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Economic total maximum daily load for watershed-based pollutant trading.

A Z Zaidi1, S M deMonsabert

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Summary

Water quality trading (WQT) can be improved using an Economic TMDL model to calculate pollutant rights. This approach offers a superior environmental and economic trading scenario compared to traditional methods.

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Area of Science:

  • Environmental science
  • Water resource management
  • Environmental economics

Background:

  • Water quality trading (WQT) is a program supported by the US Environmental Protection Agency (USEPA) under the total maximum daily load (TMDL) framework.
  • Current WQT programs aim for pollutant reductions equivalent to or better than TMDL scenarios, using trading ratios to establish equivalence.
  • Uncertainties in modeling pollutant impacts from point and nonpoint sources complicate WQT, and high trading ratios increase costs without guaranteeing water quality attainment.

Purpose of the Study:

  • To present an innovative post-TMDL trading approach by calculating pollutant rights for each source.
  • To introduce an Economic TMDL optimization model for determining superior trading scenarios.
  • To compare the proposed economic approach with actual TMDL allocations for calculating source-specific trading rights.

Main Methods:

  • Development of an Economic TMDL optimization model.
  • Calculation of pollutant rights for individual pollutant sources within a watershed.
  • Application of the methodology to established TMDLs for bacteria in the Muddy Creek subwatershed, Virginia, USA.

Main Results:

  • The proposed Economic TMDL model can determine an economically and environmentally superior trading scenario.
  • The model facilitates the calculation of selling/purchasing rights for each contributing source.
  • Case study results demonstrate the benefits of using economic optimization in WQT.

Conclusions:

  • An Economic TMDL model offers a more effective approach to water quality trading.
  • This method allows for the determination of cost-effective pollutant reduction strategies.
  • WQT programs can achieve better environmental and economic outcomes by incorporating economic optimization models.