Taxing cows to curb climate change

Cows on pastureWhen you fill your car's tank, you pay a gas tax. Someday, when you fill your belly with cheese, milk, or steak, you might have to pay another type of gas tax — one levied on the methane and nitrous oxide emitted by the cows that produced or became your food.

Bacteria in a cow's gut help digest what the cow eats. During this process, some of the bacteria emit methane, a potent greenhouse gas. Later on, as the cow's manure decomposes, it emits methane and nitrous oxide, another potent greenhouse gas. Consequently, some have suggested that beef, dairy cattle and other livestock should be included in climate change regulations, whether carbon taxes, cap and trade, cap and dividend, or some other approach. Other animals that emit greenhouse gases through digestion or manure decomposition, such as hogs and sheep, could also be subject to such a tax.

According to the Little Falls Times in New York, a report from the Environmental Protection Agency suggested that one policy option would be a tax on facilities with annual emissions of more than 100 tons of greenhouse gas per year. This could cover operations with more than 200 hogs, 50 beef cattle, or 25 dairy cows. For reference, 100 tons is approximately the annual emission of 17 passenger cars or the energy use by 8 average homes,  according to the EPA's equivalence calculator.  The annual levy would be approximately $20 for each hog, $87.50 per head of cattle, and $175 per dairy cow (the Madison Daily Leader says that these figures are from the American Farm Bureau Federation).

Via The Daily Climate, an aggregator of climate and environmental science news, I ran across comments from a U.S. senator who is not fond of the idea. "This proposal, which will impact New York from one end to the other, is so absurd that we have to put a stake through its heart immediately. Cows can’t change the way they are," Sen. Chuck Schumer (D-NY) told the Little Falls Times.

There are two big problems with that statement. First, even though cows can't change "the way they are," we can change how many of them we raise by adjusting our diets — choosing legumes instead of beef, or goat cheese instead of cows-milk cheese. We can also change how much methane and nitrous oxide reaches the atmosphere by altering manure management practices; for example, by installing methane digesters like those used at Straus Family Creamery in Marin County, CA. 

And second, the hard reality is that neither methane nor nitrous oxide can change the way they are, and they will continue to interact with the atmosphere in an undesirable way. (On a pound for pound basis, each of the gases is far more potent than carbon dioxide: the Fourth Assessment Report of the IPCC assigns methane a warming impact 25 times higher than carbon dioxide, and nitrous oxide one that's 298 times higher.)

Unfortunately, it's likely that such climate-change-curbing actions as a "cow tax" will create short-term economic turmoil. Small, independent farm businesses might have to raise their prices and thus suffer reduced sales, potentially driving many into bankruptcy before they could adapt by installing methane capture systems, switching from cows to goats (which emit far less methane), or establishing value-added businesses like farmstead cheese. Therefore, our policymakers need to identify ways to help meat ranchers and dairy farmers adapt to climate-change regulations, perhaps through low-interest loans, direct subsidies, or an adjustment to price-control regulations, as milk prices are highly regulated in the U.S. If a cap-and-trade program is implemented, then money for transitional programs could be raised by auctioning carbon-emission permits (as opposed to some politicians' plans to simply give away the permits based on historical emissions).

After the jump, I'll explore how the emissions are calculated, alternatives to the "cow tax," and what such a tax might actually cost producers and consumers.

Cattle are a significant source of greenhouse gas in the U.S. and around the world. The EPA's Inventory of Greenhouse Gas Emissions and Sinks estimates that the contribution of dairy and beef cattle through digestion (also known as "enteric fermenation") and manure decomposition is about 2% of the total anthropogenic greenhouse gas emissions in the U.S.  If we are going to be serious about tackling the climate change problem, then all human-caused sources of greenhouse gases must be included. Unlike burning gasoline or coal, where it's fairly simple to determine the emissions, it won't be easy to count those of cattle, as they probably vary based on feed, climate, genetics, and more. But we can certainly try.

Let's look at the emissions from milk production. A paper in the academic journal Agricultural Systems calculated the GHG emissions associated with milk production in Ireland. They considered "cradle to farm gate" emissions, so they summed the emissions from the animals, feed production, milk collection, and whatever processing occurs before the milk leaves the farm to come up with a figure of 1.5 kg of greenhouse gas per kg of milk. (Note that these emissions are expressed in "CO2 equivalent", or CO2e, which adds up the CO2 emissions, 25 times the methane emissions, 298 times the nitrous oxide emissions and whatever other greenhouse gases are emitted to obtain the amount of CO2 that would have the equivalent climate effect.)

About half of the emissions (49%) are emitted directly from the cows in the form of methane, as a result of their digestion; 11% of the emissions are related to manure management, which means that the direct contribution of the cows is 0.9 kg of CO2e per kg of milk. With annual U.S. milk production of around 85 billion kilograms, that's a lot of greenhouse gas emissions. (The milk production figure is the December 2008 Livestock, Dairy, and Poultry Outlook.)

We also need to look at how the emissions from cows and their manure compares to the rest of the dairy production chain — the diesel fuel to power the trucks, fossil-fuel electricity to pump and chill the milk — because they will almost certainly be included in cap-and-trade or a carbon-tax system. A few months ago I wrote about an academic paper by Christopher L. Weber and H. Scott Matthews from Carnegie Mellon University in which the authors performed a greenhouse gas life-cycle analysis of the average American's diet. One of their estimates was that dairy products average a life-cycle emission of about 4.2 kg CO2e per kg, making the cows' direct contribution to the overall greenhouse gas emission around 20%, a pretty significant number.

Looking at the overall household diet, Weber and Matthews found that methane emissions from cows made up a sizable contribution of the average diet's greenhouse gas emissions. They calculated that average annual household emission was 8.1 metric tons of CO2e, with about 16% of this derived from the methane emitted during production of red meat and dairy.

Alternatives to the 'cow tax'

While it's true that cows can't change the way they are, or their basic biology — at least not yet — we can change what we eat and how cows are raised.

For example, there are numerous protein sources that have far lower greenhouse gas emissions, like chicken, legumes, goats, pork, kangaroo, and so on. As the figure below indicates, when considering the entire supply chain (emissions from feed production, transportation, and the animals' emissions), poultry has a greenhouse-gas emission factor 8 times lower than feedlot beef, while pork's emission factor is about 4.5 times lower (the sources of the data are listed at the end of the post). Legumes are probably even lower. If climate change regulations ignore the far higher greenhouse-gas emissions from cows, it would be a de facto subsidy to the cattle and dairy industries.

Greenhouse gas emissions from fish, poultry and meat production

Similarly, there are methods to reduce greenhouse-gas emissions from dairy and cattle farms. Lots of  research focuses on determining how an animal's feed influences its methane emissions. For example, Living on Earth interviewed a researcher at the Swedish University for Agricultural Sciences whose team is sampling the emissions of dairy cows; researchers have investigated how different feed regimes affect methane emissions from goats; the USDA has an active study underway on emissions from dairy cows; the New Scientist has a summary of other research; and the U.N. report "Livestock's Long Shadow" discusses some other factors, like the importance of considering the greenhouse gases released in producing an alternative animal feed.

I'm sure that many Ethicurean readers are wondering about the grass versus corn equation. The New Scientist article referenced above cites research by Professor Ermias Kebreab and colleagues at the University of Manitoba indicating that cattle fed only grass had higher methane emissions than cattle fed a mixture of corn and grass. That's interesting, but it doesn't include the emissions required to produce the feed — most corn produced in the U.S. is drenched in petroleum, whereas grass can have a negative carbon impact by storing carbon in its roots. Having a carbon policy that considers the entire supply chain would therefore impose a higher cost on industrial corn than grass, potentially shifting feeding strategies.

A promising technology for reducing manure emissions involves decomposing the manure in an enclosed chamber, capturing the emitted methane, and then burning it to produce electricity or heat for the farmer (or selling it back to the utilities). A dairy with a methane capture system, for example, could receive a tax credit (or something similar) that would offset part of the cow tax and allow lower prices or higher profit. Or it is possible that pasture management strategies or conversion of cropland to forest could sequester significant amounts of carbon, thus canceling out some of the emissions from the cows.

Costs and signals

The newspaper articles I linked to above provide estimates of an annual levy of $175 per dairy cow. Although discussions of dairy costs and prices are made difficult by many layers of government policy (price supports, quotas, and so on) and complex distribution systems, we can look at some numbers to provide a frame of reference. The December 2008 Livestock, Dairy, and Poultry Outlook from the USDA (PDF) estimates that the average dairy cow provided 2,380 gallons of milk (20,467 pounds) in 2008, meaning that a $175 annual tax would amount to about 7 cents per gallon. The USDA has also provided data on operating costs for dairy farms (Report ERR-47) that indicates that a $175 per dairy cow tax would increase operating expenses by a few percent.

Although there are certainly farms and consumers who can't handle a few percentage points increase in expenses or prices, we're not looking at some kind of apocalyptic burden — like prices doubling — that will cause havoc across the entire milk market. Policymakers will need to consider ways to help smooth the transition to a lower greenhouse gas economy.

Finally, one of the frequent points in climate change discussions is that there are currently no penalties for emitting greenhouse gas, and so consumers don't receive direct signals about their emissions. Sure, there are books, reports, articles, and blogs that explain how beef differs from pork or peanut butter and jelly, but it takes extra effort to learn the differences. Having the costs of greenhouse-gas emissions built into the product will bring the difference to the forefront and let market forces work their magic on our product choices and the shape of the economy.

Policies that help our society make the transition to a low-carbon living might be painful to certain producers and eaters in the near term, but the consequences of doing nothing will likely be far worse. It would be helpful if, for a start, politicians learned about the issues instead of giving knee-jerk responses that put one constituency ahead of the what's best for the public.

Data sources
: The greenhouse-gas emission factor for wild fish is from Ambio, volume 34 (2005) 635-638; the farmed salmon emission factor is from Aquaculture, 272 (2007) 399-416; emission factors for sheep, beef and pork are from a report prepared for the Belgian Federal Office for Scientific, Technical and Cultural Affairs.

12 Responsesto “Taxing cows to curb climate change”

  1. Laura says:

    The idea does sound a little outlandish at first, but what it essentially does is bring the cost of beef in line with the true societal cost (i.e. production + environmental impact).  It's the concept that Jeffrey Sachs talks about in his book Common Wealth.  Politically difficult I would imagine, but certainly not stupid.

  2. Red Icculus says:

    Cows have been emitting gas longer than humans.  This is yet another example of why global warming is more a matter of faith than fact.

  3. Jackie says:

    I'm not against the tax, per se, but it sounds like it could become the next additional burden in a long line of burdens for the farmer.  Unless we direct market, we are forced to accept 'market prices' for our commodities, whether it is grain, milk or meat, so there will be no way to increase our prices to recoup the tax.   Beef producers already see a very small return on our product.  How long would it take for the tax burden to make it's way through market forces and be reflected in higher prices?  For small farmers, even a one year adjustment (loss) would be devastating.  It would likely favor larger CAFO's, like most regulation does.   In the end I think the idea is a good one, but unfortunately most regulation hurts the small farmer. just gave me something to chew on for the evening.  Thanks.

  4. Wow. Get real. Cows, and all other animals combined, produce less than 2% of the greenhouse gasses. Even if you really succeeded in taxing all the cows worldwide it would not have anywhere near as much effect as if you simply drove you car less.
    The other problem with this is that you assume global warming is bad. It isn't. The alternative, global cooling, which they were warning us about back during the 1970's, is far worse than global warming. The reality is the temperatures on our planet have gone up and down over the millennia. You're just used to the current temperature. Personally, I would like to see some global warming - winters are long and cold. I could do without the acid rain I keep getting from the mid-west... That is real pollution. Let's deal with real problems and leave the cow farts alone.
    Eat that beef burger and skip the SUV if you want to make a difference.

  5. Angie says:

    This is simplistic.It ignores some things. Much of the emissions is from soil and happens naturally.On farms or in the wild. Its all lumped together.Also your 7cents on a gallon of milk is at the wholesale level but you are thinking it is not much cuz your looking at the retail level. Farms only get paid $15 per 100 weit which is only $1.20 or so. Out of fhtat dollar they have to pay for the cow, farm, fuel, feed, and maybe they get paid too. More likely they work for free. You dont now what your talking about. Nice numbers. Look good feel good article but not real. It is like you are a submarine vegan.

  6. John Postlewaite says:

    It seems like a somewhat logical proposition, considering the potency and quantity of the gases being released, but it seems like it would be incredibly difficult to pass intelligent legislation that wouldn't damage small producers. Rotational grazing can enhance the quality of grasslands if done with care, sequestering carbon and enhancing soil quality, smaller producers generally market to closer consumers, and have many other positive effects that aren't necessarily directly related to greenhouse gas emissions but are incredibly important.
    With the size of conventional feedlot meat production (and their involvement in shaping government policy), it seems like well meaning legislation could be narrow sighted and could end up exacerbating the problem that it was attempting to solve.

  7. As someone who works to compare animal product consumption to things like peanut butter and jelly (thanks for the link), I do appreciate the simplicity of building the actual environmental cost into the product. I think this kind of fee for polluting the air is best done as part of a comprehensive system of taxing emissions - the key is that when we do get around for charging people for emissions from oil and coal, we also include agricultural emissions. Another idea would be to stop subsidizing the industries - it seems a little silly to subsidize the the livestock industry and its inputs (feed, water, land) with tax dollars while we're taxing it.

  8. This is exactly the sort of thing we want to raise awareness of.  Sometimes its the most unlikely things that significantly contribute to climate change.

  9. Jackie --
    You make some good points and ask some tough questions. The same small vs. large problem occurs in other regulations and perhaps this time it would be as uneven. There is a concept being floated called "cap and dividend" which might have promise. There are a few good commentaries on the subject over at Gristmill.

    There are places, however, where the CAFOs might be at a disadvantage. For example, they might be too large to quickly adapt to changing market conditions, or to change operations to create climate credits (perhaps by adjusting pasture management practices), or to get involved in direct marketing.

    Walter --
    Your argument that cows should be ignored because they are only 2% of the emissions inventory is a much better argument that "that's just the way they are," but I don't agree. The states of Indiana, Tennessee, Missouri, Maryland, and Wisconsin are each only 2% of the population, so why not exempt one of them from climate change plans? The combined populations of Montana, Delaware, South Dakota, Alaska, North Dakota, Vermont, District of Columbia, and Wyoming are 2% of the U.S. population, so should we exempt that colleciton of states? No, I think we should put it all on the table and then we'll see which sector is least costly to reduce. It might be that Americans would rather give up steak than driving everywhere -- after all, our diets are much easier to change than our transport networks. Or it might be that some greenhouse gas reductions can be achieved at a far lower cost in dairies than in power plants or transportation.

    As for the other items, I'll point readers to a Gristmill's collection of skeptic's favorite topics, the American Physical Society (e.g., "Emissions of greenhouse gases from human activities are changing the atmosphere in ways that affect the Earth's climate."), a National Academies report, and the Intergovernmental Panel on Climate Change's FAQs (PDF).

    Angie --
    The emissions I report above are only the methane emitted by the cow digestion process and the greenhouse gases emitted by the manure decomposition — emissions from the soil are considered in other parts of the EPA inventory.

    As for prices and costs, I don't know how a 7 cent increase in price at the wholesale level would ripple through the supply chain to the retail level. Would it be passed to the wholesaler and then to the consumer? How much would it increase as it got closer to retail? Double, triple, or more? And how would milk processors pass on higher energy or transportation costs because of carbon tax? I'm sure this has been studied in detail by ag economists, but I haven't run across any research. If you have any insights into retail milk economics there are probably many who would like to read them (including me).

    Incidentally, the USDA report that I cited above (ERR-47) notes that the average small dairy farm can't cover its costs and that there is a significant amount of free labor involved. For those who want to see numbers from the USDA's economic experts, it's worth a read. Looking at a dairy operation with a herd of 50-199 dairy cows, for example, the USDA reports an output of 16,157 pounds of milk per cow and total costs of $20.87 per hundred pounds of milk. About 30% of the operating costs are feed, 25% are labor, 25% are ownership costs related to the facilities.

    John --
    Ideally, there will be mechanisms so that farmers and ranchers can earn carbon credits from their land. Back in March, Living on Earth had a piece about Montana ranchers who are selling carbon credits on the Chicago Climate Exchange. A report from the Pew Center on Global Climate Change that discusses agriculture might also be of interest.

    The abundance of influence that Big Ag will be able to apply to policymakers is definitely worrisome. It's easy to see them sneaking in measures that squeeze small enterprises.

  10. Lisa McCrory says:

    I am feeling like something is missing here... if a herd of cattle is rotationally grazed on pasture, the action of grazing builds carbon in the soil as each time a plant is grazed a proportional amount of root mass is shed and left in the soil profile as carbonaceous material. That negative carbon impact should be subtracted from the methane that they emit from digestion.
    And if these same animals are leaving their manure on the pasture as they graze, their manure is not being contained in an anaerobic manure pond from which methane gas is created. Rather, it is being broken down immediately by birds, worms, dung beatles and other biological life. And again, a carbonaceous material is being left  behind to become food for the soil organisms and the plants.
    Management intensive grazing enhances this process of carbon sequestration, binding carbon instead of releasing. In all the material i am reading about the methane breathing green house monsters,  all the 'livestock' impacts that are being discussed are animals living in factory farm/confinement situations as is the manure that they excrete. We need to STOP lumping all livestock farming enterprises into one basket. I want to see these 'calculations' and I want to see some value associated with ecologially friendly, pasture based farming enterprises. If someone could direct me to some information like that, I would really appreciate it.
    Lisa McCrory

  11. Not only that, Lisa, but the government is stealing the value of our farm's forests which are soaking up about 1.4 tons of carbon per year. 
    The government turns around and sells the carbon credits to industry so they can pollute more and keeps the money while also charging us real estate taxes on those steep mountain forests and pretending that they are all developable at highest use as condominiums. 
    Then it gets worse, they propose taxing us on our carbon production from our pastured livestock. That's government for you.
    I calculated our family of five's carbon foot print at -300 tons per year per person. The government owes us big time for the carbon credits they're stealing and for the service we do of absorbing pollutants from the air.
    The whole carbon trading game is a scam. The perpetrators, industry and government, should be shut down and locked up for it. It's just a tool they use to generate more taxes and allow more polluting.

  12. andrew says:

    thank you, thank you, thank you. i'm very heartened to know that there are other people out there who understand how much cattle - managed correctly - can help the planet. it'll be a sad, sad day when responsible farmers are driven out of business by a ridiculous cow tax. yet another fault of the proposal - not mentioned so far - is that the tax, if assessed per cow, would further slant the playing field toward industrial agriculture, which gets far more meat and milk per cow than do farmers who don't pump their livestock full of hormones and antibiotics.