A recent report issued by the Swedish Sustainable Economy Foundation proposes putting a fee on phosphorus and nitrogen imports in order to stimulate the economy to run clean and protect the Baltic Sea. The Foundation calls it the Flexible Pollutant Fee Mechanism (flex fees). Although a fee will make some food more expensive, paradoxically the Foundation claims that the economy will be stimulated. More jobs, green ones at that, will be created as the Foundation proposes that the fees collected are returned to the economy stimulating the demand for green technology and new jobs. Compared to Cap and Trade, the Foundation sees flex fees as being a more effective way to price pollution.
Flexible pollutant fees are set at a medium level and raised at regular intervals until the market responds by reducing pollution. It is the market response that dictates the speed of abatement. The report highlights two very modern approaches: control engineering of the economy, and replacing a linear engineering approach to agriculture and waste management with the circular economy.
Control engineering is the science of controlling systems so they perfume the function intended. The Foundation demonstrates that if the intention is for society to have zero emissions of nutrients like phosphorus and nitrogen into the sea, then economic systems can be designed to ensure just that. Economic incentives can be designed and put into place to stimulate the market to introduce solutions.The technology happens to be available, (some of it leading edge Swedish technology). New dredging technology from Teknikmarknad. se (http://teknikmarknad.se/aktuellt.html) promises to retrieve phosphorus rich sediments without stirring up the sea bottom, which would release burdensome amounts of nutrients threatening the sea eco system.
The Nordic Council of Ministers recently published a comprehensive report (see the link here http://www.norden.org/en/publications/publikationer/2014-512) comparing the Foundation’s Flexible Fee approach with Cap and Trade in the specific area of phosphorus and nitrogen emissions. The Study comes some way but more research is needed.
Other insights from the Foundation’s report:
- Some nitrogen arrives in the country as a byproduct of combustion, from internal combustion engines for example
- Modern dredging techniques on dead zones in the Baltic could retrieve phosphorus from the sea bed, clean the sea and create whole new industries.
- Whilst import of phosphorus costs 20 kronor a kilo, cleaning the sea can cost up to 3500 kronor per kilo.
- Pollutants come in different categories, something economic incentive design needs to take into account.
Find out more :
- The Foundation’s website article on the new report
- Join the free webinar to air 17th April that explains how the phosphorus cycle needs to be secured for future generation food security and opportunities for corporations to participate-
- A short explanatory video
- The 2014 edition of the report Brief_PhosphorousRD5
- A deeper comparison of the Swedish EPA Cap and Trade and Flex fees approach
Stephen Hinton Consulting 