Gulf of Mexico hypoxia issues pose a significant challenge in addressing the protection of the marine environment given the sheer magnitude of excess nutrient loading and the size of the contributing Mississippi River watershed. This nutrient loading is a result of cumulative nutrient discharges across the largest river basin in North America, the Mississippi River Basin. The Wabash River watershed contributes a significant nutrient load, from portions of Indiana, Illinois, and Ohio, to the Ohio River, the Mississippi River, and eventually, the Gulf of Mexico. Recent Total Maximum Daily Loads developed to address impairments in the Wabash River watershed identify sources of nutrient loads.  These include agricultural nonpoint source runoff and a variety of permitted point source discharges, including municipal and industrial wastewater discharges, storm water discharges, combined sewer overflows and sanitary sewer overflows.

The nutrient issues associated with these sources not only affect local water quality issues, but also drive the Gulf hypoxia problems.Water quality trading is a potential tool for effectively addressing both local water quality issues and downstream Gulf hypoxia issues. This market feasibility analysis will determine if the necessary conditions exist in the Wabash River watershed to support the development and implementation of a viable, sustainable water quality trading program involving agricultural nonpoint sources and permitted point sources.

Funded by

USEPA Targeted Watershed Grant

Project Partners

Duke Energy
Indiana Association of Soil and Water Conservation Districts
Indiana Farm Bureau
Indiana Soybean Association 


Pollutant Suitability Analysis.  We are analyzing and assessing pollutant sources and contributions from subwatersheds in the Wabash River watershed project area (i.e., the Illinois and Indiana portions of the Wabash River watershed).   Our
initial discussions focused on the existing modeling, such as the model used to support the 2006 nutrient TMDL for the mainstem of the Wabash River, and additional modeling necessary to understand pollutant contributions from subwatersheds, including the use of SWAT modeling.

Our team has selected the Tippecanoe and Driftwood subwatersheds for a smaller-scale quantitative market feasibility analysis.
We are in the process of understanding both point source nutrient contributions and nonpoint source agricultural contributions to the Wabash River watershed project area.  These sources are potential water quality trading credit buyers and sellers.  We will use the data provided by the Indiana Department of Environmental Management, as well as local extension offices and producers, to compile an inventory of potential buyers and sellers with their respective pollutant load contributions to the Wabash River watershed project area.
In addition, we are compiling an analysis of water quality trading drivers.  This analysis will identify numeric TMDL targets for point and nonpoint sources, watershed management plans with nutrient water quality goals, the status of state numeric water quality criteria for nutrients, and hypoxia goals for the Gulf of Mexico.
Next steps will include analysis of demand and supply estimates from potential buyers and sellers,  options for trade ratios, and options for the lifetime of water quality trading credits.
Economic Suitability Analysis.
Further work on economic suitability will include an analysis of how much point source polluters might be willing to pay, per credit generated. 

For More Information

Contact Karen Scanlon, executive director, by email at or call (765) 494-9555.