In recent years, there has been growing interest in developing watershed based trading as a regulatory tool to meet water quality goals. The incentives driving that interest are generally twofold. On one level, wastewater treatment operations are increasingly looking for cost effective alternatives to expensive capital investments in their plants in order to meet treatment demands. On a second level, society is seeking ways to correct ongoing water quality degradation that cannot be exclusively addressed by treatment plants. Research shows that 40% of the nation's waters remain unsafe for fishing and swimming, and a major source of the problem is nonpoint source runoff. Trading is widely viewed as a win win option to cooperatively meet both demands.