An economic inquisition of water quality trading programs, with a case study of Jordan Lake, NC.

A water quality trading (WQT) program was promulgated in North Carolina to address water quality issues related to nutrients in the highly urbanizing Jordan Lake Watershed. Although WQT programs are appealing in theory, the concept has not proved feasible in several attempts between point and nonpoint polluters in the United States. Many application hurdles that create wedges between success and failure have been evaluated in the literature. Most programs, however, face multiple hurdles; eliminating one may not clear a pathway to success. Therefore, we identify and evaluate the combined impact of four different wedges including baseline, transaction cost, trading ratio, and trading cost in the Jordan Lake Watershed program. Unfortunately, when applied to the Jordan Lake program, the analysis clearly shows that a traditional WQT program will not be feasible or address nutrient management needs in a meaningful way. The hurdles individually would be difficult to overcome, but together they appear to be unsurmountable. This analysis shows that there is enough information to pre-identify potential hurdles that could inform policy makers where, and how, the concept might work. It would have saved time, energy, and financial resources if North Carolina had done so before embarking to implement their program in the Jordan Lake Watershed.

The Relationship between Land Use and Vulnerability to Nitrogen and Phosphorus Pollution in an Urban Watershed.

Characterization of the vulnerability of water bodies to pollution from natural and anthropogenic sources requires understanding the relationship between land use and water quality. This study aims (i) to explore the influence of upstream land use on annual stream water concentrations and loads of total nitrogen (TN) and phosphorus (TP) and (ii) to characterize the vulnerability of water bodies to TN and TP pollution as a function of land use under varying climatic conditions. Multiple linear regression models were used across 23 stream locations within the Jordan Lake watershed in North Carolina between 1992 and 2012 to explore land use-water quality relationships. The percentage of urban land use and wastewater treatment plant capacity were the most important factors with strong ( 0.7) and significant ( < 0.01) positive correlations with annual TN and TP concentrations and loads. Percent agricultural land was negatively correlated with TN in 18 out of 21 yr of the study period. Using analysis of covariance, significant ( 0.01) differences were determined between models developed for urban land use with TN and TP loads based on annual precipitation. Using concentrations instead of loads resulted in a nonsignificant difference between models for average and wet years. Finally, a procedure was developed to characterize the vulnerability to TN and TP pollution, computed as the probability of exceeding the nutrient standard limits. Results indicated that the vulnerability to TN and TP was controlled primarily by urban land use, with higher values in dry years than normal and wet years.