New Zealand is known as one of the most beautiful landscapes in the world. However, the predominance of livestock has led to serious environmental damage. Lake Taupo is North Island’s largest and most iconic lake. While a major tourist destination, it is also important for the country’s indigenous Maori population since the Ngati Tuwharetoa iwi tribe have called the region home for over 700 years. However, the quality of the water in the lake has been declining due to nitrate leaching from agricultural sources.

Nitrogen pollution of water occurs when nitrogenous fertilisers, like ammonium nitrate or nitrogen-rich livestock manure, are applied to farmland and dissolved bu heavy rain before plants have been able to utilise all of the available nitrogen. Surplus nitrate compounds are then leached into groundwater or washed directly into rivers. Once in the waterways, it can cause eutrophication, making freshwater and marine ecosystems inhospitable to life due to the resulting deoxygenation. Nitrates in drinking water have also been linked to cancers of the digestive tract, bladder and breast, thyroid disease and neural tube defects.

Faced with high levels of nitrogen pollution, the local government in Waikato’s Lake Taupo created an innovative programme in 2011 to tackle the issue through a Cap-and-Trade programme with the goal of reducing nitrate levels by 20%. Their hope was that a market-based system (rather than regulation) would be more successful at delivering environmental goals at a lower cost and with greater flexibility. Lake Taupo Protection Trust was set up to fund the initiative with a budget of close to NZD $80 million (£41.3 million) from local, regional and central governments.

The scheme capped agricultural emissions of nitrogen in the Lake Taupo catchment to 915 tonnes annually and a Taupo nitrogen market was set up in order for farmers to exchange allocations. Each farm was given a nitrogen discharge allowance, which was set individually, based on historic levels. These allocations allowed farmers to decide whether they would carry on as normal and not increase nitrogen output or they would reduce their nitrogen pollution by changing land management and financially benefit from selling off the nitrogen allocation that they did not use. Alternatively, they could increase their level of nitrogen use (and ergo their pollution) but have to purchase additional allocations to cover the emissions. The Trust also offered to purchase farms from farmers who did not wish to participate in the scheme. If the farmer chose to sell, they were paid the market price of their land before the Cap-and-Trade policy was put in place and the Government took ownership of the land for reforesting in order to reduce the nitrogen pollution from the land.

There was significant push back at the start of the programme as farmers in the catchment felt that they should have the right to farm their land as they wanted and were not happy of being accused of polluting the area. As a result, the scheme was initially treated with suspicion by the local farmers. In order to build trust and improve buy-in, the government changed its approach. In order to work more collaboratively across the local community, they brought in independent agricultural scientists who could communicate effectively with both local council staff and farmers, which ultimately led to support for the programme by the local agricultural associations and cooperatives.

In many respects the programme has been considered a success. The scheme met its target to reduce nitrogen emissions by 20%, three years ahead of time and within budget. Most farmers in the region have embraced the scheme by switching their production methods and adopting new practices (such as olive growing) to diversify their income stream and make up any lost profit from switching over to a low-nitrogen system. It has even resulted in the creation of a Taupo brand for farming businesses with lower nitrogen emissions .

However, the target reduction of 20% was controversial from the start. It was seen by many scientists as not stringent enough because estimates suggested that 20-80% reductions were needed to significantly reverse the damage. Furthermore, it is difficult to say whether the 20% reduction is enough to maintain or improve water quality because of the long timescales associated with groundwater filtration. This phenomenon, known as the ‘nitrate time bomb’, is caused by the continual application, over decades, of high levels of artificial fertilisers that seep slowly through the ground and into groundwater aquifers. The pollution which results might not reach the aquifers for years and years after it was initially released into the ecosystem.

Nitrate pollution is not only an issue in New Zealand. Governments worldwide need to adopt ambitious and bold targets if we are to reverse the damage to our environment. Globally, the biogeochemical flow of nitrogen has been pushed to 350% above planetary boundaries, as outlined by the Stockholm Resilience Centre. At the SFT, we continue to look for innovative solutions to the issue of nitrogen pollution in our environment.

In the coming months, the SFT will be working on this issue and investigating projects around the world that have aimed to tackle nitrogen pollution. If you know of any interesting work that is being done, please let us know.

Photograph: farmboyted

Sign up to our Newsletter

Stay up to date with the latest SFT views and news