Simulating a thermal water quality trading market for education and model development

Thermal water quality trading is an emerging policy tool that allows thermal polluters to comply with effluent restrictions by paying landowners to plant shade trees. A simulation game was created to help participants understand the structure, dynamics, benefits, and drawbacks of thermal water quality trading markets. Simulation participants negotiate to make trades, and their decisions are entered into a system dynamics model that simulates tree growth and water temperature. A debriefing session allows the participants to discuss outcomes and strategies. The exercise has been performed twice and has proven to be a useful teaching tool. These simulations provided valuable insight into decision-making strategies in thermal water quality trading markets, suggesting decision rules that the researchers used for subsequent model development.