Nitrogen Trading – modelling principles from Australia’s Great Barrier Reef: parallels and contrasts with the Baltic

James C.R. Smart1,2 & Syezlin Hasan2

1Griffith School of Environment and Science, Griffith University, Nathan Queensland 4111, Australia.
2Australian Rivers Institute, Griffith University, Nathan Queensland 4111, Australia

Dissolved inorganic nitrogen (DIN) runoff from agriculture, particularly sugar cane, is widely recognised to be causing significant adverse impacts on water quality in Australia’s Great Barrier Reef (GBR). Catchment-generated anthropogenic DIN loads will have to be reduced by at least 50% if the end-of-catchment load targets set in the Reef 2050 Long-Term Sustainability Plan are to be achieved. Recent estimates suggest that the costs of meeting the 2025 DIN load targets will be very substantial. Modelling indicates that water quality credit trading, operating within proposed catchment DIN load limits, offers potential for delivering cost-effective improvements in Reef water quality.

This presentation describes a ‘smart market’ approach that has been used to model water quality trading for DIN in catchments along Queensland’s Wet Tropics coast which drain into the GBR Lagoon, and considers parallels and contrasts with potential smart market DIN trading in an agricultural catchment in northern Denmark. Trading frameworks consider both changes in agricultural management practice (e.g. reduced fertiliser applications) and changes in land use (e.g. wetland construction). Extensions to the original model to incorporate point-sources, multi-year perspectives and non-emitting entities will be discussed.