NutrientNet – Reducing Watershed Nutrient Runoff
http://www.nutrientnet.org/

The World Resources Institute has worked closely with partners in three watersheds in the upper Midwest to complete economic analyses of alternative water quality policies. The results showed trading to be an economically preferable approach. For the full results, please see Fertile Ground: Nutrient Trading’s Potential to Cost-Effectively Improve Water Quality. However, WRI’s experience in carrying out the analyses indicated that a variety of implementation issues need to be resolved before trading will become broadly acceptable. These issues include: transaction costs, the credibility of nonpoint source load reductions, and public oversight. Transaction costs can preclude trading if they are too high. It is therefore essential to keep them low by providing easy means for market participants to find each other and to identify what they have to sell or need to buy. For there to be credibility in the reduction credits generated by agriculture and other nonpoint sources, standard estimation methods must be used. Essentially, the public and the buyers need to be assured that all credits are estimated in the same way. Lastly, there has to be a relatively simple way to record trades so that the relevant government agencies and the general public know what is taking place. A trading website such as NutrientNet can help to solve some of these problems by providing a simple way for buyers and sellers to connect, by making it relatively easy for both point sources and nonpoint sources to estimate their remediation costs using standard, consistent methods, and by making the record of trade readily accessible. Specifically, NutrientNet is designed to serve the following functions: a) provide potential market participants and other stakeholders with background information on nutrient trading; b) provide farmers, municipal treatment works, and industrial plants with tools for estimating releases of nutrients to surface waters from their operations, exploring reduction options, and estimating the costs of achieving reductions; c) help market participants identify potential trading partners; d) track the volume and type of trades within a watershed; share lessons learned about trading across the watersheds where it is being tried or considered; and e) provide information on water quality problems and trading as a possible means to address them. This has been added to Prediction Markets Subject Tracer™ Information Blog.