Most studies of water quality trading (WQT) analyze the cost effectiveness of reducing nutrient pollution in isolation from other policies. However, the policy landscape to reduce nutrient pollution from agriculture is dominated by existing cost-share (CS) programs, which are likely to persist...

The distinctive nature of environmental quality problems in agriculture — an industry based on the extraction of highly variable natural resources under stochastic conditions — has important implications for policy design. First, we examine the source of environmental quality problems and...