Tradeable rights for water quality management

Despite the successes to date in Australia, more widespread use of tradeable emission rights is constrained by a number of factors. Drew Collins presented a paper to the 2008 International Expo on Water and Sustainable Development in Zaragoza, Spain, reviewing experiences with water quality trading in Australia, and emerging directions including the shift from point-point permit trading to alternative market structures that incorporate diffuse sources.

Drew argues that resistance to the adoption of water quality trading has often focused on scientific discomfort in establishing environmental equivalence ratios and administrative means to cost-effectively monitor and enforce liabilities. While these are significant challenges to be overcome, all policy interventions face these problems, it is just that the assumptions used and ultimate performance of other approaches is generally less explicit. Policy choice is inevitably one of relative imperfection, and market based instruments and alternative policy approaches need to be judged on equal terms. Drew’s paper can be downloaded here.

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