Under a cap and trade system, water polluters could have the option to reduce pollution in their own operations or buy water pollution-control or water quality credits from another source at a lower cost than if they undertook the pollution control themselves.
In theory a cap and trade system would achieve the same overall water-quality improvement at a lower overall cost. It would also allow water treatment technology transfer if integrated into a larger global market system.
And such programmes don’t have to be limited to water-quality problems, either. Industries, farmers or cities could also conceivably buy and sell credits for water use, driving down the cost of water conservation and efficiency programmes.
The holistic effect is to add to the sustainability of the commodity. The general trend in the price of water rights to abstract also has seen some incremental growth. A record was recently achieved in the US of close to $30,000 for an acre foot per year (325,851 US gallons or 1,233.5 kl (or m³) per year) – not bad considering similar rights were trading at $500 five years ago.
Green business: Carbon works, why not water? | Citywire