A Feasibility Assessment of Water Quality Trading in the Greenbrier River Watershed, West Virginia

Abstract

The main goal of this dissertation was to assess the physical and economic feasibility of a water quality trading (WQT) program in the Greenbrier River watershed in West Virginia which can reduce the nutrient related water pollution. The focus of this dissertation is the feasibility of nutrient trading between wastewater treatment plants (WWTPs) and farmers in the watershed. This dissertation compares 12 WQT scenarios that include different market design parameters of trading ratios (1:1 and 2:1), effluent limitations for point sources (WWTPs), and baseline requirements for agricultural non-point sources. The physical feasibility analysis includes the estimation of nutrient reduction requirements for the WWTPs (potential demand for nutrient credits) and nutrient reduction potential from the agricultural sources (potential supply of nutrient credits) in the watershed. The economic feasibility analysis includes estimation of costs of credit generation from the agricultural sources, cost of nutrient reduction for the WWTPs, demand for and supply of nutrient credits, cost saving for individual WWTP, and total potential economic benefits from the potential WQT program in the watershed.;A water quality model was developed in using water quality modeling program (MapShed) developed by Evans and Corradini (2011) to estimate the current level of nutrient loads from non-point sources and load reduction potentials from the implementation of best management practices (BMPs) by farmers on the crop and pasture/grass lands. The per unit costs of nutrient reduction from the individual BMPs were estimated based on the USDA NRCS West Virginia payment schedules for the 2012 Environmental Quality Incentive Program (EQIP). Nutrient reduction requirements for WWTPs were estimated based on the most likely effluent limitations for the WWTPs in the watershed, their current level of nutrient concentration (mg/l), daily amount of nutrient discharge (lb.), and facility's discharge flow (MGD). The cost estimation model used in the Chesapeake Bay Program for point source treatment plant upgrading was used to estimate total nitrogen (TN) and total phosphorus (TP) reduction costs for WWTP in the Greenbrier River watershed.;The results of this feasibility assessment indicate that the Greenbrier River watershed has potential for a WQT program under certain conditions. The pollutants reduction feasibility study shows that the utilization of TN and TP credits under all targeted TN and TP limits can be met through the implementation of agricultural BMPs on the crop and pasture/grass lands in the watershed. Four market design parameters: effluent limitations for WWTPs, trading ratio between point and non-point sources, baseline requirement for agricultural sources, and market type, had significant impacts on the economic feasibility of the WQT program in the watershed.;The total potential economic benefit from the WQT program in the watershed was estimated by computing aggregate potential demand and supply curves under 12 scenarios and two markets.…