A nitrogen permit trading scheme could tap into market forces to boost innovation and land-user engagement in catchments affecting the Great Barrier Reef.
Sugarcane production relies on the application of nitrogen fertiliser to enhance soil quality seasonally. Current approaches to reducing the amount of dissolved inorganic nitrogen (DIN) entering the Great Barrier Reef lagoon are not predicted to meet the 80 per cent reduction target set by the Reef 2050 Long Term Sustainability Plan.
This project led by Dr Jim Smart from Griffith University simulated a nitrogen cap-and-trade scheme on the Tully River catchment and found it would lead to massive reductions in end-of-catchment DIN loads.
The simulation divided the catchment into paddock-sized ‘cells’ and allocated weight-per-hectare permits for nitrogen emissions. The simulated farmers were then able to trade these permits amongst themselves according to their nitrogen use.
Market forces drove innovative methods of reducing DIN output, including the conversion of poor-quality cane paddocks into wetlands. Through the trading scheme, some farmers will make more money from converting wetlands than they would from poor-quality cane paddocks requiring increased nitrogen application for better productivity.
The full report is available online.
More info on this project can be found here.