A Pollution Offset System for Trading Non-Point Source Water Pollution Permits

Prabodanie, R.A. Ranga; Raffensperger, John G.; Milke, Mark W.

doi:10.1007/s10640-009-9325-1

Cited by 37 publications

(36 citation statements)

References 21 publications

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“…This is also performed in Great Miami trading program in Ohio (Newburn and Woodward 2012). The interactions between point and non-point sources are also discussed (Ranga Prabodanie et al 2010;Ribaudo and Gottlieb 2011). In spite of the advantages of WQT, supportive rational decision-making approaches including fuzzy logic were used to make the results accurate enough to forecast exact outcomes, particularly at a large scale (Niksokhan et al 2009b;Nguyen et al 2013).…”

Section: Introductionmentioning

confidence: 99%

Equitable fund allocation, an economical approach for sustainable waste load allocation

Ashtiani

Niksokhan

Jamshidi

2015

Environ Monit Assess

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This research aims to study a novel approach for waste load allocation (WLA) to meet environmental, economical, and equity objectives, simultaneously. For this purpose, based on a simulation-optimization model developed for Haraz River in north of Iran, the waste loads are allocated according to discharge permit market. The non-dominated solutions are initially achieved through multiobjective particle swarm optimization (MOPSO). Here, the violation of environmental standards based on dissolved oxygen (DO) versus biochemical oxidation demand (BOD) removal costs is minimized to find economical total maximum daily loads (TMDLs). This can save 41% in total abatement costs in comparison with the conventional command and control policy. The BOD discharge permit market then increases the revenues to 45%. This framework ensures that the environmental limits are fulfilled but the inequity index is rather high (about 4.65). For instance, the discharge permit buyer may not be satisfied about the equity of WLA. Consequently, it is recommended that a third party or institution should be in charge of reallocating the funds. It means that the polluters which gain benefits by unfair discharges should pay taxes (or funds) to compensate the losses of other polluters. This intends to reduce the costs below the required values of the lowest inequity index condition. These compensations of equitable fund allocation (EFA) may help to reduce the dissatisfactions and develop WLA policies. It is concluded that EFA in integration with water quality trading (WQT) is a promising approach to meet the objectives.

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Section: Introductionmentioning

confidence: 99%

Equitable fund allocation, an economical approach for sustainable waste load allocation

Ashtiani

Niksokhan

Jamshidi

2015

Environ Monit Assess

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“…Prabodanie, Raffensperger and Milke (2010) also examined the difficulties in implementing tradable permit systems due to non-point sources and transaction costs. In particular, focusing on nitrate loading into groundwaters, the authors proposed a pollution offset system for nonpoint sources in which traders buy from/sell to a common pool rather than trading pairwise, submitting bids and offers to an online trading system.…”

Section: Specific Application Problems In the Case Of Twprmentioning

confidence: 99%

Water tradable permits: a review of theoretical and case studies

Borghesi

2013

Journal of Environmental Planning and Management

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Over the last few years the growing problems of water scarcity and water pollution have induced ever increasing attention towards the application of market mechanisms based on tradable permits in the water sector, similar to those adopted for air pollution. In spite of the growing interest surrounding this instrument, a general critical valuation of the application of tradable permits for water management is still missing in the literature. This paper aims to fill this gap by critically analysing the experiences of various countries who have adopted tradable water permit programmes, underlining both the advantages and disadvantages that have emerged in each case, in order to provide useful indications for possible future applications in other regions. Despite the merits of tradable water permits and their success in some contexts, the case studies analysed highlight the existence of significant difficulties during implementation, which can prevent the full functioning of such an instrument

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“…The government would also have to enforce the contracts by physically visiting owners' properties. Prabodanie and Raffensperger (2007) and Prabodanie et al (2010) which land uses and management practices were appropriate to their property, calculate the associated costs and run-off factors, and then determine the associated bids. Again, government agents would have to visit owners' properties to ensure that the owners made the changes they had agreed to do.…”

Section: N O T C O P Y E D I T E Dmentioning

confidence: 99%

Proposed Smart Market Design for Sediment Discharge

Pinto

Raffensperger

Cochrane

et al. 2013

J. Water Resour. Plann. Manage.

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Sediment discharge from erosion, urban run-off, and construction can cause environmental degradation. Governments try to regulate sediment, but the regulatory approach is costly to land owners. In principle, a market-based system could reduce costs, but the associated transaction costs are far too high, as market participants must find trading partners, negotiate, and seek government approval.In this paper, we propose a smart market design with an associated market clearing model for sediment discharge. Market participants bid for and offer tradable discharge allowances to a central auctioneer. The allowances correspond to kilograms of sediment discharge per year, as estimated by an erosion model. The auctioneer then uses a linear program to price and allocate sediment allowances in a given catchment. Participants do not trade bilaterally, but rather through a central pool, reducing transaction costs. The market design can use all available relevant hydrological data, quantifies environmental effects explicitly, and gives price signals based on the environmental features. Additionally, the initial rights could be scaled back or up when catchment is over or under-allocated to keep a market operator with revenue neutrality. We simulate the smart market for two catchments in Auckland, New Zealand.

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A Pollution Offset System for Trading Non-Point Source Water Pollution Permits

Cited by 37 publications

References 21 publications

Equitable fund allocation, an economical approach for sustainable waste load allocation

Equitable fund allocation, an economical approach for sustainable waste load allocation

Water tradable permits: a review of theoretical and case studies

Proposed Smart Market Design for Sediment Discharge

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