Wastewater

 

Japan and Qatar are currently in negotiations (certainly the first of its kind) to trade wastewater for oil and natural gas, according to a report in the Oil & Gas Journal. The proposed deal would allow wastewater from Japan to be used as ballast to stabilize empty tankers returning to Qatar.  Seawater has traditionally been used as ballast, but now facing tight restrictions on the practice due to the threat of invasive aquatic species, tankers are examining their other options.

 

Learn more at the Oil and Gas Journal and Circle of Blue.

 

 
Water a Top Priority within China

 

U.N. climate talks kicked off last week in Tianjin, China. To the outside world, curtailing greenhouse gas emissions is high on the radar. But inside China, water trumps most other environmental concerns. China is the world’s third driest country, with demand for water expected to outstrip supply by 2030 by more than 52 trillion gallons, according to a 2009 McKinsey study. In response, the country is looking for innovative ways to conserve, reuse, and clean up water supplies while accommodating growing demand. The Chinese Ministry of Water has set a target of a 60 percent improvement in ‘water intensity’, and the government is investing heavily in more efficient technologies and consumption practices.

 

Get the full story at Circle of Blue

Read the 2009 McKinsey special report on water scarcity

 

 
Australian Government in the Market to Buy Back Irrigation Rights from Farmers

 

A new plan to restore rivers in the Murray-Darling basin involves the Australian government spending A$4 billion to buy back irrigation rights from farmers over the next ten years, cutting water use in the basin by about a third, or between three and four thousand gigalitres per year. The goal is to restore the Murray Darling, and Murrumbidgee river systems, which have suffered for years from over-allocation of withdrawal rights for irrigation and rising salinity levels. The proposal has elicited strong reactions from farmers who argue that reducing water supplies would devastate the agricultural community in the Murray-Darling basin, which generates 93 percent of Australia’s domestic food production and 40 percent of agricultural production overall. A government decision is expected by the end of 2011.

 

Read more from the Mother Nature Network

 

 

 

SCIENCE AND TECHNOLOGY

Rivers for Tomorrow Platform Provides Tools for Better Watershed Management

 

The Nature Conservancy and IBM have partnered to create the Rivers for Tomorrow project, an online interface that offers a platform where watershed managers around the world can find free tools and data, including mapping tools and models for simulating the effects of land use changes on water resources. Users can also share information about the health of river basins and cleanup efforts with one another. The Rivers for Tomorrow interface is currently being piloted in the Paraguay and Parana River basins in Brazil, with plans to expand for use anywhere in the world.

 

Read the press release here

 

 
IBM’s World Community Grid -- Innovative Solutions to Water Quality Around the Planet

 

IBM also recently deployed the World Community Grid – a network of computers provided by 600,000 volunteers around the world – to find solutions to water management problems in the US Chesapeake Bay watershed, China, and Brazil. The computing power of the Grid, comparable to one of the world’s fastest supercomputers, is being used to model the impacts of agricultural, commercial and industrial decisions on the Chesapeake Bay watershed, develop new water filtration technologies in China, and help scientists tackle drug-resistant strains of schistosomiasis, a water-borne parasite, in Brazil.

 

Read the press release here.

 

 
Dams Interactive Map Tool Focused on Hydropower in the Amazon Basin

 

A new interactive map featuring technical and economic information about 140 hydroelectric dams that are either already operating, under construction or on the drawing board in Brazil, Bolivia, Colombia, Ecuador and Peru is available online. Developed by Fundación PROTEGER of Argentina and International Rivers of the United States and funded by ECOA Brazil, the map tool is now available at www.dams-info.org.

 

 
I-Phone app Turns Citizens into Watershed Monitors

 

A new I-Phone app called Creek Watch allows citizens to monitor and share information on the health of local waterways, by simply snapping a photo and reporting water levels and trash; the data is aggregated and shared with local water management authorities.

 

Learn more at the Creek Watch website

 

 

EVENTS

Events

 

2010 AWRA Annual Water Resources Conference

November 1-4, 2010

Philadelphia, PA

http://www.awra.org/meetings/Philadelphia2010/index.shtml

 

Philadelphia Global Water Initiative 4th Annual Conference

“Managing the Last 1%: Allocating Water to Meet the UN Millennium Development Goals”

November 4, 2010

University of Pennsylvania, Philadelphia, PA

http://www.pgwi.org/

 

First Forum of the Alliance for Water Stewardship-Regional Initiative for Latin America and the Caribbean (AWSLAC) 

November 11-12, 2010

San José, Costa Rica

www.allianceforwaterstewardship.org 

 

National Environmental and Water Management in Latin American Cities, is a symposium convened by the municipal drinking water utilities in Quito and Cuenca, Ecuador and the leading hydroelectric generator in Ecuador to be held November 23-26, 2010 in Quito, Ecuador.

Visit the link for more information: http://www.emaapq.gov.ec/simposio1/pages/iniciodw.html 

 

Consortium for the Sustainable Development of the Andean Ecoregion (CONDESAN) will meet in Lima, Peru, November 16-18, 2010 where the publication Andean Overview on Hydrological Services will be launched.  

 

A Community of Ecosystem Services (ACES) Conference 

December 6-9, 2010, Gila River Indian Community.

For details and registration: http://www.conference.ifas.ufl.edu/aces/index.html

 

 

 
 
 

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