Jeff Sproule writes:*
When thinking about global warming and greenhouse gas (GHG) emissions, most people think about cars being the main culprit. Although they have a large effect on the atmosphere, livestock, especially cattle have more devastating results. Studies vary, but the results show that cattle are responsible for 10-20% of global warming. The main reason is cattle produce an extreme amount of methane from bacteria in their stomachs breaking down food. Methane actually has a greater ability to trap heat in the atmosphere than carbon dioxide. With this extreme amount of methane being produced, cattle are by far the most polluting livestock on the planet. So why are we eating so much of it? The reason is that the price of beef does not take into account all of the costs (mainly the negative externality of GHG's) therefore is consumed higher than the socially optimal level. The simplest way to reduce the amount of beef people are eating would be to create a “methane” tax similar to the carbon tax many countries/provinces have on buying petroleum products.
Bottom Line: Introducing a methane tax would aid the price system into closing the gap between efficiency and environmental friendliness.
* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.