Frequently Asked Questions

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Why do mercury loadings to some rivers and streams need to be reduced in California?
Since the early 1800s, residual mercury from mining has been transported with sediment downstream into the Sacramento/San Francisco Bay estuary, where it is believed to have contributed to elevated mercury contents in fish, resulting in consumption advisories. Most mercury pollution in this area was from placer gold mines, which used mercury to extract gold through hydraulic, drift, and dredging methods (Alpers and Hunerlach, 2000). In addition, mercury mines in the Cache Creek watershed have contributed extensive amounts of mercury pollution and raised subsequent water-quality, fish-tissue, and human-health issues.

As a result of its toxicity, numerous environmental studies of mercury contamination have been undertaken by various Federal and State agencies throughout California. Many of these studies have focused on the Sacramento River watershed. The California Bay-Delta Authority currently has a mercury program, the CALFED Mercury Project (http://loer.tamug.tamu.edu/calfed/) that assesses the ecologic and human-health impacts of mercury in the bay-delta watershed. Past research includes assessments of avian mercury exposure, analysis of the effects of wetland restoration on methyl-mercury production, and studies of the geochemical composition of mercury-rich mineral deposits.

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What is an offset/trading program?
“Pollutant trading refers to an exchange of either permitted discharge levels or required abatement levels between two or more dischargers, either in a formal ‘commodities’ market or banking system, or a less structured exchange; offsets generally refer to unilateral abatement efforts by a discharger to remove a certain amount of pollutant discharge from existing sources to compensate for the discharger’s own discharge.” (Wilson, 2001)

The aim of offset/trading programs is to use financial incentives and institutional flexibility to help dischargers achieve total watershed mercury reduction goals at reduced costs. An offset/trading program allows dischargers to transfer discharge\control responsibility in common units of exchange—a tradable commodity, such as units of contaminant mass loading in air or water —without violating the overall emission standard or limit. In an offset system, water quality can be improved when one point source can maintain its own loadings by reducing pollution from another site that may or may not have an owner (for example, an abandoned mine). Thus, the discharger can accumulate pollution-reduction credits that can be used to offset its own loadings.

In theory, improved efficiency is achieved because the wastewater-treatment plant has the flexibility to either use the least cost-abatement techniques or purchase additional trading permits if others can reduce emissions more cheaply. The success of a trading program depends on the type, transport, and environmental behavior of the contaminant. Because mercury is a bioaccumulative persistent toxic chemical, location is significant, and the issue of hotspots (areas concentrated with a specific contaminant) is important. In addition, the potential for a cost-effective trading policy depends on whether or not the transaction costs (identifying remediation opportunities, remediation technologies, number of traders, administration, monitoring, etc.) surpass the cost savings of implementing such a program.
Frequently asked questions about water quality trading are posted on the EPA’s water-quality trading Web site.

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How can trading and offsets benefit me and my watershed?
In addition to the environmental benefits associated with lower levels of mercury in water, sediment, and fish, offsets can generate these economic benefits:
-Point sources with high unit costs of treatment benefit from paying less to achieve a given reduction in mercury and methyl-mercury loadings
-Point and nonpoint sources with lower control costs benefit from getting financial support for reducing mercury loadings, thus helping them overcome upfront costs that prevented them from taking additional action in the past
-Avoiding “command and control” regulation, involving local stakeholders in negotiating the best feasible solution to meeting water-quality standards

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Where are trading and offsets being considered for mercury?
The Cache Creek watershed in Northern California is the first watershed to be considered for mercury offsets. The Mercury Offset Program is identified in the EPA's Water Quality Trading Web site as the only pilot study of pollutant trading involving a bioaccumulative persistent toxic chemical.

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Why are trading and offsets being considered now?
Most efforts to improve water quality in the United States have fallen into one of two categories:
-regulatory requirements for point sources: such sources as municipal and industrial treatment facilities that have an identifiable point of discharge, like a pipe; and
-voluntary programs for nonpoint sources: sources of pollution that are dispersed across the landscape, such as runoff from urban areas or mine sites.
Nutrient Net web site

Point-source requirements have become tighter over time. Potential reductions from lower-cost methods have largely been exhausted, meaning that only higher point-source cost-control options remain. Past controls have produced significant improvements in water quality; however, surface-water-quality problems persist, and so greater pollution reductions are needed to meet beneficial uses and the goals of the Clean Water Act, the main Federal law protecting water quality.