In response to growing concern for salmon and other cold-water species, two new temperature Total Maximum Daily Loads (TMDLs), a type of water quality improvement plan, were recently adopted for the Umpqua River and the Willamette River in Oregon. Several additional temperature TMDLs are currently under development in Oregon and are expected to be finalized in the next few years; these include the Rogue River, Lower and Middle Columbia, and John Day. These TMDLs establish stricter limits on heat pollution, raising the bar for entities like wastewater treatment plants by requiring them to further reduce clean but warm discharges to keep rivers cool enough for sensitive species. This limit, in turn, also protects other beneficial uses for the rivers, including domestic drinking water and livestock watering.
While efforts to improve watershed conditions receive broad support, the new TMDLs also raise a difficult question for communities and dischargers: how do you simultaneously meet the tougher standards and support healthier rivers without overburdening local ratepayers or stalling local economies? As communities work to meet clean water goals, the costs of complying with TMDLs are rising. Infrastructure upgrades are expensive, and traditional regulatory tools often don’t provide the flexibility needed to adapt to changing conditions or address watershed-scale issues. This problem is made worse when new capital investments don’t necessarily solve difficult water quality problems. For many communities facing this dilemma, water quality trading (WQT) can offer a practical, flexible, and cost-effective solution.
WQT is a voluntary, watershed-based approach that allows entities regulated by the Clean Water Act (e.g., wastewater treatment plants or industrial dischargers) to offset their impacts with projects elsewhere in the watershed. This approach enables regulated entities to achieve compliance with their water quality permits by reducing pollutants from other sources. For temperature, actions may include restoring the riparian area along the banks of the river to create more shade; increasing instream flow; and modifying the river channel to make the waterway narrower and deeper to return it to a more natural condition.
The idea isn’t new. The U.S. Environmental Protection Agency (EPA) supported early WQT efforts in the 1990s and adopted a National WQT Policy in 2003. The approach has since gained traction in watersheds across the country.
In Oregon’s Rogue River and Willamette River watersheds, The Freshwater Trust (TFT) has partnered with the Cities of Medford and Ashland as well as the Metropolitan Wastewater Management Commission of Eugene-Springfield to reduce the rivers’ temperature by designing and implementing some of the country’s most successful WQT programs. Instead of building costly infrastructure to cool treated wastewater, the local utilities funded the restoration of riparian areas, planting thousands of native trees along riverbanks to shade and cool the water, improving conditions for salmon, steelhead and other fish and wildlife. This solution was not only cheaper—it is a long-term investment in the watersheds. Additional benefits include reduced erosion, increased high-quality habitat, control of problematic invasive plants, and increased resilience to fires and floods.
WQT is not a regulatory shortcut; rather, it is a way to achieve equal or greater environmental outcomes at lower cost and with multiple benefits for the watershed.
While trading does not replace traditional regulation, it has become a powerful complement, unlocking new opportunities to reduce pollution where it’s most cost-effective. The approach is grounded in the simple principle that where pollution reductions happen can matter just as much as how they happen.
The benefits of WQT are compelling. Compared to expensive infrastructure upgrades, trading can deliver compliance-grade reductions, often at a lower cost. Rather than investing millions in treatment plant upgrades, utilities can fund conservation projects that reduce pollutants such as heat and address the root causes of problems. This can prevent substantial increases in utility bills for ratepayers while also accelerating water quality improvements.
It’s not just about the bottom line. WQT can address sources of impairment that are otherwise not regulated, achieving progress towards broader watershed goals. Additionally, investing in natural solutions like riparian restoration usually generates multiple co-benefits, such as improved habitat, enhanced soil and water health, better drinking water, and increased resilience to climate change. Trading programs also provide opportunities to local businesses, restoration groups and landowners, generating benefits for the local economy. Importantly, trading is voluntary. Done right, trading is an innovative tool that brings together unlikely partners to deliver real results for rivers and communities. Further, because WQT takes a watershed-scale perspective and fosters collaboration, these programs can create the foundation to build even larger, coordinated funding and implementation approaches, such as Watershed Outcomes Banks.
Water quality trading isn’t a silver bullet—but when thoughtfully designed and implemented with rigor and oversight, it can be a win-win: cleaner water, smarter spending, and healthier landscapes. It’s about using every tool in the toolbox to restore and protect our freshwater resources.
The Freshwater Trust is a national leader in the development and implementation of WQT programs. TFT’s collaborative efforts to develop and implement WQT programs were recently recognized by the Oregon Association of Clean Water Agencies, which awarded TFT and its partners the 2025 Outstanding Agency Project for work related to a WQT program. TFT also previously received the prestigious Water Prize for its innovative water quality trading programs.
