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

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  • Key, Nigel
  • Sneeringer, Stacy

Abstract

Anaerobic digesters can provide renewable energy and reduce greenhouse gas emissions from manure management. Government policies that encourage digester adoption by livestock operations include construction cost-share grants, renewable electricity subsidies, and carbon pricing (offset) programs. However, the effectiveness and efficiency of these policies is not well understood. For the U.S. dairy sector, we compare predicted digester adoption rates, carbon emission reductions, renewable electricity generation and sales, and net returns and social benefits of several policies. We find that a carbon pricing policy provides the greatest net social benefit for a range of assumptions about the benefits of carbon reductions and renewable energy.

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  • Key, Nigel & Sneeringer, Stacy, 2012. "Carbon Emissions, Renewable Electricity, and Profits: Comparing Policies to Promote Anaerobic Digesters on Dairies," Agricultural and Resource Economics Review, Cambridge University Press, vol. 41(2), pages 139-157, August.
    • Handle: RePEc:cup:agrerw:v:41:y:2012:i:02:p:139-157_00
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    References listed on IDEAS

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    1. Jeffrey R. Stokes & Rekha M. Rajagopalan & Spiro E. Stefanou, 2008. "Investment in a Methane Digester: An Application of Capital Budgeting and Real Options," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 30(4), pages 664-676.
    2. Key, Nigel D. & Sneeringer, Stacy E., 2011. "Carbon Markets and Methane Digesters: Potential Implications for the Dairy Sector," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 43(4), pages 1-22, November.
    3. Leuer, Elizabeth R. & Hyde, Jeffrey & Richard, Tom L., 2008. "Investing in Methane Digesters on Pennsylvania Dairy Farms: Implication of Scale Economies and Environmental Programs," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 37(2), pages 1-16.
    4. William F. Lazarus & Margaretha Rudstrom, 2007. "The Economics of Anaerobic Digester Operation on a Minnesota Dairy Farm," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 29(2), pages 349-364.
    5. Key, Nigel D. & Sneeringer, Stacy E., 2011. "Climate Change Policy and the Adoption of Methane Digesters on Livestock Operations," Economic Research Report 102758, United States Department of Agriculture, Economic Research Service.
    6. Clark P. Bishop & C. Richard Shumway, 2009. "The Economics of Dairy Anaerobic Digestion with Coproduct Marketing," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 31(3), pages 394-410, September.
    7. 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.
    8. 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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    Cited by:

    1. Lim, Teng & Massey, Ray & McCann, Laura & Canter, Timothy & Omura, Seabrook & Willett, Cammy & Roach, Alice & Key, Nigel & Dodson, Laura, 2023. "Increasing the Value of Manure for Farmers," USDA Miscellaneous 333552, United States Department of Agriculture.
    2. Njuki, Eric & Bravo-Ureta, Boris, 2014. "A Bayesian Approach to Analyzing the Economic Costs of Environmental Regulation in U.S. Dairy Farming," Working Papers 33, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
    3. Benavidez, Justin & Thayer, Anastasia W., 2018. "Poo Power: Revisiting Energy Generation from Biogas on Dairies in Texas," 2018 Annual Meeting, February 2-6, 2018, Jacksonville, Florida 266636, Southern Agricultural Economics Association.
    4. Benavidez, Justin R. & Thayer, Anastasia W. & Anderson, David P., 2019. "Poo Power: Revisiting Biogas Generation Potential on Dairy Farms in Texas," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 51(4), pages 682-700, November.
    5. Anh Sam & Xiang Bi & Derek Farnsworth, 2017. "How Incentives Affect the Adoption of Anaerobic Digesters in the United States," Sustainability, MDPI, vol. 9(7), pages 1-14, July.

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