Carbon Emissions, Renewable Electricity and Profits: Comparing Alternative Policies to Promote Anaerobic Digesters on Dairies

Biogas recovery systems that use methane from manure to generate electricity have not been widely adopted in U.S. mainly because the costs of constructing and maintaining these systems have exceeded the value of the benefits provided. Climate change mitigation and renewable energy policies could increase profits for the operators of such systems thereby making digester adoption more widespread. For the U.S. Dairy sector, we examine digester adoption rates, emissions reductions, net returns, electricity generation, and program costs under different policy scenarios. We find that 3% or fewer dairies would need to adopt digesters to meet the policy goals of reducing 25% of greenhouse gas emissions from dairy manure or generating one million megawatt hours of electricity per year. A carbon pricing program provides the highest net social benefits for almost all policy goals considered.