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Abstract
Anaerobic digestion allows farmers to create renewable energy and significantly
reduce manure methane emissions. Methane emission reductions have the potential to be an
important source of carbon dioxide offsets under cap and trade climate legislation. Estimates of
the aggregate supply curve for CO2e offsets were developed based upon dairy farm data
collected by the USDA/ERS Agricultural Resource and Management Survey (ARMS). The
results provide insight regarding the potential for methane emission reductions and renewable
energy generation on U.S. dairy farms. Offset prices in excess of $15 per ton of carbon dioxide
equivalent would be required to reduce methane emissions from manure storages by 50 percent
from 2005 levels.