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Water Quality Trading: Theoretical and Practical Approaches

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  • Marianne Keudel

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.

Suggested Citation

  • Marianne Keudel, 2006. "Water Quality Trading: Theoretical and Practical Approaches," IWP Discussion Paper Series 01/2006, Institute for Economic Policy, Cologne, Germany.
    • Handle: RePEc:kln:iwpdip:dp01/06
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    File URL: http://www.iwp.uni-koeln.de/fileadmin/contents/dateiliste_iwp-website/publikationen/DP/DP_01_2006.pdf
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    References listed on IDEAS

    as
    1. James S. Shortle & Richard D. Horan, 2001. "The Economics of Nonpoint Pollution Control," Journal of Economic Surveys, Wiley Blackwell, vol. 15(3), pages 255-289, July.
    2. Montgomery, W. David, 1972. "Markets in licenses and efficient pollution control programs," Journal of Economic Theory, Elsevier, vol. 5(3), pages 395-418, December.
    3. Kraemer, R. Andreas & Kampa, Eleftheria & Interwies, Eduard, 2004. "The Role of Tradable Permits in Water Pollution Control," IDB Publications (Working Papers) 2985, Inter-American Development Bank.
    4. Dana L. Hoag & Jennie S. Hughes-Popp, 1997. "Theory and Practice of Pollution Credit Trading in Water Quality Management," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 19(2), pages 252-262.
    5. 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.
    6. 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.
    7. Finn Førsund & Eric NÆvdal, 1998. "Efficiency Gains Under Exchange-Rate Emission Trading," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 12(4), pages 403-423, December.
    8. W. Montgomery, 1974. "Artificial markets and the theory of games," Public Choice, Springer, vol. 18(1), pages 25-40, June.
    9. Keudel Marianne, 2005. "Permit Trading as an Instrument for Water Pollution Control.A practically oriented analysis considering the European Water Framework Directive," Zeitschrift für Wirtschaftspolitik, De Gruyter, vol. 54(3), pages 280-304, December.
    10. Ger Klaassen, 1996. "Acid Rain and Environmental Degradation," Books, Edward Elgar Publishing, number 1165.
    11. 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.
    12. R. Andreas Kraemer & Eleftheria Kampa & Eduard Interwies, 2004. "The Role of Tradable Permits in Water Pollution Control," IDB Publications (Working Papers) 30998, Inter-American Development Bank.
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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: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 28(5), pages 1309-1325, March.
    2. Marianne Keudel, 2007. "Climate Change and Water Resources – An International Perspective," IWP Discussion Paper Series 02/2007, Institute for Economic Policy, Cologne, Germany.
    3. Nadine Wittmann, 2014. "A Note on Distortional Distributional Effects in River Basin Discharge Permit Trade," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 28(1), pages 279-285, January.
    4. Simone Borghesi, 2014. "Water tradable permits: a review of theoretical and case studies," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 57(9), pages 1305-1332, September.

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    More about this item

    Keywords

    water quality trading; water pollution control; river basin management;
    All these keywords.

    JEL classification:

    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water

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