Effects of Discharge Permit Trading on Water Quality Reliability

Abstract

Transferable discharge permit (TDP) programs show potential as cost-effective methods of pollution control. Nevertheless, there remain uncertainties that, if not adequately addressed, might impair their success. Concerns include modeling difficulties that might cause erroneous predictions of cost savings and environmental performance. This study focuses on environmental modeling associated with the stochastic environment. The mean-value first-order second-moment (MFOSM) method is extended to demonstrate how changes, due to discharge permit trading, in the environmental quality mean and∕or variance of a system will cause the environmental quality reliability of the system to either decrease, increase, or remain unchanged. The Willamette River in Oregon and the Athabasca River in Alberta, Canada, are used as example case studies. These river systems are simulated to predict how they might respond if trading were implemented. In this study, environmental quality reliability is defined as the probability of the minimum dissolved oxygen (DO) concentration over the length of the river meeting a predetermined standard. Generally, for the Willamette River, trading improves the reliability, while for the Athabasca River, trading makes the reliability worse.