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Economics and Environmental Markets: Lessons from Water-Quality Trading

Published online by Cambridge University Press:  15 September 2016

James Shortle
James Shortle*
Affiliation:
Department of Agricultural and Environmental Economics at Penn State University
*
Correspondence: James Shortle ▪ Agricultural and Environmental Economics ▪ Penn State University ▪ 112 Armsby Building ▪ University Park, PA 16802 ▪ Phone 814.865.7657 ▪ Email jshortle@psu.edu.
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Abstract

Water-quality trading is an area of active development in environmental markets. Unlike iconic national-scale air-emission trading programs, water-quality trading programs address local or regional water quality and are largely the result of innovations in water-pollution regulation by state or substate authorities rather than by national agencies. This article examines lessons from these innovations about the “real world” meaning of trading and its mechanisms, the economic merits of alternative institutional designs, utilization of economic research in program development, and research needed to improve the success of environmental markets for water quality.

Keywords

environmental marketswater-quality trading
Type
Invited Papers
Information
Agricultural and Resource Economics Review , Volume 42 , Issue 1 , April 2013 , pp. 57 - 74
Copyright
Copyright © 2013 Northeastern Agricultural and Resource Economics Association 

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