Water Quality Trading for Temperature & Nutrient Compliance: A Turn-key Solution

Water Quality Trading for Temperature & Nutrient Compliance: A Turn-key Solution

Alex Johnson, Ecosystem Credit Programs Director Idaho Operators Conference, May 19, 2014

Title of the slide hereWater Trends: United States

Impaired Waters in the United Statesunder Section 303(d) of the Clean Water Act

Percentage of assessed rivers and streams reported to EPA as “impaired” or “threatened” water quality.

SOURCE: http://www.epa.gov/waters/ir/

Existing Conditions

Æ CONSERVATION REACTS to environmental challenges at a small scale (fish, wildlife, water quality, etc.), after degradation

Æ REGULATORY DRIVERS are present on small percent of overall impacts

Æ TECHNOLOGICAL SOLUTIONS employed by regulated entities are appropriate for some, but not all, new parameters

Need New Approaches to Meet NPS Challenge

SOURCE: http://www.deq.state.or.us

Point Source

Non-Point Source

86%

14%

Thermal impacts of non-point vs point sources,

Willamette River TMDL

For restoration to be viable compliance alternative...

CLEAR AUTHORITY: Æ Regulators must adopt and promote required

rules

CLEAR FRAMEWORK: Æ Approved standards and protocols for

measuring ecosystem services and implementing credit generating projects

CLEAR ROLES: Æ Third parties (such as The Freshwater Trust)

willing to assure delivery of compliance-grade credits with secure, turn-key projects

Three Keys for Restoration to Work

Crediting Protocol

Idaho, Oregon, and Washington water quality agencies (with technical oversight from U.S. EPA Region 10) working together on joint regional statement that defines recommendations for implementing water quality trading Facilitated by the Willamette Partnership and The Freshwater Trust

Title of the slide here

Æ Modeling regulatory policy outcomes

Æ Permitting calculations & projections

Æ Natural alternatives to end of pipe

Æ Program costs

Æ Implementation & billing schedules

Æ Logistics & supply chain

Æ Building compliance portfolios

Calculations & Quantification

Required Traditional Restoration vs. Required Compliance-Grade Credits

Traditional Restoration Steps Compliance-Grade Credit Generation Steps

Identify project site Identify project site

Fundraising Financing

Negotiate 20+ year contract with landowner

Collect pre-project data

Project design Project design

Estimated credit values

Implement Implement

Verification that implementation meets standards

Certification that credits meet accounting protocols

Credit registration

Monitoring and maintenance (Years 1 – 3) Monitoring and maintenance (Years 1 – 3)

Monitoring and maintenance (Years 4 – 20)

Annual payments to landowners (20+ years)

= Local Project Managers = The Freshwater Trust

Local RestorationPartners(e.g. Watershed Council)

Regulated Entity Projected to be Out of Compliance (e.g. Wastewater Facility)

Contracted Stream RestorationOrganization(e.g. Non-Profit)

Completed Project/Credit Generation(Uplift for ecosystem services through restoring streams)

Verified,Certified andRegistered Credits (Completed by a third-party)

Regulated Entity Purchases Credits to Meet Compliance

VERIFIED

CERTIFIED

REGISTERED

Local Nurseries

Local Contractors

Local Landowners

Local HeavyEquipmentOperators

Restoration Alternative Transaction Process

Project Funding & Recruitment

Credit Calculation

Verification,Certification

& Credit Registration

Project Implementation

Credit Sale







VERIFIED

CERTIFIED

REGISTERED

Local Nurseries

Local Contractors

Local Landowners



Project Funding & Recruitment







VERIFIED

CERTIFIED

REGISTERED

Local Nurseries

Local Contractors

Local Landowners



Project Implementation







VERIFIED

CERTIFIED

REGISTERED

Local Nurseries

Local Contractors

Local Landowners



Credit Calculation

Verification,Certification

& Credit Registration

Credit Sale


Æ Program design and site prioritization

Æ Local & ecological priorities

Æ Contracting leases with public & private owners

Æ Site design based on reference conditions & quality standards & best professional judgement

Prioritization, Design & Contracting

Ken Denman Wildlife Area Riparian Planting

Pre-Planting Aerial View

Post-Planting Aerial ViewCottonwood/Alder Planting

Willow Planting

Title of the slide herePre-Project Conditions: February 2012

Photo Point 1B Photo Point 2A Photo Point 3A

Title of the slide hereAs Built Conditions: May 2012

Camera Point 1B Camera Point 2A Camera Point 3A

Year 1 Conditions: September 2012


Year 2 Conditions: September 2013


Verification & Registration

Calculating Credits

Credit Type Pre-project Post-Restoration Reduction

Temperature (kCals/day)

56,246,205 41,726,475 14,519,730

Phosphorus(lbs/year)

6 1 5

Nitrogen(lbs/year)

103 12 91

Sediment(lbs/year)

8,243 3,331 4,912


Æ Projects have pre-project data and are monitored annually

Æ Monitoring data is collected and stored by the StreamBank web platform, providing a searchable/reportable database of project results that can also be ported to other databases

StreamBank® app

Monitoring: Performance & Transparency

Case Study: City of Medford

Buyer: City of Medford (population 170,000)

Seller: 20+ landowners in Rogue River Basin

Broker: The Freshwater Trust

Driver: Projected excess heat under TMDL limits: 300 million kcals/day in 10 years

Options: Æ Giant holding pond to store water for 1 month

of each year: $16 Million Æ 10-15 miles of native riparian vegetation

restored and maintained for 20 years: $6.5 Million

Money Stays in Local Economy: Æ Money pays local restoration contractors Æ Farmers get annual lease payments Æ Restoration = 20 jobs per $1 Million spent

Rogue River Basin

Degraded Conditions

Degraded Conditions

Degraded Conditions

Implementation Actions



Four Keys for Communities

Restoration prevails on the four factors that matter...

Æ ECONOMIC: Restoration compliance generally far less expensive than technological solutions, spread over many years

Æ SOCIAL: Restoration keeps funding in the local community, creating jobs

Æ ECOLOGICAL: The restoration solution converts point-source investment into non-point source projects, with multiple environmental benefits

Æ TURN-KEY: Cities only pay for certified credits

Æ Roughly $10M in thermal credits currently contracted in Oregon with 5 buyers

Æ Contracted first nutrient credit demonstration program in Klamath Basin

Æ Quantified conservation analysis for Idaho Power Co. in support of Hells Canyon Complex FERC relicensing

Æ Developing metrics for Eugene source water protection program

Æ Active consulting throughout Northwest

Æ Regulatory clarity ÆCommunication asset development Æ FERC relicensing analysis ÆCredit program development

Active Programs

Water Quality Trading for Temperature & Nutrient Compliance: A Turn-key Solution

Alex Johnson, Ecosystem Credit Programs Director Idaho Operators Conference, May 19, 2014

Environment

Water Quality Trading for Temperature & Nutrient Compliance: A Turn-key Solution