In response to my post on Clark on climate change, in which I suggested that farmers should be paying the cost of their emissions rather than receiving an environmental subsidy from the government, Muerk asked the obvious question: wouldn't this cause prices to rise? And could this have bad equity effects by pricing low income families out of dairy consumption?
I've just spent the last half hour geeking out trying to answer this question. Here's my quick calculations:
According to Fonterra's summary of the dairy industry, there are 3.85 million dairy cows in New Zealand, producing 14.6 billion litres of milk. So each cow produces on average 3792 L of milk.
According to the latest inventory report, each cow produces:
- 117 kg / year of nitrogen in urine. Using the measured emissions factor of 0.01 and the standard Global Warming Potential of 310, this turns into 0.3627 T CO2-e per year of nitrous oxide.
- 79.4 kg / year of methane from enteric fermentation, and 0.889 kg / year of methane due to shit. Using the standard emissions factor of 21, this turns into 1.686 T CO2-e per year of methane.
Added up, this is just under 2.05 T CO2-e per cow per year. The cost of those emissions varies depending on who you ask - the government says $20 / tonne, the Greens $30. Using the Greens' figure to get a high estimate, this means an additional $61.50 a year per cow. Dividing by 3792 L of milk yields an extra 1.6 cents a litre. Hardly going to break the bank, is it?
Similar calculations to find the carbon cost added to each sausage or steak are left as an exercise for the reader.