Comparison of GHG-Emission Indicators for Dairy Farms with Respect to Induced Abatement Costs, Accuracy, and Feasibility

Bernd Lengers, Wolfgang Britz and Karin Holm-Müller

Applied Economic Perspectives and Policy, 2013, vol. 35, issue 3, 451-475

Abstract: There is broad debate about including agriculture in greenhouse gas (GHG) reduction efforts such as the European Emissions Trading Scheme. Since most agricultural GHG emissions originate from non-point sources, they cannot be directly measured, and therefore have to be derived by calculation schemes (indicators). We designed five such GHG indicators for dairy farms and analyzed the trade-offs between their feasibility, measurement accuracy, and level of induced abatement costs. Analyses of induced abatement costs and calculation accuracy are based on emission reduction simulations with a highly-detailed single-farm optimization model. Feasibility is discussed in a qualitative manner. Our results indicate that the trade-offs depend on both farm characteristics and the targeted reduction level. In particular, the advantages of detailed indicators decrease for higher abatement levels. Only the least feasible indicator led to abatement costs that would result in emission efforts at given prices in the European Emissions Trading Scheme, although with a rather small potential. Our results thus suggest little potential for including dairy production into market-based reduction policies. Copyright 2013, Oxford University Press.

Date: 2013
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