The Ecosystem Marketplace W.E.T. Newsletter

First there was sulfur dioxide permit trading, then wetland mitigation banking, then conservation banking, and now carbon credits. Markets are increasingly being seen as innovative—and often effective —tools for achieving environmental ends. In the case of carbon, environmental markets are also driving new areas of economic growth. Carbon markets—as those of you who get our V-carbon email newsletter know—traded an estimated $30 billion last year. But what is next? And why don't we hear about markets being used to address those other major environmental problems: water pollution and water scarcity? The truth is that markets and payment schemes are being used to address all sorts of environmental issues related to water. The problem is that these solutions are limited in scale and remain experimental or anecdotal. They are small –albeit important—bricks that don't yet add up to a bigger building. We've been reporting on these initiatives for nearly three years (see some of our past coverage below), but even we think it is not enough. Fortunately, the time is ripe for bigger, better, and more effective environmental markets related to water. The question is: how do we get from here to there? We have some ideas, but we readily recognize that we don't have any perfect answers, hence this newsletter. In WATER/ENVIRONMENT/TRADING (W.E.T.), we will report from the frontlines of global attempts to use markets and market-like instruments to address environmental issues related to water. We will cover everything from schemes that seek to ensure more predictable flows of water downstream by protecting forests upstream, all the way to larger and more elaborate markets designed to protect and enhance water quality in industrial areas.

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