Wisconsin is the only Great Lakes state with statewide numeric water quality standards for phosphorus. In the Fox-Wolf basin, where phosphorus pollution is a major issue, there are projects underway to meet those standards through the innovative strategies of water quality trading and Wisconsin’s “adaptive management option” This workshop will illustrate each strategy through case studies and a discussion of their similarities and differences. This presentation was given by Victoria Pebbles, Program Director, Great Lakes Commission.

1. Applying
Water
Quality
Trading
in
the
Lower
Fox
River
Watershed

2. Fox
P
Trade
•
3.5
year
project
•
Water
Quality
Trading
• Nutrient
Trading
•
Phosphorus
Trading
•
Leverage
and
build
on
other
work
to
date
• Wisc.
P
Rule
(NR
102,
NR
217,
NR
151)
• State
WQT
Guidance
• LFRW
TMDL
• Various
studies
(e.g.,
FWWA,
Sea
Grant,
UWGB,
etc.)
• Design
a
P
trading
program
specifically
for
the
LFRW

3. Great
Lakes
Commission
• 8
states;
2
provinces
• To
promote
the
orderly,
integrated,
and
comprehensive
development,
use,
and
conservation
of
the
water
resources
of
the
Great
Lakes
Basin
• Great
Lakes
Basin
Compact
(1955)

4. Wisconsin
Delega9on
to
the
GLC
Ken
Johnson,
Administrator,
Water
Division
Steve
Galarneau,
Director,
Office
of
the
Great
Lakes
Dean
Haen,
Director,
Water
Division,
Brown
County
Port
and
Solid
Waste
Department

5. Great
Lakes
Commission
Program
Areas
Core
Services
Clean
Energy
and
Climate
Communications
Water-­‐Dependent
Economy
and
Infrastructure
Analysis
&Reporting
Invasive
Species
Facilitation/
Consensus
Building
Water
Resource
Management
Water
Quality
and
Ecosystem
Health
Policy
Coordination/
Advocacy
Habitat
and
Coastal
Management
+

6. Steps
to
Develop
A
WQT
Program
1.
2.
3.
4.
5.
Set
Goals
Convene
Stakeholders
Assess
Feasibility
Hyp0thetical
Scenarios
Design
Program
a)
b)
c)
d)
e)
Goal
Quantification
methods
Risk
Management
Administration
Guidance
Document
6. Pilot
Design
7. Adapt—apply
lessons
learned

7. Fox
P
Trade
Task
Timeline
Fox
P
Trade
-­‐-­‐
Total
Project:
42
months
-­‐-­‐
3/1/13
-­‐
9/30/16
Task
1
2
3
4
5
Title
Develop
Workplan
and
Project
WQ
Goal
Convene
Stakeholders
Feasibility:
Supply
Feasibility:
Demand
Feasibility:
Market
Survey
HypotheKcal
Trade
Scenarios
Design:
ArKculate
Goal
Year
1
(2013)
Year
2
(2014)
Year
3
(2015)
Year
4
(2015)
Design:
QuanKficaKon
Methods
Design:
Manage
Risk
Design:
Program
AdministraKon
Design:
Guidance
Document
6
Pilot
Design
(as
resources
allow)
7
Lessons
Learned

8. Goal
— to
establish
a
phosphorus
trading
program
where
trades
are
enabled
by
a
combination
of
cost
effective
approaches
that
contribute
to
improved
instream
water
quality
in
the
Lower
Fox
River
Watershed
— Set
in
part
by
NRCS
Grant
Terms
— Influenced
by
WI
DNR
policy
— P
limits
set
by
state
regulations
— TMDL
load
allocations
— WQT
guidance

9. Convene
Stakeholders
— Collaborative
process
that
runs
throughout
project
— Objectives:
— Build
direct
relationships
between
buyers
and
sellers
— Enable
the
regulated
community,
farmers,
other
Advisory
Group
businesses,
ENGOs,
and
others
to
have
candid
conversations
about
their
goals
for
the
watershed
and
Technical
Resource
their
individual
drivers
(e.g.,
cost
of
permit
compliance)
Team(s)
— Safeguard
interest
of
those
not
directly
involved
in
the
process,
but
who
are
interested
and
stand
to
benefit
or
lose
from
a
successful/failed
program

10. Project
Management
Team

11. Working
Group
— Great
Lakes
Commission
(GLC)
— U.S.
Department
of
Agriculture
— Lower
Fox
Dischargers
—
—
—
—
—
—
—
—
Natural
Resources
Conservation
Service
(USDA-­‐NRCS)
Wisconsin
Department
of
Natural
Resources
(WDNR)
Brown
County
Land
and
Water
Conservation
Department
EPA
Region
5,
Water
Division
Fox-­‐Wolf
Watershed
Alliance
Northeast
Wisconsin
Stormwater
Consortium
(NEWSC)
Green
Bay
Metropolitan
Sewerage
District
("NEW
Water")
—
—
—
—
Association
Northeast
Wisconsin
Stormwater
Consortium
Oneida
Nation
of
Wisconsin
Outagamie
County
Land
Conservation
Department
University
of
Wisconsin
Extension
Wisconsin
Association
of
Professional
Agricultural
Consultants
Clean
Wisconsin

12. Advisory
Group
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Alliance
for
the
Great
Lakes
Applied
Ecological
Services,
Inc.
ARS
Baird
Creek
Preservation
Foundation
Bay-­‐Lake
Regional
Planning
Commission
Brickstead
Dairy
Brown
County
Land
and
Water
Conservation
Department
Bureau
of
Indian
Affairs
Calumet
County
Land
&
Water
Conservation
Department
City
of
Appleton
City
of
Green
Bay
Clean
Wisconsin
Conestoga-­‐Rovers
and
Associates
Dairy
Business
Administration
DATCP
DNR
Earth
Tech
AECOM
East
Central
Wisconsin
Regional
Planning
Commission
EPA
GLNPO,
Region
5
Fox-­‐Wolf
Watershed
Alliance
Georgia
Pacific
Glacierland
RC&D
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Green
Bay
Metropolitan
Sewerage
—
District
("NEW
Water“)
—
Greenleaf
Advisors,
LLC
—
Marek
Landscaping,
LLC
—
Michael
Fields
Agricultural
Institute
—
Michigan
Farm
Bureau
Midwest
Environmental
Advocates
—
Northeast
Wisconsin
Technical
—
College
—
NRCS
—
Oneida
Tribe
—
Outagamie
County
Land
—
Conservation
Department
Polenske
Agronomic
Consulting
Inc
—
Professional
Dairy
Producers
Of
Wisconsin
—
Professional
Nutrient
Applicators
Assoc
of
Wisconsin
—
River
Alliance
of
Wisconsin
—
Sand
County
Foundation
Sierra
Club
The
Nature
Conservancy
—
Tidy
View
Dairy
USACE
—
USDA-­‐FS
—
—
—
—
USFWS
USGS
UW
Discovery
Farms
UW
Extension
UW-­‐Green
Bay
UW-­‐Milwaukee
UW-­‐Oshkosh
UW
Sea
Grant
Institute
Village
of
Allouez
Village
of
Ashwaubenon
Village
of
Bellevue
Winnebago
County
Land
&
Water
Conservation
Department
Wisconsin
Academy
of
Sciences,
Arts
and
Letters
Wisconsin
Agri-­‐Business
Association
Wisconsin
Association
of
Professional
Agricultural
Consultants
Wisconsin
Corn
Growers
Association
Wisconsin
Farm
Bureau
Federation
Wisconsin
Farmers
Union
Wisconsin
Land
&
Water
Conservation
Association
Wisconsin
Paper
Council
Wisconsin
Soybean
Association

13. Economic
Demand
Feasibility
— Determine
whether
there
will
be
enough
demand
(who
will
“buy”
the
credits)
— Characterize
potential
demand/pollution
reduction
needs
—
—
X
lbs
of
P/year
Cost
Per
lb
reduction
— Determine
cost
differential/willingness
to
pay
-­‐
difference
between
cost
of
trading
and
next
cheapest
option

14. Economic
Supply
Feasibility
— Determine
whether
there
will
be
enough
supply
(who
will
sell
the
credits
and
how
much
can
they
generate)
— Assess
total
watershed
load
reduction
potential
from
unregulated
and
nonpoint
source
areas.
— Calculate
what
portion
of
the
total
load
reduction
potential
is
needed
to
meet
TMDL
load
allocations
Load
reduction
Load
reduction
Total
load
to
achieve
the
credit
threshold).
(i.e.,
needed
to
meet
that
can
reduction
TMDL/credit
generate
P
potential
— Calculate
total
amount
threshold
of
creditable
load
reductions
credits
(e.g.,
load
reductions
beyond
the
credit
threshold).

15. Compare
Demand
and
Supply
to
Assess
Overall
Economic
Feasibility
— Determine
whether
P
load
reductions
from
unregulated
and
nonpoint
sources
are
adequate
to
offset
the
need
for
reductions
from
point
source
discharges.
— Can
the
watershed
generate
enough
P
credits
to
meet
the
needs
of
the
credit
buyers
(demand)?
— Target
Promising
Credit
Generating
Areas
— Of
the
which
sub-­‐watersheds
have
the
greatest
credit
generation
potential?
— Which
individual
farms/municipalities
within
those
sub-­‐
areas
have
the
greatest
potential
to
generate
credits
for
sale/
trade?

16. Hypothe9cal
Scenarios
— 2-­‐4
promising
sellers
and
buyers
— real
farm/facility
data
will
be
used
to
determine:
— BMPs
installed/credit
generation
(apply
trade
ratios)
— purchase
potential
(amount
buyer
willing
to
spend
on
credits)
— credit
value
— cost
of
sale
— Expose
the
greatest
areas
of
risk
and
uncertainty
from
both
the
seller
and
buyer
perspective
— Prepare
documentation
to
address
all
risk
and
liability
assurances
to
support
the
trade

17. Trading
Infrastructure
— Eligibility—determine
who
is
eligible
to
trade
— Calculate
credit
generation
potential
— Validate
proof
of
tile,
rights
to
credits,
plans
for
restoration/conservation/credit
generation
(e.g.,
nutrient
management
plan
implementation)
Ø Seller’s
Project
validation
checklist
— Verification
and
Certification
—independent
process
to
verify
that:
— Conservation
actions
are
additional
(beyond
credit
threshold)
— Planned
management
actions
can
achieve
stated
load
reductions
(independent
calculation
of
load
reductions)
— A
long-­‐term
stewardship
plan
is
in
place
to
implement
and
maintain
the
practices
Ø Credit
Calculator:
A
Simple
Tool
to
Calculate
Credit
Generation
— Build
on
existing
models
(e.g.,
SNAP-­‐plus)management
actions
can
achieve
stated
load
reductions
(independent
calculation
of
load
reductions)
— Use
WI
DNR
Trade
Ratios—account
for
uncertainty

18. More
Trading
Program
Elements
— Reporting
and
Tracking—housing
information
about
individual
trades;
tracking
trades
over
time
— Liability,
Enforcement,
and
Other
Risk
Management
— Assurances
for
credit
buyers—reflecting
trades
in
permits
— Addressing
“what
ifs”
— Long
Term
Program
Administration
— Verification
and
certification
— Tracking
and
reporting
— Brokering

19. Actions
Calculate
Credit
Generation
Potential
Assurances
Eligibility
requirements
•
Is
the
project
additional?
•
Are
plans
in
place?
Identify
and
Design
BMPs
Identify
Buyers
Implement
BMPs
Quantify
Credits
and
Apply
Trading
Credit
Ratios
Trade
Ratios
• To
Account
for
uncertainty
Verification
and
Certification
Are
credit
calculations
correct?
Is
all
documentation
in
place?
Verify
Credits
Registration
Register
Credits
Sell
Credits
Ongoing
maintenance
and
verification
• To
track
credits
over
time
Ongoing
Verification
• Are
BMPs
meeting
performance
standards?

20. Pilot
Design
(tbd)
— Use
guidance
document
and
supporting
information
to:
— identify
one
or
more
prospective
buyers
and
one
or
more
prospective
sellers
— facilitate
a
trading
agreement
(possibly
those
buyers
and
sellers
selected
for
hypothetical
scenario)
— craft
a
trading
agreement
and
all
supporting
documentation
Ø Trading
would
commence,
but
Fox
P
Trade
project
will
not
oversee
implementation
of
the
trade

21. Deliverables
— P
trading
guidance
document
for
the
LFRW
— Eligibility
checklist
— Credit
calculator
that
quantifies
environmental
improvements
associated
with
various
BMPs
and
other
activities
and
converts
them
into
credits
that
can
be
traded
— Contract
templates,
verification
and
other
forms
— Program
administration
qualifications
and
desired
services

22. Next
Steps
(6
months)
— Continue
to
Engage
Working
Group
and
Stakeholder
Advisory
Group
— Issue
RFP;
Begin
Feasibility
Study
— Scope
Hypothetical
Trading
Partners

23. Thank
you!
Victoria
Pebbles,
Program
Director
Great
Lakes
Commission
(734)
971-­‐9135
vpebbles@glc.org
http://www.glc.org/foxptrade