The Potential Supply of Carbon Dioxide Offsets from the Anaerobic Digestion of Dairy Waste in the United States

Brent A. Gloy

Applied Economic Perspectives and Policy, 2011, vol. 33, issue 1, 59-78

Abstract: Anaerobic digestion allows farmers to create renewable energy and significantly reduce manure methane emissions. Estimates of the aggregate supply curve for carbon dioxide (CO2) equivalent offsets from the adoption of anaerobic digestion (AD) were developed based upon dairy farm data collected by the National Agricultural Statistics Service/Economic Research Service Agricultural Resource and Management Survey. The estimated supply curve demonstrates how the supply of CO2 offsets from AD would be influenced by offset prices. A sensitivity analysis examines how changes in capital and operating costs, as well as energy prices, would influence the supply of offsets. Under a base set of assumptions, offset prices in excess of $15 per ton of CO2 equivalent would be required to reduce methane emissions from manure storages by 50% from 2005 levels.

Date: 2011
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