BOULDER, Colo. --Hydrosphere Resource Consultants of Boulder, Colorado has completed Phase III of the Orphan Sites Feasibility Study, an initiative of the National Forum on Non-Point Source Pollution. The objective of this study is to investigate market-based incentives and mechanisms to achieve a net water-quality benefit to a watershed not otherwise attainable under existing regulatory programs.
The Orphan Sites concept allows any interested entity to "adopt" and clean up an unregulated "orphan" source of pollution in exchange for some type of "credit." The opportunity to then "bank" the credit for future use or sale expands the degree of flexibility for sponsors. In Phase III of the study, Hydrosphere describes a framework that centers on trades of unlike types of pollutants and other resources affecting water quality. In addition, options for banking credits were also explored.
The overall success of this trading concept relies on having a sufficient number of potential market players to increase the amount of the financial resources. Unlike trading increases the size of the marketplace since trades are not limited to in-kind, in-place and in-time credit uses. The inclusion of banking in this framework also expands the degree of flexibility for sponsors by enabling a sponsor to "bank" credits for use or sale at some later date. This flexibility could result in an increase in the number of market players and the amount of financial resources to further water quality goals.
Phase III of the feasibility study involved the investigation of alternative technical and institutional approaches to the evaluation of proposed trades including options for the administration of an orphan sites trading program. The greatest technical challenge involved the identification of an appropriate basis for the evaluation of trades between different types of pollutants and physical characteristics. Hydrosphere's investigation identified and evaluated the Target Zone Approach as a mechanism for determining whether proposed trades result in "net" benefits to the watershed. The greatest institutional challenge was identified to be overcoming the nature of which management and regulatory responsibilities are divided among many agencies. Two administrative approaches are described an informal incremental approach and a formalized cooperative approach.
The Orphan Site Feasibility Study was chosen as an initiative that supports the National Forum on Non-Point Source Pollution's goal of exploring market- based solutions to cleaning up non-point sources of pollution. The Clear Creek Watershed in Colorado has served as the model watershed for the study. Phase I and II involved obtaining stakeholder input to identify the level of support for the project, to list potentially acceptable uses of credits, and to identify water quality and environmental management goals for the Clear Creek Watershed. The next phase will involve a demonstration project. A number of potential orphan sites have been identified and proponents are being sought to test these concepts.
The National Forum on Non-Point Source Pollution, convened by the Conservation Fund and the National Geographic Society, has launched 25 separate initiatives across the country. The Orphan Sites Feasibility Study, one of these initiatives, is directed by a Steering Committee with representatives from U.S. Environmental Protection Agency, Region VIII, Colorado Department of Public Health and Environment, Coors Brewing Company, Environmental Defense Fund, the City of Westminster representing downstream users, and the Upper Clear Creek Watershed Association.
For more information, contact Hydrosphere Resource Consultants at 303-443-7839 or review the study in detail at www.hydrosphere.com/hrc.
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