A Note on Distortional Distributional Effects in River Basin Discharge Permit Trade

This note exhibits how the implementation of the Total Loads Standard for issuing tradable water rights along a river basin can cause a significant location-induced economic disadvantage to some of the agents located along a given river site. Analysis shows, however, that this issue can be resolved by a modification of the original Total Load Standard regarding the handling of so called critical zones in which the desired water quality level is otherwise not upheld. Copyright Springer Science+Business Media Dordrecht 2014