Environmental Economics

Incentive Analysis for Clean Water Act Reauthorization: Point Source/Nonpoint Source Trading for Nutrient Discharge Reductions

This report examines effluent trading as one option to achieve water quality objectives at least cost. While several options are discussed, the paper focuses principally on trading schemes in which regulated point sources are allowed to avoid upgrading their pollution control technology to meet water quality-based effluent limits if they pay for equivalent (or greater) reductions in nonpoint source pollution within their watersheds. The report identifies several conditions that appear necessary for an efficient and effective point/nonpoint source trading program. Reviews of three trading experiences to date--Cherry Creek and Dillon Reservoir in Colorado, Tar-Pimlico River Basin in North Carolina--indicate that the absence of one or more of these necessary conditions result in the delay of trading or will necessitate a shift in focus of the trading program to facilitate continued pollutant load reductions.

The report also discusses the economic benefits and costs, the nationwide potential, and Clean Water Act implications of effluent trading.

  • Keywords

    4. Economic Incentives and Other Innovative Approaches
    4. Economic Incentives and Other Innovative Approaches - Trading and Marketable Permits
    Environmental Media:
    b. Water
    b. Water - Surface
    Kashmanian, Richard
    Podar, Mahesh
    EPA Project Officer/ Manager:
    Luttner, Mark
    Geographic Area:
    Colorado, North Carolina, Wisconsin
    Study Purpose:
    Policy Evaluation
    Report Series:
    Effluent Trading for Clean Water Act Reauthorization
    Inventory Record #: EE-0443
    List of all reports in the Series:
  • Participating Organizations

    Research Organization:

    Apogee Research, Inc.Address:
    City: Bethesda State: MD ZIP:
    Phone: Fax:
    Funding Organization:
    Ebvironmental Protection Agency, Office of Water and Office of Policy, Planning and EvaluationAddress:
    City: State: ZIP:
    Phone: Fax:
  • Report Details
    Number of Pages:
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    Date Linked: 08/29/2017