Aurecon engaged with Seqwater to run a pilot nutrient trading scheme and improve the health of South East Queensland waterways.


South East Queensland Nutrient Trading Scheme, Australia

Research and development of a pilot nutrient trading scheme to improve health of South East Queensland waterways

Across the world, research shows that water, salinity, biodiversity, carbon and renewable energy trading markets are operating and achieving sustainable environmental outcomes.

As a result of two years of market viability research, a pilot nutrient trading scheme is proposed to commence in 2021 in South East Queensland to enhance the ecological integrity of the region’s waterways and Moreton Bay.

The health of water in the area has been declining due to increasing loads of nutrient-laden sediments from population growth and growing industrial activity. As sediments enter the waterways or Bay, they pose a risk to the health of the system and overload the city’s water and sewerage services.

Aurecon and GHD, supported by Queensland Urban Utilities, Seqwater, Suncorp and Redeye, researched the science, conceptualised the market, and developed the trading mechanism needed to run a pilot trading scheme that allows industry to restore water catchments as a way of offsetting their nutrient waste.

A stable and predictable system for nutrient trading is beneficial for promoting investment, innovation and technological change – all of which are vital for sustainable development and a green economy.

The project is supported by the Queensland Government, which, as the environmental regulator, had to create and regulate the market.

Restoring water catchments with a trading scheme

Substantial investment is required given the scale of the problem of nutrient laden sediments entering waterways in South East Queensland. A trading scheme allows industry to assume some of that cost by undertaking catchment restoration actions that reduce soil erosion or surface water runoff from developments and farms, and decrease the overall nutrient load entering waterways.

Proving the science behind the scheme

The project determined that a nutrient cap and trade scheme would help to reduce the physical risks to waterways. This scheme enables and expedites investment and accelerates innovation by capturing nutrients and creating tradeable credits.

The scheme connects willing buyers, sellers and investors through a trading platform that creates a competitive market for cost-effective investments and incentivises the creation and trading of credits.

The research and development team proved the science to underpin the project, ensuring that potential buyers of offset nutrient credits had confidence in the trading scheme.

By adopting a pilot trading scheme, the research and development team can monitor the science to learn and adapt the market rules and operations, to minimise unintended consequences and make appropriate adjustments to the cap.

The government-regulated scheme lets producers and industry buy and sell discharge allowances. It allows sources with higher pollution control costs to purchase pollution reductions from sources with lower costs. Those with higher costs can save money, while those with lower costs can earn new revenue.

The science developed over many years of research, and the recent experience with environmental offsets, can now be applied to expedite transformation of catchments.

Boosting the green economy

The nutrient trading scheme is a green economic instrument that integrates the jigsaw puzzle pieces of ecological sustainability, economic viability and social equity. Prudent investment in ‘green’ assets delivers what customers and communities expect – safe sustainable water services at affordable prices.

The pilot scheme boosts the green economy in Queensland with industry investing in infrastructure that reduces sediments from entering waterways and Moreton Bay. This may include ecological monitoring and restoration works, revegetation, land protection works, effluent recycling, seaweed and algae cultivation, nutrient harvesting and reuse, and operational and maintenance job opportunities.

Investments contribute to lowering the volumes of sediments entering South East Queensland’s waterways and Moreton Bay. It also provides industry with incentives to find innovative ways of tackling environmental challenges.

Collaboration was the key to change

The research and development project brought together water utilities, government regulators, scientists, private sector, community groups, landholders and managers: to co-develop concepts and principles and to co-create the pilot trading scheme. It attracted seed funding for research activities, and in-kind research and advisory expertise, to define the science behind the development of a trading mechanism.

It creates a competitive market for cost-effective investments and incentivises the creation and trading of credits. Without a market, there is little incentive to convert aspiration into value creation. It offers a real pathway towards cost-effectively reducing nutrient discharge into waterways and Moreton Bay for South East Queensland, which has a positive impact on ecological sustainability.

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