A pollution offset system is a discharge permit system in which transfers are made subject to a restriction that no violations of water quality standards occur at any location. Simulation of a pollution offset system with seasonal variation and multiple pollutants allows for comparison of the savings possible from these design features. A simulation model (Qual‐TX) developed by the Texas Water Commission is applied to a case study region near Austin, Texas, yielding impact coefficients for an economic optimization model without investment whose least cost solution represents the theoretical equilibrium of a pollution offset system. The optimization model finds short‐run savings of 17.5% for a pollution offset system, as compared to a command and control policy that would also achieve the dissolved oxygen standard. Seasonal variation in permit design produces minimal effects; virtually all savings come from allowing pollution offsets for the two different pollutants. This paper is not subject to U.S. copyright. Published in 1992 by the American Geophysical Union.
ASJC Scopus subject areas
- Water Science and Technology