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Economics and Environmental Markets: Lessons from Water-Quality Trading

Published online by Cambridge University Press:  15 September 2016

James Shortle*
Department of Agricultural and Environmental Economics at Penn State University
Correspondence: James ShortleAgricultural and Environmental EconomicsPenn State University112 Armsby BuildingUniversity Park, PA 16802Phone 814.865.7657 ▪ Email
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Water-quality trading is an area of active development in environmental markets. Unlike iconic national-scale air-emission trading programs, water-quality trading programs address local or regional water quality and are largely the result of innovations in water-pollution regulation by state or substate authorities rather than by national agencies. This article examines lessons from these innovations about the “real world” meaning of trading and its mechanisms, the economic merits of alternative institutional designs, utilization of economic research in program development, and research needed to improve the success of environmental markets for water quality.

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Copyright © 2013 Northeastern Agricultural and Resource Economics Association 

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