Cost‐efficiency of transferable discharge permits for the control of BOD discharges

The cost efficiencies of four systems of transferable discharge permits (TDP's) designed for BOD control were compared to least‐cost and minimum uniform treatment strategies for achieving the same water quality. One of the four policies, viz., the policy in which the permits are defined in terms of the dissolved oxygen deficit contribution (DODC) at the checkpoint, always induces a least‐cost treatment strategy. Another policy, for which the permits were defined in terms of the discharge rate (load) of ultimate BOD, is almost as efficient as the least‐cost strategy for the example case of the Willamette River. The requirements for the high cost efficiency of the latter policy are identified, analyzed, and discussed. The economic cost for all four policies, some of which were very conservative, was found to lie between the least cost and the cost of minimum uniform treatment.