RT Journal Article
SR Electronic
T1 Pollution Trading in Water Quality Limited Areas: Use of Benefits Assessment and Cost-Effective Trading Ratios
JF Land Economics
JO Land Econ
FD University of Wisconsin Press
SP 191
OP 205
DO 10.3368/le.81.2.191
VO 81
IS 2
A1 Farrow, R. Scott
A1 Schultz, Martin T.
A1 Celikkol, Pinar
A1 Van Houtven, George L.
YR 2005
UL http://le.uwpress.org/content/81/2/191.abstract
AB This paper proposes a water quality trading design that addresses common implementation problems. Trading ratios, which are calculated from damages integrated over each source’s spatial zone of influence, drive the system to a socially cost-effective outcome. The design is applied to combined sewer overflow management in the Upper Ohio River Basin, where trading ratios can vary significantly among trading partners. The analysis shows that significant compliance cost savings are possible without incurring a penalty in terms of social damages or overall water quality despite a higher level of discharge relative to the command and control option. (JEL Q53)