however there is evidence that voluntary participation may not reach the major polluters and subsidybased programmes can have limited impact due to public budget constraints and a lack of environmental regulations on diffuse pollution the greatest challenge of regulating outputs of diffuse pollution is how to allocate a pollution cap or maximum permitted load to individual land owners in a way that is equitable and costefficient a natural capital based approach to allocating diffuse pollution limits is an emerging development that has the ability to reach the full economic potential of natural resources based on the underlying capacity of the soil to filter and retain water and nutrients water quality trading offers a way to promote practices that reduce pollution at least cost to society by revealing preferences and water pollution costs markets and payments for ecosystem services are not a perfect substitute for robust regulations equity and fairness in burden sharing do not preclude efficiency