Regulating Nonpoint Source Pollution in the Ottawa River Watershed
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Queen’s Policy Review Volume 2, No. 2 (Fall 2011)
Regulating Nonpoint Source Pollution in
the Ottawa River Watershed
Alex Carr
Carleton University
ABSTRACT
Nonpoint source pollution, such as agricultural, urban, and septic tank
runoff, is a major issue facing the Ottawa River watershed, one of
Canada’s largest tributaries. As regulation of point source emissions have
tightened around the world, attention has turned to regulating nonpoint
sources, which are often more harmful and difficult to curb. This paper
demonstrates what the field of environmental economics can offer towards
management of this issue. Three policy instruments, ranging from
standards, to tradable permits and to taxes, are assessed for their
applicability to current issues and the overarching stakeholder
environment.
Introduction
Nonpoint source (NPS) pollution, such as agricultural, urban, and septic
tank runoff, is a major issue facing the Ottawa River watershed. As
regulation of point source emissions have tightened around the world,
attention has turned to regulating nonpoint sources, which are often more
harmful and difficult to curb. This paper will demonstrate what the field
of environmental economics can offer towards management of this issue.
After setting the context, including a discussion of jurisdictions and
relevant legislation, this paper will identify the specific pollutants and their
80Queen’s Policy Review Volume 2, No. 2 (Fall 2011)
sources. It will then discuss how to set the environmental targets using a
stakeholders approach. At this point, an in-depth analysis of policy
instruments will help determine the most effective and efficient way of
abatement. Special attention will be paid to the idea of introducing an
emissions trading scheme between point and NPS polluters. The paper will
then conclude with a brief discussion of the best ways forward. Guiding
this research is a strong belief that bringing together the various
stakeholders involved—though there are many—in a meaningful fashion,
and addressing complicated jurisdictional conflicts will be critical to
ensuing successful outcomes. There are also opportunities to learn from
other efforts at watershed management. The key will be determining what
has been effective in the past, and whether those policies can be applied to
the Ottawa River context.
Context
The Ottawa River is significant for a variety of reasons. At over
1,000 km in length and with a vast watershed of over 146 000 km2 1, The
Ottawa River is home to diverse flora and fauna. The river’s rich
biodiversity is matched by its mighty flow, from headwaters in
southwestern Quebec to its mouth at the St. Lawrence River. Besides its
mighty geography the Ottawa is also historically and socially significant.
Considered the heartland of the Algonquin, the Ottawa River, or ‘Kichi
Sibi,’ has been the site of First Nations hunting, trading, and settlement for
millennia. The river also played an important role in the colonization of
Canada, as an avenue for continental exploration, the site of expanding fur
trade, and the development of the logging industry. It serves as the
boundary between Ontario and Quebec, which makes the river politically
significant, but presents jurisdictional problems. The watershed is also
home to 1.7 million residents and the National Capital Region. Economic
activity in the area is highlighted by power generation, pulp and paper,
agriculture, and many forms of recreation. Despite its importance, the
Ottawa River has no comprehensive water management plan. Efforts to
protect the river have been uncoordinated and inconsistent2. Besides NPS
pollution, the watershed suffers from a number of environmental
problems, including dam and power generation activity, the Chalk River
nuclear station, urban and shoreline development, wetlands conservation,
and climate change. While this paper will focus on NPS pollution, the
approach involved and principles detailed could serve as a starting point
for renewed interest in comprehensive management of this resource.
81Queen’s Policy Review Volume 2, No. 2 (Fall 2011)
Jurisdictions
Water-pollution regulation in Canada, particularly for NPS
pollutants, has not been prioritized as it has in other developed regions. In
the U.S. the EPA has labeled runoff as the leading threat to water quality,
and has thus tackled the issues through the Clean Water Act. The EU’s
Water Framework Directive has mandated all water bodies meet ‘good’
water quality standards and have established provisions to help countries
meet those objectives. No such legislation exists in Canada, and the issue
of runoff has been largely ignored. In Canada, water-pollution is mainly a
provincial responsibility, although the federal government has authority
through the Fisheries Act. This legislation sets standards for substances
that are detrimental to aquatic life, but it is inconsistently applied and
rarely enforced. Health Canada also sets guidelines for drinking water, and
the federal government provides funds to municipalities to upgrade their
sewage treatment facilities.
Provincial regulation of water quality is also geared towards point
source emissions and ensuring safe drinking water. Since the E-coli water
contamination in Walkerton, Ontario in 2000, the Ontario government has
become slightly more proactive in regulating NPS emissions, for example
manure runoff. They have introduced some technology-based standards to
3 4
encourage better farming practices . According to Brown , however, the
“reactive and piecemeal approach to managing our river is inefficient and
uncoordinated.” The river’s integrity is dependent on pollution from both
sides of the border. An interprovincial watershed-based management plan
that can address NPS pollution is therefore necessary. Leadership to
overcome the complications from overlapping jurisdictions must come the
federal government. This could be in the form of a regulatory body,
comprised of representatives from all levels of government and key
stakeholders, as was done in with the St. Lawrence River5.
NPS Pollutants in the Ottawa River Watershed
While the jurisdictional issues are complex, sources of nonpoint
pollutants are relatively well known. In NPS pollution, “water flows on
the surface, dissolving and washing away pollutants and soil sediments
along its path and finally discharging into receiving waters6. Pollutants
flow into the Ottawa River directly, and indirectly through runoff into
lakes, tributaries, creeks, wetlands, and groundwater. This is particularly
acute during large rainfalls and snow melt. Pollution from nonpoint
sources can be incredibly harmful because they are often untreated,
82Queen’s Policy Review Volume 2, No. 2 (Fall 2011)
unregulated, and difficult to contain. As such, they have been more or less
ignored in the Ottawa River watershed context. The Ottawa Riverkeeper
report describes three major types of pollutants affecting the watershed:
7
pathogens, nutrients, and toxins .
Pathogens are disease-causing microorganisms, such as bacteria and
viruses. These pollutants come from wildlife, farm animals, septic tanks,
and leaky sewer infrastructure. Beach closures resulting from such
pollutants are a serious issue in the Ottawa-Gatineau area. Levels of
infectious agents, such as E-coli, frequently exceed provincial guidelines,
leading to mandated urban beach closures. For example, in Ottawa, the
8
Petrie Island beach was closed 11 out of 71 days in 2005 . The frequency
of such alerts has tarnished the view of river recreation9 and leads to social
and economic loss.
Nutrients are compounds that stimulate plant growth, for example
nitrogen and phosphorous. The primary sources of these pollutants are
agricultural runoff, septic tank seepage, and urban runoff. Nutrients can be
found in sewage, manure, chemical fertilizers, and lawn care products.
Around the world, agricultural fertilizer runoff is regarded as the biggest
contributor of eutrophication of waterways, and is a major source of
pollution for the Ottawa River watershed. Nutrients stimulate the growth
of aquatic organisms such as phytoplankton, which deplete water of
dissolved oxygen, a necessary condition for other aquatic life. They also
contaminate water supply and contribute to water acidification.
Phosphorous levels in the Ottawa River watershed are a particular
10
concern . Furthermore, it is estimated that 25% of those living in the
11
region rely on septic systems . Improperly maintained, constructed, or
located septic systems can leak effluent into the watershed.
Toxins include heavy metals, such as lead and zinc, pesticides, and
organic compounds like PCBs. These pollutants harm aquatic and human
life, are resistant to breaking down, and also bioaccumulate in the food
chain. They come from a variety of nonpoint sources, particularly
agricultural and urban runoff, such as salts, oils, and sewage overflow.
Over the years, more attention has been paid to urban runoff, as regulators
began to realize that it accounted for many of the environmental problems
in water bodies downstream or within urban areas12. Fish in the Ottawa
River are exposed to endocrine disrupter chemicals (EDCs), which
negatively affect growth and reproduction in animals13. These substances
come from a variety of sources, including pesticides, fertilizers, antibiotics,
and hormones, as well as urban runoff from pharmaceuticals and personal
body care products14. Recreational boating is another source of pollution
when vehicles leak fuel, engine oil, and toxic cleaning products. Metals
83Queen’s Policy Review Volume 2, No. 2 (Fall 2011)
such as copper can be found in many smaller tributaries around the city of
Ottawa, primarily coming from runoff from roads, construction, and other
15
urban activity
Clearly sources of nonpoint pollutants are numerous and varied.
On a positive note, abatement techniques for many of these NPS pollutants
are practiced across North America and the world, and can be readily
applied in the Ottawa River context. The main challenge for regulators
will be determining environmental targets and what policy instruments will
be the most efficient and effective in meeting those objectives.
Environmental Targets and Stakeholders
Levels of NPS pollution depend on a variety of factors, including
land-use practices, soil properties, topography, and weather. For example,
runoff pollution can be episodic in cases of large rainfall events. As a
result of the complex nature of NPS pollution, choosing appropriate policy
instruments poses a challenge for regulators. The first step, however, is
establishing environmental targets. For the Ottawa River watershed
several considerations should go into deciding these objectives.
Stakeholder views on acceptable levels of damages and abatement
are critical. A survey of residents in Ottawa-Gatineau in 2008
demonstrated that public perception about river water quality is quite
pessimistic. Half of those surveyed believe the river is ‘highly’ or ‘quite’
polluted16. The study shows that residents living in the National Capital
Region are concerned about the river and therefore would be keen on
setting stricter environmental targets.
Urban dwellers, however, are just one stakeholder. Rural and small
town residents, especially those living downstream from Ottawa-Gatineau
where water quality issues are more pronounced, are also important.
Given that septic tanks are a significant source of pollution, these
individuals may be directly affected by policy. Likewise small town and
rural municipalities, as polluters and policymakers, are a key stakeholder
that must be involved in setting environmental targets. Recreational users
of the watershed also have a vested interest in regulatory intervention.
Sport-fishers, swimmers, and boaters all depend on good water quality,
uncontaminated fish, and sufficient flow rate.
At the same time, Algonquin First Nations have been living in the
Kitchi Sibi watershed for thousands of years17. Not only should they be
granted stakeholder standing, because of their vested interest, but they
should also be solicited for their vast knowledge. The watershed is their
traditional hunting, fishing, and settlement ground. Their local knowledge
84Queen’s Policy Review Volume 2, No. 2 (Fall 2011)
could prove invaluable for determining thresholds, targets and policy. If
First Nations are brought into the process in a meaningful fashion, their
historical perspective on vital issues such as water levels, flow rate, fish
stocks, and the impact of weather will inform scientists, engineers, and
regulators, and fill gaps in information. This type of insight is also useful
given the uncertainty of climate change and the interaction between the
river and climate.
NPS polluters themselves have the most at stake with policy
intervention. Most emissions come from agricultural, urban, and septic
system runoff, meaning there are a myriad of polluters involved. In
establishing targets and policy there are many factors to consider. How
should regulators distribute the burden among these actors? There is a
fairness argument that states the worst offenders should bear the brunt of
emissions reductions. At the same time, if farming is a major source of
pollutants, it might be undesirable to punish them too severely. Not only is
it a politically sensitive issue, but putting pressure on farming might also be
socially objectionable, given its importance vis-à-vis local food, food
security, and society’s general nostalgia for that way of life. Particular
attention should be paid to meaningful discussions with farmers. Their
‘buy-in’ to water management is crucial. Direct personal contact and
appealing to their sense of stewardship has been shown to be an effective
method of negotiating reduced emissions through better practices18.
Municipalities are largely responsible for runoff of salts, oils, and other
harmful compounds. Luckily, Ottawa and Gatineau are the only two main
urban areas, and therefore this aspect of the problem may be easier to
regulate. Given that agriculture and septic tanks are major NPS polluters,
rural municipalities with jurisdiction in those areas will need to be brought
on board and given a voice as well. Clearly there are economic, social, and
political hurdles in regulating nonpoint sources that must be navigated. A
mutually agreeable solution, however, must be guided by science-based
evidence.
Water quality along a vast watershed such as the Ottawa River’s is
dependent on many factors and requires scientific and engineering analysis,
monitoring, and modeling. For example, there may be some thresholds
with regards to levels of pollution that cannot be surpassed. The marginal
damages of some compounds could be high enough to warrant zero
emissions. Given its considerable flow rate, the river’s assimilative capacity
in this respect is likely substantial. Similarly, if the effects of potentially
harmful pollutants are not understood or uncertain, then employing the
precautionary principle may be the best option until information gaps can
be addressed. At the same time, there are different types of thresholds. For
85Queen’s Policy Review Volume 2, No. 2 (Fall 2011)
19
example, the Ontario government sets guidelines for consumption of fish .
If fish stocks are too contaminated, they become uneatable, resulting in
societal loss. Lake sturgeon, which are important for First Nations and
support a small fishery, have already plummeted because of anthropogenic
stressors, such as dam and power generation, overfishing, and pollutants,
including from non-point sources2021. The real challenge lies in attempting
to model how nonpoint sources interact with the local ecosystem and how
the entire watershed is affected. The stochastic nature of NPS pollution
makes this even more challenging, considering that unpredictable factors
such as the weather plays an important role.
Guided by science, stakeholder input, and local knowledge –
particularly indigenous knowledge – environmental targets for key
indicators could be set by an intergovernmental regulatory. Common
indicators of water quality include dissolved oxygen or biological oxygen
22
demand. Taebi and Droste also suggest looking at sediment, nutrient
levels, pH balance, conductivity, and heavy metals. There will no doubt be
divergence in perspectives among stakeholders, particularly for those that
will be most affected by establishing targets where before regulation was
absent. Establishing environmental targets is about the trade-off between
environmental improvements and costs to society. Environmental
economics offers a simplistic model to remedy this situation by equating
marginal damages (MD) of a pollutant with the marginal abatement costs
(MAC) to polluters. This principle minimizes costs to society, but is
sometimes difficult to implement in reality.
Policy Instruments
Clearly the nature of non-point source pollution and the various
stakeholders involved makes for a complicated policy situation. This paper
will now briefly investigate three policy options—standards, taxes, and
tradable discharge permits—paying particular attention to the idea of
establishing an emissions trading scheme between point and NPS polluters.
Guiding this analysis are the five objectives of environmental policies
advanced by Barry & Field23: efficiency, equity, innovation incentives,
administrative ease, and political feasibility. In the end, this section will
shed light on whether market-based approaches are suitable, or if the issue
requires traditional heavy-handed action such as standards or taxation.
Standards
In Canada, the most frequent policy remedy for water quality has
86Queen’s Policy Review Volume 2, No. 2 (Fall 2011)
been emission standards. As discussed earlier, there are several laws,
regulations, and guidelines on the books at various levels of government.
Regulation, however, has been geared towards point source polluters, such
24
as the pulp and paper industry , or more recently, municipal wastewater
25
treatment . The U.S. and EU have established comprehensive standards
for water quality, including mandated actions to combat NPS pollution.
One option is to implement technology-based standards (TBS) across the
watershed. Standards could be set for NPS emitters, for example septic
tanks, based on ‘best-available technology.’ Essentially residents would be
forced to upgrade outdated or poorly located septic systems. Applying
standards can be effective because they force nonpoint emitters to abate.
This is particularly useful if there are known thresholds or if pollutants are
particularly toxic. These policies, however, rarely meet efficiency criteria,
unless individual standards are set according to each polluter’s marginal
abatement cost curve. This would be extremely onerous in the context of
the thousands of NPS emitters in the Ottawa River watershed. “[W]ithout
some link to MAC and MD, one cannot tell whether elimination of
contaminants is socially efficient”26. Given the high social costs, uniform
standards across the region will be politically unfeasible, and would be
administratively onerous. For example, manure spreading and tillage rules
on farms require substantial monitoring and enforcement. While
emissions standards provide some incentives for research and development,
in the case of TBS, incentives are undermined entirely. Incentives under
emissions standards, however, are weaker than those created by market-
based initiatives, such as tradable discharge permits.
Taxes
Another possible instrument to curb NPS pollution is the use of a tax.
There are several forms of taxes associated with nonpoint sources, and
they are typically geared towards agricultural runoff. The most common is
an input tax. For example the provincial government could impose a levee
on fertilizers or pesticides. The increased price should theoretically lead to
decreased usage of damaging inputs or a switch to practices that require
less nutrients. Another advantage of the input tax is relative administrative
ease. It involves virtually no enforcement costs on the emissions side,
although some monitoring to gauge effectiveness is recommended.
Unfortunately, this policy does not account for the variable nature of
runoff itself. Imposing a uniform tax ignores the fact that runoff is
affected by area-specific factors. A specific change in harmful inputs does
not always lead to a proportionate change in runoff, as MD are governed
87Queen’s Policy Review Volume 2, No. 2 (Fall 2011)
by factors such as topography and soil conditions. In this way, input taxes
are inefficient. Issues of fairness also arise when we consider that different
crops require varying amounts of fertilizer. Equity among farmers is a
sensitive issue. Depending on the level of tax, this increases the cost of
farming, an industry not known for its profitability. Another consideration
is that “regulating the intensity of one input affects the intensity of all
other inputs, [therefore] an input tax should be accompanied by a
27
restriction on land acreage” . Such measures are likely to be politically
unfeasible, not only because of the general unpopularity of taxes, but also
because of the accompanying managerial restrictions on land use. There
are also issues with setting the tax at the correct level, an inherently
political decision. If input taxes are not high enough, polluters may not
reduce emissions. Unless regulators in the Ottawa River context manage
to obtain perfect information from stakeholders on marginal damages and
abatement costs, setting a tax at the efficient level will be impossible.
Implementing a flexible system where the tax can be readjusted is also
challenging and impractical.
Another possibility is the implementation of an emissions tax.
Emissions taxes avoid some of the pitfalls of input taxes. Most
importantly, it comes closer to employing the polluter pays principle. NPS
emitters are taxed based on total emissions, as opposed to inputs. They
also provide strong incentives to innovate and adopt new technologies with
lower MACs28. For nonpoint sources, however, this particular policy
becomes administratively unpalatable. Ambient emissions must be
measured. In the case of the Ottawa River’s immense geographic area and
dispersed nonpoint sources, this would be prohibitively expensive.
Romstad29 proposes a ‘team approach,’ whereby groups of NPS polluters
are held collectively liable through taxation for wider ambient emissions
and therefore must bargain over abatement amongst themselves. While
this proposal improves economic efficiency it still requires substantial
monitoring costs. Additionally, “ambient tax revenues raised in many
cases would be far greater than farm revenues”30, making these policies
even less politically attractive. In either case, imposing a tax will be
fraught with political negotiation and will no doubt be set lower than the
efficient level unless many other concessions are made.
Tradable Discharge Permits
In some jurisdictions, water quality trading (WTQ) has gained
prominence over command-and-control policies. The main idea is to
determine the aforementioned sustainable level of pollution and cap total
88Queen’s Policy Review Volume 2, No. 2 (Fall 2011)
emissions at that level. At this point emissions permits are either auctioned
or grandfathered to polluters, and are then traded on a market. In the U.S.
for example, the Clean Water Act and mandated ‘total maximum daily
31
loads’ has resulted in a flurry of interest in WQT schemes . The majority
of these projects involve nutrient trading, specifically phosphorous and
nitrogen32. Since the adoption of the EU Framework Directive on water
quality, the EU has also moved towards market-based instruments33.
Principles of environmental economics state that emissions permit trading
results in a socially efficient outcome. Permit markets depend on trading
opportunities, so that companies with the lesser abatement costs are
reducing emissions first. Abatement costs for point sources, such as pulp
and paper mills, have risen dramatically with increased regulation over the
past several decades, and can be up to sixty-five times higher34. While
reductions in point source pollution has been crucial, regulators have
realized that NPS pollution can cause as much if not more harm to water
quality. Thus, ‘watershed-based’ effluent trading has been given increased
attention in the past several years. Nonpoint sources have lower
abatement costs, and can therefore sell discharge permits to point source
emitters. In the Ottawa River context, if a nutrient trading program was
established, there are a number of ways NPS emitters can abate and thus
sell permits. For agriculture, these include soil erosion control, livestock
exclusion, constructing riparian buffers, rotational grazing, rehabilitated
wetlands, cover-cropping, and land retirement. Urban runoff abatement is
not usually included in trading schemes, although it is theoretically
possible. Improving practices such as construction site management or
decreasing municipal usage of salts and oils on roadways could also be
credited. Clearly WQT between point and nonpoint sources in the Ottawa
River watershed is an alluring prospect.
Despite this appeal, experience with WQT between point and
nonpoint sources has been mixed. In the U.S. while some programs have
resulted in substantial savings over the command and control option,
others have not35. In some cases, “point sources did not have the
flexibility to chose between implementing in-plant control measures and
purchasing reduction credits from nonpoint sources”36. This set-up
violates a key aspect of true market-based trading schemes, where the
regulator must cede management and abatement decisions to polluters37.
On top of this, market efficiency requires a large pool of participants,
including some willing to sell permits at a relatively low cost. While the
Ottawa River watershed is large geographically, polluters are not densely
located. Most WQT regimes have been established in areas of dense
agricultural, industrial, or residential activity38394041. It is unclear whether
89Queen’s Policy Review Volume 2, No. 2 (Fall 2011)
the Ottawa River Watershed will yield a large enough pool of participants
for effective market performance. One suggestion is to include privately
42
owned septic tanks . This would certainly increase the size of the Ottawa
River watershed trading market. Proper monitoring and enforcement
would be crucial to ensure reductions are carried out. Similarly, WQT
schemes rarely support the trading of permits for multiple pollutants.
According to Sarang et al.43 “cross-pollutant trading for pollutants that
affect dissolved oxygen concentrations [is possible] whenever enough
information exists to implement the trades and determine the resulting
impacts on water quality”44. Given that there are a number of pollutants
and sources that affect dissolved oxygen in the Ottawa River watershed,
this would be useful, although it would be crucial to employ proper
weighting techniques for each pollutant.
Several aspects of this type of scheme present challenges for the
Ottawa River watershed context. In point to nonpoint emissions trading,
there are four criteria necessary for effective and efficient trading:
efficiency, equivalency, additionality, and accountability45. Efficiency refers
to the aforementioned principle, where trading results in the pollution
abatement at the lowest cost. As we will see, it is unclear whether WQT in
the Ottawa River watershed can reach this target. In practice, designing,
implementing, monitoring, and enforcing these programs can be costly and
undermine the theoretical efficiencies. As Stavins46 points out,
“transaction costs increase the aggregate costs of control indirectly by
reducing total trading volume and directly by adding to the total costs of
47
control” . Establishing equivalency between point and non-point
pollutants is also tricky. Point sources emissions are easy to measure.
Nonpoint sources, on the other hand, are weather dependent and hard to
measure, both in their quantity and marginal damage to a water body.
While models are created to simulate effects of NPS pollution as well as to
estimate the marginal damages and abatement curves48 much uncertainty
remains. This ambiguity becomes a point of dispute when setting up
WQT initiatives. Establishing an equivalency in emissions between
pollution from pulp and paper mills and agriculture, for example, is
riddled with complication. In order to account for the spatial variations
and uncertainty of nonpoint emissions, trading ratios are usually set larger
than one by regulators. The end result of this is that costs of NPS
abatement are increased. These issues are a major stumbling block in terms
of political feasibility. Farmers in the Ottawa River watershed might even
argue that pulp and paper factories or municipal wastewater facilities are
more harmful because they create ‘hot spots.’ These schemes also affect
NPS emitters differently. Some will benefit greatly from selling permits,
90Queen’s Policy Review Volume 2, No. 2 (Fall 2011)
whereas others, for example farmers “growing crops with low fertilizer
intensity on poor soils benefit relatively little, if at all”49. In fact, when
permits are allocated to point sources based on historic pollution
reductions, “the majority of farmers actually become net buyers of effluent
50
permits and net losers” .
The additionality criterion is also important. This stipulates that a
NPS reduction credited to a point source “would not have occurred
51
otherwise, in the absence of a point-nonpoint trading”. In Ontario, there
are pre-existing provincial programs that promote better manure practices
on farms, therefore the regulator must carefully vet trades to ensure that
abatement occurs as a result of trading. Lastly, accountability refers to the
monitoring and enforcement of the overall trading scheme, and ensuring all
other criteria are being met. In the Ottawa River watershed, establishing
trading ratios and monitoring the entire initiative might require substantial
costs due to the wide and variable geographic area. “[A] high degree of
accountability achieved by regulatory means, such as inspections and legal
actions, will increase program costs”52. One way to limit inspection costs
is by encouraging the use of abatement that is easily verifiable, for example
construction of riparian buffers or land retirement53.
Given the complex jurisdictions, an Ottawa River WQT initiative
would also require an intergovernmental regulatory body. This entity
would be charged with approving every trade, and given the authority to
nix past trades based on inspection. In the end, the tradeoff between
economic efficiency and environmental accountability must be considered.
54
According to Malik , when enforcement, monitoring, and transactions
costs are high, market-based initiatives are no more cost-effective than
traditional pollution control technology-standards. One final
consideration is that WQT brings up ethical concerns, whereby
environmentalists and other stakeholders take issue with the allocation of
property rights to pollute. In the Ottawa River context, stakeholder
concerns will no doubt manifest themselves, perhaps from First Nations or
environmentalist groups. Woodward55 finds that the widespread resistance
of regulators to give polluters the right to emit, and therefore allow WQT
programs to operate freely, has hindered market performance. There will
no doubt be similar pressures in Canadian context to maintain a high
degree of control over any trading scheme. The complexities of the
Ottawa River context cast doubt on the economic efficiency of this
approach.
91Queen’s Policy Review Volume 2, No. 2 (Fall 2011)
Discussion
Using one single instrument can be problematic in the context of NPS
pollution because of the variability inherent in runoff. “Thus single
instruments based on mean emissions do not account for the risk of
56
stochastic loads and may be neither efficient nor effective” . Large
rainfall events or unusually dry seasons result in very different runoff
effects, therefore inflexible instruments such as an input tax, which are set
based on predicted emissions, will be inefficient. The regulator could set
emission target based on ‘worst-case scenario,’ however it is likely to be
politically unfeasible. Research shows that the success of market-based
initiatives, such as WQT, over managerial control, such as standards,
depends on random factors such as the weather57. Given this uncertainty,
58 59 60
many authors have proposed mixed instruments as a solution .
For farming, input or emissions taxes could be combined with
subsidies or educational programs to develop practices that reduce runoff
and harmful inputs. ‘Landowner’ learning programs that involve direct
interpersonal contact have been shown to be particularly effective61. In
abating their emissions, farmers will be engaging in more long-term
sustainable practices, such as crop-switching or allowing soil to rest
through land retirement. “Managerial options can also generate ancillary
environmental benefits in terms of wildlife habitat and landscape amenity
value, which would increase their cost-effectiveness by reducing their net
social costs”62 Because of their numbers and spatial dispersal, technology-
based standards might be the only viable option for septic tanks. Financial
incentives could be offered to rural residents for system upgrades. In the
St. Lawrence Plan for Sustainable Development63, both the Province of
Quebec and federal government are providing subsidies on the micro level
for farming best practices, and evaluating which specific techniques yield
the most effective runoff reduction. Once results are published, these
findings can be applied to the Ottawa River context. The reality is that
NPS “pollution literature is primarily model-drive and lacks empirical
studies of implemented policy tools”64. As a result, regulators should
proceed with caution and will most likely focus on the ‘low-hanging’ fruit
of pollution abatement, leaving tougher or more elaborate mechanisms for
the future.
This paper has shown that a stakeholders approach is crucial to this
process. It is possible that the stakeholder cooperation involved in
establishing a regulatory body and environmental targets could act as a
stepping-stone towards voluntary regulation. Voluntary regulation is
appealing because of its administrative ease and political feasibility.
92Queen’s Policy Review Volume 2, No. 2 (Fall 2011)
Whether such a scheme would be lead to real abatement of NPS pollution
in the Ottawa River watershed, however, is unclear. Success depends on
participation, independent monitoring, and a credible enforcement threat if
65
it fails to produce environmental improvements . Besides voluntary
regulation, future research might also consider the usefulness of more
decentralized policies, such as liability laws and assignment of property
rights. Though not commonly practiced in Canada, these policies can offer
socially efficient outcomes, but they also entail litigation and moral
considerations.
Conclusion
The Ottawa River watershed is significant in many ways. It holds a
special place in the hearts of users, and its historical and political
importance means the River is part of Canada’s heritage. Despite its
importance, there is no broad, long-term plan for the management of this
resource. Although recent policies are well intentioned, for example the
recent ban on cosmetic fertilizers in Ontario and Quebec and technology-
based standards for farm manure, the issue of NPS pollution requires
comprehensive and coordinated action. Leadership and cooperation
between governments has been lacking. In the future, stressors like climate
change, growing population, and aging infrastructure will likely accentuate
these problems. NPS pollution is one of many issues facing the Ottawa
River, and therefore the insights offered by environmental economics and
the framework of this paper should be applied towards a broader
management plan, one that includes all stakeholders and guarantees the
sustainability of this resource.
93Queen’s Policy Review Volume 2, No. 2 (Fall 2011)
NOTES
1
Haxton, T., (2002): 449
2
Ottawa Riverkeeper, (2006): http://ottawariverkeeper.ca/programs/the_river_report/
3
Field, Barry C. and Olewiler, Nancy D., (2005): 316
4
Brown, Meredith, (2008)
5
Canada and Quebec, (2008)
6
Taebi, Amir & Droste, Ronald L. (2004): 175
7
Ottawa Riverkeeper, supra note 2: 51
8
Ibid: 62
9
Chung, Emily, Fischer, Steve and Gamache, Nick. (2008).
10
City of Ottawa, (2006).
11
Ottawa Riverkeeper’s River Report, supra note 2: 38
12 Taebi, Amir & Droste, Ronald L., supra note 6: 327
13
Picard-Aitken, Michelle, Fournier, Henri, Pariseau, et al, (2007): 200–211
14
Ottawa Riverkeeper’s River Report, supra note 2: 60
15
City of Ottawa, supra note 10
16
Segma Unimarketing, (2008)
17
Koschade, Bettina and Peters, Evelyn, (2006)
18
Ryan, Clare M., (2009): 43
19
Ontario, (2009): http://www.ene.gov.on.ca/en/water/fishguide/index.php
20
Haxton, T., supra note 1: 18
21
Harkness, W. J. K. and Dymon, J. R., (1961)
22
Taebi, Amir & Droste, Ronald L., supra note 6: 327
23
Field, Barry C. and Olewiler, Nancy D., supra note 3
24
Ottawa Riverkeeper, supra note 2: 49
25
Field, Barry C. and Olewiler, Nancy D., supra note 3
26
Ibid: 305
27
Aftab, Ashar, Hanley, Nick, and Baiocchi, Giovanni., (2010): 30
28
Field, Barry C. and Olewiler, Nancy D., supra note 3: 235
29
Romstad, Eirik, (2003): 47
30
Ibid: 72
31
Lankoski, Jussi, Lichtenberg, Erik, and Ollikainen, Markku, (2008): 1044–1058
32
Veil, John. A. (1998): 39-49
33
Cools, Jan, Broekx, Steven, Vandenberghe, Veronique, et al (2010): 44-51
34
Bacon, E.F., (1992)
35
Fang, Feng., Easter, K. William, and Brezonik, Patrick L., (2005)
36
Ibid: 655
37
Shabman, L., K. Stephenson, and W. Shobe, (2002): 4
38
Woodward, Richard T., (2003): 35-245
39
Fange, Feng., Easter, K. William, and Brezonik, Patrick L., supra note 35
40
Lankoski, Jussi, Lichtenberg, Erik, and Ollikainen, Markku, supra note 29: 1044–1058
41
Cools, Jan, Broekx, Steven, Vandenberghe, Veronique et al, supra note 33: 44-51
42
Woodward, Richard T., supra note 38: 235-245
94Queen’s Policy Review Volume 2, No. 2 (Fall 2011)
43
Sarang, Amin and Lence, Barbara J. and Shamsai, Abolfazl. (2008): 620–646
44
Ibid: 622.
45
Senjem, N. (1997): 5
46
Stavins, R.N. (1995): 133-148
47
Ibid: 144
48
Cools, Jan, Broekx, Steven, Vandenberghe, Veronique, supra note 33: 44-51
49
Lankoski, Jussi, Lichtenberg, Erik, and Ollikainen, Markku, supra note 29: 1057
50
Ibid: 1057
51
Senjem, supra note 45.
52
Fang, Feng., Easter, K. William, and Brezonik, Patrick L., supra note 35: 648
53
Lankoski, Jussi, Lichtenberg, Erik, and Ollikainen, Markku, supra note 29: 1056
54
Malik, A.S. (1992): 714-721
55
Woodward, Richard T., supra note 42: 235-245
56
Aftab, Ashar, Hanley, Nick, and Baiocchi, Giovanni, (2010): 30
57
Ibid
58
Dowd, Brian M., Press, Daniel, and Huertos, Marc Los (2008): 151–161
59
O’Shea, L. (2002): 49–63
60
Weersink, M. (2002): 265–273.
61
Ryan, Clare, supra note 18: 1122-1130
62
Aftab, Ashar, Hanley, Nick, and Baiocchi, Giovanni, supra note 56: 32
63
Canada and Quebec, supra note 5
64
Dowd, Brian M., Press, Daniel, and Huertos, Marc Los, supra note 58: 155
65
Ibid.
95Queen’s Policy Review Volume 2, No. 2 (Fall 2011)
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