Water Quality Trading and Wetland Banking: Lessons for Iowa

Preserving soil productivity in the United States has been a major policy goal since the Dust Bowl of the 1930s. Water quality improvement later became a component of the policy agenda with the initiation of programs to contain soil erosion and clean up water at the federal, state and local levels. Some of these programs split the costs between the government and landowners for installing practices such as farm ponds or terraces. Others require certain practices, or limit what can be discharged to water bodies; often these mandated changes have not been accompanied by compensation. Examples of the latter form of policies include the banning of DDT at the federal level and limits on the amount of Atrazine that could be applied in some Iowa counties.1 Iowa’s water quality has suffered in recent years due to intensive agriculture and greater urbanization. The Iowa Department of Natural Resources (DNR) recognizes 2,039 water body segments in Iowa. The DNR designates each segment for a specific use, such as recreation (swimming or fishing); drinking water; or maintaining a healthy population of fish and other aquatic life. Iowa’s 2006 list of impaired waters records that of the 823 water body segments for which sufficient information is available, 279 are impaired (34 percent). In these 279 water body segments one or more pollutants has caused water to be unfit for one or more of its designated uses