Water Quality Auctions

Water quality auctions provides a means to promote spatial targeting of water protection and improve budgetary cost-efficiency relative to widely applied flat rate policies producing higher water quality benefits from a given conservation budget. Using performance-based indicators as a part of auction mechanism helps to further improve environmental outcomes of conservation auctions. The chapter collects experience from conservation auction, mostly applied to promote multiple environmental goals at the same time. The preferred auction for water protection purposes is water quality auction. They are rare but Great Miami River and Pennsylvania Nutrient Credit Trading Programs provide the first positive examples. Water quality auctions complement the toolbox of nutrient policies; they can be used as such in sensitive watersheds or as a part of water quality trading programs or traditional practice-based policies.