Predicting the Existence and Prevalence of the US Water Quality Trading Markets

Water quality trading (WQT) programs aim to efficiently reduce pollution through market-based incentives. However, WQT performance is uneven; while several have found frequent use, many experience operational barriers and low activity. What factors are associated with existence, prevalence, stage? In this paper, we present analyze the most complete database of in United States (147 programs/policies), detailing market designs, mechanisms, traded pollutants, segmented geographies 355 distinct markets. We use hurdle models (joint binary count regressions) evaluate markets concert demographic, political, environmental covariates. find that only one half become operational, new establishment has declined since 2013, existence prevalence nuanced relationships local political ideology, urban infrastructure, waterway waterbody extents, regulated impacts, historic impairment. Our findings suggest opportunities for better projecting program need targeting funding.