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Climate Change Policy and the Adoption of Methane Digesters on Livestock Operations

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Author Info

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

Abstract

Methane digesters—biogas recovery systems that use methane from manure to generate electricity—have not been widely adopted in the United States because costs have exceeded benefits to operators. Burning methane in a digester reduces greenhouse gas emissions from manure management. A policy or program that pays producers for these emission reductions—through a carbon offset market or directly with payments—could increase the number of livestock producers who would profit from adopting a methane digester. We developed an economic model that illustrates how dairy and hog operation size, location, and manure management methods, along with electricity and carbon prices, could influence methane digester profits. The model shows that a relatively moderate increase in the price of carbon could induce significantly more dairy and hog operations, particularly large ones, to adopt a methane digester, thereby substantially lowering emissions of greenhouse gases.

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Bibliographic Info

Paper provided by United States Department of Agriculture, Economic Research Service in its series Economic Research Report with number 102758.

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Date of creation: Feb 2011
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Handle: RePEc:ags:uersrr:102758

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Related research

Keywords: methane; methane digesters; manure; livestock; climate change; greenhouse gases; carbon offset; Environmental Economics and Policy; Financial Economics; Livestock Production/Industries; Resource /Energy Economics and Policy;

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Cited by:
  1. Key, Nigel D. & Sneeringer, Stacy E., 2012. "Carbon Emissions, Renewable Electricity, and Profits: Comparing Policies to Promote Anaerobic Digesters on Dairies," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 41(2), August.

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