Efficiency of an emissions payment system for nitrogen in sewage treatment plants - a case study

An emissions payment system for nitrogen in Swedish sewage treatment plants (STPs) was evaluated using a semi-empirical approach. The system was based on a tariff levied on each unit of nitrogen emitted by STPs, and profitable measures to reduce nitrogen emissions were identified for twenty municipal STPs. This was done through direct involvement with the plant personnel and the results were scaled up to cover all treatment plants larger than 2000 person equivalents in the Swedish tributary areas of the Kattegat and the Baltic Proper. The sum of costs and nitrogen reductions were compared with an assumed command-and-control regulation requiring all STPs to obtain 80% total nitrogen reduction in their effluents. Costs for the latter case were estimated using a database containing standard estimates for reduction costs by six specified measures. For both cases a total reduction target of 3000 tonnes of nitrogen was set. We did not find that the emissions payment system was more efficient in terms of total reduction costs, although some practical and administrative advantages could be identified. Our results emphasize the need to evaluate the performance of policy instruments on a case-by-case basis since the theoretical efficiency is not always reflected in practice.