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Water Quality Trading Programs: An International Overview

In 2008, WRI undertook an assessment of water quality trading programs worldwide. We identified 57 programs; of these, 26 are active,6 21 are under consideration or development, and 10 are inactive. We compared water quality trading programs along seven dimensions—policy drivers, allocation of caps, establishment of nonpoint-source baselines, nonpoint-source nutrient reduction calculations, use of trading ratios, market structure, and trading activity.

Key Findings

Executive Summary

Water quality trading is gaining traction in a number of watersheds around the world. It is a market-based approach that works alongside water quality regulation to improve water quality, providing flexibility in how regulations are met and potentially lowering regulatory compliance and abatement costs. Our research identified 57 water quality trading programs worldwide. Of these, 26 are active, 21 are under consideration or development, and 10 are inactive or are completed pilots with no plans for future trades. The majority of programs were located in the United States, with only six programs existing outside the United States—four in Australia, one in New Zealand, and one in Canada.

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