Impact of Tradable Discharge Permit (TDP) Programs on the Reliability of a River

Tradable Discharge Permit (TDP) programs have shown, both in practice and in theory, to have tremendous potential as a cost-effective method of pollution control. Nevertheless, there are still many uncertainties regarding TDP programs that if not adequately addressed, might impair its success. These uncertainties, of which some are quantifiable but most are not, are as random as they are diverse. Concerns range from issues of market failure that prevents optimal trading, to political agendas that differ from a typical TDP program in their priorities, to modeling difficulties that might cause erroneous predictions of cost savings and environmental performance. The authors of this study recognize the hopelessness of trying to overcome these concerns all at once. And therefore, apart from a brief introduction where the more common of these issues are identified and discussed, attention is focused only on the ones that are less abstract and more tangible. More specifically, for the time being, uncertainties of trading, politics and such are assumed negligible and only modeling uncertainties are considered. Numerous studies have been carried out to predict the potential impacts of TDP programs, whether positive or negative, on the environment they are intended to protect. These studies have been invaluable in laying essential groundwork for the further understanding and actual implementation of such programs. However, many of these studies assumed deterministic environmental models when in reality nothing is ever constant. The environment is an open system vulnerable to, amongst many other agents, weather variations and changes in microbial behavior. It is therefore, this study's goal to attempt to advance a step forward by re-assessing those same questions asked many times before, but this time without disregarding the stochastic nature of the environment.