Nutrient Trading Between Wastewater Treatment Plants in the Baltic Sea Region

  • Sami HautakangasEmail author
  • Markku Ollikainen


We analyze nutrient trading between wastewater treatment plants as a tool for reducing nitrogen and phosphorus loads in the Baltic Sea. We build a numerical model and demonstrate that the goals of the Baltic Sea Action Plan can be achieved to a fairly large extent by nutrient trading between wastewater treatment plants. It is also a relatively inexpensive way to reduce nutrient loads. Furthermore, a nutrient trading scheme with properly designed initial allocations enables an evening out of the cost burden between wastewater treatment plants. We study alternative types of nutrient trading schemes and show that when trading is based on nitrogen equivalents, phosphorus abatement reaches its capacity limits. Moreover, we illustrate that transaction costs clearly increase the level of nitrogen abatement costs but only slightly the level of phosphorus abatement costs. Nevertheless, even though transaction costs reduce benefits from trading relative to command-and-control, huge cost differences between the installations create space for trading.


Baltic Sea Cost-effectiveness Environmental policy Eutrophication control Nitrogen Nutrient abatement cost Nutrient reduction Nutrient trading Phosphorus Wastewater treatment 



Best available technology


Baltic Sea Action Plan


Environmental Protection Agency


Emissions trading scheme


European Union


Gross domestic product


Baltic Marine Environment Protection Commission–Helsinki Commission


Marginal abatement cost


Marginal transaction cost


Nordic Environment Finance Corporation


Nutrient trading scheme


Person equivalent


Total abatement cost


Urban Waste Water Treatment Directive


Water Framework Directive


Water quality trading


Wastewater treatment plant

Supplementary material

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Supplementary material 1 (DOCX 21 kb)
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Supplementary material 3 (DOCX 18 kb)
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Supplementary material 4 (DOCX 14 kb)


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Copyright information

© Springer Nature B.V. 2018

Authors and Affiliations

  1. 1.Department of Economics and ManagementUniversity of HelsinkiHelsinkiFinland

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