Regional economic aspects of carbon markets and anaerobic digesters in the USA: the case of swine production

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2024-04-05
Authors
Dumortier, Jerome
Burress, Molly
Valcu-Lisman, Adriana
Lewandrowski, Jan
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Society of Industrial Chemistry and John Wiley & Sons Ltd.
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Crespi, John
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Hayes, Dermot
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Economics

The Department of Economic Science was founded in 1898 to teach economic theory as a truth of industrial life, and was very much concerned with applying economics to business and industry, particularly agriculture. Between 1910 and 1967 it showed the growing influence of other social studies, such as sociology, history, and political science. Today it encompasses the majors of Agricultural Business (preparing for agricultural finance and management), Business Economics, and Economics (for advanced studies in business or economics or for careers in financing, management, insurance, etc).

History
The Department of Economic Science was founded in 1898 under the Division of Industrial Science (later College of Liberal Arts and Sciences); it became co-directed by the Division of Agriculture in 1919. In 1910 it became the Department of Economics and Political Science. In 1913 it became the Department of Applied Economics and Social Science; in 1924 it became the Department of Economics, History, and Sociology; in 1931 it became the Department of Economics and Sociology. In 1967 it became the Department of Economics, and in 2007 it became co-directed by the Colleges of Agriculture and Life Sciences, Liberal Arts and Sciences, and Business.

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1898–present

Historical Names

  • Department of Economic Science (1898–1910)
  • Department of Economics and Political Science (1910-1913)
  • Department of Applied Economics and Social Science (1913–1924)
  • Department of Economics, History and Sociology (1924–1931)
  • Department of Economics and Sociology (1931–1967)

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Center for Agricultural and Rural Development

The Center for Agricultural and Rural Development (CARD) conducts innovative public policy and economic research on agricultural, environmental, and food issues. CARD uniquely combines academic excellence with engagement and anticipatory thinking to inform and benefit society.

CARD researchers develop and apply economic theory, quantitative methods, and interdisciplinary approaches to create relevant knowledge. Communication efforts target state and federal policymakers; the research community; agricultural, food, and environmental groups; individual decision-makers; and international audiences.

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Abstract
The USA has significant potential to produce energy from anaerobic digesters (AD) due to the size of its agricultural sector. The use of ADs reduces greenhouse gas (GHG) emissions from manure management. The financial benefits to farmers come from the on-farm use, or off-farm sales, of biogas and its end products, namely renewable natural gas (RNG) or electricity. Current energy prices and policies in the USA are insufficient to trigger large-scale construction of ADs; however, payments to avoid GHG emissions and sequester carbon could become sufficiently high to prompt investment. This analysis quantifies the economic incentives necessary for the construction of ADs for swine producers and can easily be expanded to include other feedstocks. Various end-use pathways to produce RNG and electricity are considered to account for location, herd size, and other parameters to deliver a comprehensive analysis for the USA. The analysis and results are composed of a generic part to illustrate the effects of carbon payment on profitability in general as well as a specific analysis for states representing 83.6% of the US hog inventory. Our results indicate that carbon payments would be a stronger determinant than energy prices in farm-level decisions to install ADs, but that energy prices would be influential in determining the optimal biogas end use. The potential need for long-term contracts – both for energy and carbon payments – to reduce investment uncertainty and increase investment in ADs is also discussed.
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This article is published as Dumortier, Jerome, John Crespi, Dermot J. Hayes, Molly Burress, Adriana Valcu‐Lisman, and Jan Lewandrowski. "Regional economic aspects of carbon markets and anaerobic digesters in the USA: the case of swine production." Biofuels, Bioproducts and Biorefining (2024). doi:10.1002/bbb.2615. Works produced by employees of the U.S. Government as part of their official duties are not copyrighted within the U.S. The content of this document is not copyrighted.
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