Trading pig excrement
Trading pig excrement - a particularly smelly form of market failure
Pig meat accounts for nearly 40% of global meat consumption. Pigs emit methane from their nether regions (excrement) and these are a contributory factor to global warming. Under EU rules for emissions, this increases farmer's costs. So what's the solution? Well agricultural firms can capture the methane and then use it as a bio-fuel rather than allowing it to be emitted into the atmosphere. Farmer's will then be able to claim carbon credits under EU emissions trading market.
No, this really isn't an April Fool! Read the following articles: Pig manure means big bucks and Where there's muck, there's brass and answer the questions below. You can read these in the windows below, or follow the previous link to read the article in a separate window. Then answer the questions below questions below.
You may also like to read the following articles relating to recycling methane from pigs:
Explain why methane emissions are considered a form of market failure.
Using diagrams, as appropriate, show how methane emissions from pig waste may result in a misallocation of resources.
Using the diagrams from question 2, show the impact of using technology to collect the methane from pigs and sell it or use it to gain carbon credits.
Examine how the EU carbon emissions trading system help to reduce emissions of greenhouse gases.
Evaluate two policies that the government could implement to encourage the use of alternative fuels like the new pig fat bio-diesel.