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A recent focus of water quality discussions has been the idea of “trading” cleanup efforts between pollution sources. Trading would allow a polluting firm to sponsor pollution controls elsewhere in a watershed rather than install controls of its own. Point-nonpoint trading takes place between two dissimilar firms, one, a point source, involving traceable pollution, and another, a nonpoint source, producing more diffuse pollution, such as runoff of agricultural chemicals from cropland. If nonpoint source pollution is significant and the cost of its control is lower than for additional point source controls, trading could achieve water quality goals at a lower cost. This analysis provides an initial, empirical assessment of the feasibility of trading for managing agricultural land use in coastal watersheds to protect water quality.


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