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  5. Moving Pollution Trading from Air to Water: Potential, Problems, and Prognosis

Moving Pollution Trading from Air to Water: Potential, Problems, and Prognosis

  • Karen Fisher-Vanden
  • Sheila Olmstead
Journal of Economic Perspectives
vol. 27, no. 1, Winter 2013
(pp. 147-72)
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Abstract

This paper seeks to assess the current status of water quality trading and to identify possible problems and solutions. Water pollution permit trading programs have rarely been comprehensively described and analyzed in the peer-reviewed literature. Including active programs and completed or otherwise inactive programs, we identify approximately three dozen initiatives. We describe six criteria for successful pollution trading programs and consider how these apply to standard water quality problems, as compared to air quality. We then highlight some important issues to be resolved if current water quality trading programs are to function as the "leading edge" of a new frontier in cost-effective pollution permit trading in the United States.

Citation

Fisher-Vanden, Karen, and Sheila Olmstead. 2013. "Moving Pollution Trading from Air to Water: Potential, Problems, and Prognosis." Journal of Economic Perspectives, 27 (1): 147-72. DOI: 10.1257/jep.27.1.147

JEL Classification

  • K32 Environmental, Health, and Safety Law
  • Q25 Renewable Resources and Conservation: Water
  • Q53 Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
  • Q58 Environmental Economics: Government Policy
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