Water Quality Trading

Learn about the various types of water quality trading systems and how trading can be used as a market-based method of managing water pollution.

Water quality trading is an innovative approach to water pollution control that is of interest to water quality policy makers and managers in the United States and other countries as mechanism for improving the effectiveness and efficiency of water quality protection. The U.S. has been the leader in the development of water quality trading programs. State water quality agencies have been the primary innovators, but their work has been encouraged and supported by the federal government, most notably the US Environmental Protection Agency (USEPA) and US Department of Agriculture (USDA). The USEPA initially issued policy guidelines to facilitate water quality trading in the U.S. in the early 2000s and recently issued new recommendations to encourage and facilitate the development of trading programs by state and tribal water quality authorities. While fewer trading programs are found outside the U.S., some very successful and interesting initiatives are elsewhere, and there is substantial interest in trading outside of the U.S. This information will describe what water quality trading is, the various forms it can take, present a brief history of trading, and describe selected implementations in the United States and other countries. It will describe the reasons why trading is of interest to water quality policy makers and managers, the results that have been obtained, and lessons learned. It will conclude with recommendations program development.