Water Quality Trading with Lumpy Investments, Credit Stacking, and Ancillary Benefits.
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| Title: | Water Quality Trading with Lumpy Investments, Credit Stacking, and Ancillary Benefits. |
|---|---|
| Authors: | Lentz, Adam H.1, Ando, Amy W.2 amyando@illinois.edu, Brozović, Nicholas2 |
| Source: | Journal of the American Water Resources Association. Feb2014, Vol. 50 Issue 1, p83-100. 18p. |
| Subjects: | Water quality, Watersheds, Pollution, Nonpoint source pollution, Sewage disposal plants, Water pollution, Public welfare |
| Abstract: | This paper studies the economics of a water quality trading market in a predominantly agricultural watershed, and explores the effects of credit stacking in such a market when buyers and sellers of pollution credits can only reduce pollution with large, discrete investments that yield discontinuous supply and demand. The research simulates hypothetical water quality trading markets in the corn-belt area of Illinois, where wastewater treatment plants ( WWTPs) can pay farmers to reduce nutrients by installing wetlands and farmers may or may not be allowed to earn payments for multiple services from one wetland. We find that wetlands are a more cost-effective way to mitigate nitrogen pollution than abatement by WWTPs. Stacking credits may improve social welfare while providing more ecosystem services if there is enough demand for the primary credit in the market (nitrogen) to cover most of the cost of installing the wetland but the supply of nitrogen credits is not exhausted. However, in the presence of lumpy pollution reduction activities, the effects of allowing stacked credit sales are idiosyncratic and not necessarily positive; stacked payments may or may not satisfy additionality. The results imply that credit trading for nitrogen is likely to make society better off, but the effects of allowing farmers to receive multiple payments from a single wetland depend on details of the situation. [ABSTRACT FROM AUTHOR] |
| Copyright of Journal of the American Water Resources Association is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.) | |
| Database: | Engineering Source |
| FullText | Text: Availability: 0 |
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| Header | DbId: egs DbLabel: Engineering Source An: 94253835 AccessLevel: 6 PubType: Academic Journal PubTypeId: academicJournal PreciseRelevancyScore: 0 |
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| Items | – Name: Title Label: Title Group: Ti Data: Water Quality Trading with Lumpy Investments, Credit Stacking, and Ancillary Benefits. – Name: Author Label: Authors Group: Au Data: <searchLink fieldCode="AR" term="%22Lentz%2C+Adam+H%2E%22">Lentz, Adam H.</searchLink><relatesTo>1</relatesTo><br /><searchLink fieldCode="AR" term="%22Ando%2C+Amy+W%2E%22">Ando, Amy W.</searchLink><relatesTo>2</relatesTo><i> amyando@illinois.edu</i><br /><searchLink fieldCode="AR" term="%22Brozović%2C+Nicholas%22">Brozović, Nicholas</searchLink><relatesTo>2</relatesTo> – Name: TitleSource Label: Source Group: Src Data: <searchLink fieldCode="JN" term="%22Journal+of+the+American+Water+Resources+Association%22">Journal of the American Water Resources Association</searchLink>. Feb2014, Vol. 50 Issue 1, p83-100. 18p. – Name: Subject Label: Subjects Group: Su Data: <searchLink fieldCode="DE" term="%22Water+quality%22">Water quality</searchLink><br /><searchLink fieldCode="DE" term="%22Watersheds%22">Watersheds</searchLink><br /><searchLink fieldCode="DE" term="%22Pollution%22">Pollution</searchLink><br /><searchLink fieldCode="DE" term="%22Nonpoint+source+pollution%22">Nonpoint source pollution</searchLink><br /><searchLink fieldCode="DE" term="%22Sewage+disposal+plants%22">Sewage disposal plants</searchLink><br /><searchLink fieldCode="DE" term="%22Water+pollution%22">Water pollution</searchLink><br /><searchLink fieldCode="DE" term="%22Public+welfare%22">Public welfare</searchLink> – Name: Abstract Label: Abstract Group: Ab Data: This paper studies the economics of a water quality trading market in a predominantly agricultural watershed, and explores the effects of credit stacking in such a market when buyers and sellers of pollution credits can only reduce pollution with large, discrete investments that yield discontinuous supply and demand. The research simulates hypothetical water quality trading markets in the corn-belt area of Illinois, where wastewater treatment plants ( WWTPs) can pay farmers to reduce nutrients by installing wetlands and farmers may or may not be allowed to earn payments for multiple services from one wetland. We find that wetlands are a more cost-effective way to mitigate nitrogen pollution than abatement by WWTPs. Stacking credits may improve social welfare while providing more ecosystem services if there is enough demand for the primary credit in the market (nitrogen) to cover most of the cost of installing the wetland but the supply of nitrogen credits is not exhausted. However, in the presence of lumpy pollution reduction activities, the effects of allowing stacked credit sales are idiosyncratic and not necessarily positive; stacked payments may or may not satisfy additionality. The results imply that credit trading for nitrogen is likely to make society better off, but the effects of allowing farmers to receive multiple payments from a single wetland depend on details of the situation. [ABSTRACT FROM AUTHOR] – Name: AbstractSuppliedCopyright Label: Group: Ab Data: <i>Copyright of Journal of the American Water Resources Association is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract.</i> (Copyright applies to all Abstracts.) |
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| RecordInfo | BibRecord: BibEntity: Identifiers: – Type: doi Value: 10.1111/jawr.12117 Languages: – Code: eng Text: English PhysicalDescription: Pagination: PageCount: 18 StartPage: 83 Subjects: – SubjectFull: Water quality Type: general – SubjectFull: Watersheds Type: general – SubjectFull: Pollution Type: general – SubjectFull: Nonpoint source pollution Type: general – SubjectFull: Sewage disposal plants Type: general – SubjectFull: Water pollution Type: general – SubjectFull: Public welfare Type: general Titles: – TitleFull: Water Quality Trading with Lumpy Investments, Credit Stacking, and Ancillary Benefits. Type: main BibRelationships: HasContributorRelationships: – PersonEntity: Name: NameFull: Lentz, Adam H. – PersonEntity: Name: NameFull: Ando, Amy W. – PersonEntity: Name: NameFull: Brozović, Nicholas IsPartOfRelationships: – BibEntity: Dates: – D: 01 M: 02 Text: Feb2014 Type: published Y: 2014 Identifiers: – Type: issn-print Value: 1093474X Numbering: – Type: volume Value: 50 – Type: issue Value: 1 Titles: – TitleFull: Journal of the American Water Resources Association Type: main |
| ResultId | 1 |
