"Way back in the day", when I was still seemingly suffering from or perhaps just getting over the loutish aversion to environmentalism that free-marketeers catch like the flu, I remarked on Dani Wenner's long-defunct liberty-news.com (revived thanks to archive.org) about the inability to rein in the Gulf of Mexico's Dead Zone through traditional means like emissions bans or the tort process, noting that perhaps some market-based solution could be brought to bear.
I lost sight of the issue between then and now, until the Nature Conservancy's newsletter brought it back to my attention. That ever-innovative group, having concluded a paired-watershed study exploring different means to buffer waterways, has begun a pilot program which may be a major step toward the institution of markets in wetlands' ecological services. To quote:
Faced with spiraling land-acquisition costs, the Conservancy is exploring how environmentally friendlier practices might be woven into existing farming operations. On the Mackinaw River, a tributary of the Illinois River, the Conservancy is carrying out a pilot program to test the feasibility of “nutrient farming.” Conservancy staff have built micro-wetlands at the ends of farm fields to catch nutrient-laden water before it reaches the river (in the wetlands, many nutrients are either taken up by plants or metabolized by bacteria and then released into the air).
Nutrient farming could form the basis of a market modeled after an existing cap-and-trade system that has helped curb emissions of the pollutants that cause acid rain. Farmers could be paid for nitrogen and phosphorus they take out of the water with micro-wetlands, reducing the overall nutrient load flowing to the Gulf of Mexico.