Managing uncertainty in thermal water quality trading programs

Thermal water quality trading is an emerging policy tool that allows thermal polluters to comply with effluent restrictions by paying nearby landowners to plant shade trees. We created a system dynamics model of a hypothetical thermal trading program and conducted scenario analysis to study how weather, climate, and trading behavior might influence program effectiveness. It is likely that neither thermal trading nor conventional regulation can reduce water temperatures to desired levels, but the model indicates that trading ratios, used to account for uncertainty, lead programs to decrease water temperatures below those produced through conventional regulation.