Economic Return:
Water Quality Trading provides income through the sale of reductions in water pollution earned by changing land management practices on private land with private investment. Credits are used to offset the effect of water impacts from point and non-point sources under the Total Maximum Daily Load requirements of the Clean Water Act.
Background Information:
Water Quality Trading is a tool used by regulatory agencies to address environmental issues such as sediment, nitrate or phosphate loading in waterways. Essentially, it allows sources facing higher pollutant control costs to purchase environmentally equivalent or superior pollutant reductions from another source at lower cost. The regulatory framework that allows water quality trading is called Total Maximum Daily Load (TMDL), which refers to the Clean Water Act trading policy section established in 2003.
Through its investments, MMA SLI will implement land use practices on components of property that will reduce water quality impacts. In cases where MMA SLI properties are located in TMDL trading areas, we will participate in trades which reward each incremental unit of pollution reduction. Credits are given to landowners or pollution sources only when they go beyond water quality based limits.
The benefits of this innovative system include:
- Lowest Cost Compliance: By providing the ability for low cost producers of environmental improvement to produce more benefits, overall pollution reductions are obtained at lower cost.
- Incentives: By providing economic incentives, TMDL programs engage more watershed sources in improving water quality.
- Ancillary Benefits: Practices used by land managers in TMDL programs, such as wetlands restoration, buffer strip planting, and riparian setbacks, have additional benefits for wildlife and biodiversity.
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