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Water Quality Trading: Theoretical and Practical Approaches

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  • Marianne Keudel

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    Abstract

    Permit trading as an instrument to control air pollution has already been implemented in several countries, so in Europe since 2005. Could this instrument, however, also be adequately used for water pollution control of river basins in form of a water quality trading? Specific characteristics of rivers, pollutants and pollution sources strongly influence the design of such an instrument. This paper reviews theoretical and practical approaches on water quality trading. It is surprising that these approaches have never been linked by the literature. To fill this gap, this paper gives a first idea, how different water quality trading approaches (in theory and practice) can be made comparable.

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    Paper provided by Institute for Economic Policy, Cologne, Germany in its series IWP Discussion Paper Series with number 01/2006.

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    Date of creation: Mar 2006
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    Handle: RePEc:kln:iwpdip:dp01/06

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    Keywords: water quality trading; water pollution control; river basin management;

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    1. Finn Førsund & Eric NÆvdal, 1998. "Efficiency Gains Under Exchange-Rate Emission Trading," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 12(4), pages 403-423, December.
    2. W. Montgomery, 1974. "Artificial markets and the theory of games," Public Choice, Springer, vol. 18(1), pages 25-40, June.
    3. McGartland, Albert, 1988. "A comparison of two marketable discharge permits systems," Journal of Environmental Economics and Management, Elsevier, vol. 15(1), pages 35-44, March.
    4. Hung, Ming-Feng & Shaw, Daigee, 2005. "A trading-ratio system for trading water pollution discharge permits," Journal of Environmental Economics and Management, Elsevier, vol. 49(1), pages 83-102, January.
    5. Montgomery, W. David, 1972. "Markets in licenses and efficient pollution control programs," Journal of Economic Theory, Elsevier, vol. 5(3), pages 395-418, December.
    6. R. Andreas Kraemer & Eleftheria Kampa & Eduard Interwies, 2004. "The Role of Tradable Permits in Water Pollution Control," IDB Publications 30998, Inter-American Development Bank.
    7. Krupnick, Alan J. & Oates, Wallace E. & Van De Verg, Eric, 1983. "On marketable air-pollution permits: The case for a system of pollution offsets," Journal of Environmental Economics and Management, Elsevier, vol. 10(3), pages 233-247, September.
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    Cited by:
    1. Nadine Wittmann, 2014. "A Microeconomic Perspective on Water Resources Management: Analyzing the Effects on Optimal Land Rents Along a River Basin," Water Resources Management, Springer, vol. 28(5), pages 1309-1325, March.
    2. Nadine Wittmann, 2014. "A Note on Distortional Distributional Effects in River Basin Discharge Permit Trade," Water Resources Management, Springer, vol. 28(1), pages 279-285, January.
    3. Marianne Keudel, 2007. "Climate Change and Water Resources – An International Perspective," IWP Discussion Paper Series 02/2007, Institute for Economic Policy, Cologne, Germany.

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