A framework for cost-effectiveness analysis of greenhouse gas mitigation measures in dairy industry with an application to dairy farms in China

Abstract

The dairy industry is a significant contributor to global greenhouse gas emissions (GHG). Although much effort has been directed to explore the cost-effective measures for many sectors such as electricity, building infrastructure, transportation, research on mitigation measures within dairy industry remains limited. A notable obstacle is the absence of a cost-effectiveness analysis (CEA) framework to guide decision-makers and practitioners in this sector. In response, we propose a comprehensive CEA framework tailored to mitigate GHG emissions in the dairy industry. Our conceptual framework consists of six steps: defining the system boundary to determine the activities generating GHG emissions; identifying GHG emission sources within the system boundary; identifying potential mitigation measures; determining methods to quantify GHG emissions; collecting data to estimate both GHG emissions and mitigation costs; and applying general econometric methodologies to analyze the cost-effectiveness of mitigation measures. We further conducted a case study focusing on dairy farms in China, analyzing three categories of mitigation measures: feed, energy, and manure management. The results indicate that implementing effective feed and energy measures is a cost-saving strategy, reducing the cost per unit of milk production. Conversely, adopting effective manure management measures may lead to increased costs for dairy farms. The findings offer strategic recommendations for reducing GHG emissions from dairy production in China and provide analytical insights and strategic references applicable to other developing countries.