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Carbon Emissions, Renewable Electricity and Profits: Comparing Alternative Policies to Promote Anaerobic Digesters on Dairies

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  • Key, Nigel D.
  • Sneeringer, Stacy E.

Abstract

Biogas recovery systems that use methane from manure to generate electricity have not been widely adopted in U.S. mainly because the costs of constructing and maintaining these systems have exceeded the value of the benefits provided. Climate change mitigation and renewable energy policies could increase profits for the operators of such systems thereby making digester adoption more widespread. For the U.S. Dairy sector, we examine digester adoption rates, emissions reductions, net returns, electricity generation, and program costs under different policy scenarios. We find that 3% or fewer dairies would need to adopt digesters to meet the policy goals of reducing 25% of greenhouse gas emissions from dairy manure or generating one million megawatt hours of electricity per year. A carbon pricing program provides the highest net social benefits for almost all policy goals considered.

Suggested Citation

  • Key, Nigel D. & Sneeringer, Stacy E., 2011. "Carbon Emissions, Renewable Electricity and Profits: Comparing Alternative Policies to Promote Anaerobic Digesters on Dairies," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103440, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea11:103440
    DOI: 10.22004/ag.econ.103440
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    References listed on IDEAS

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    1. MacDonald, James M. & O'Donoghue, Erik J. & McBride, William D. & Nehring, Richard F. & Sandretto, Carmen L. & Mosheim, Roberto, 2007. "Profits, Costs, and the Changing Structure of Dairy Farming," Economic Research Report 6704, United States Department of Agriculture, Economic Research Service.
    2. Brent A. Gloy, 2011. "The Potential Supply of Carbon Dioxide Offsets from the Anaerobic Digestion of Dairy Waste in the United States," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 33(1), pages 59-78.
    3. Roberto Mosheim & C.A. Knox Lovell, 2007. "Scale Economies and Inefficiency of U.S. Dairy Farms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(3), pages 777-794.
    4. Denley, Jonathan & Herndon, Cary W., Jr., 2008. "Financial Analysis of Implementing an Anaerobic Digester and Free Stall Barn System on a Mississippi Dairy Farm," 2008 Annual Meeting, February 2-6, 2008, Dallas, Texas 6786, Southern Agricultural Economics Association.
    5. Ernst, Matthew & Rodecker, Jared & Luvaga, Ebby & Alexander, Terence & Kliebenstein, James & MIRANOWSKI, JOHN A, 1999. "The Viability of Methane Production by Anaerobic Digestion on Iowa Swine Farms," ISU General Staff Papers 199910010700001329, Iowa State University, Department of Economics.
    6. Brent A. Gloy, 2011. "The Potential Supply of Carbon Dioxide Offsets from the Anaerobic Digestion of Dairy Waste in the United States," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 33(1), pages 59-78.
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    Keywords

    Environmental Economics and Policy; Livestock Production/Industries;

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