2019 SWCS International Annual Conference July 28-31, 2019 Pittsburgh, Pennsylvania

1. Water Quality Trading
and Market-Based
Approaches
1
Tom Wall, Director
Watershed Restoration, Assessment & Protection Division
Office of Wetlands, Oceans and Watersheds
July 29, 2019
Soil and Water Conservation Society 2019 Annual Meeting

2. Thinking
Outside
the Box
EPA will continue to use the
traditional tools available to us..
2
…we recognize the need to think
more creatively and holistically in
solving these environmental
challenges
AND

3. Actions to Spur Progress
 Sent joint EPA-USDA letter to state agriculture and
environmental directors offering assistance
 https://www.epa.gov/nutrient-policy-data/inter-agency-
engagement-nutrient-reduction
 Signed MOU with the Water Research Foundation
 https://www.epa.gov/npdes/epa-memorandum-
understanding-water-research-foundation-advancing-
nutrient-management-efforts
 One focus: manure management technologies
 Issued memo updating EPA’s water quality trading
policy
 https://www.epa.gov/nutrient-policy-data/water-
quality-trading-memos
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4. Promoting
Market-based
Approaches
to Improve
Water Quality
Helping states, tribes and stakeholders
use market-, incentive- and community-
based approaches to reduce excess
nutrients and improve water quality at a
lower cost
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5. Water Quality Trading Memo -- 6 Principles
5
States, tribes, and
stakeholders should consider
implementing water quality
trading and other market-
based programs on a
watershed scale
EPA encourages the use of
adaptive strategies for
implementing market-based
programs
Water quality credits and
offsets may be banked for
future use
EPA encourages simplicity
and flexibility in
implementing baseline
concepts
A single project may generate
credits for multiple markets
Financing opportunities exist
to assist with deployment of
nonpoint land use practices

6. Funding the Approach
$14 million in Great Lakes Restoration Initiative Grants
$1.5 million available for innovative water quality trading projects
EPA-USDA Workshop and Webinars on Innovative Financing
for Reducing Nutrient Losses
EPA’s Gulf of Mexico Office awarded two $1 million dollar
grants last year to help farmer’s reduce nutrient losses in
Mississippi and Iowa
Many of the 28 National Estuary Programs across the country
work with their stakeholders and use creative approaches to
tackle nutrient problems
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7. Federal Financing for Nutrient Reductions:
Grants and Lending Opportunities
The §319 Nonpoint Source Program
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8. Nonpoint Source Pollution Dominates Impaired Waters
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*NPS shaded in blue
Source: Draft CWA 305(b) National Water Quality Inventory
Disclaimer: Impairment information as of October, 2017. Because data are being migrated to the new ATTAINS system, these numbers may not
reflect most current information.

9. §319 of the Clean Water Act
• 319(b) - State NPS Management Program (plans updated every 5 years)
• 319(h)- Grant Program
• In addition to CWA, states follow §319 grant guidelines
http://www.epa.gov/nps/319-grant-current-guidance
4

10. §319 Allocation of Funds
• Distributed to states annually based on formula
• In FY19 ~ $165M; ranges from ~$1M to $8M per state
• 40% non-federal match required
• About 5% of funds allocated to Tribes
• Grant Guidelines expect 50/50 split of funds
• NPS program funds – manage state NPS program
• Watershed project funds – support on-the-ground
projects
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11. ($555,394,300)
($444,098,740)
($386,967,700)
($392,747,254)
319 federal funding, 13.35%
§319 Grants: a Catalyst for Funds Leveraging and Coordination
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An analysis of WQ projects shows that for each dollar
of §319 funds, states and partners invested an
additional $8

12. • Partners from national through local
• In 10 years over 1000 different local partners in success stories since 2005,
including hundreds of conservation districts, many cities and hundreds of
counties
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§319 Grants: a Catalyst for Funds Leveraging and Coordination

13. 13
Asnapshotof§319 Projects 2008-2013
• §319 fills a unique role including technical assistance such as:
watershed coordination, planning and outreach, demonstration
of new Best Management Practices, and effectiveness
monitoring
Of these projects ~ 80% address nutrient impairments

14. Results:
• ~ 11,000 miles of streams and rivers, 290,000 acres of lakes and ponds restored for one or more impairments
• Most frequent pollutants: Sediment, Pathogens, Nutrients, Acid/Metals
• Nutrient successes, include the attainment of water quality standards in 80,000 acres of lakes, ponds and reservoirs; 2,700
miles of rivers and streams; and 60,000 acres of estuaries and coastal waters (since 2006).
• https://www.epa.gov/nps/success-stories-about-restoring-water-bodies-impaired-nonpoint-source-pollution
Nonpoint Source Success Stories

15. Recent Success Stories Examples
Minnesota: Community’s Commitment to Installing Management
Practices Restores Mitchell Lake (2019)
• Implementing a mix of upstream practices and in lake treatment
reduced phosphorus and algal growth.
• Over 500 local community members from: the city Lake
Association, Riley-Purgatory-Bluff Creek Watershed District,
University of Minnesota, and Hennepin County.
• Phosphorus dropped from 107 ug/L to 57 ug/L
• Local farmers formed the Lime Creek Watershed Council to encourage
practices that reduce erosion
• Reduction in Sediment and Phosphorus and Nitrate concentrations
• Mussel species found went from 0 in 1998 to 6 in a 2011 survey.
Iowa: Watershed Work Reduced Nutrients and Restored
Native Freshwater Mussels in Lime Creek ( 2018)
Local farmer and conservation leader in cover crop
Native wildflowers re-established along the lake shore

16. Points of Engagement in the Nonpoint Source Process
State Updates of 5 year nonpoint source management plans
Participate in Local level Watershed plans
Engage in State Competitive RFP process

17. TMDLS
Total
Maximum
Daily
Loads

18. What is a
TMDL?
TMDL =  WLAi +  LAi + MOS
WLAi: Sum of waste load allocations (point sources)
 LAi: Sum of load allocations (nonpoint sources)
MOS: Margin of Safety
A calculation of the
maximum amount of a
pollutant that a waterbody
can receive and still meet
water quality standards, and
an allocation of that amount
to the pollutant’s sources
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 “the math and the path” for waterbody restoration
 States establish most TMDLs
 EPA recognizes that under certain circumstances
alternative restoration approaches may be more
immediately beneficial or practicable in achieving
WQ goals than pursuing a TMDL in the near-term

19. TMDL
Benefits
TMDL development can provide valuable information
about the state of a waterbody, sources of
impairment, and approaches for allocating loadings
Bring stakeholders together to discuss the issues,
prompt the creation of new tools, innovative thinking
and collaborative approaches for restoration
Allow cooperation among governments to address
impairments together in a way that they would not be
able to solve independently
Provides certainty for communities that need to invest
in water quality improvements
Most importantly, TMDLs can lead to reducing
pollution and meeting water quality uses
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20. 20
Tom Wall, Director
Watershed Restoration, Assessment &Protection Division
Office of Wetlands, Oceans and Watersheds
July 29, 2019
Questions?

21. Coordination with USDA
and Supporting State
Programs
21
Katie Flahive
Office of Wetlands, Oceans and Watersheds
July 29, 2019
Soil and Water Conservation Society 2019 Annual Meeting

22. 22

23. Collaborative Partnerships
 EPA and USDA recognize that making progress in nutrient loss
reduction depends largely, if not entirely, on the efforts of state,
tribal, and local programs working in partnership with stakeholders.
We encourage states and their partners to use market-based
approaches, e.g.,
 water quality credit trading
 public-private partnerships
 pay-for success
 supply chain programs
 point and non-point partnerships through state-supported watershed
planning and sponsored nutrient management practices
 EPA is providing technical and financial support, including through
research and implementation dollars.
 EPA is committed to engaging with local stakeholders, leveraging
resources, and helping to remove barriers that impede progress.
 EPA and USDA are inviting each state environmental and agricultural
agency to engage with to identify local opportunities and challenges.
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24. Other
Progress
 EPA and USDA continue to partner on
watershed-scale implementation of
agricultural conservation practices for
nutrients through the National Water
Quality Initiative.
 EPA and Iowa continue to co-chair the
Gulf of Mexico Hypoxia Task Force,
EPA is coordinating significant
investment and progress tracking in
the Chesapeake and Great Lakes
 EPA continues to provide contract
technical assistance to support states
and their partners as they implement
their nutrient strategies
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25. The National Water Quality Initiative (NWQI)
A collaboration of NRCS, EPA, and state water quality agencies
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26. NWQI
Background &
Recent
Developments
Launched in FY12, NRCS coordinates with EPA & State WQ agencies to
address Ag nonpoint sources in small watersheds nationally
NRCS targets EQIP funds ($22-33M/yr) to water quality-focused
conservation practices to address nutrients, sediment, and pathogens
from animal ag
State WQ agencies concur on watershed selection, invest and monitor in
at least one watershed
EPA supports state NPS engagement, provides monitoring guidance,
tracks and reports annual results
In most states NWQI has added value in leveraging between State WQ
agencies and NRCS
‘Readiness’ program (FY17 on) emphasizes watershed and on-farm
planning and outreach prior to targeted implementation
Source water protection phase added in FY19
Watershed Assessments starting in FY20; “9-element” or other plans must
contain
◦ critical source areas in the HUC12
◦ description and evaluation of planned scenarios and alternatives to
meet the WQ objectives
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27. Gulf of Mexico Hypoxia Task Force
• 12 state, 5 federal agency Members; EPA is federal co-chair (Dave
Ross)
• Goal: by 2035 reduce the extent of the Gulf of Mexico hypoxic zone to
<5,000 km2
• Interim target: by 2025 reduce by 20 percent the N and P delivered load
• Nutrient Loss Reduction Strategies
• Serve as cornerstone for reaching the goal while improving local waterways
• Developed with public input, identify small priority watersheds where local
engagement and implementation will provide results
• Focused implementation on the ground in state priority watersheds
• Tracking progress towards the goal
• Point Source Measures Report
• NPS Measures Report
• Continue to build and leverage partnerships
• SERA-46 Priorities for Collaboration
• Walton Family Foundation
• Innovative financing opportunities to reach watershed goals
• Communicating Success
• 2017 Report to Congress
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28. EPA Engagement: Key Ag Partners
• Soil & Water Conservation Districts – critical watershed partners
• EPA participates in NACD meetings, provides §319 program training
• Industry service providers, e.g., Certified Crop Advisors and Ag Retailers
• EPA staff serve on Board of International Certified Crop Advisors
• Land Grant Universities
• Enhancing WQ-focused training & resources via LGUs through series of small grants
• Coordinate with LGU Committee (SERA-46) that supports HTF state strategies
• Ag Sustainability and supply chain partnerships, e.g., Midwest Row Crop Collaborative,
Field to Market – stay abreast of developments, share information re: tracking progress
• Conservation Technology Innovation Center and other organizations focused on showing
progress through planning and conservation implementation – Opportunities for tracking
conservation progress
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29. Contract
Technical
Assistance
Assistance is provided at
state request, as
available resources allow
Summary of EPA Contractor Assistance for State Nutrient
Management Strategies
◦ Since 2012, contractor assistance totaling more than $1.6M has
been provided to 19 states and PR for state Nutrient Reduction
Strategies
New opportunity starting in September to support state Agricultural
Nonpoint Source Programs
◦ Develop outreach materials including websites
◦ Provide technical assistance, existing data analyses, literature
syntheses, watershed planning support and/or water quality
modeling
◦ Assess state of the art science, develop materials for varied
audiences describing agricultural activities to reduce nutrient and
other agricultural pollution
◦ EPA Regions to convene EPA, states and USDA staff in collaborative
manners to learn on a variety of topics e.g., watershed planning
models, load calculation models, priority setting and collaborative
support from federal programs for implementation
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30. 30
Katie Flahive
Office of Wetlands, Oceans and Watersheds
July 29, 2019
Questions?