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Water Quality Trading Assessment Handbook
2. Pollutant Suitability
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Water Quality Trading Assessment Handbook - Chapter 2: Pollutant Suitability (PDF) (23 pp, 427K)
This chapter discusses conditions needed for a pollutant to serve as a commodity that can be bought and sold in a trading framework established to meet water quality goals. Common commodities like wheat can be traded easily because buyers and sellers understand and can compare the characteristics of the product. For example, all market participants have a common understanding of the meaning of a bushel of hard, red winter wheat. For WQT opportunities to exist, participants in a watershed also need a common understanding of the commodity including how the exchange of the commodity will affect local water quality and overall water quality goals.
Certain pollutants and watershed conditions are more amenable to trading than others. Pilot projects have shown that nutrients such as phosphorus and nitrogen can be successfully traded, i.e., that cost-effective trades can reduce overall pollutant loadings without creating locally high pollutant concentrations. Less information is available about trading other pollutants. This chapter considers the factors that determine a pollutant’s suitability for water quality trading in a particular watershed, such as the:
- type and form of pollutant to be reduced;
- relative water quality impact of pollutant reductions at different locations in the watershed including potential for localized impacts;
- timing of expected pollutant reductions; and
- quantity of surplus pollutant reductions or ‘credits’ which will determine whether supply and demand are in alignment.
Looking at these factors, this chapter will help you assess whether watershed conditions and pollutant characteristics are favorable for effective use of water quality trading in your watershed.