Founder of Environmental Credit Corp., John Regan, believes that a water exchange could work for companies that need to deal with their own water polution problems. ECC is a carbon credit supplier on the Chicago Climate Exchange.
I wonder, however, if it would be wise to apply a rather new and untested model to another industry. While the long-term effects of such an 'externality' exchange are virtually unknown, my fear lies in the commoditization of a life-giving resource; selling off water to the highest bidder. Now let's say that water reached a price beyond the reach of the smallest companies. As many of us have seen, going green can be expensive. While this might be good for the environment in the short run, there is more to the story.
It is often (but not always) the case that the larger companies are more driven by the bottom line and less environmentally conscious than smaller mom and pop type operations. Due to lack of financial leverage, it may drive mom and pop out of business rather than force them to clean up thier act. The little guys are often the ones feeling the brunt of the pollution while the big guys have the means to move elsewhere, bring jobs to a town that would thus not want to raise complaint, or now buy water credits. So, if the little green guys are driven out of the market, the big polluting guys are left with free reign. But, one may ask, "wouldn't a free market system eliminate the need for a conscience and simply set a price by market forces?" Possibly...
In order to implement and manage such a system it requires some desire for it to be put into place. It must be done by someone with the best interests of clean water in mind so that regulations are appropriately applied and proper compliance procedures are followed.
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