Nutrient Trading in Lake Rotorua: A Prototype System
The quality of freshwater in New Zealand is of increasing concern with implications for our quality of life, fresh-water ecology, tourism and our clean green image. Water quality in Lake Rotorua has been declining for at least the last 30 years as increased levels of nutrients have entered the lake. Algal blooms are becoming common summer occurences. In Rotorua, despite significant effort and expenditure, the level of nutrients entering the lake still exceeds sustainable levels. A nutrient trading system would help the catchment achieve this goal at least cost. Nutrient sources would bear the cost of their impact on water quality and hence take these costs into account in their decision-making. This presentation discusses a prototype nutrient trading system for achieving cost effective nutrient loss reductions for the Lake Rotorua catchment covering issues of definition of environmental targets, participation, monitoring and verification, trading, allocation of allowances and how to manage the evolution of the system over time. New Zealand is an international innovator in its use of economic instruments to address water quality issues from diffuse sources. This system builds on the design of the system currently being implemented to protect Lake Taupo but with bold steps towards a significantly more flexible and efficient system.
Kerr, Suzi. 2008. 'Nutrient Trading in Lake Rotorua: A Prototype System,' Motu Public Policy Seminar, September.
Motu code: WPS0809