Policy Utopias for Nutrient Credit Trading Programs with Nonpoint Sources |
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| Authors: | Dana LK Hoag Mazdak Arabi Deanna Osmond Marc Ribaudo Marzieh Motallebi Ali Tasdighi |
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| Affiliation: | 1. Department of Agricultural and Resource Economics, Colorado State University, Fort Collins, Colorado;2. Department of Civil Engineering, Colorado State University, Fort Collins, Colorado;3. Department of Soil Science, North Carolina State University, Raleigh, North Carolina;4. Economic Research Service, U.S. Department of Agriculture, Washington, D.C;5. Baruch Institute of Coastal Ecology & Forest Science, Clemson University, Clemson, South Carolina |
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| Abstract: | A promising program to address water contamination from nutrients is water quality trading (WQT), whereby entities with high abatement costs purchase credits from entities with lower abatement costs. The concept has found some success with point source water pollution, but very few trades have occurred in over 50 programs in the United States (U.S.) that have focused on nonpoint sources (NPSs). To understand why success has been slow, we identified three environments needed for programs to succeed: physical, economic, and institutional. We estimate that only 5% of watersheds in the U.S. currently listed as nutrient impaired provide a viable physical environment for trading nitrogen; 13% are suitable for phosphorus. Economic and institutional challenges would shrink that domain even further. Therefore, we find places with the ideal physical, economic, and institutional environments necessary for feasible WQT programs are virtual policy utopias — rare places with ideal environments. Fortunately, a growing literature provides the tools necessary to identify where these policy utopias are and to expand that domain through a better understanding about how to manage WQT programs more effectively. |
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| Keywords: | agriculture nutrient trading policy utopia water quality trading |
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