Water Quality Trading And Its Associated Asset Classes

The previous chapter dealt with water quantity and the demands for water by an ever growing and thirsty population. It is important to note however that the water crisis involves not just quantity, but water quality as well. In many ways, water quantity and quality are closely related. Nutrients, such as nitrogen and phosphorus are substances that occur naturally in water, soil, and air. Nitrogen and phosphorus in fertilizer aid the growth of agricultural crops, but excessive presence of nutrients in watersheds can have harmful consequences. Exposure to excessive levels of nitrate (a form of nitrogen) can reduce oxygen levels in blood, putting infants, children, and adults with lung or cardiovascular disease at increased health risk. There has also been research linking long-term consumption of excess nitrates to cancer. Poor water quality is not only an issue for humans but wildlife as well. High concentrations of phosphorus or ammonia in lakes, streams, and reservoirs are often responsible for fish mortality, foul odors, and excessive aquatic weed growth…