A tradable permit scheme for cost effective reduction of nitrogen runoff in the sugarcane catchments of the Great Barrier Reef

Jim Smart 100dpi
Led by: Dr Jim Smart, GU


Project Summary

This project will undertake a scoping study to design a pilot nitrogen trading scheme for key cane growing catchments draining into the Great Barrier Reef Lagoon. The study will synthesise the current understanding of nitrogen dynamics, local expertise and on-ground practices from the cane industry, with lessons from successful nutrient trading programs elsewhere. Tradable permit simulation will estimate the cost effectiveness of the scheme for reducing nitrogen loads into the GBR, and the financial impact on sugarcane growers. Core enablers will be identified and key steps for implementation will be formulated, including governance structure and monitoring mechanisms.

Problem Statements


Sugarcane production relies on the application of nitrogen fertiliser to enhance soil quality, but nitrogen is a highly mobile nutrient which is easily lost from the soil. Nitrogen runoff from sugarcane production is seen as one of the major sources of nitrogen impacting water quality in the GBR.

Current methods to reduce nitrogen runoff from sugarcane production use an A-B-C-D best management practice framework which relies on voluntary participation. Despite considerable effort and expenditure, these approaches have produced only modest changes in runoff rates and water quality improvements.

How Research Addresses Problem

Nitrogen trading is an alternative management approach which could potentially deliver N-load reductions more cost effectively. This requires an understanding of:

  • practical constraints facing sugarcane growers
  • nitrogen dynamics within catchments
  • efficient operation of a nitrogen trading market
  • effective governance and monitoring arrangements

Our project will synthesise these four components to develop the holistic understanding required to design a workable and effective pilot nitrogen trading scheme. Engaging with the practical expertise of sugarcane growers, NGOs and environmental regulators will be crucial to a successful outcome. Market simulations will be used as a synthesis tool to assess likely outcomes and assist design of an efficient and effective trading market.

Project Keywords

Nitrogen; Pollution; Nitrogen trading; Cost efficiency; Water quality.

Project Funding

This project is jointly funded through GU, GU Adjunct, AR Volders Env. Consulting and the Australian Government’s National Environmental Science Programme.

Project Publications
NESP TWQ Project 2.2 Final Report
Final Report
Media Release