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Arkansas Law Review

Abstract

In the decades since the passage of the Clean Water Act (CWA), our nation’s waters remain impaired by dangerous levels of nutrients such as phosphorous and nitrogen, which can cause serious health impacts. Excess nutrients also have a substantial environmental impact on waterbodies, which in turn diminishes the recreational value of these resources. Efforts to control these nutrient levels place a substantial economic burden on local governments in both providing clean drinking water as well as treating wastewater. The CWA’s cooperative federalism approach divides sources of nutrient pollution into two categories: (1) point sources, and (2) nonpoint sources. Point sources are “discrete conveyance[s]” such as the end of a pipe from an industrial facility or municipal wastewater treatment plant discharging to surface waters. Nonpoint sources are every other source, but most nonpoint source nutrient loads come from agricultural activities and increasing urbanization. The CWA places mandatory regulations on point sources, but nonpoint source regulations are largely determined at the state level.

This comment provides policy recommendations for developing a comprehensive nutrient water quality trading framework, which will reduce litigation risk and delayed implementation. Part II provides a background on what the CWA requires of point and nonpoint source dischargers, the United States Environmental Protection Agency’s (EPA) ongoing support of watershed-based trading programs, and the judicial developments regarding trading. Part III offers suggestions for developing a statewide trading framework by focusing on four key areas: (1) requiring participating watersheds to use numeric criteria to measure the targeted nutrient; (2) limiting trading to those watersheds with Total Maximum Daily Loads (TMDL) for nutrients; (3) prohibiting trades that are likely to result in impairment; and, most importantly, (4) determining how credits may be generated by point and nonpoint sources. This fourth area will require the advisory panel and state regulatory agencies to create rules concerning credit baselines, monitoring, uncertainty, and timing issues.

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