Description / Abstract

This  paper  was  prepared  as  a  conceptual  framework  to  stimulate  discussions  on  the  role  and applicability  of  tradable  permits  in  water  pollution  control  among  participants  of  the  Technical Seminar  on  the  Feasibility  of  the  Application  of  Tradable  Water  Permits  for  Water  Management  in Chile  (13 - 14  November  2003  in  Santiago  de  Chile).  In  Chile,  water  pollution  is  a  major  problem. Until  recently,  existing  regulations  to  control  water  pollution  consisted  mainly  of  non - market based instruments.  Innovative  instruments  are  now  being  explored  via  a  recent  national  law  for  tradable emission/discharge permits.

The instrument of tradable discharge permits is one of several market - based instruments used in water management   and   pollution   control.   Tradable   discharge   permits   are   actually   among   the   most challenging  market - based instruments in terms of both their design and implementation. Experience to date  with  tradable  discharge  permits  for  water  pollution  control  has  been  limited  and  mainly  comes from several regions of the US and Australia.

The paper at first introduces tradable permits as part of an overall taxonomy of economic instruments in the field of water management. In this context, three fundamentally different fields of application of tradable  permits  systems  relating  to  water  are  presented:  tradable  water  abstraction  rights,  tradable rights  to  water - base d  resources  and  tradable  water  pollution  rights.  The  remaining  of  the  paper  deals exclusively  with  the  latter  category,  i.e.  tradable  water  pollution  rights,  their  role  and  applicability  in water pollution control 

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