Research Essay: Livestock, Greenhouse Gas Emissions, and Policies

This research essay, prepared for BSB113 Economics, delves into the significant contribution of livestock digestion and waste to greenhouse gas emissions, particularly carbon dioxide. It begins with an overview of the problem, quantifying the impact of livestock on CO2 production and referencing relevant studies. The essay then analyzes how these emissions affect economic equilibrium, highlighting the concept of negative externalities where the market fails to account for social costs. It illustrates this with a supply and demand model, showing how increased greenhouse gas production can lead to overproduction. The essay further explores potential policy solutions, including the implementation of a livestock methane tax on producers, non-price policies involving negotiation and technological innovation, and the promotion of alternative meat consumption to reduce the demand for livestock products. The conclusion emphasizes the importance of effective planning, execution, and monitoring for the success of these policies. The essay references several academic sources to support its arguments and findings.

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BSB113 ECONOMICS SEMESTER 1 2018
ASSESSMENT 2: RESEARCH ESSAY

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Table of contents
Introduction................................................................................................................................3
Overview of the contribution of livestock digestion to greenhouse gas emission.....................3
Analysis of the gas emission on the economic equilibrium of the market.................................4
Analysis of the policies to reduce the emissions........................................................................5
The livestock methane tax on producers................................................................................5
Non price policy on producers...............................................................................................5
Awareness regarding increased consumption of substitute for meat.....................................5
Conclusion..................................................................................................................................6
Reference....................................................................................................................................7

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Introduction
Greenhouse gasses have been a major concern for the environmentalists and the government
around the world. Due to the greenhouse effects, the balance of the weather and the climate
also gets disrupted. Although there are few of the advantages of greenhouse effects, its
disadvantages outweigh the advantages that it has. It is interesting to note that one of the
major sources of greenhouse gas is the wastes and the digestion of the livestock such as
cattle, sheep goats and many more. Therefore, it is a great concern for the governments to
manage the livestock in such a way that it balances the gas in the atmosphere of earth. The
aim of this paper is to analyse the contribution of livestock on the production of greenhouse
gasses. Apart from that, the paper also showcases a discussion regarding the policies that may
allow the administrations to reduce the problems.
Overview of the contribution of livestock digestion to greenhouse gas emission
Livestock and their wastes produce a lot of carbon dioxide in the atmosphere creating a
problem for the other lives on earth. As per the data, the wastes from livestock create about 7
gigatons of carbon dioxide in the atmosphere of earth. Again the study of UN food and
agricultural organization also has stated that the digestion and the wastes of the livestock
contribute to 18% of the production of CO2 in the environment. Gerber et al. (2013)
highlighted that the impacts of the livestock on the production of the CO2 in the environment
are almost same for the case of Australia as well. The food and agriculture department of
Australia in the research of 2015 stated that the wastes of cows and sheep mainly contribute
to the greenhouse gasses such as the carbon-di-oxide.
The demand for the livestock has been increasing with the increase in the population of the
world and the population of Australia as well. Beavan (2017) pointed out that the increase in
the demand for the livestock has been 13% more than the increase in the populations. There
are many of the stages which impact on the level of greenhouse in the atmosphere of the
earth. While the digestion and the wastes of the livestock contribute the most, the post-
slaughter transport, the refrigerator has also been reported to increase the level of greenhouse
gas in the atmosphere. Coglan (2016) stated that, 36% of all the contribution from the wastes
and the digestion of the livestock. This huge amount goes into the creation of the CO2 which
often goes beyond the capacity of the environment. Apart from that, the 16% of overall
contribution is through the packaging of the slaughtered livestock which also gives rise to the
CO2 level in the environment.

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Analysis of the gas emission on the economic equilibrium of the market
The increase in the greenhouse gasses due to the wastes and the digestion of the livestock, not
only impacts the environment and the atmosphere of the world it also influences the
economic outcome and the indicators as well. The increase in the greenhouse gas affects the
health of the customers of the market which the production of anything does not consider and
internalize. For example, the increasing greenhouse gas due to the livestock industry may
produce more than the equilibrium (Department of Agriculture, 2013). The producers in this
case only consider the private cost of productions and the demand from the side of the
customers. However, a social cost which also includes the cost to treat the diseases due to the
increased greenhouse gas in the atmosphere is often neglected.
Figure 1: the impacts of the negative externality on the equilibrium
(Source: Gerber et al. 2013)
As the figure 1 shows the avoidance of the social cost of the market results in the excessive
production in the market that does not efficiently allocates the resources of the market and
hence the market fails. When the cost of the treatment is included in the production of
livestock-related products, the supply of the product goes down. Now the producers include
the social cost which is more than the private costs and hence supplies fewer amounts at each
price levels. Therefore the supply curve shifts to the left reducing the production and
increasing the price of the products. Heffernan (2017) in this context noted that this increased
price of the products further reduces the negative externality benefiting the interest of the
environment and the human as a whole.

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Analysis of the policies to reduce the emissions
The livestock methane tax on producers
There are a number of ways the government can reduce the negative externality associated
with the industry of livestock and the related productions. First and the foremost actions
which are generally taken by the government throughout the world is the imposition of taxes
on the methane emissions. Methane is one of the greenhouse gasses that get exuded from the
cattle. The government set a basic allowable limit for each of the producers and extra taxes
are imposed for each extra emission of methane. This can compel the producers to reduce the
production due to the changes in the cost of production. However, Herrero (2016) contrasted
that, these taxes do not effectively work in practice due to the lack of proper inspection of the
government over the emission levels.
Non price policy on producers
Furthermore, the government can reduce the externality or compel the producers of the
industry to internalise the effect through negotiation and discussion with the stakeholders.
Through this process, the government using the representative can suggest the producers of
the market use a different technology for the production in the livestock industry. This will
not only guide the producers to adopt a new technology but innovation in the field can also be
generated. Herrero et al. (2016) stated that, it is important for the government to make sure
that the producers of the market are aware of the negative effects the production is having on
the environment and the humans. Philips and Wilks (2017) contrasted that this approach
paves the way for lobbying and bribery in the market which ultimately fails to influence the
level externality related to the production in the livestock industry.
Awareness regarding increased consumption of substitute for meat
Thirdly, the awareness regarding the use of alternative meat which does not come from the
livestock can also be undertaken so that production can be reduced. This approach to
reducing the externality takes a long time to implement the effects and hence needs to be
perfectly articulate before the implementation. Beavan (2017) highlighted that loopholes in
the execution from the side of the government may lead to further increase in the level of a
negative externality. Many studies have found out that lack of goals of the government and
proper intent may often limit the government to take serious action on the problem.

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Conclusion
Therefore, livestock digestion, along with the supply of food due to the increased population
of the world also contributes to the greenhouse gasses in the atmosphere as well. Mainly the
wastes and the digestions of these mammals contribute to the production of carbon dioxide in
the atmosphere of earth. Apart from that wastes and the digestion of the livestock, the
packaging and the transportation also does the damage. The main reason for the failure of the
market, in this case, is the avoidance of the social cost that is often overlooked by the
producers. There are many ways government can step in to curb negative externalities of the
industry. Although most of the approaches of the government have attracted criticism, they
can be made effective with proper planning, execution, and monitoring.

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Reference
Beavan, K. (2017, 22 Nov.) Australian red meat sector sets 2030 carbon neutral target at
Alice Springs producer forum. ABC News. Retrieved from
http://www.abc.net.au/news/rural/2017-11-22/meat-livestock-australia-sets-cattle-
industry-carbon-target/9180902
Coglan, L. (Compiler). (2016). BSB113: Essentials of Economics (4th ed.). Australia:
Pearson Australia, Chapter 11.2
Department of Agriculture. (2013). Australian agriculture: reducing emissions and adapting
to a changing climate. Key findings of the Climate Change Research Program. CC
BY 3.0. Retrieved from:
http://www.agriculture.gov.au/Style%20Library/Images/DAFF/__data/assets/pdffile/
0006/2359815/reducing-emissons-adapting-changing-climate.pdf
Gerber, P.J., Steinfeld, H., Henderson, B., Mottet, A., Opio, C., Dijkman, J., Falcucci, A. and
Tempio, G. (2013). Tackling climate change through livestock – A global assessment
of emissions and mitigation opportunities. Food and Agriculture Organization of the
United Nations (FAO), Rome. Retrieved from
http://www.fao.org/docrep/018/i3437e/i3437e.pdf
Heffernan, O. (2017). Sustainability: A meaty issue. Nature, 544, S18. doi: 10.1038/544S18a.
Retrieved from https://www.nature.com/articles/544S18a
Herrero, M. (2016, 22 March). To reduce greenhouse gases from cows and sheep, we need to
look at the big picture. The Conversation. Retrieved from
https://theconversation.com/to-reduce-greenhouse-gases-from-cows-and-sheep-we-
need-to-look-at-the-big-picture-56509
Herrero, M., Henderson, B., Havlík, P., Thornton, P. K., Conant, R. T., Smith, P., . . .
Stehfest, E. (2016). Greenhouse gas mitigation potentials in the livestock sector.
Nature Climate Change, 6, 452. doi: 10.1038/nclimate2925. Retrieved from
https://www.nature.com/articles/nclimate2925

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Philips, C. and Wilks, M. (2017, 22 February). No Animal required, but would people eat
article meat? The Conversation. Retrieved from https://theconversation.com/no-
animal-required-but-would-people-eat-artificial-meat-72372
Wilks, M. and Phillips, C.J.C. (2017). Attitudes to in vitromeat: A survey of potential
consumers in the United States. PLOS ONE, 12(2):
e0171904.https://doi.org/10.1371/journal.pone.0171904.