NCPA - National Center for Policy Analysis

EPA Adopts Water Quality Trading

January 23, 2003

The Environmental Protection Agency (EPA) has issued new policy rules to allow industrial plant owners to pay unregulated polluters not to pollute. It is called water quality trading -- and a dozen states have already experimented with it.

Observers predict it will result in more clean water than command-and-control policies have produced.

  • Clean water trading allows local governments, businesses and others to trade their pollution rights in a way that produces less costly, but broader clean up.
  • Instead of imposing expensive technologies, clean up plans can now include paying farmers to keep their cows out of local creeks, or planting grasses for a "riparian buffer zone" that stops pollution from traveling into waterways and causing nutrient overloading.
  • Thanks to water quality trading, North Carolina, for example, has already successfully attacked a nutrient buildup problem in its Tar-Pamlico River Basin.
  • Studies from the Clinton administration put the annual nationwide savings in cleanup costs from trading at somewhere between $658 million and $7 billion.

Source: Editorial, "The Color of Clean Water," Wall Street Journal, January 21, 2003.

For text (WSJ subscription required),,SB1043110589727694104-search,00.html


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