Fact Sheets: Pollution Trading

In 1977, Congress passed a set of amendments to the 1972 Federal Water Pollution Control Act. Together, the original act and the amendments came to be known as the Clean Water Act (CWA). The CWA set a strong and simple standard that polluting is illegal, and that the national goal is zero discharge into our public waterways. Failing achievement of zero discharge, the CWA set limits on discharges.

All too often when an economist or banker looks out at an expanse of virgin forest or free-flowing river, she doesn’t see nature — she sees “natural capital.” This concept promotes the view that our natural resources should be attached a value and managed using market-based principles of supply and demand. It is the cornerstone of the “green economy” that many free-market proponents and market-oriented environmentalists assert will provide environmental sustainability.