Coral reefs thrive in nutrient poor water. Excess nutrients from runoff, wastewater treatment plants, coastal development, marinas, and other sources can encourage the growth of fast-growing macroalgae, which can smother a reef. The macroalgae block out the sunlight, preventing the zooxanthalae that grow on the coral from conducting photosynthesis. Then, the symbiotic relationship between the algae and the coral is compromised, resulting in death of the coral. 
A new study has shown that reefs overgrown with algae or characterized by coral rubble and send chemical cues that repel juvenile fish, while healthy coral colonies attract new recruits. 
Overview and Definition
Nutrient loading is the influx of nutrients into the water surrounding reefs that negatively affects the overall health of the reefs. The influx of nutrients comes most commonly from development on land in areas close to reefs. The lack of management of nutrient runoff directly affects the amount of nutrients that enter the body of water. 
Indirect effects include adjustments to cycles of carbon, hydrogen, and oxygen. These adjustments affect the biosphere and in turn limit tourist interaction. In most Caribbean communities, the tourist industry is the main industry. When nutrient loading occurs, tourist levels decrease and detrimental effects are incurred with the local economy. 
Direct effects include algae build up, degradation of reefs, relocating of fish life, and nutrient cycling adjustments. Algae build up leads to limited sunlight and increased calcification. Increased calcification leads to the degradation of reefs and in turn the relocating of fish life. Nutrient loading also adjusts nutrient cycling and how coral reefs filter and adjust to the nutrients themselves. Sunlight reduction is a direct effect of nutrient loading as the availability of light decreases directly as a function of particle concentration and water depth.
Nutrient Loading in the Bigger Picture
Nutrient loading, and more specifically land based pollution sources, are the primary cause of reef degradation. In the Caribbean, 80% of ocean pollution originates from land development. Run-off carries large quantities of sediment from land-clearing, high levels of nutrients from agricultural areas and sewage outflows, and pollutants such as petroleum products and pesticides. Furthermore, excess nutrients lead to poor water quality and poor water quality causes decreased oxygen and increased nutrients in water. This is commonly referred to as eutrophication and occurs in other parts of the world, not just near coral reefs. 
Eutrophication leads to algae growth on reefs, crowding out corals, significantly degrading ecosystems, pesticides interfering with coral reproduction and growth, and pathogens that can be introduced to coral reef systems. Two examples of this are aspergillus sydowii, a disease in sea fans, and serratia marcescens, a disease linked to white pox. 
The ENCORE Experiment
The School of Biological Sciences at the University of Sydney launched an experiment in which nutrients naturally introduced to The Great Barrier Reef in Australia were measured and compared to past local statistics and current global statistics. The location consisted of twelve small patch reefs. Three of the reefs received no treatment and the remaining 9 received treatments including the influx of NH4Cl, KH2PO4, and a combination of the two chemicals. The experiment lasted over two years. Biological processes were not affected, other than coral reproduction, in all three sub-sections of reefs. Coral mortality levels increased almost suddenly at one and a half years into the survey. 
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Dixson, Danielle L., David Abrego, and Mark E. Hay. Chemically mediated behavior of recruiting corals and fishes: A tipping point that may limit reef recovery. Science 22 August 2014: Vol. 345 no. 6199 pp. 892-897. DOI: 10.1126/science.1255057