Assessing the Feasibility of Water Quality Trading to Address Agricultural Sources of Pollution in Canada - Water and Agriculture: Sustainability, Markets and Policies - page 82

Pollutant sources and potential trading partners
WQT is suitable for pollutants for which there is a potential to create supply and
demand for pollution reduction credits. There are several potential trading partners for
agricultural phosphorus, nitrogen, and sediment, and fewer for bacteria and pesticides
(Table 1).
Phosphorus, nitrogen, and sediment can enter a waterway from several potential
trading partners with which agricultural producers could exchange credits, particularly
municipal wastewater and industrial facilities that are regulated. The ubiquity of nutrient
and sediment sources, both agricultural and non-agricultural, contributes to their
suitability as candidates for WQT.

Table 1. Main agricultural pollutants, potential trading partners, and major science considerations

Science
Considerations Potential Trading Partners

Quantifi-
able
reductions
from NPSs

Urban
storm
run-off

Behaviour
known

Municipal
Waste-
water

Septic
systems

Industry

Forestry Mining

Agricultural
Pollutants

Phosphorus

Nitrogen

Sediment

Bacteria *

Pesticides *

Trace
Elements

Salts

*

Depends on the type of bacteria or pesticide.

- Not typically a problem in Canada.

Bacteria from septic systems and urban storm water are often unmeasured and
unpredictable. Pesticide use varies and their fate is not well understood. Salinity trading
occurs in other countries, such as Australia, but concerns regarding salts and trace
elements are not widespread in Canada. For these reasons, it is more difficult to
implement water quality trading for these pollutants than for nutrients and sediment. 6

6.

Note that a trading system in pesticide use rights could be envisaged on a national basis. Such a
system would probably be similar to the manure quota trading system implemented in the
Netherlands.