This week I had some pretty significant accomplishments. First of all, I think I am fairly close to finishing with the first half of my project, which is analyzing the benefit side of the Cost-Benefit analysis. I did a lot of reading regarding the aviation industry, government subsidies on sustainable fuel, river cleanup projects and nutrient credit trading. All I need to do now is do the write up for these potential markets and learn a little more about nutrient trading.
Secondly, I had my presentation to the algae working group yesterday (6/29/11).
I delivered the talk to Professor Tracy, Professor Cooke, Professor Dennis Manos, and two graduate students who worked on the site. I think the talk was pretty informative. I reported to them the 4 markets that I thought that had the most potential: Aviation, government, river-cleanup, and nutrient trading. They were most curious about the nutrient trading market, because no one really knew exactly how the Exchange worked. Would it be similar to a stock market where people can just buy and sell credits online, or would it be similar to a futures market where everything is build on promises. Some questions that were asked proved to be really helpful in my next few steps of research. Now, I need to figure out the answers to the following:
1) How much credit of nitrogen/phosphorus is currently available. Is there an extra supply or extra demand? If the prices are set at such a low price, wouldn’t there always be an extra demand of credits?
2) Where are the supplies currently coming from? Are they from upgrades that are currently happening, or upgrades that will be made in future? The point is, why would people still upgrade when they can buy credits at such a low price? TMDL?
3) Who determined these prices of $2/$4? How were they calculated? The current spot price of phosphorus is $45 per pound, http://www.chemicool.com/elements/phosphorus.html ,Why is it so cheap in the exchange? It also costs about $45 to take out the a pound of phosphorus, according to professor Manos.
4) What role do local governments play this the exchange? Can MS4 municipality (regulated municipal separate storm sewer, a local government that owns a storm water sewer system within an urbanized area designated by the EPA) trade in the Exchange? (Because local government has money).
Next week, I hope to answer these questions and start working on the cost side of the analysis. I’m pretty happy to see that the idea of research is getting clearer and clearer everyday!