Greenhouse Gas Emissions and Technical Efficiency in Alberta Dairy Production: What Are the Trade-Offs?

Stephanie Le, Scott Jeffrey and Henry An

Journal of Agricultural and Applied Economics, 2020, vol. 52, issue 2, 177-193

Abstract: The impact of greenhouse gas (GHG) reduction on the efficiency of Alberta’s dairy industry is assessed through a technical efficiency analysis over the period 1996–2016, with and without emissions included as a “bad” output. Environmentally adjusted technical efficiency and technical efficiency estimates are highly correlated; thus, reducing GHG emissions may not result in decreased efficiency. Increased milk per cow, a southern Alberta location, and increased use of forage are associated with greater environmentally adjusted technical efficiency. The opportunity cost of foregone milk revenue associated with reduced emissions is Can$308.29 per metric ton of GHG. The results imply possible policy strategies to reduce emissions.

Date: 2020
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