5. Calculation of Tradina Values for Phase and Phase II
This calculation was done for each nutrient individually. and for nutrients as a
whole. The results are shown in Table
Table
Basin Cost-Effectiveness Values
per kilogram per
Parameter
9
Phosphorus
Nutrients, in general
Estimating a trading value
Although undocumented, it appears that the following approach was used to
calculate the nutrient trading value for Phase of the Tar-Pamlico Nutrient
I
Trading Program (Danielson. 1994):
The Tar-Pamlico Phase 1 reduction goal was 200,000
of "nutrient".
this total, 20,000
was for phosphorus and 180,000
was for
nitrogen. As seen in Table
the annual cost for each kilogram was
9 for phosphorus, and for nitrogen. The weighted average cost
therefore is:
.10
kg N I 200.000 kg
(20,000 kg
200,000 kg
This is the estimated full cost (both government and farmer shares) of the
"average"
to obtain the Phase 1 target. However, since only 75
percent of the cost must be cost-shared, the value is:
.10
.32
which, when rounded is equal to the trading fee of
75
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