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Payments for nutrient uptake in the blue bioeconomy – When to be careful and when to go for it
2021
Hasselström, Linus | Grøndahl, Fredrik
Harvesting of marine biomass for various applications may generate ecosystem services that currently lack a market price. One of these is nutrient uptake, which could counteract eutrophication. Market-based instruments (MBIs) such as cap & trade, compensatory mitigation, and payment for ecosystem services could help internalize such positive externalities. However, activities of the blue bioeconomy are diverse. We show that identifiable market characteristics can provide guidance concerning when to use these instruments and not. We find that the activities most suitable for MBIs are those that have positive environmental impacts but that are not (yet) financially viable. For activities that are already profitable on the biomass market, ensuring ‘additionality’ may be a significant problem for MBIs, especially for cap & trade systems or compensatory mitigation. We provide an overview of how some current biomass options fit into this framework and give suggestions on which biomass types to target.
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