Feasibility Study for Water Quality Trading in the Lake Simcoe Watershed.
Bill or Act:
Summary of Decision:
The Ministry of the Environment released and consulted on a Feasibility Study for Water Quality Trading in the Lake Simcoe Watershed, pursuant to clause 75 (1.9) (c) of the Ontario Water Resources Act. In addition to the EBR posting, the Ministry held numerous meetings with the general public and key stakeholders. The Ministry also received advice from the Lake Simcoe Science Committee and the Lake Simcoe Coordinating Committee.
After considering the feedback received, the Ministry has decided to further evaluate a number of issues related to the potential design and operation of a water quality trading program. This further evaluation will be undertaken in consultation with watershed stakeholders before making a decision on whether or not to develop a water quality trading regulation and program for the Lake Simcoe watershed.
March 15, 2010
Summary of Proposal:
The Lake Simcoe Protection Plan requires the development of a phosphorus reduction strategy for the Lake Simcoe watershed. The Plan reinforces the need to consider innovative solutions to reducing phosphorus.
To this end the Lake Simcoe Protection Plan commits the province to complete a Water Quality Trading Feasibility Study under subsection 75 (1.9) of the Ontario Water Resources Act (OWRA) for the Lake Simcoe Watershed within one year of the release of the Plan.
The purpose of the feasibility study was to assess the feasibility of water quality trading as an option for improving water quality and reducing phosphorus loadings in the Lake Simcoe watershed. The study evaluates the effectiveness of pollutant trading programs in leading jurisdictions, identifies options for the structure and delivery of a water quality trading program, and assesses the environmental, economic and social implications of implementing a water quality trading program.
The feasibility study concludes that a water quality trading program in the Lake Simcoe watershed is feasible, and that it could play a meaningful role in helping to reduce phosphorus inputs to Lake Simcoe.
The feasibility study outlines potential guiding principles that could be used to set the foundation for developing, implementing, and evaluating the success of a water quality trading program. The study suggests that a water quality trading program should be:
The feasibility study suggests that the participants in a water quality trading program would include the “buyers” and “sellers” of phosphorus reduction credits.
Municipal sewage treatment plants
New urban stormwater dischargers
Stormwater retrofits in areas of existing development
Best management practices on agricultural lands
Treatment of Holland Marsh polder
Conversion of on-site sewage systems
Reduction of airborne phosphorus loading
Other potential participants:
First Nations and Métis communities
The feasibility study recommends using either a “clearinghouse” or an exchange market trading structure, where trading is conducted through a central administrator or exchange.
The feasibility study suggests that a water quality trading program in the Lake Simcoe watershed would be best administered by either a coalition of existing agencies and associations or by an existing watershed organization, both subject to regulatory oversight by the province.
The feasibility study emphasizes that, if the government decides to proceed with a water quality trading program in the Lake Simcoe watershed, there are a number of operational matters that would need to be considered, including how best to:
address variability between sources of phosphorus (e.g., trading ratios);
define geographic locations;
collect, evaluate, and verify information related to both the generation of phosphorus reduction credits and the effectiveness of the water quality trading program as a whole;
fund the administrative costs of starting, maintaining, and overseeing the program; and
continue to engage the public in developing, implementing, and evaluating the success of a water quality trading program in the Lake Simcoe watershed.
Senior Policy Advisor
Ministry of the Environment
Integrated Environmental Policy Division
Land and Water Policy Branch
135 St. Clair Avenue West
July 7, 2010