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Point source water pollution comes from discrete conveyances and alters the chemical, biological, and physical characteristics of water. It is largely regulated by the Clean Water Act of 1972. Among other things, the Clean Water Act requires dischargers to obtain a NPDES permit to legally discharge pollutants into a waterbody. However, water pollution remains an issue due to some limitations of the Act. Consequently, other regulatory approaches have emerged, such as water quality trading and voluntary community-level efforts.

2. Introduction

a. Definition (SW)

Water pollution is the contamination of natural water bodies by chemical, physical, radioactive or pathogenic microbial substances .Point sources of water pollution are discrete conveyances such as pipes or man-made ditches from stationary locations such as sewage treatment plants, factories, wastewater treatment facilities, septic systems, ships, and other sources that are clearly discharging pollutants into water sources.

b. Relevant Science

The input of pollutants into a water body may impact the water's ability to deliver ecological, recreational, educational, and economic services. While the impacts of water pollution vary considerably based on a variety of site-specific factors, they may be either direct or indirect. Pollutants that are directly toxic pose a threat to organisms that may come into contact with contaminated water. These include persistent organic pollutants used as pesticides (DDT and Toxaphene) and toxic byproducts of industrial activity (cyanide). Other pollutants may indirectly impact ecosystem services by causing a change in water conditions that allows for a harmful activity to take place. This includes sediment inputs that decrease the amount of light that can penetrate through the water, reducing plant growth and diminishing oxygen availability for other aquatic organisms .

There are a variety of water quality parameters that may be impacted by point source water pollution. They include: dissolved oxygen and biochemical oxygen demand (BOD), temperature, pH, turbidity, phosphorus, nitrates, total suspended solids, conductivity, alkalinity, and fecal coliform . Given that much of the point source water pollution in the United States comes from wastewater treatment plants, BOD is perhaps the most widely used metric to assess water quality.

Water quality is also closely linked with water quantity issues. Water shortages from natural and anthropogenic activity reduce the dilutive properties of water and may concentrate water pollution. Oppositely, during flooding events, water pollution may spread to previously uncontaminated waters through surface overflow or the failure of man-made barriers.

c. Nature of the problem/context (SW)

i. Cuyahoga River Fire (SW)

The Cuyahoga river is located in north-east Ohio and drains into lake Erie. The river was thrust into the national limelight in 1969 when it caught fire although the river had been plagued by fires since 1936. Pollution of the river had become prevalent in the early 1800’s as contaminants from municipal and industrial discharges, bank erosion, commercial/residential development, atmospheric deposition, hazardous waste disposal sites, urban storm water runoff, combined sewer overflows (CSOs) and wastewater treatment plant bypasses were discharged into the river . The Time magazine described the Cuyahoga as the river that "oozes rather than flows" and in which a person "does not drown but decays” . The 1969 fire drew significant public attention to the state of the nation’s waterways and is sometimes credited for the creation of the Federal Water Pollution Control Act (1972), commonly called the Clean Water Act, the Oil Pollution Act of 1990, and the establishment of federal and state environmental protection agencies such as the Environmental Protection Agency (EPA) .

3. Regulatory framework

a. History of regulation (DC)

Historically, regulation of point source water pollution in the United States included health- and use-based standards to protect environmental and economic interests. The River and Harbor Act of 1899 contained provisions that made discharging refuse matter into navigable waters of the United States illegal without a permit issued by the Army Corps of Engineers.

In 1948 Congress passed the Federal Water Pollution Control Act (FWPCA). Although it was amended several times, the original FWPCA granted the Surgeon General of the Public Health Service the authority to develop programs to combat pollution that was harming surface and underground water sources. The FWPCA also authorized cooperation between federal and state agencies to construct waste treatment plants.

The FWPCA amendments of 1966, which came to be known as the Clean Water Restoration Act established a study to determine the effects of pollution on wildlife, recreation, and water supplies. The Act also set forth guidelines for abatement of water that may flow into international territory and prohibited the dumping of oil into navigable waters of the United States.

Further amendments to FWPCA in 1970 were dubbed the Water Quality Improvement Act. They required the development of certain water quality standards and expanded federal authority in upholding the standards. The most substantial amendments to the FWPCA occurred in 1972 and became known as the Clean Water Act.

b. Overview: Clean Water Act (JES)

The Clean Water Act regulates the discharges of pollutants into the waters of the United States through point and nonpoint sources by regulating quality standards for surface waters. A facility that wishes to discharge pollutants through a point source must first obtain a NPDES permit, which sets limits on the amount of pollutants that can be discharged into a waterbody thereby maintaining water quality standards.

NPDES Program

The Clean Water Act requires that anyone who wishes to discharge pollutants into a waterbody from a discrete point source must obtain a NPDES permit, which sets limits on the amount of pollutants that can be discharged into a waterbody. Limits are maintained through technology-based standards and water quality-based standards.

Permits

Individual states are authorized by the EPA to issue permits when they have demonstrated that their program is at least as stringent as the EPA’s program. States perform the day-to-day issuance of permits and oversight of the program while the EPA provides review and guidance to the states. All NPDES permits must contain a “specific, numeric, measurable set of limits on the amount of various pollutants that can appear in the wastewater discharged by the facility into the nation's waters” as well as guidelines on how often monitoring should be performed and what “sampling and analytic techniques should be used.”

Types of Permits

• Individual - A unique permit is issued for each discharger.
• General - A single permit that covers a large number of similar dischargers in a specific geographic area.

Permitting Process

The authorized permit issuing body receives and reviews the permit application. The technology-based and water quality-based effluent limits are developed and then compared to determine which is the more stringent, which is then used as the effluent limit for the permit. Monitoring requirements, special conditions, and standard conditions for each pollutant are developed and the permit is then issued and its requirements are implemented.

• Technology-based requirements: A minimum level of treatment based on available treatment technologies is required for discharged pollutants, however, a discharger may use any available treatment technologies to meet the limits. The effluent limits are derived from different standards for different discharges:
  • Municipal discharges (POTW): National secondary treatment standards define limits of biological treatment standards based on BOD, TSS, and pH.
  • Non-municipal discharges: “Effluent limitations guidelines and standards are established by EPA for different non-municipal (i.e., industrial) categories. These guidelines are developed based on the degree of pollutant reduction attainable by an industrial category through the application of pollutant control technologies.” (http://cfpub.epa.gov/npdes/techbasedpermitting/effguide.cfm) For existing sources, this level of treatment is equivalent to “Best Available Technology Economically Achievable” (BAT) and for new sources the treatment level is “New Source Performance Standards” (NSPS). (http://www.epa.gov/npdes/pubs/tenets.pdf)
• Water quality-based requirements: If a permit write finds that the technology-based standards are not stringent enough to meet state water quality standards, they can develop Water Quality Based Effluent Limits (WQBEL) to ensure that the water quality standards are attained. (http://www.epa.gov/npdes/pubs/chapt_06.pdf) WQBELs are "back calculated" from ambient water quality standards, setting allowable pollutant levels in the effluent, which after accounting for available dilution, will meet WQS in-stream. (http://www.epa.gov/owow/watershed/wacademy/acad2000/cwa/cwa41.htm)

Permit Violation

A permitee can be in violation of their permit when they discharge pollutants at a level higher than what is specified on their permit or discharge without a permit. They can also be in violation if they fail to comply with the monitoring and enforcement portion of the permit.

Enforcement

Since the NPDES permit program is a self-monitoring system where permitees are required to carry out detailed monitoring requirements, the EPA promotes “compliance assistance” as an enforcement technique, which “helps permittees come into, and remain, in compliance with their permit, rather than going immediately to enforcement actions." The EPA and state NPDES agencies have can perform periodic inspections and the EPA gives individual states the authority to enforce NPDES permits although the EPA has the right to carry out enforcement should a state not do so. Enforcement actions for violations include: injunctions, fines for typical violations, imprisonment for criminal violations, or supplemental environmental projects (SEP). Citizens may also bring suits against violators but they must first provide the EPA and state NPDES permit agency with the opportunity to take action.

c. Others

i. EPA Water Quality Trading Policy

The Clean Water Act has made great strides in reducing point source water pollution, but this effect is overshadowed by the fact that nonpoint source pollution, which is not subject to regulation under the Act, has correspondingly increased . One of the solutions to address this imbalance is point/nonpoint source trading of pollutants. In January 2003, the EPA Water Quality Trading Policy was issued. At this time, most waters in the United States did not support their designated uses. Specifically, 40 percent of rivers, 45 percent of streams, and 50 percent of lakes that had been surveyed were unfit. Consequently, when The Water Quality Trading Policy was issued it acknowledged that “the progress made toward restoring and maintaining the chemical, physical, and biological integrity of the nation’s waters under the 1972 Clean Water Act and its National Pollutant Discharge Elimination System (NPDES) permits has been incomplete .”

The purpose of the policy is to “encourage voluntary trading programs that facilitate the implementation of TMDLs, reduce the costs of compliance with CWA regulations, establish incentives for voluntary reductions, and promote watershed-based initiatives (3) .” The policy supports the trading of nutrients such as nitrogen and phosphorous and sediment load reductions, but in order for it to be extended to other contaminants, more scrutiny is required . All water quality trading programs are subject to the requirements of the Clean Water Act .

The Trading Policy outlines basic ground rules for trading by specifying viable pollutants, how to set baselines, and detailing the components of credible trading programs. It also stipulates that trades must occur within the same watershed . Water quality trading programs are subject to the stipulations of the Clean Water Act .

ii. Other federal laws that may apply for a NPDES permit: (JES)

• Endangered Species Act: Requires that Federal agencies must consult with Fish and Wildlife Services to ensure that a project will not endanger a threatened species or their habitat.
• NEPA: Only discharges that are subject to New Source Performance Standards (or new sources) are subject to NEPA review prior to being issued a permit.
• National Historic Preservation Act: Prior to issuing a permit, Regional Administrators must adopt measures that mitigate adverse effects on properties in the National Register of Historic Places.
• Coastal Zone Management Act: Permist will not be issued unless the permitees certifies that proposed activities, which would affect land or water use in coastal zones, comply with the Coastal Zone Management Act.
• The Wild and Scenic Rivers Act: Prohibits issuance of permit for water resources projects that will have a direct, adverse effect on the values for which a national wild and scenic river was established.
• Fish and Wildlife Coordination Act: Jurisdiction over wildlife resources must be established prior to permit issuance so that resources can be conserved.
• Essential Fish Habitat Provisions: Requires EPA to consult with the National Marine Fisheries Service for any EPA-issued permits which may adversely affect essential fish habitat identified under the Magnuson-Stevens Act.

4. Problems/Issues/Concerns

a. Funding

i. Funding issues for monitoring (JES)

Monitoring of waterbodies is the responsibility of authorized states, not the EPA. The EPA has acknowledged the lack of funding on the state's part that is required to carry out this monitoring, which leads to a level of uncertainty regarding the quality of most surface waters.

b. Enforcement

i. Self-monitoring and self-reporting

In many cases, the enforcement mechanisms of the Clean Water Act have created tension between regulators, regulated parties, and local citizens. Most NPDES permits require dischargers to monitor and report the contents of their discharges to the appropriate authorities. This requirement is potentially self-incriminating, forcing industries to provide information that may subject them to penalties and legal constraints. As a result, some dischargers go to great lengths to avoid penalties, including falsifying discharge monitoring reports and tampering with monitoring equipment. In United States v. Hopkins, the court ruled on a case where the vice president for manufacturing at Spirol International Corporation was charged with three criminal violations for falsifying water samples sent to state regulatory agencies. Spirol diluted his samples, which contained high levels of Zinc, with tap water on numerous occasions and frequently ordered his subordinates to reduce the zinc concentration in the water by running it through a coffee filter.

ii. Tensions between state and federal government

Like other environmental laws, the Clean Water Act delegates many enforcement responsibilities to state agencies. While the burden of enforcement may be transferred to the states, federal agencies reserve the right to approve or reject state plans for dealing with water pollution. This relationship reduces the regulatory burden on federal agencies, but can lead to confusion and tension between the two regulators.

Many of these tensions arise with regards to the commerce clause of the constitution. Until recently, the commerce clause has given the federal government considerable authority in regulating states' decisions about water use. In 2000, the United State Supreme Court ruled on Solid Waste Agency of Northern Cook County v. US Army Corps of Engineers. This ruling struck down the Corps' ability to prevent the construction of a disposal site for non-hazardous waste in Illinois based on power derived from the commerce clause. The Corps cited the Migratory Bird Rule when they initially denied the §404 permit under the Clean Water Act. The migratory bird rule was meant to protect habitats used by migratory birds, which included the abandoned mining site that SWANCC had proposed to construct the waste disposal site. Chief Justice Rehnquist wrote: "Congress passes the CWA for the state purpose of 'restoring and maintaining the chemical, physical, and biological integrity of the Nation's waters.' In doing so,, Congress chose to recognize, preserve, and protect the primary responsibilities and rights of States to prevent, reduce, and eliminate pollution, to plan the development and use... of land and water resources...". In reversing the Corps' decision to issue a permit, the court reversed a trend and placed a check on federal power over state land use and water rights. Tensions between federal and state agencies concerning interstate commerce and point source water pollution continue, and are a reality of the Clean Water Act.

c. Ambiguity of the CWA

i. Coeur Alaska v. Southeast Alaska Conservation Council

In 2009, the United States Supreme Court ruled on Coeur Alaska v. Southeast Alaska Conservation Council. The case concerned the re-opening of a gold mine outside Juneau, Alaska that had been out of operation since 1928. Coeur Alaska planned to utilize froth floatation in order to extract gold, creating 4.5 million tons of tailings over the course of its lifetime. The mining company opted to dispose of the tailings in nearby Lower Slate Lake, requiring a permit to comply with the Clean Water Act. The tailings would fundamentally change the physical and chemical characteristics of the lake, raising the lake bed by 50 feet and expanding the area from 23 to 60 acres. Coeur Alaska proposed to temporarily re-route nearby streams around Lower Slate Lake until they could purify the water and re-introduce the natural flow patterns.

Tailings from froth floatation contain high concentrations of heavy metals, including aluminum, which have toxic effects of aquatic organisms. As a result, the disposal of these tailings into Lower Slate Lake is eligible for a §402 permit for discharge of a pollutant from the EPA (NPDES permit). The nature of the tailings also justifies their categorization as a fill material, or a “material [that] has the effect of… [c]hanging the bottom elevation” of a water body. Consequently, Coeur Alaska was also eligible for a §404 Dredge and Fill permit from the Army Corps of Engineers. The company applied for this latter permit and received authorization from the Corps to dump the tailings into Lower Slate Lake. The Southeast Alaska Conservation Council contended that disposal of the tailings is explicitly banned by §306(e) of the Clean Water Act, and would therefore make Coeur Alaska ineligible for a NPDES permit.

The Supreme Court ruled in favor of Coeur Alaska, explaining that if the Army Corps of Engineers has authority to issue a permit under §404, the EPA does not have authority to issue a §402 permit. They asserted that the law is ambiguous as to whether §306 applies to fill materials and found no erroneous or unreasonable behavior by the Corps. As a result, although the tailings would explicitly violate the Clean Water Act under §402, the Corps may issue a dredge and fill permit.

This decision has not resonated well with environmental groups, who are worried that the decision may allow companies to discharge massive amounts of hazardous pollutants by avoiding the NPDES permitting procedure. Of particular concern is the mountaintop mining industry, which has the capacity to fundamentally alter aquatic ecosystems by filling in water bodies with sediment and mining debris. This tension between various sections within the Clean Water Act is sure to receive considerable attention in future years.

5. Other Emerging Regulatory Approaches

a. Water Quality Trading (KD)

i. Definition

Water quality trading (WQT) is a market-based approach, implemented on a watershed-scale, used to improve or maintain water quality. It involves the voluntary exchange of pollution reduction credits from sources with low costs of pollution control to those with high costs of pollution control. WQT programs are still subject to the requirements of the Clean Water Act, but they can be used to reduce the overall cost of compliance. Usually, permitted point sources of water pollution, such as wastewater treatment plants, have high discharge treatment costs, whereas nonpoint sources of water pollution, such as agriculture, have low costs of pollution reduction. Therefore, it is generally assumed that most trades would take place between point sources and nonpoint sources . However, point source-point source trades could also occur as well as pretreatment trades and intra-plant trades.

ii. Background

Most of the water quality trading markets currently in operation are focused on the trading of nutrients such as phosphorous and nitrogen. However, increasing interest has been shown in trading programs for sediment runoff, biological oxygen demand, and temperature . WQT programs can be used to preserve good water quality in unimpaired waters by counterbalancing new or increased pollutant discharges. In impaired waters, a WQT program can be used to improve water quality by reducing pollutant discharges in order to meet a specified water quality standard or total maximum daily load (TMDL) .

TMDLs apply to both point sources and nonpoint sources and they represent the primary impetus for WQT programs. Point sources of pollutants that require NPDES permits often have strict discharge limits based on a TMDL. WQT can allow these sources to obtain lower costs of compliance, while still achieving the overall desired pollution reduction. Several factors influence whether or not a TMDL-based water quality trading program will be successful. First, the market must be appropriately structured within the regulatory framework of the Clean Water Act. Second, the pollutant must be well-suited for trading. Third, implementation of a WQT market requires public input and voluntary participation. Finally, there must be adequate differences in pollution control costs and available opportunities for reduction .

iii. Credits and trade ratios

In a WQT market, a unit of pollutant reduction is called a credit. A point source can generate credits by reducing its discharge below its most stringent effluent limitation and a nonpoint source can generate credits “by installing best management practices (BMPs) beyond its baseline" . Before being able to purchase credits, source must first meet its technology-based effluent limit (TBEL). The credits can then be used to meet water quality-based effluent limits (WQBEL) .

In order to ensure that trades are effective and do not result in more pollution than would occur in their absence, trade ratios are used. Trade ratios can have several components including:

• Location: Source location relevant to the downstream area of concern can be an important factor.
• Delivery: The distance between sources can play a role in determining whether permit requirements are met at the outfall.
• Uncertainty: Nonpoint source reductions can be difficult to quantify.
• Equivalency: Sources may be discharging different forms of the same pollutant.
• Retirement: Credits may be retired to achieve further water quality improvement .

Permitted point sources can trade with other point sources or nonpoint sources. Trades can occur directly, or be brokered by third parties. However, when dealing with nonpoint source reductions, a level of uncertainty does exist. In order to address this, monitoring should be conducted. Modeling can also be used as a supplement to monitoring. Uncertainty can also be mitigated by field testing BMPs and using conservative assumptions for BMP efficacy .

iv. Benefits

There are many economic, environmental, and social benefits that can be gained by establishing a WQT market within a watershed. Economically, since WQT is a market-based policy instrument, substantial savings can be generated while still achieving a mandated water quality goal . In 1997, EPA estimated that private and public point source control costs were $14 billion and $34 billon, respectively. According to The National Cost to Implement Total Maximum Daily Loads (TMDLs) Draft report, flexible approaches to improving water quality, such as WQT markets, could save $900 million per year when compared with the least flexible approach (3). In 2008, WQT programs were worth $11 million, but have the potential for rapid growth . Other economic benefits of WQT include a reduction in the overall costs of compliance, the ability for dischargers to take advantages of economies of scale and differences in treatment efficiencies, and the ability to maintain growth without further harming the environment .

The environmental benefits of WQT programs are also numerous. First, habitats and ecosystems are protected and/or improved. Second, water quality objectives are able to be achieved in a timely manner. Third, there is incentive for innovation and creation of pollution prevention technologies. Finally, nonpoint sources are included in solving water quality problem. Social benefits include dialog among watershed stakeholders and incentives for all dischargers to reduce their pollution.

v. Factors influencing success

The success of a WQT market is determined by several factors including the pollutant of interest, physical characteristics of the affected watershed, control costs, trading mechanisms, and stakeholder participation and willingness . It is also important that the desired level of pollution reduction is not so great that all sources must reduce the maximum amount possible because this would eliminate surplus reductions to be used for credits .

vi. Obstacles to implementation

The biggest obstacle to the widespread adoption of WQT markets is lack of supply and demand. Under existing regulatory conditions, there are simply not enough willing buyers and sellers. Currently, most nonpoint sources of water pollution are unregulated or, assuming detection occurs, have relatively small consequences for violations. Consequently, nonpoint sources do not have incentive to participate in WQT . For WQT markets to be successful, greater demand is needed for pollution credits. For this to happen, water quality standards need to be clear and enforceable .

b. Voluntary community based approaches (A Case Study of the US/Mexico Border Region)

An Overview

The border region (approximately 2000 miles long and 62 miles wide) is predominantly arid and contains seven watersheds including the Rio Grande riverwhich forms part of the border. The watersheds provide numerous benefits for the 14 cities and approximately 12.6 Million people in the region. However, increasing population, the arid climatic conditions of the region, the nature of economic activities along the rivers, increased trade, and uncontrolled emissions into them have placed tremendous pressure on water resources and threatened natural ecosystems. A large proportion of the population lacks access to clean drinking water and sanitation triggering public health concerns.

Policy Issues

Point source water pollution is a source of concern along the US-Mexico border as pollutants from both countries are entering shared waterways due to agricultural runoff, industrial discharge, and untreated sewage. Various policy issues arise in attempting to deal with this:

• Some pollution originates from areas beyond the border region as pollution is carried into the region by the waterways
• Pollution is caused by and affects both countries therefore requiring a joint response.
• The socio-economic differences between the two countries could have implications for policy implementation
• Various interests are represented with strong influence from environmental and social groups

The Response

There have been a number of attempts by both governments over the years to address the environmental concerns in the region including the construction of wastewater treatment plants . Significant intervention, however, resulted from the North American Free Trade Agreement (NAFTA) of 1994 between the U.S., Canada, and Mexico which renewed concerns over the environmental quality of the region and thus led to the establishment of the US-Mexico Border Environment Cooperation Agreement. The agreement created a number of institutions. The Border Environmental Cooperation Commission(BECC) and the North American Development Bank(NADB) were created to address border environmental-infrastructure issues. The US-Mexico Border Program was also created by the agreement and was placed under the management of the EPA to correct the oversights of previous institutions and give guidance to cross-border environmental policy. The three institutions work together to identify projects in the communities and certify them as “environmentally sustainable” subsequently funding them. Distinct characteristics of their approach are that they: are truly binational (have members from both countries) at all levels; emphasize a bottom-up approach with enhanced public participation; have a preference to assist disadvantaged communities; avoid regulatory or standard-driven approaches; emphasize economic and environmental sustainability. Projects are required to meet certain criteria to qualify for certification and funding. Among other requirements, they have to address an eligible environmental sector; must have a U.S.-side benefit; and have adequate planning, operations and maintenance, and pretreatment provisions. One specific provision regarding point-source water pollution states that “projects where the discharge is directly or indirectly to U.S. side waters, must target achievement of U.S. norms for ambient water quality in U.S. side waters, although infrastructure development may be phased over time. Any flow reductions that result from implementation of non-discharging alternatives must not threaten U.S. or shared ecosystems”.