Quantcast
Keep Wall Street Out of Our Waterways | Food & Water Watch
Victory! Cleveland passes resolution against antibiotic misuse on factory farms. more wins »
X

Welcome!

You're reading Smorgasbord from Food & Water Watch.

If you'd like to send us a note about a blog entry or anything else, please use this contact form. To get involved, sign up to volunteer or follow the take action link above.

Blog Categories

Blog archives

Stay Informed

Sign up for email to learn how you can protect food and water in your community.

   Please leave this field empty

September 11th, 2012

Keep Wall Street Out of Our Waterways

By Scott Edwards

Food & Water Watch Report: Bad CreditUp until now the United States has adhered to a public trust approach to our waterways, maintaining that waters were part of the commons—owned by no one and by everyone—and protected for future generations. It was a doctrine that gave rise to a body of water law that holds that no one can mistreat our waterways in a way that injures the rights of others. Public trust provides the underpinnings of our Clean Water Act (CWA), which recognizes that industries simply don’t have the right to pollute. Unfortunately, though, there’s an insidious shift underway in our nation’s water policies that can only mean disaster for the most precious resource on the planet.

As populations grow, water demands increase and industry seeks workarounds from our environmental laws, the Wall Street investment industry is looking for new ways to profit. And what’s the best “commodity” for any investment banker? As Goldman Sachs puts it, “As a necessity for life, there is no substitute for water. It is the only utility you ingest….” For the investment banking industry, water-related death, drought and degradation aren’t calamities; they’re profit opportunities. “If you play it right,” says one hedge-fund advisor, “the results of this impending water crisis can be very good.”

Market managers have been pushing for years to turn our waterways into widgets. Allowing bottled water companies to suck dry our aquifers and facilitating privatization of our water delivery infrastructure isn’t enough. With the latest move to steal away our public waterways, Wall Street’s getting yet some more federal assistance.

In 2010, the U.S. Environmental Protection Agency took a giant step away from the public trust approach of the CWA when they created a plan that gives polluters the option to buy the right to pollute our waterways. In the Chesapeake Bay Total Maximum Daily Load (TMDL), a regulatory pollution allocation program, EPA is allowing polluters like coal-fired power plants to purchase “credits” from other polluters, like industrial agriculture, in lieu of controlling their discharges. As we approach the 40th anniversary of the CWA this fall, this landmark piece of legislation is facing its biggest challenge to date. And, ironically, it’s coming from the very agency charged with upholding it.

This is how water pollution trading in the Chesapeake Bay works. Financial middlemen (aggregators) harvest nitrogen and phosphorus (and soon sediment) pollution “credits” from farms in the watershed. These credits are generated when farmers fill out forms attesting to various future practices that predict reductions in these pollutants, but the reductions are never truly verified. The aggregator then bundles these unverifiable credits together, aggregating and selling something of questionable value, which we learned from the mortgage crisis is a bad idea. Then they are sold to power plants and wastewater treatment plants and other “point source” polluters who are either unable or simply unwilling to meet their CWA permit limits. Say goodbye to the one successful part of the CWA—control of point source discharges from factories and power plants. With trading, these industries can pollute waterways as much as they can afford, and they can afford a lot because they’ll pass that cost onto you.

You’ll find lots of rationales from trading proponents. Credit purchasers say it’s a cheaper way to deal with pollution. The credit-generating agricultural industry claims trading’s a win/win because it, “help[s] farmers earn money while providing polluters with the opportunity to increase their pollution to the Chesapeake Bay and its tributaries.” USDA is pouring millions of dollars into trading pilot programs spearheaded by the coal-fired power plant industry that wants to find ways to continue their massive nitrogen discharges. You’ll even find studies coming out of academic and NGO circles prematurely proclaiming trading as a success even though there isn’t a single, documented successful water trading program. But there are lots of fraudulent pollution trading schemes.

Take the Los Angeles car scrapping fiasco of 20 years ago where scrapyards sold air emissions credits to the petro-chemical industry after taking old cars off the roads. It turned out they were pulling the engines and selling them before scrapping the car and selling the credit. And then there’s the more recent example down on the very Eastern Shore where water pollution credits are now being generated, where a biodiesel market middleman was convicted of selling fake credits under another EPA-administered pollution trading scheme. The carbon emissions trading scams are simply too numerous to count. It’s not hard to see where water pollution trading is going: fake credits, no oversight and dirty water.

Anyone who cares about the water they drink and recreate in should be denouncing water pollution trading and fighting to keep financial markets out of our rivers and lakes – the health of our waterways is just too important to hand over to Wall Street.

For more information about how pollution trading affects our ability to protect America’s waterways, please read our new fact sheet, Trading Away Your Right to Clean Water: Trading and the Financialization of Nature.

6 Comments on Keep Wall Street Out of Our Waterways

  1. JJames Singmaster, III, Ph.D. says:

    Concerning water supply, WHEN will some group wake up to using solar energy to distill fresh water from salt or dirty water in such areas as coastal CA. and Tex.????. It is ridiculous what Gov. Brown is calling for in shipping NorCal water to LA with pipelines crossing quake fault lines. Getting water supply handled better ought to be a concern for national security as haveing supply lines to LA area collapsed by an earthquake would be worse than event like 9/11. I urge FWW staff and readers here to send messages to Natl. Security Agency and Dept. of Defense warning that broken water supply lines and droughts may be what cripples the USA before an enemy does anything.
    Dr. J. Singmaster, Ph.D. Environmental Chemist, Ret., Fremont, CA

  2. Nate says:

    For an example of a single, documented successful water trading program see the work of the Willamette Partnership and the Freshwater Trust on Oregon’s Rogue River: http://www.oregonlive.com/environment/index.ssf/2012/08/restoring_rogue_river.html

    • Scott Edwards says:

      The Rogue River article you link to states that the work to mitigate the WWTP thermal pollution will begin in the fall of 2012. Unless you define success as simply “a trade occurred,” it would be premature to label it as a trading success story.

      More importantly, we believe “success” means that a problem was solved without sacrificing the public trust and human and ecological health in the process. From all indications, this thermal pollution trading scheme doesn’t even solve the first prong of this measurement since downstream shade trees do nothing to remedy the thermal impacts of the discharges at the site of the facility. Forcing the industry to treat their wastewater for thermal pollution is a solution; sacrificing local water quality at the site of the credit purchaser discharge in exchange for potential downstream impact mitigation is not.

      All this program has succeeded in doing to date is undermining the technological standards of the Clean Water Act and the one proven part of this landmark legislation, point source pollution control.

  3. I’ve been involved in air quality issues in SoCal for 35 years and never heard this before:

    “Take the Los Angeles car scrapping fiasco of 20 years ago where scrapyards sold air emissions credits to the petro-chemical industry after taking old cars off the roads. It turned out they were pulling the engines and selling them before scrapping the car and selling the credit.”

    Can you provide a link to details about that loophole?

    I note that, according to the SCAQMD website, this is still an active program. http://www.aqmd.gov/prdas/oldvehiclescrapping/mainpage.html

    • Scott Edwards says:

      Thanks you for leaving a comment. The reference to the car scrapping fraud comes from a law review article located here: http://fwwat.ch/Pg0fQY

      In it, the authors state:

      “Many of the cars allegedly destroyed through the Rule 1610 program were not, in fact, destroyed, according to Bruce Lohmann, SCAQMD’s Chief Inspector for the Rule 1610 program. While the car bodies were crushed, many of the engines which produce the pollution were not. Instead, many of those engines were sold for re-use, despite the fact that pollution credits for destroying the car had been granted by SCAQMD.”

      And yes, the link you provided indicates that car scrapping, which begin with Rule 1610 in 1993, is still being used in California.

  4. Thanks. I look forward to reading the whole article, especially because it also addresses the SCAQMD RECLAIM SOx/NOx trading program which my own less formal study concluded was a failure.

Leave a Comment

Your email address will not be published. Required fields are marked *

*