Files
Abstract
The management of nonpoint source water pollution presents an immense challenge to
economists and policy makers alike. A complex array of physical, economic, political and
institutional barriers lie between theoretically appealing textbook prescriptions and their
transition into successful real-world solutions. Underlying beliefs about property rights, interest
group politics and the transaction costs associated with designing and implementing successful
measures have all played a particularly critical role. Building on the theoretical literature and the
lessons provided by the practical use of economic instruments for nonpoint source water
pollution management around the world, this paper considers these issues in the context of the
Swan-Canning river system in Perth. Four innovative economic instruments for the management
of nonpoint source nutrient pollution in that system are discussed: auctioned best management
practice payments; best management practice incentive charges; an urban nonpoint source
emissions offset bank; and a catchment based licensing/trading program.