Water tradable permits: a review of theoretical and case studies

Abstract

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

Greening Markets:

“…This could be better achieved by allowing local government bodies to benefit from a functional emissions market, such as allowing them to auction off emissions permits and obtain the revenues. Past experience in Asia suggests that the price signal in many cap-and-trade schemes has been low and volatile, (Borghesi andMontini 2016 andNarassimhan et al 2017). This is largely due to caps that are not stringent enough, which induces a low permit price.…”

Rule design and status quo evaluation on cross-industrial wastewater emissions trading in China’s typical industrial sectors

“…The rapid development of the emissions trading system in international environmental law and the successful practice in Europe and America countries show that the operation of the emission trading system is feasible for the reduction of pollutants and promoting the improvement of the environment quality [12]. It provides experience and new ideas that can be used for reference in China's environmental management [13,14].…”

Tell the truth or not? The montero mechanism for emissions control at work

“…While emission permit markets for major pollutants such as SO 2 and CO 2 are typically very large, examples with small numbers of firms to be regulated do exist, notably regional pollution markets including locally restricted cases of air or water pollution (e.g., Borghesi, 2014;Muller et al, 2002;Sunnevåg, 2003). In this respect, Muller et al (2002, p.72) note that in 2001 the Ontario Ministry of Environment announced a mandatory cap on N O x and SO x emissions from six generation stations, all owned by a single firm (Ontario Power Generation).…”

“…In this respect, Muller et al (2002, p.72) note that in 2001 the Ontario Ministry of Environment announced a mandatory cap on N O x and SO x emissions from six generation stations, all owned by a single firm (Ontario Power Generation). Borghesi (2014) describes tradable water pollution rights in Lake Dillon, Colorado, with only four municipal waste water treatment plants.…”