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Applying a Reverse Auction to Reduce Stormwater Runoff
Citation:
THURSTON, H. W., M. A. Taylor, A. ROY, M. A. MORRISON, W. D. SHUSTER, J. Templeton, M. CLAGETT, AND H. CABEZAS. Applying a Reverse Auction to Reduce Stormwater Runoff . AMBIO. Royal Swedish Academy of Sciences, Stockholm, Sweden, 37(4):326-327, (2008).
Impact/Purpose:
To inform the public
Description:
Incentivizing commercial properties to adopt stormwater runoff control is usually done through command-and-control tactics such as stormwater fees with rebates for implementation of certain best management practices (BMP). In recently-built housing developments around the country, in part due to increased awareness of the inimical effects of stormwater runoff, municipalities often have sufficient public support to be able to require stormwater runoff BMP. However, property rights issues and lack of impervious surface restrictions during past building periods conspire to cause built residential property to be one of the hardest-to-control sources of stormwater runoff. Parikh et al. (2005) suggest a reverse auction as the preferred economic mechanism to create incentive for construction of retrofit, low-technology storm water runoff retention practices in established residential neighborhoods. Currently the popular alternative is to offer a fixed payment to residents to install certain BMP on their property (Doll et al. (1998)). We show the auction to be more cost effective.
