Establishing a Clearinghouse to Reduce Impediments to Water Quality Trading
Pennsylvania adopted a water quality trading program to reduce Chesapeake Bay nutrient pollution. It is the first such program to provide regulated point sources the option of purchasing nutrient reduction credits via arms-length market transactions to achieve mitigation requirements. After the program initially experienced limited trading, the Pennsylvania Infrastructure Investment Authority designed a nutrient credit clearinghouse to reduce some of the transaction costs and risks that impeded market activity. We review the clearinghouse functionality, examine initial results of its implementation, and evaluate its effectiveness. Nutrient credit auctions conducted by the clearinghouse revealed that the clearinghouse provided benefits for participants seeking to buy credits and that purchasing credits could be a least-cost compliance alternative for many regulated point sources. To our knowledge, this is the first clearinghouse to successfully administer a nutrient credit auction on behalf of regulated point sources seeking to comply with a discharge permit.
Volume (Year): 42 (2012)
Issue (Month): 2 ()
|Contact details of provider:|| Web page: http://jrap-journal.org/index.htm|
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Cynthia Morgan & Ann Wolverton, 2005. "Water Quality Trading in the United States," NCEE Working Paper Series 200507, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Jun 2005.
- Arun S. Malik & David Letson & Stephen R. Crutchfield, 1993. "Point/Nonpoint Source Trading of Pollution Abatement: Choosing the Right Trading Ratio," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 75(4), pages 959-967.
- King, Dennis M., 2005. "Crunch Time for Water Quality Trading," Choices, Agricultural and Applied Economics Association, vol. 20(1).
- Hanna L. Breetz & Karen Fisher-Vanden & Hannah Jacobs & Claire Schary, 2005. "Trust and Communication: Mechanisms for Increasing Farmers’ Participation in Water Quality Trading," Land Economics, University of Wisconsin Press, vol. 81(2).
- Andrew Manale & Cynthia Morgan & Glenn Sheriff & David Simpson, 2011. "Offset markets for nutrient and sediment discharges in the Chesapeake Bay Watershed: Policy tradeoffs and potential steps forward," NCEE Working Paper Series 201105, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Aug 2011.
- Richard D. Horan & James S. Shortle, 2005. "When Two Wrongs Make a Right: Second-Best Point-Nonpoint Trading Ratios," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(2), pages 340-352.
- Richard D. Horan, 2001. "Differences in Social and Public Risk Perceptions and Conflicting Impacts on Point/Nonpoint Trading Ratios," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(4), pages 934-941.
- Sheila M. Olmstead, 2010. "The Economics of Water Quality," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 4(1), pages 44-62, Winter.
- Abdalla, Charles W. & Borisova, Tatiana & Parker, Douglas D. & Saacke Blunk, Kristen, 2007. "Water Quality Credit Trading and Agriculture: Recognizing the Challenges and Policy Issues Ahead," Choices, Agricultural and Applied Economics Association, vol. 22(2).
When requesting a correction, please mention this item's handle: RePEc:ags:jrapmc:143776. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.