Local Innovations in Water Protection: Experiments with Economic Incentives

The ineffectiveness of traditional agricultural policies to reduce nutrient-related water quality impairments has prompted some states, local environmental and conservation agencies, and some nonprofit groups, to experiment with new approaches. This article examines innovations that make use of economic incentives to engage the agricultural sector in nutrient and sediment controls. It focuses on various forms of water quality trading, but also presents some other novel uses of incentives aimed at promoting cost-efficiency.