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Optimizing the scale of markets for water quality trading

dc.contributor.author Doyle, MW
dc.contributor.author Patterson, LA
dc.contributor.author Chen, Y
dc.contributor.author Schnier, KE
dc.contributor.author Yates, AJ
dc.date.accessioned 2014-09-26T14:20:20Z
dc.date.issued 2014
dc.identifier.issn 0043-1397
dc.identifier.uri https://hdl.handle.net/10161/9151
dc.description.abstract Applying market approaches to environmental regulations requires establishing a spatial scale for trading. Spatially large markets usually increase opportunities for abatement cost savings but increase the potential for pollution damages (hot spots), vice versa for spatially small markets. We develop a coupled hydrologic-economic modeling approach for application to point source emissions trading by a large number of sources and apply this approach to the wastewater treatment plants (WWTPs) within the watershed of the second largest estuary in the U.S. We consider two different administrative structures that govern the trade of emission permits: one-for-one trading (the number of permits required for each unit of emission is the same for every WWTP) and trading ratios (the number of permits required for each unit of emissions varies across WWTP). Results show that water quality regulators should allow trading to occur at the river basin scale as an appropriate first-step policy, as is being done in a limited number of cases via compliance associations. Larger spatial scales may be needed under conditions of increased abatement costs. The optimal scale of the market is generally the same regardless of whether one-for-one trading or trading ratios are employed.
dc.language eng
dc.publisher Blackwell Publishing Ltd
dc.relation.ispartof Water Resources Research
dc.relation.isversionof 10.1002/2014WR015395
dc.subject TMDL
dc.subject Trading ratios
dc.subject Water quality trading
dc.title Optimizing the scale of markets for water quality trading
dc.type Journal article
pubs.organisational-group Civil and Environmental Engineering
pubs.organisational-group Duke
pubs.organisational-group Environmental Sciences and Policy
pubs.organisational-group Nicholas School of the Environment
pubs.organisational-group Pratt School of Engineering
pubs.organisational-group Staff
pubs.publication-status Accepted
dc.identifier.eissn 1944-7973


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