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WQ Market Monthly

February 14, 2011    

Water Photo

From the Editors

 

Only six weeks into the New Year and it’s already shaping up to be a contentious one, at least for those in the Chesapeake Bay Watershed and in Florida’s Lake Okeechobee and the heart of the Everglades. We are referring to attempts in both cases to establish Total Maximum Daily Loads (TMDLs) to curtail new loadings of nitrogen, phosphorus and sediments into already severely stressed watersheds. Legal challenges to EPA’s proposed TMDL are under way in both the Chesapeake Bay and Florida. (For more information on these cases, see our news briefs in the Domestic Markets section below.) For those promoting and tracking the use of market-based mechanisms as tools for improving water quality (and ecosystem services in general), tougher regulations (in this case in the form of caps on new loadings into already impaired waters) usually boost demand for water quality credits and lead to a stronger, more robust marketplace. But what’s truly at stake in these two landmark cases goes to the heart of how the US will engage in the protection and restoration of the country’s water resources. In the words of one water quality expert in the Chesapeake Bay region, the odds of either side winning the lawsuit are about even. The outcome, either way, will have profound impacts on the water resources in these two iconic drainage basins;  it’s a dramatic story which is being closely watched by water resource managers and policy makers across the country. 

 

These challenges mirror our own “stresses on resources” as we at the EM-Water program are trying to survive a severe financial drought. Tightening government and donor budgets have hit us hard and just as our growth was taking off. We are at risk of shutting down if new resources are not identified by the end of March. It bears mentioning that Ecosystem Marketplace (a project of the non-profit, Forest Trends) brings vital, timely news about water markets and payments for watershed services directly to your in box—free of charge. Producing our newsletters and reports requires manpower and brainpower. Reader feedback tells us that you, our readers, value our work so we ask you to join us in keeping the information flowing, by making an annual donation of $150 (or more) to Ecosystem Marketplace. We’ll recognize your contribution as a “newsletter donor” along with a web link to your organization, which will circulate to all subscribers of W.E.T., in each issue for one year. We also invite you or your organization to become a sponsor of Ecosystem Marketplace. Click here for information about sponsorship and rates. 

 

Thank you, in advance, for your generous support and don’t forget--you add up and so does your contribution!

 

 

DONATE NOW

 

Lastly, on a much lighter note, the editors at EM were recently informed by Lexis-Nexis that our blog EKO-ECO.com has been nominated as one of the candidates for the LexisNexis Top 50 Environmental Law & Climate Change Blogs for 2011. Lexis has asked for comments from our readers. If you'd like to support our nomination, please leave a comment at this link.

 

 

— The Ecosystem Marketplace Team

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


News

DOMESTIC MARKETS

EPA Issues Final Chesapeake Bay TMDL

 

On December 29th the Environmental Protection Agency (EPA) issued the final Chesapeake Bay Total Maximum Daily Load, which puts the Bay and its tidal tributaries on a strict pollution diet. The TMDL is the largest ever developed by EPA – it’s actually a combination of 92 smaller TMDLs for individual tidal segments - and requires a 25 percent reduction for nitrogen, 24 percent for phosphorus, and 20 percent for sediment loadings. Jurisdictions covered by the TMDL in Delaware, Maryland, New York, Pennsylvania, Virginia, West Virginia, and the District of Columbia are required to put all the necessary pollution control measures in place by 2025, with at least 60 percent completed by 2017. After rejecting a number of states’ draft Watershed Implementation Plans this fall (for failing to “sufficiently identify programs needed to reduce pollution or provide assurance the programs could be implemented”), the EPA has accepted revised versions and removed most of the federal backstop measures it had threatened in the draft TMDL. The EPA itself will not determine how individual point and non-point sources reduce pollution; it sets aggregate allocations for major basins by jurisdiction, and the jurisdictions themselves determine how to sub-allocate loading restrictions. Get the full TMDL, an Executive Summary, Fact Sheets, WIP evaluations, and a press release here

 

The American Farm Bureau has sued the EPA, charging that the agency has overstepped its authority with the TMDL for the Chesapeake Bay and is relying on faulty data and models (which the Farm Bureau believes to have overstated agriculture’s contribution to Bay nutrient pollution). Read more at Stock & Land

 

Meanwhile the Chesapeake Clean Water Act, which included funding for cleanup projects in the Bay, has died in Congress

 

The Center for Progressive Reform issued report cards for the Bay states’ Phase 1 Watershed Implementation Plans – and they’re not too impressed. Key criticisms include a lack of specific commitments, unclear funding sources for implementation, and insufficient information. Perhaps most worryingly, the Center expressed "little confidence that the Bay’s health will improve over the long-term because Virginia and Pennsylvania -- two of the three states that contribute most of the pollution burdening the Bay – submitted the weakest plans.” Read the report here.

 

 
New Florida TMDL Triggers a Lawsuit Against the EPA

 

Florida has sued the Environmental Protection Agency (EPA) in response to a new TMDL passed in November that placed strict caps on nutrient pollution in the state's inland waters. The suit, filed in federal court in Pensacola, alleges that the new rules represent an unprecedented extension of authority by the EPA, and that implementing the new criteria will be massively expensive for regulated entities in the state. A number of municipalities, the Florida League of Cities, the Florida stormwater association, and other groups have also sued. Other states have adopted similarly tough restrictions, but Florida is the first case where the EPA has imposed them. Former Ag Commissioner Charles Bronson called the regulations a "power grab" by the EPA and a "bureaucratic nightmare," while the Florida Department of Environmental Protection accused the EPA of underestimating costs. The TMDL was adopted in response to a 2008 suit, wherein the EPA was sued by the Florida Wildlife Federation over a lack of nutrient standards in the state. The EPA plans to adopt quantitative water quality criteria for Florida's coastal waters by August 2012.

 

 
Maryland Out Ahead on PES/PWS for Improving Chesapeake Water Quality

 

The US state of Maryland has a history of putting innovative ideas into practice when it comes to the environment.  Over the past three years, for example, it has quietly implemented one of North America's most sophisticated large-scale payments for watersheds services programs, and now it's developing a statewide system of payments for ecosystem services. Maryland Governor Martin O’Malley's Ecosystem Services Working Group (ESWG) met in early February to iron out the remaining differences in its Interim Report on Ecosystem Services.  More than four months in the making, a preliminary draft circulated last week lays out a detailed analysis of the need for developing a statewide payments for ecosystem services (PES) approach to dealing with environmental problems. Ecosystem Marketplace has the scoop

 

 
Bundled Benefits in Filtering Forests on the Chesapeake Bay

 

Late last year, conservation planner David Burke teamed up with Joel Dunn, Program Coordinator of The Conservation Fund’s Sustainable Chesapeake initiative, to edit and publish a how-to guide for conservation-finance success called A Sustainable Chesapeake: Better Models for Conservation, which The Conservation Fund has made available as a free download. The book offers 31 case studies that cover a range of conservation issues.  One case study in particular caught our eye. "Earning Multiple Credits for a Forested Riparian Buffer" is particularly timely given the thorny debate over how and whether to bundle multiple ecosystem values on one piece of land

Download the book here

Get more analysis at Ecosystem Marketplace. 

 

 
NYC Payment for Watershed Services Program Comes with a Bonus: Leadership Development

 

Eric Martin of Cambridge Leadership Associates has published a thoughtful piece on the need for adaptive leadership in watershed management, taking as an example the 1997 New York City decision to invest in protecting the Catskills watershed upstate, instead of building new water treatment facilities. Negotiating the necessary stakeholder agreement was a difficult process, and Martin attributes the EPA’s success in navigating conflicts to its understanding that ‘adaptive challenges’ - complex problems that require coordination between many actors and decisions made with imperfect information – require adaptive leadership. “Complex environmental challenges like watershed protection are fundamentally different from technical problems like building a water filtration plant. The EPA’s effectiveness in the watershed depended on this critical distinction,” he writes. 

Read the post here.

 

 
Linking Forests, Water Quality, and Local Communities in the Northern Forest

 

Catch the Northern Forests Watershed Incentives (NFWI) project’s recent webinar detailing progress in the Northern Forest region of Maine, New Hampshire, Vermont, and Connecticut. NFWI is a project developed by the World Resources Institute, the American Forest Foundation, and local partners. It aims to create incentives for land owners and managers in the Crooked River and upper Connecticut River watersheds to restore and protect forest land, which is crucial to water quality in the region.

Learn more and watch the webinar here

 

 
In Washington State, Stormwater Pollutants Might Fund Their Own Cleanup

 

A bill (HB1735/SB5604) introduced in the state of Washington’s legislature would establish a 1% fee on major stormwater pollutants, including petroleum, fertilizers, and herbicides. The fee is expected to generate $100 million a year in funds for projects cleaning up the state’s waterways. It would be levied at the point of first possession and in general would not apply to gasoline used for transport, or to consumer products. The bill comes after two failed measures in previous legislative sessions to introduce a stormwater pollution tax. Environmental advocates, labor, and cash-strapped local governments, who support the bill, are lined up against oil, agricultural, and other business interests. Stormwater runoff is the major source of pollution in Puget Sound and other bodies of water in the state. 

The Seattle Times and The Olympian have the story. 

 

 
"Blue Carbon" Initiatives Make Wetland Restoration a Triple Threat

 

The Contra Costa Times take a look at how restoring wetlands can confer multiple benefits. "Blue carbon" refers to the impressive carbon-sequestering powers of coastal and ocean environments, including wetlands. High-functioning wetlands, it turns out, don't just provide ecosystem services crucial to both water quality and essential habitat. They also represent "probably the highest sequestration of carbon dioxide you can get in a biological system," explains one wetland expert. Now many would like to see wetland projects included in the carbon market that’s being developed in California. 

Learn more at the Contra Costa Times.

 

 
West Coast Fisheries Experiment with Market Approach

 

Some west coast fisheries are moving to a market-based system: catch shares. Here’s how they work: at the beginning of each season, fishery managers announce an aggregate catch limit. Fishermen are allocated a share of that quota. They can then buy and sell their shares. Supporters of the new system, which went into effect in early January for bottom fish like sole and Pacific whiting, say when fisherman know exactly how many fish they can catch, overfishing is minimized. Catch-shares also give fisherman greater flexibility. But some argue the system threatens small operations and worry that shares could become concentrated in a small number of hands.

KPLU covers the story.

 

 
Arizona, Mexico to Leave Part of Colorado River Allocation in Lake Mead to Avoid Triggering Automatic Cutbacks

 

The latest news on the Lake Mead reservoir, which had reached record-low levels when we covered it back in October: Mexico and Arizona are both planning on leaving a portion of their annual allocations in the Colorado River, which should help to boost water levels a bit. Arizona's taking a gamble that giving up part of its share this year will slow Lake Mead from shrinking to the point of triggering strict cutbacks, which could devastate Arizona farmers.  In Mexico, the decision to give up part of its allocation arises from a lack of storage capacity, which comes as farmers in northern Mexico work to repair damage from an earthquake last spring. These are unusual moves in the Colorado River Basin, where users fighting over every drop has long been the norm. 

Read more on Arizona's and Mexico's proposals at Arizona Central.

 

 
New York and New Jersey Try to Clean Up Their Act – With Oysters

 

Oyster reefs improve water quality, provide important habitat, and even indirectly boost fish populations. A new multimedia guide showcases oyster restoration projects in the estuaries of New York City and New Jersey. Browse video, slideshow presentations, important documents, news articles, maps and more at NYC Transported.

 

 

POLICY UPDATES

A Strong Case for Letting the Marketplace Rule

 

Terry Anderson of the Property and Environment Research Center (PERC) and Gary Libecap, a economics professor at UC Santa Barbara, have coauthored an opinion piece detailing how the complexities and regulatory hurdles of water law in the US West are stifling water rights markets, with unhappy consequences. “As long as water allocation remains in the domain of legislatures and courts and out of the marketplace, shortages and conflict will persist, “ they argue. “Where water markets are being allowed to work, prices reflect scarcity and trades provide incentives to conserve." 

Read the piece at the Hoover Institution Journal.

 

 
Knowing Peak Water When You See It

 

"Peak water" is a buzzword these days - the New York Times included it in its 2010 "Words of the Year" list  - but what does the term actually mean? Peter Gleick, President of the Pacific Institute, breaks it down for us at Circle of Blue.  He distinguishes between peak renewable water - where humans appropriate a river’s or stream's entire renewable flow for themselves; peak non-renewable water, referring to the depletion or degradation of non-renewable sources likes groundwater aquifers; and peak ecological water, "the point where any additional human uses cause more harm (economic, ecological, or social) than benefit.” 

Read the piece at Circle of Blue

 

 
Ecosystem Services Get Their Sea Legs

 

A new booklet by Science to Action, People and Oceans, provides a useful and interdisciplinary overview of the links between human well-being and the health of our coastal and ocean environment. It makes a compelling case for establishing specially protected/managed marine zones, in the same way that we’ve set aside areas for conservation on land. Highlights include a discussion of the true economic value of marine resources and how marine managed areas (MMAs) can help to secure these values, as well as policy tools to incentivize marine conservation and protection. 

Read the booklet here

 

 
World Economic Forum Considers Marine Values

 

Heads of state and CEOs at the World Economic Forum in late January in Davos, Switzerland, were treated to an overview of the value of our oceans when oceanographer Dr. Greg Stone delivered a lecture on the economic impacts of ongoing ocean degradation. To hear Dr. Stone's thoughts on linking economic incentives to marine protection, read his interview with TreeHugger, and check out his Ted Talk, "Saving the Ocean One Island at a Time."

 

 
New Guide Helps Urban Communities Realize the Value of Green Infrastructure

 

The Center for Neighborhood Technology has teamed up with American Rivers to produce The Value of Green Infrastructure: A Guide to Recognizing its Economic, Environmental, and Social Benefits. The guide explains what 'green infrastructure' means and why we need more of it, especially in the urban context. Green infrastructure is first and foremost a set of water management practices, helping to limit stormwater runoff, increase infiltration, and protect nearby waterways – but it also delivers surprising benefits for energy conservation, air quality, and community livability. The guide walks decision-makers through the process of assessing what investing in green infrastructure can do for their community. 

Download a copy of the guide here.

 

 
The Key to Water Security: Healthy Wetlands and Forests

 

A Convention on Biological Diversity Communiqué issued on February 2nd in celebration of World Wetlands Day stressed the links between wetlands, forests, water, and human well-being. “Water is tightly linked to forests and wetland ecosystems through the hydrological cycle,” states the communiqué, and there are “crucial economic benefits” to maintaining the health of those linkages. “The Economics of Ecosystems and Biodiversity (TEEB) study, for example, estimates that water-related services of tropical forests account for more than US$ 7,000 per hectare each year, i.e., up to 45 per cent of their total value,” the document notes. “This exceeds the value of timber, tourism and carbon storage combined.” 

Read the communiqué here.

 

 

GLOBAL MARKETS

Investors Agree: We Want Water Data

 

The Water Disclosure Project is only in its second year of existence, but it’s caught the attention of heavyweight investors. 354 institutional investors - controlling $43 trillion in assets - signed the Carbon Disclosure Project's request to companies to disclose their water management practices, 217 more than last year. The CDP is targeting the 400 companies listed in the FTSE with the most water-intensive operations.

Read more at Environmental Leader.

 

 
Coca-Cola Assesses its Water Stewardship Performance

 

Coca-Cola has released its seventh sustainability report detailing the company's successes and setbacks in improving its water management practices. The report notes that Coca-Cola didn’t quite hit its target of ensuring that 100 percent of wastewater discharges are returned to the earth “at a level that supports aquatic life,” by 2010 – in fact an estimated 94 percent of facilities were up to speed by the end of the year. The company did meet its goals for improving water use efficiency. Coca-Cola aims to implement water source protection plans for all of its bottling plants by 2013, and to "replenish to nature and communities an amount of water equivalent to what is used” in its beverages by 2020. 

Read the press release and download the report from Coca-Cola. Environmental Leader summarizes the report highlights.

 

 
Singapore Discovers a Market for Recycled Wastewater

 

Singapore has long relied on water imports, desalinization, and other unconventional methods to meet its drinking water needs. Now it's taking a new approach: recycled treated wastewater. Branded as NEWater, the reclaimed wastewater goes through two rounds of treatment, and accounts for a full 30 percent of the fresh water running through the taps. Singapore has opened five NEWater treatment plants already, able to recycle hundreds of millions of gallons every day. Circle of Blue has the story

 

 
How Economic Growth is Driving Incentives for Water Conservation in China

 

The World Resources Institute researchers  Professor Zou Ji, Lijin Zhong and Hua Wen, all of WRI’s China Water Team are highlighting the links between energy, water scarcity, and growth prospects for China's economy. Of particular interest to us at here Ecosystem Marketplace was their discussion of China's shift toward market-like mechanisms in its water management, including water pricing and other economic incentives to encourage conservation. The energy-sector is one of the most water-intensive industries in China. As Zou explains, “ China has an ambitious target to expand total energy use and this needs complimentary water supply regardless of the energy source….The partial answer to this is to introduce incentives – for example, correct water pricing or allocation of water quotas, which are measures we have already been using for a long time.” 

Read more at WRI.

 

 
How Economic Growth is Driving Incentives for Water Conservation in China

 

The World Resources Institute researchers  Professor Zou Ji, Lijin Zhong and Hua Wen, all of WRI’s China Water Team are highlighting the links between energy, water scarcity, and growth prospects for China's economy. Of particular interest to us at here Ecosystem Marketplace was their discussion of China's shift toward market-like mechanisms in its water management, including water pricing and other economic incentives to encourage conservation. The energy-sector is one of the most water-intensive industries in China. As Zou explains, “ China has an ambitious target to expand total energy use and this needs complimentary water supply regardless of the energy source….The partial answer to this is to introduce incentives – for example, correct water pricing or allocation of water quotas, which are measures we have already been using for a long time.” 

Read more at WRI.

 

 
Vietnam Embracing Payments for Forest Environmental Services

 

The Than Nien News has an article covering the Vietnam Payments for Forest Environmental Services (PFES) program currently active in the Highlands province of Lam Dong. Payments from hydropower plants, a water company, and tourism businesses were used to establish a USD$4.46 million fund for forest protection. Forest management boards, forestry businesses, and households receive payments in exchange for forest protection activities. This is a classic example of a payment for ecosystem services mechanism, in that the beneficiaries of the forest services are paying for conservation. The program is also increasing awareness about the linkages between forests, water quality, and biodiversity, as well as providing an important source of income for rural households. It’s reported  that households are receiving average payments of USD$540-615, nearly 400 percent more than under earlier government payment programs for forest protection. 

Read more at the Thanh Nien News.

 

 
Irrigators in Australia Want a Free Market for Water, Some of the Time

 

A debate is flourishing in Australia about government cuts to irrigation water to increase environmental flows. The cuts, which intended to correct earlier overallocation, are being compensated through government ‘buybacks’ on the water rights market. Now some farmers and irrigators are demanding their full allocations again and pushing back against the government plan to buy up water rights. “The farmers and the irrigators signed on and gave their support to freeing up the water trade and it doesn't matter if it is an irrigator buying the water title or the government buying the title,” counters director of Australian National University’s Centre for Water Economics, Quentin Grafton. “As long as there are willing sellers there is no reason to impose restrictions on trade.” 

Learn more at The Australian.

 

 

CITATION CORNER - THE LATEST JOURNAL ARTICLES

Reclaiming freshwater sustainability in the Cadillac Desert

 

J.L. Sabo, T. Sinha, L.C. Bowling, G.H.W. Schoups, W.. Wallender, M.E. Campana, K.A. Cherkauer, P.L. Fuller, W.L. Graf, J.W. Hopmans, J.S. Kominoski, C. Taylor, S.W. Trimble, R.H. Webb, and E.E. Wohl

This paper revisits the issues described in Marc Reisner's 1986 classic Cadillac Desert: The American West and Its Disappearing Water, taking a rigorous look at the relationship between human appropriation of freshwater resources and the sustainability of cities, agriculture, and ecosystems in the US West. The study's authors examine the scientific support for the claims that Reisner, a journalist, made about growing hydrologic dysfunction in the region. Their sobering conclusions suggest that Reisner was largely correct. The paper concludes with recommendations for regaining freshwater sustainability in the Cadillac Desert.

Read the paper.

 

 
A Survey of Entrepreneurial Risk in U.S. Wetland and Stream Compensatory Mitigation Markets

 

T.K. BenDo and J.A. Riggsbee

This paper examines the impacts of federal regulations issued in 2008 governing compensatory mitigation of streams and wetlands. The regulations, which were intended to guarantee high-quality restoration, have in fact created barriers to market entry and participation for would-be mitigation bankers, the authors report based on findings from a national survey of mitigation professionals. In the paper, they discuss the implications of this 'environmental paradox' and potential solutions, including a more centralized system for mitigation policymaking.

Article can be purchased here.

 

 

SCIENCE AND TECHNOLOGY

Mapping the Value of Watershed Services

 

More and more cities are coming to realize that they can slash water treatment costs by investing in the maintenance of distant forests and valleys – thereby laying the foundation for a more sustainable water strategy by improving the forest's ability to capture, store, and filter rainwater.  New tools are helping them maximize their investments by identifying the most environmentally valuable pieces of forestland. Ecosystem Marketplace offers a review of how GIS tools like the Conservation Priority Index can help inform watershed management and decisions about conservation priorities. 

 

 
Mapping Catch Shares Around the World

 

The Environmental Defense Fund offers a map of catch shares around the world, broken down by species, program design features, and number of species by country. View it here.

 

 

JOBS

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EVENTS

Upcoming Events

 

National Green Infrastructure Conference 2011

February 22-25, 2011

Shepardstown, West Virginia

http://www.conservationfund.org/GIC2011

 

2011 AWRA Spring Specialty Conference

Managing Climate Change Impacts on Water Resources: Adaptation Issues, Options, and Strategies

April 18-20, 2011

Baltimore, Maryland

http://www.awra.org/meetings/Baltimore2011/index.html

 

National Mitigation and Ecosystem Banking Conference

April 26-29, 2011

Baltimore, Maryland

http://www.mitigationbankingconference.com/

 

The Oregon Water Conference 2011: Evaluating and Managing Water Resources in a Climate of Uncertainty

May 24-25, 2011

Corvallis, OR

http://www.towc2011.org/

 

2011 AWRA Summer Specialty Conference

Integrated Water Resource Management: The Emperor’s New Clothes or Indispensable Process?

June 27-29, 2011

Snowbird, Utah

http://www.awra.org/meetings/Summer2011/

 

4th Annual Ecosystem Markets Conference (sponsored by the American Forest Foundation and the World Resources Institute)

June 28 - July 1, 2011

Madison, Wisconsin

Website forthcoming

 

World Water Week: Responding to Global Changes - Water in an Urbanising World

August 21-27, 2011

Stockholm, Sweden

www.worldwaterweek.org

 

14th Annual International River Symposium

September 26-29, 2011

Brisbane, Australia

http://www.riversymposium.com/

 

 

 
 
 

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