Comparing the cost effectiveness of GHG mitigation options on different Scottish dairy farm groups

Abstract

Greenhouse gas (GHG) mitigation is one of the main challenges faced by agriculture sector especially under an increasing demand for food. Production expansion needs to be accompanied by reductions in the GHG emission intensity of agricultural products. However, any uptakes of mitigation options by the farmers depend on the cost effectiveness of adopting such options as well as the farm characteristics. A highly effective mitigation option might not be practical for a farmer if the associated costs are high. A list of mitigation option implemented on different farm types with their cost effectiveness on farms would therefore be very useful for farmers as well as policy makers to make a decision. This paper aims to explore the use of three GHG mitigation options on different dairy farm groups in Scotland and determine the cost effectiveness of each of the options in those farm groups. The mitigation options considered for this paper are; i) use of sexed semen, ii) installing and using anaerobic digester and iii) increasing the share of concentrate diet. Farm level data from the Scottish Farm Accountancy dataset (FAS) was used and a cluster analysis was carried on to identify different dairy farm groups. The potential reduction of GHG emission per farm, including emissions arising from inputs used on the farm, under each of the option is then calculated using the GLEAM life cycle assessment model. An optimising farm level model, ScotFarm, was used on each of the farm groups to determine the optimum farm net margins under a baseline situation (with no options implemented) and three mitigation scenarios. The cost effectiveness of all three mitigation options are then determined based on reduction in GHG emission per farm and change in farm net margins under those options. Initial results for the sexed semen scenario suggest that this option can be cost effective for both efficient dairy farms (-£6.26/tCO2e) and medium-sized dairy farms (-£12.56/tCO2e).