In practice of water quality management, the environmental authority sets a limit (a cap) on the total amount of pollutants discharged into receiving water such as river or lake. This total is then transformed into a number of limited rights and allocated to polluters such as industrial plants to emit below the allowed levels.
Market-based approach is a cost effective way to achieve the targeted level of total discharge. Tradeable credit system, which is used in NutrientNet.EDU, falls into this approach. In the system, credits are generated corresponding to the amount of pollution reduced below the allowed levels and they can traded on the market. In addition, polluters can meet the requirement by implementing wastewater treatment practices (WTPs) or buying credits from other polluters in the same watershed. As is usual, point sources such as industrial plants and wastewater treatment plants discharge in excess of the allowed limits and have negative credits. So, they are potential buyers of credits. However, in case they can find the efficient practices to reduce pollution at low cost then they would become sellers of credits.
Together with point source, nonpoint source(NPS), mainly including agricultural farms, plays a key role in the trading system. For a NPS, the current discharge is considered baseline and so farmers initially get zero credit. They can obtain credits by implementing best management practices (BMPs) to reduce pollutant (chiefly nutrient) discharge below the current levels. So, nonpoint source is always seller of credits. In fact, agricultural BMPs can reduce a unit of pollution at a much lower cost compared to indusrial WTPs and so there exists credit trading opportunity between these two sources of pollution.
NutrientNet.EDU
NutrientNet.EDU is a simulated market that allows classes to participate in reduction credit trading. The pollutant involved in the trading is nutrient, which mainly includes Nitrogen and Phosphorus, one of the major causes of water pollution. In the simulated market NutrientNet, students will be assigned roles as point or nonpoint sources of pollution within a watershed. Then, they will explore and make decisions on a variety of ways to cost-effectively solve their collective water quality problems.
In order to support the use of this website, several documents are available from the page Teaching Tools. If you want to get a background on water quality problems and the environmental approaches, you may need to read A Guide to Market Based Approaches to Water Quality. Also on the same page, Powerpoint Presentation including Instructor's Guide and Student's Guide will show you easy steps to use NutrientNet. In addition, Getting Started and Trading Process also cover the basic ideas and how to trade in NutrientNet.
