Climate Change Changes the Equation on Investments in Circular Agriculture: The Potential of Anaerobic Digesters in Uruguay

Abstract

On-farm manure management technologies have an important role to play in protecting natural resources, balancing human and animal health, and boosting farmers resilience to climate shocks. This paper demonstrates the potential of anaerobic digesters on dairy farms to make farms more resource independent for adaptation to climate change. It answers the question – what would the economic benefits be if every dairy farmer in the country were using an anaerobic digester? This study demonstrates how on-farm investment in sustainability under the current scenario requires complementary public investment, because most benefits accrue at societal level. However, in facing some of the worst impacts of climate change, benefits shift to become private, and farmers have larger incentives to invest in resilience. These findings have implications for investments worldwide, as water is projected to become a major limiting factor to agricultural production worldwide.

Keywords: anaerobic digestion, climate change, circular economy, on-farm, circular technologies, water