Ecosystem services for water include water supply. water damage
mitigation. and water-related cultural services (Brauman et aI., 2007).
Water quality trading is regulated by the EPA and a number of state
regulatory agencies and markets for water quality credits are established
from a regulatory structure that producers or developers
must follow in order to acquire permits for their operations.
Market-based schemes for improving water quality are generally limited
to local or regional programs within a specific watershed. Water
quality trading provides a market-based process for polluters to pay
for the reduction of pollutant levels to achieve targets for a watershed.
When conservation and protection efforts are employed by
landowners. additional benefits to the watershed include flood and
erosion control, habitat retention and wetland restoration. Water
quality trading programs must include key components that define
the types of pollutants that can be traded, who can trade, when trades
can occur and standards for enforcement, verification and liability
(Boyd, 2000). Water quality trading involves discharges of point
source pollution; these dischargers would be the buyers of credits.
Dischargers buy credits from sellers, who can be either point sources
or non-point sources of pollution or providers of improved habitat to
mitigate pollution. In 2010, there were 72 water quality trading programs
in the world with the majority