Air Emissions of Ammonia and Methane from Livestock Operations: Valuation and Policy Options

Abstract

The animal husbandry industry is a major emitter of methane, which is an important greenhouse gas. The industry is also a major emitter of ammonia, which is a precursor of fine particulate matter - arguably, the number-one environment-related public health threat facing the nation. We present an integrated process model of the engineering economics of technologies to reduce methane and ammonia emissions at dairy operations in California. Three policy options are explored: greenhouse gas offset credits for methane control, particulate matter offset credits for ammonia control, and expanded net metering policies to provide revenue for the sale of electricity generated from captured methane gas. Individually, any of these policies appears to be sufficient to provide the economic incentive for farm operators to reduce emissions. We report on initial steps to fully develop the integrated process model that will provide guidance for policymakers.

Keywords: methane, ammonia, carbon dioxide, greenhouse gases, climate change, offset, particulate matter, net metering, environmental policy, CAFO, manure management, biodigester, electricity, global warming, cost-benefit, incentive approach

JEL Classification: Q2, Q4, Q53