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Does encouraging the use of wetlands in water quality trading Programs make economic sense? presentation
Citation:
HEBERLING, MATTHEW T., J. Garcia, AND H. W. THURSTON. Does encouraging the use of wetlands in water quality trading Programs make economic sense? presentation. Presented at Wetlands 2008; Wetlands and Global Climate Change, Portland, OR, September 16 - 18, 2008.
Impact/Purpose:
To inform the public.
Description:
Water quality trading has grown in popularity and scope in recent years owing to its potential as a flexible, low-cost way to achieve nutrient reduction goals. Policy makers are interested in encouraging traders, primarily agricultural sources, to use restored and constructed wetlands in water quality trading programs because wetlands can remove nutrients from nonpoint sources of pollution and also provide ancillary benefits like carbon sequestration, wildlife habitat, and biodiversity provision. But these ancillary benefits or third party effects can affect how the market functions. In this paper, we propose the use of a subsidy based on the wetland benefits and consider the impact on designing efficient water quality trading programs. The effects the wetland subsidy will have on agricultural sources’ behavior (e.g., changes in crop production, fertilizer use, and wetland use) and nonpoint source pollution are examined in our theoretical model. Future research will include improving our understanding of how to model wetland services and investigating alternative approaches for incentivizing the use of wetlands such as promoting multiple markets for different wetland services.
