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This paper provides a concise introduction to and evaluation of the Lake Taupo nitrogencap and trade program established as part of Waikato Regional Council's recent Regional PlanVariation Five. The policy establishes a catchment-wide cap on nitrogen losses by allocatingfarmers individual nitrogen discharge allowances and allowing those farmers flexibility to tradeallowances amongst themselves and to sell allowances to a public fund while remaining withinthe overall catchment cap. This paper seeks to explain the structure and evolution of thenitrogen trading market and to analyse its impact thus far by drawing on a wide variety ofrelevant perspectives. Research drawn from written material and basic quantitative data providethe basis for analysing the policy, while interviews with relevant stakeholders provide insight intothe successful, surprising and contentious issues which arose throughout its development andimplementation.
