Building Successful Water Quality Trading Programs The Hunter River Case (original) (raw)
Related papers
Development of Conceptual Framework for Water Quality Trading
IJSRD, 2014
Water resources in our world: Scarce and Precious. Preservation of these resources in their pristine form is of utmost significance for the whole of humanity. The industrial sector consumes a huge amount of water and also pollutes it, further alleviating the problem of water scarcity. In order to incentivize the industries for effluent treatment and environmental issues as a whole, several ‘Trading Schemes’ have come up. Water Quality trading and Effluent trading are some of its forms. This study is focused on Water Quality Trading (WQT). It is an innovative and cost-effective approach to achieve water quality goals more efficiently. The intent of trading is to achieve an expected reduction of a particular pollutant at a lower cost by allowing sources with high abatement costs to purchase pollution discharge reductions from sources that have lower abatement costs. The challenge with trading is to allow for innovative, market-based reforms without compromising the existing safeguards in environmental protection. All the possible elements required for the successful implementation of WQT program to work with full efficacy have been discussed in the paper. It shall serve as a guideline to the researchers and developers to design more effective programs. Water-quality trading is an area of active development in environmental markets.
Water quality trading: A conceptual framework for incorporating ancillary benefits
International Journal of Sustainable Development and Planning
Water quality trading (WQT) has been proposed as a mechanism for improving surface water quality goals in an economically and socially responsible manner. however, to date, successful markets for WQT have been slow to develop with many interested parties pointing to the need for aggressive regulatory enforcement of standards as a key requirement in the trading process. As regulations in the United States and many other countries typically apply to impaired waterways, the inherent problem with this as the only driver for trades is that little to no value is prescribed to raising water quality to above minimum standards. Because numerous studies have shown the economic value of improved ecosystem services and our own work with public surveys that demonstrated the importance of water quality, we hypothesize that an informed public (as well as aquatic ecosystem managers) will place additional value on water quality conditions that exceed minimum values. We present a framework for incorporating this concept into the WQT process that already includes essential elements such as trading ratios, uncertainty, and evaluation. We demonstrate the framework approach using a Streeter-Phelps dissolved oxygen (DO) model to address a recognized DO problem in the Jordan River in Utah, USA. It is recognized that this work represents the initial discussion of the process and that adaptive management of the complex processes will be needed in order to maximize the sustainable of water resources.
The benefits of Water Quality Trading
Journal of the Royal Agricultural Society of England, 2009
Summary Fresh water is the underpinning natural global asset. It is the limiting factor on global population growth and ultimately will be the brake on the globalisation model. Without access to suitable fresh water, the human population will not reach the estimated 9.5 ...
The Structure and Practice of Water Quality Trading Markets
Journal of the American Water Resources Association, 2002
The use of transferable discharge permits in water pollution, what we will call water quality trading (WQT), is rapidly growing in the U.S. This paper reviews the current status of WQT nationally and discusses the structures of the markets that have been formed. Four main structures are observed in such markets: exchanges, bilateral negotiations, clearinghouses, and sole source offsets. The goals of a WQT program are environmental quality and cost effectiveness. In designing a WQT market, policy makers are constrained by legal restrictions and the physical characteristics of the pollution problem. The choices that must be made include how trading will be authorized, monitored and enforced. How these questions are answered will help determine both the extent to which these goals are achieved, and the market structures that can arise. After discussing the characteristics of different market structures, we evaluate how this framework applies in the case of California's Grassland Drainage Area Tradable Loads Program. (KEY TERMS: transferable discharge permits; nonpoint source pollution; water policy/regulation/decision making; water quality.)
Nutrient Credit Trading--a Market-based Approach for Improving Water Quality
2008 Providence, Rhode Island, June 29 - July 2, 2008, 2008
Imagine the day when you could gain financial rewards for implementing conservation practices on your farm. It is now possible because these practices can assist industrial users in the watershed meet regulatory requirements, thus reducing the overall pollutant discharge to a water body and improving its water quality. This is not a scenario of the future. Rather, it is currently being practiced and developed in many states around the United States, and it is called Water Quality Trading. Producers are getting paid for their stewardship in natural resource conservation activities. They are accumulating and selling credits earned through nutrient or sediment reduction by implementing conservation measures. Wastewater treatment plants are buying these credits to meet their regulatory requirements within the National Pollutant Discharge Elimination System (NPDES) permits. These permits restrict the amount of pollutants the plants can discharge from their facilities to the local water bodies. It provides an economic incentive for the agricultural sector as well as contributes to cleaner rivers and streams. Water quality trading leads to a mutually beneficial situation for all involved in the process. Treatment plants utilize a full suite of measures to meet their regulatory requirement. Purchasing water quality credits allows industries more flexibility in investment in new technologies; the producers get rewarded for their efforts, and the environment benefits in multiple facets including water quality, wildlife habitat, and carbon sequestration. This chapter reviews the approaches to water quality trading, its current status of implementation around the nation, and different tools (including the Nitrogen Trading Tool (NTT) being developed by the USDA/ NRCS) to facilitate in this process. 2. Introduction: Water quality trading is a market-based approach that pairs buyers of water quality credits with the people generating these credits through conservation and stewardship to achieve the best results for the least cost. For example, a downstream wastewater treatment plant needs to reduce the amount of pollutants it discharges to meet its NPDES permit requirements. Instead of spending huge amounts of money to upgrade or install new equipment on-site, it could fund less expensive agricultural conservation practice(s) upstream and achieve better quality of pollution control. These agricultural practices, also known as Best Management Practices (BMPs), would not only combat the pollutant
Economics and environmental markets: Lessons from water-quality trading
Water-quality trading is an area of active development in environmental markets. Unlike iconic national-scale air-emission trading programs, water-quality trading programs address local or regional water quality and are largely the result of innovations in water-pollution regulation by state or substate authorities rather than by national agencies. This article examines lessons from these innovations about the "real world" meaning of trading and its mechanisms, the economic merits of alternative institutional designs, utilization of economic research in program development, and research needed to improve the success of environmental markets for water quality.
Crunch time for water quality trading
Choices, 2005
©19992005 CHOICES. All rights reserved. Articles may be reproduced or electronically distributed as long as attribution to Choicesand the American Agricultural Economics Association is maintained. Choicessubscriptions are free and can be obtained through http://www. ...
Water Quality Trading in the United States
2005
This paper provides a systematic overview of water quality trading in the U.S. The primary source of information for this overview is a detailed database, collected and compiled by a team of researchers at Dartmouth College. This paper divides the trading programs discussed in the database into four categories: on-going offset/trading programs, one-time offset agreements, state and regional trading policies, and other projects and recent proposals that involve trading. Details discussed include: sources of the pollutant, types of pollutants traded, legal liability, main regulatory drivers, market structure, trading ratios, transaction and administrative costs, and difficulties encountered in trading. We find that trading has often been explored in the context of more stringent discharge limits, or watershedwide caps (e.g. TMDL). The most common type of trading program in the United States is between point sources and non-point sources. Point sources are usually held liable for non-point source reductions. The pollutants most commonly traded in the U.S. are nutrients such as phosphorus and nitrogen, and almost all offset and trading programs focus on one pollutant only. However, market structures, trading ratios, and other details of the trading framework vary widely among programs.
Trading Efficiency in Water Quality Trading Markets: An Assessment of Trade-Offs
SSRN Electronic Journal, 2011
Declining water quality as a result of increased nutrient leaching is a serious and growing concern, both internationally and in New Zealand. Water pollution issues have traditionally been addressed with command-and-control type regulation, but market-based nutrient trading schemes are becoming more widespread. In New Zealand, a cap-and-trade system has been implemented in Lake Taupo and another has been designed for Lake Rotorua. Despite the importance placed on avoiding transaction costs in water quality trading markets, there has been little discussion in the literature of practical policies to decrease these transaction costs, or any real assessment of when it is and is not optimal to decrease transaction costs. This paper begins to address these issues. We find that strong efforts to control time-of-trade transaction costs are most likely to be worthwhile in schemes with heterogeneous participants and large expected values and volumes of trading. The trading inefficiency that results from search and bargaining, and trade registration costs can be minimised at some cost. Regulators can reduce trade approval costs if they establish baseline leaching levels for all participants and design standardised leaching monitoring systems as part of the setup of the system, and monitor all sources equally regardless of whether participants trade instead of estimating and approving changes in traders' leaching at the time of each trade (as occurs in a baseline-and-credit system). Finally we find that while regulators may be tempted to restrict trading or increase measuring and monitoring requirements to increase the environmental certainty of a scheme's outcome, environmental risk may be better addressed through a less certain but more stringent environmental target.
Comparing Water Quality Trading Programs: What Lessons Are There To Learn?
Journal of Regional Analysis and Policy
Water quality trading is being widely explored and, as we show, increasingly imple-mented as a means of providing flexibility and lowering the costs of meeting water quality goals. A comparison between existing and evolving trading programs in Australia, New Zea-land and North America illustrates both differences and similarities among programs and identifies the main hurdles to trading as well as some key factors for program success. These can be used to design more effective programs.