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Water Pollution: Pollutant Trading Could Reduce Compliance Costs If Uncertainties Are Resolved

RCED-92-153 Published: Jun 15, 1992. Publicly Released: Jul 16, 1992.
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Highlights

Pursuant to a congressional request, GAO provided information on the cost-effectiveness of pollutant trading, focusing on: (1) projects using pollutant trading to reduce pollution at specific locations; (2) potential barriers to wider use of pollutant trading; and (3) Environmental Protection Agency (EPA) efforts to implement a nationwide trading program.

Recommendations

Matter for Congressional Consideration

Matter Status Comments
If Congress wishes to see trading employed on a wider basis, it may want to address the concerns that some have raised about trading's legal status under the Clean Water Act. This could be accomplished by amending the act to explicitly authorize trading.
Closed – Implemented
The House bill (H.R. 961) to reauthorize the Clean Water Act contains language that would grant states authority to use pollutant trading among point and nonpoint sources. However, the Clean Water Act has not been reauthorized for several years and there is little indication that it will be reauthorized in the immediate future.

Recommendations for Executive Action

Agency Affected Recommendation Status
Environmental Protection Agency To help resolve some of the remaining questions and concerns surrounding pollutant trading, the Administrator, EPA, should assist others in initiating demonstration projects specifically designed to test alternative approaches to pollutant trading. EPA should then develop detailed and specific guidance--based in part on these demonstration projects--to help others considering trading projects.
Closed – Implemented
In May 1996, EPA issued a draft handbook as a guide for those considering developing trading projects (EPA-800-R-96-001). The handbook is entitled "Draft Framework for Watershed Base Trading" and the policy statement is contained in appendix A to the handbook. In addition, under "Reinventing Environmental Regulation," issued in March 1995, effluent trading in watersheds is one of 25 high-priority initiatives. Under this initiative, EPA will establish a framework to promote different types of effluent trading, issue policy guidance to permit writers, and provide technical assistance.

Full Report

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Topics

Environmental lawIndustrial facilitiesIndustrial pollutionNonpoint source pollutionPollution monitoringWaste disposalWater pollutionWater pollution controlWater qualityPollutants