Non-point Finance
Read the Non-point Finace Final Report on the web site of our partner, the Northeast/Midwest Institute.Introduction
Between 1972 and 1989, the percentage of degraded U.S. lakes, rivers and streams decreased from more than 60% to 26%. This improvement in water quality was due largely to enforcement against point sources of pollution under the Clean Water Act (CWA), in conjunction with federal/state funding programs for municipal wastewater treatment. However, despite the continued success of the CWA at reducing point source pollution, U.S. water quality has declined over the past decade. According to EPA, the percentage of degraded U.S. waters increased from 26% in 1989 to 36% in 1999, due mainly to the growth of nonpoint source pollution (NPS).
This water quality trend reversal occurred despite a growing federal commitment to NPS remediation. Perhaps $2 billion/year in grants or loans is potentially available for NPS projects, mainly through USDA and EPA funding programs. While more funding for NPS controls may be needed, it appears likely that existing federal fiscal resources could be used more efficiently.
Goal
The Nonpoint Finance Project seeks innovative ideas to improve the efficiency, effectiveness and integration of federal funding programs that address NPS water pollution.
Method
The Project plans to hold a series of forums to evaluate existing NPS funding programs and examine innovative ways to finance NPS remediation. We will ask forum participants to develop innovative ideas about how to increase the efficiency, effectiveness and integration of NPS funding programs. Changes to current law, regulation, finance mechanisms, and technical assistance programs are within the purview of our project.
The forums will consider federal funding for three broad categories of NPS problems:
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1) agriculture
2) stormwater
3) on-site wastewater treatment
For each of these three categories, the forums will:
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a) identify inefficiencies in federal NPS funding programs
b) consider innovative funding sources
c) explore how to integrate, modify, or leverage NPS funding programs to maximize their effectiveness and increase NPS funding.
Existing federal NPS programs are described in GAO?s February 1999 report: Federal Role in Addressing ? and Contributing to ? Nonpoint Source Pollution. This report could serve as a starting place for initial forums.
The Project hopes to work closely with the EPA's Environmental Finance Center (EFC) at the University of Maryland to plan and produce these forums. EPA's environmental finance program helps support eight EFCs, located at colleges and universities throughout the country. EFCs provide state and local officials with educational and advisory services on environmental financing alternatives.
Money and the NPS Problem
Most federal funds potentially available for NPS remediation come from:
1) annual appropriations to USDA programs
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Conservation Reserve Program ($1.7B/FY98)
Environmental Quality Incentives Program (EQIP) ($0.2B/FY98)
Wetlands Reserve Program ($0.28B/FY98)
2) annual loan capacity of the $27.3 billion in the CWA State Revolving Fund (SRF loans to NPS projects currently total $0.8B, or 4% of the total)
3) annual appropriation to EPA Section 319 grants program ($0.2B/FY99)
Unfortunately, there is no inter-agency or state/federal mechanism that integrates these programs on a watershed or priority basis. Nor are there mechanisms that seek to maximize their collective efficiency at reducing NPS pollution. While the Clinton Administration?s Clean Water Action Plan has called for better coordination among federal agencies, there is little evidence of such coordination.
Efficiency problems exist both within and between federal programs. For example, almost no coordination exists between SRF and the CWA Section 319 grants program, the two largest potential NPS funding streams from EPA. A few inter-agency innovations have been initiated at the state level between EQIP and SRF, and between other USDA programs and Section 319. However, in most states there is no such coordination. This lack of coordination can result in lost opportunities to maximize water quality benefits, tackle large projects, or better leverage funding.
Participants
Representatives of the regulated community, the regulating community, as well as elected officials, environmentalists, bond market representatives, financial experts and academics will participate in the forums. We particularly seek the participation of agencies, organizations, and project implementers who have experience integrating funding programs, or who are using existing funding in innovative ways.
Work Products
The project will publicize its recommendations as a report on issues, findings, and recommendations. In conjunction with co-sponsors, we will help educate federal, state, and local stakeholders of the report?s findings. In addition, the report will be delivered to EPA?s Environmental Finance Advisory Board, the Council of Infrastructure Financing Authorities, the Clean Water Network, the Sustainable Agriculture Network, the Soil and Water Conservation Society, and relevant Congressional Committees and Subcommittees.
The Nonpoint Finance Project will seek to hold a follow-up conference or seminars to discuss the report, and to introduce it to a wider public via organizational newsletters, press releases, and participants? web sites.
Audience
The purpose of the report on issues, findings, and recommendations is to educate and gain the support of the following groups:
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1) Members of Congress
2) relevant federal agencies
3) the agricultural and environmental communities
4) bond market and public finance community
Starting Assumptions
The Nonpoint Finance Project believes that continued growth of the largest potential NPS funding resource, state revolving funds, is an important prerequisite for any effort to promote the efficient funding and operation of federal NPS programs. This project, therefore, will not consider any proposal that might decapitalize SRFs.
We recognize that not all barriers to NPS control are legal or monetary; sociological and behavioral obstacles to efficient NPS controls also exist. However, such obstacles are outside this project?s mission.
Project Management
The Nonpoint Finance Project is a joint effort of the Marine Studies Consortium, Chestnut Hill, MA, and the Northeast/Midwest Institute, Washington DC. Our forums will loosely follow the charette model developed by the Maryland EFC. Relationships with other EFCs or potential sponsors may be sought. The Project is funded by a grant from the Joyce Foundation.