Feasibility Study to Examine Demand and Supply for Innovative Water Quality Trading Program in Lower Fox River, WI
Wisconsin’s Lower Fox River, which drains from Lake Winnebago to the bay of Green Bay, a portion of Lake Michigan, has been receiving a lot of attention this past year. Among several key initiatives that have garnered regional and national attention is Fox P Trade—a three-year initiative to launch water quality trading that will alleviate high nutrient levels and associated algal blooms in the river and Green Bay.
In March 2014, Fox P Trade selected a team of national experts on water quality trading (WQT) to assess the economic feasibility of trading in the Lower Fox River Watershed. The team will be led by Kieser & Associates, LLC of Kalamazoo, MI and also includes XCG Consultants Ltd of Ontario, CA, Troutman Sanders LLP of Washington, D.C., and The Freshwater Trust of Portland, OR. Collectively, the team has been involved with some of the most successful, innovative, and largest trading programs in the world.
Over the next several months, this team will look at the demand for buying credits (largely from industrial and municipal facilities) to satisfy permit compliance needs and the costs for traditional treatment. This will be compared to the potential to supply those credits, primarily through installing additional conservation practices in the watershed at the HUC-12 watershed scale. The team will then compare demand and supply across three time periods to reflect different compliance schedules to identify optimum approaches implementing phosphorus reduction practices to minimize costs and maximize the supply of available credits. The approach includes in-person engagement with stakeholder groups, interviews, and plenty of data analysis. Among the key deliverables will be prioritized rankings of HUC-12 subwatersheds and the main stem of the Lower Fox River based on: a) the greatest credit-generating potential; and b) potential to supply credits at or below the willingness to pay price ranges.
Water quality trading is an innovative, market-based approach whereby credits are earned for reducing pollution and those credits are sold to entities that are faced with high pollution control costs. Trading enables a cost effective approach to pollution reduction when polluters are facing very different costs to control the same pollutant. Fox P Trade focuses primarily on trading phosphorus, but can also include total suspended solids: both pollutants are both are subject to a Total Maximum Daily Load in the Lower Fox River watershed.
Since spring of 2013 Fox P Trade has been building on past work in the watershed and other water quality trading programs, and responding to the unique policy and environmental factors that are driving opportunities for nutrient trading in the Lower Fox River watershed. Fox P Trade is collaboration between the Great Lakes Commission, the USDA Natural Resource Conservation Service and the Wisconsin DNR, with funding made available throughGreat Lakes Restoration Initiative. For more information, see www.glc.org/projects/water-quality/foxptrade or contact Victoria Pebbles (vpebbles@glc.org) or Jessica Schultz (jessica@fwwa.org).
