Can Markets Solve the Water Pollution Problem?
This article originally appeared on the Katoomba Group’s Ecosystem Marketplace, and is the final installment in a five-part series on water markets around the globe. Figuring out how to encourage individuals to do something voluntarily for the greater good has perplexed philosophers for centuries, and the nascent market for Water Quality Trading (WQT) in the U.S. is bumping up against a more prosaic version of the same dilemma. WQT schemes aim to do for water what emissions trading schemes have done for air pollution: drive down levels of water pollutants, especially agricultural “nutrients” (nitrogen, phosphorous, and potassium), by letting emitters trade credits among themselves to find the most cost-efficient way of reducing them. Voluntary water-trading schemes have spread in recent years, with a June 2007 survey by the U.S. Environmental Protection Agency (U.S. EPA) identifying 23 WQT programs operating across the U.S. that have traded credits at least once. But WQT faces the same
