Advocacy Groups Challenge National Water Pollution Trading Model

Washington, D.C. — Food & Water Watch and Friends of the Earth, represented by Columbia Law School’s Environmental Law Clinic, filed a joint lawsuit today to force the U.S. Environmental Protection Agency (EPA) to strengthen the Chesapeake Bay water clean-up efforts and maintain the integrity of the Clean Water Act. The lawsuit seeks to invalidate water pollution trading provisions included in EPA’s 2010 plan to clean up the Chesapeake Bay watershed. The lawsuit declares that water pollution trading, otherwise known as cap-and-trade, is illegal and would undermine the region’s efforts to comply with strict pollution limits set by the Bay’s total maximum daily load or TMDL. This program would allow for new and increased pollution discharges into the Chesapeake Bay watershed under a scheme of market-based offsets and pollution trading.

“The 40 years of success of the Clean Water Act will be traded away if this scheme is allowed to go forward,” said Food & Water Watch Executive Director Wenonah Hauter. “Why would we put Wall Street, the same industry that brought us the financial crisis, in charge of protecting the Bay? Allowing polluters to purchase their way out of upgrading equipment and reducing their toxic runoff is irresponsible and reckless. It’s opening the door to the end of the Clean Water Act and the downfall of our waterways. It’s essentially an entitlement program for the financial services industry and polluters.”

The pollution trading provisions in the Bay TMDL allow financial middlemen to identify and purchase nitrogen and phosphorus “credits” from industrial agriculture operations in the watershed that attest to engaging in future practices to reduce their pollution levels. These unverifiable credits are then aggregated and bundled together, and sold to power plants, wastewater treatment plants and other “point source” polluters who are either unable or simply unwilling to meet their CWA permit limits. This “pay-to-pollute” trading program represents a dramatic departure from the successful industrial pollution controls established by the Clean Water Act (CWA), a bedrock environmental law Congress passed 40 years ago this month.

“Simply put, the Bay water pollution trading program sets bad national precedent and will allow more, not less, pollution in the Chesapeake Bay,” said Friends of the Earth President Erich Pica. “Cleaning up our national waters, including the Chesapeake Bay, is a matter of political will at the state and national level. We cannot rely on the worst polluters of the Bay and Wall Street traders to lead the efforts to revive this invaluable natural resource.”

The Obama administration has been promoting water quality trading, which is favored by the financial services industry, in the Chesapeake Bay watershed, with the hopes of establishing an interstate market in nitrogen and phosphorous runoff there that could be replicated around the U.S.

EPA recently adopted the TMDL for nitrogen, phosphorus and sediment discharged into the Chesapeake Bay. These pollutants are chiefly responsible for massive dead zones throughout the Bay during each summer. In theory, when properly designed and implemented through legally required permits and state regulatory programs, the TMDL should result in improved water quality for fishing and swimming in the Bay and its tributaries in New York, Pennsylvania, Maryland, West Virginia, Delaware, Virginia and the District of Columbia sometime after 2025. However, the trading provisions of this plan are not authorized under the CWA and likely means that the Bay will remain polluted for decades to come.

The TMDL, as finalized, allows for unmonitored “nonpoint” sources of pollution, mainly agricultural operations, to claim unverified reductions in nitrogen and phosphorus discharges and sell these alleged reductions to “point” source industries like power plants and wastewater treatment plants. This market-based approach means that polluters will be able to buy and sell the right to pollute the Bay through a series of complex and non-transparent deals brokered by third party middlemen.

Supporters of water pollution trading claim that the market approach will finally motivate agricultural operations—an industry that is largely exempt from CWA regulation despite being the largest polluters of waterways in the country—to reduce their levels of discharges. However, pollution trading follows on the heels of decades of failed financial incentives to get the industry to clean up its mess in the Bay, from taxpayer funded cost- share projects to manure transport programs and other voluntary measures. The EPA’s implementation of trading, the latest voluntary approach, sacrifices the most successful part of the CWA: the point source permitting program.

“Water pollution is a theft of our public trust rights to clean and healthy waterways. The notion that polluters should be allowed to profit by selling the right to pollute the Bay to other polluters not only violates the letter of the Clean Water Act, but offends the very spirit of the law,” stated Food & Water Justice Co-Director Michele Merkel. “EPA cannot be allowed to place a ‘for sale’ sign on the ecological integrity of the Chesapeake Bay.”

"Pollution trading also has dire consequences for communities of color and other communities that lack political access," stated Patuxent Riverkeeper Fred Tutman. "As industries purchase the right to pollute more, it’s the surrounding communities that will bear the brunt of these increased discharges. And we know, from decades of research, that it’s communities of color who live nearest to these facilities. Pollution trading is nothing more than a scheme to dump even more toxics into these communities who already bear the disproportionate burden of our environmentally irresponsible ways."

“Pollution trading in the Chesapeake Bay watershed would put at increased risk the health of the public who live in the watershed and those who are on the Bay for work or recreation,” said Robert S. Lawrence, MD, Director, Center for a Livable Future, Johns Hopkins Bloomberg School of Public Health. “We need to preserve the Clean Water Act to clean up the Bay, not allow it to be weakened and add more nitrates, bacteria, viruses, heavy metals, and other pollutants that threaten human and ecologic health.”

Resources:
Chesapeake Bay TMDL Q & A: Why the Pollution Trading Provisions of the Bay TMDL are Illegal, and Harmful to the Bay

Bad Credit: How Pollution Trading Fails the Environment

Don’t Bet on Wall Street: The Financialization of Nature and the Risk to Our Common Resources

Complaint for Declaratory and Injunctive Relief 

Contacts: 
Scott Edwards, Food & Water Watch, 914-299-1250, [email protected]
Michele Merkel, Food & Water Watch, 202-257-0877, [email protected]