Five years ago Medford, Oregon, had a problem common for most cities—treating sewage without hurting fish.

The city’s wastewater treatment plant was discharging warm water into the Rogue River. Fish weren’t dying, but salmon in the Rogue rely on cold water. And the Environmental Protection Agency has rules to make sure they get it.

So, instead of spending millions on expensive machinery to cool the water to federal standards, the city of Medford tried something much simpler: planting trees.

It bought credits that paid others to handle the tree planting, countering the utility's continued warm-water discharges. Shady trees cool rivers, and the end goal is 10 to 15 miles of new native vegetation along the Rogue.

Pollution-trading programs are common in other industries, such as caps on sulfur dioxide from U.S. power plants. A regulator, say the EPA, issues or sells to polluters permits allowing a set amount of emissions. Firms must own permits to match their emissions, but the total amount is capped. If a coal plant owner can't or won't cut emissions from its stacks, it buys permits, or credits, from other utilities that have chopped emissions and don't need as many.

But using credits to curb warm discharges is novel and water-quality trading to protect stream temperatures is gaining traction in Oregon.

Supporters say it’s a win-win: wastewater plants save money, streams stay cool and the trees do other good things like provide habitat and suck up carbon.

“Traditional environmental practices, litigation, advocacy, got us a long way, but not too much further,” said Joe Whitworth, president of The Freshwater Trust, which spearheaded the Medford project. “We thought, what else is out there, what can we do different to enhance the entire watershed?”

However, some say it’s not enough to protect the states’ fish.

“It is a get-out-of-jail card,” said Nina Bell, executive director of the nonprofit, Portland, Oregon,-based Northwest Environmental Advocates. “It takes care of [wastewater] plant’s responsibility but doesn’t have the kind of real water quality benefits we need.”

Using trees to save green
Medford is situated on the Rogue River—famous for its runs of salmon and steelhead. The wastewater plant, serving roughly 170,000 people, adds to the overall warming of the river, which can make eggs incubate earlier, affecting survival rates.

With discharge likely to increase—by 2030 the plant is estimated to serve an additional 30,000 people—Medford started looking for ways to lessen their discharge footprint.

Cooling towers and chillers are a traditional solution, said Walt Meyer of West Yost Associates, the city's engineering consultant. But shady riverbanks can accomplish the same goal as expensive engineering. “It turned out trading was the most cost-effective and the most environmentally compatible,” he said.

Chillers run somewhere around $15 million to $20 million and require massive amounts of energy to run, while tree planting will cost the city about $8 million.

The city started buying credits in 2012, and so far 21 acres—3.5 miles of stream—have been planted with native plants such as Ponderosa Pine, Black Cottonwood, Big Leaf Maple, Oregon Ash and White Alder.

A software system run by The Freshwater Trust calculates the benefits of planting a given area. The Medford wastewater treatment plant can buy the credits, ostensibly offsetting the warm water they’re releasing into the environment.

The current price per credit is a little more than 1/100th of a penny. About 600 million credits will be required for Medford’s compliance.

The Freshwater Trust has to recruit landowners along the river who could use some restoration. A lease agreement grants the rights to manage the land for 20 years.

So far there are seven participating landowners, who are paid between $200 and $300 per acre/per year for the length of the project. Eventually an expected 25 to 30 landowners will be involved, said David Primozich, senior ecosystems services director at The Freshwater Trust.

Then there’s removal of non-native species and a trip to the nursery.

“We walk into nursery and say ‘over the next 5 years, we’re going to plant something like 500,000 trees and they need to be native,’” Whitworth said. “They need to find right kinds of different species, grow them and sites need to be prepped.”

Not without controversy
The upper temperature limit, as set by the Oregon Department of Environmental Quality (DEQ), for the Rogue in summer is 64 degrees Fahrenheit. In the fall, when the fish spawn, and into the winter that limit is 55ºF, said Dennis Ades, the former water quality trading coordinator with the Oregon Department of Environmental Quality.

Many factors influence stream temperature—both natural fluctuations in temperature and precipitation, and human causes such as discharges and removing vegetation from riverbanks.

Ades estimates that of the human warming sources, wastewater treatment plants typically account for 5 to 10 percent in Oregon. The remainder is from what’s called non-point sources—such as agriculturally driven losses of streamside vegetation and river diversions.

This is where some of the controversy comes in. That 90 percent remainder is a big number.

“Some say this [Medford project] is a great idea as it will restore some riparian areas,” Bell said. “It might restore some areas, but it’s such a drop in the bucket and distracts from real question: what are we doing to achieve widespread non-point source controls?”

“Point sources" such as wastewater treatment plants are where states have the most authority to make a difference, Ades said. “The Clean Water Act doesn’t give us a lot of non-point tools."

Oregon has some local ordinances and voluntary reductions, he added. For instance, farmers can participate in water quality trading projects, accelerating their voluntary reductions.

Medford's initial round of credit-buying and tree-planting will be completed by 2020. The water from Medford is discharged in White City, and the trees are planted elsewhere in the Rogue River’s basin.

Saving money in environmental programs is key, said Larry Karp, a professor of agricultural and resource economics at the University of California. “By doing it cheaply, you can do more of it. You’re more likely to achieve environmental benefits if you go about it in efficient ways.”

And someone else pretty important agrees with Karp. In a 2012 speech, before the program had really gotten underway, President Obama praised the Medford project as an example helping the environment without putting unnecessary financial pressure on industry.

“It worked for business, it worked for farmers, it worked for salmon,” President Obama said. “Those are the kinds of ideas we need in this country.”

The idea of water quality trading was hatched a little more than a decade ago, born out of thinking of how to lessen not only the impact of wastewater treatment plants but also that other 90 percent of sources that are contributing to warming the river but not fully regulated.

Trees don’t discriminate: Planting them helps the whole watershed—removing both pollutants and climate-warming gasses from the air and providing shelter and habitat for creatures.

Chillers require about 6,000 horsepower of connected load, Meyer said, which would have been an energy suck.

Bell, the critic, admits trees are good. But location matters—the trees are being planted on the main stem of the Rogue River, while shading smaller offshoot streams would have much more impact, she said.

Primozich agrees smaller tributaries would be more influenced by shade, but regulators require thermal reductions where the heat is being added, on the Rogue's main stem.

Primozich said the project is too young to have generated much shade. That’s where the aptly named Shade-A-Lator software program comes into play, estimating future shade benefits. “Within seven to 10 years, we anticipate about half of the shade at maturity.” he said.

Bell countered that “planting a few trees here and there is not addressing state’s problem.” Her organization has sent multiple letters to the regional EPA offices with concerns about the Medford program and officials have said “pretty much nothing in response,” she said.

“They’re still discharging something that’s warmer than it should be,” Bell said. “How can you do that without undercutting the regulatory structure of the Clean Water Act?”

Primozich said one way the state has addressed the continued discharge and lag between tree planting and shade is by using a ratio tilted in the direction of more shade. “If the utility discharges 10 units of heat, we have to plant 20 units of shade, using a 2 to 1 ratio.”

Oregon leads the way
The EPA doesn't track polluters taking advantage of tree-planting permits under the Clean Water Act, as states oversee such programs, said EPA spokeswoman Enesta Jones in an email.

The agency would not make any of their environmental economists available for an interview.

There have been more than 40 water quality-trading projects in the United States, according to the Rutgers University Water Resources Program. However, the projects are focused on pollution—not hot water—discharge and seem to have limited success, according to a study last year

Medford is not the first such program in Oregon: Clean Water Services, which cleans about 60 million gallons of wastewater daily for 550,000 customers in nearby Washington County, has been using a similar trading system on the Tualatin River for about a decade, Ades said.

That program has been largely successful for the environment and has provided “widespread community benefits" such as payments to participating landowners, as well as the aesthetic and recreational value of restored riparian areas, according to a 2011 study from Portland State University. The researchers estimate that the trading has cost Clean Water Services 95 percent less than buying new equipment would have been.

James Boyd, senior fellow and director of the Center for the Management of Ecological Wealth, said as long as the natural method works as well as the technological fix, it comes down to one thing: money.

“You’re seeing that in Oregon, you might get co-benefits of riparian restoration and desirable aesthetics, but bottom line is they’re doing it cheaper,” Boyd said.

Karp said the poster child for market-based environmental approaches is sulfur emission trading under the Clean Air Act for power plants and other industries burning coal.

The Medford situation is analogous, Karp said.

“The societal goal is for pollution to not exceed a certain level," he noted. "You could insist every factory put on certain equipment, or in the case of Medford, make them use cold water."

But if the target is clear, Karp said, the emissions trading program has shown that letting companies decide how to achieve it is often the most efficient approach.

So why isn’t everybody using trading for warm water discharges?

“For one thing it's a lot easier to go to an engineering company and say ‘this is what we need’,” Boyd said. “You get more certain outcomes. Whereas when you start to talk about green infrastructure, things get messier.” Boyd also said the way the Clean Water Act targets wastewater plants and industries, but not farmers, creates some disincentive to work together.

Oregon has been very progressive on this, Boyd said. But making sure trading is producing the desirable result “complicates lives,” he said.

Historically environmental groups have been leery of trading programs, but that’s starting to change, Karp said.

“There’s no doubt environmental groups have come on board to a considerable extent when it comes to market-based methods,” he said. “Maybe a groundswell is an exaggeration, but there’s been at least a drift.”

Karp said one of the main objections to trading is hot spots. “By allowing trade and permits, you might lower aggregate, but might concentrate emissions, or thermal loading, in certain areas,” Karp said. But Meyer said Medford doesn’t have a hot spot.

“The stream segment where we discharge doesn’t violate temperature standards. Sixty miles downstream is the point of impact,” Meyer said.

Bell said she’s not opposed to water quality trading but maintains the Medford trading is letting the wastewater plant shed its responsibility to curb warm discharges and questions whether the promised stream restoration will actually get done.

Whitworth remains unfazed. He said such “quantified conservation” is the future. Confident that monitoring throughout the life of the project will silence critics, he sounds almost Machiavellian.

“Some in the environmental community are like ‘hey what are you doing here? You’re doing tradeoffs and the environment will get shortchanged’,” he said. “But we can quantify.

“You can do a deal with the devil himself and still be ahead environmentally.”

This article originally ran at Environmental Health News, a news source published by Environmental Health Sciences, a nonprofit media company.

For questions or feedback about this piece, contact Brian Bienkowski at bbienkowski@ehn.org.