Water Quality Impacts of Biochemical Oxygen Demand Under Transferable Discharge Permit Programs

Biochemical oxygen demand is an important example of water pollutants that degrade biochemically and affect water quality according to the location as well as the strength of the discharge. Therefore, it is important to examine carefully the potential water quality impacts of a program of transferable discharge permits (TDPs) to regulate these discharges prior to the implementation of such a program. This paper provides a framework for evaluating these impacts and illustrates trade-offs among cost eficiency, equity, and uncertainty with respect to meeting water quality goals. Examples are given for the Delaware River estuary and the Willamette River. It is shown that violations of the standard could occur under a TDP program. Restrictions on the market could be used, however, to control or possibly to eliminate such violations. Limits on the total discharge in sections of the basin, zone boundaries for markets, and revaluation factors for transferred permits were shown to be effective individually or in various combinations. Even with these restrictions, however, there is sufficient flexibility so that significantly more cost-efficient solutions are obtained than under direct regulation programs that treat all dischargers uniformly.