an economics analysis of greenhouse gas emissions associated with farming livestock (specifically cows and sheep).

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Externalities in livestock
Global warming is one of the serious issues that the world is trying to find a solution to today. The ever-increasing greenhouse gas emissions have been blamed for global warming. This has led to rising atmospheric concentration changing our climatic conditions (Jose et al. N.p). According to recent studies, livestock farming has resulted in over 6 billion in tones of produced gases. The figure can be estimated to be above 18% of all the emitted gases (Herro, N.p). Mainly cows and sheep rearing have contributed to the emission where they account for about 12% due to the high level of production of their products.
The worlds tracking mechanism for the emission of livestock greenhouse gas is very ineffective in the producing countries only held responsible despite the export of the livestock products (Zaks, 17-18). Although we derive a lot of benefits from cows and sheep’s, like meat, milk and other products, its increased production has resulted in negative externalities hence affecting the equilibrium market leading to market failure. The externality is due to the pollution from livestock farming where according to studies manure accounts for the second highest pollutant of the GHGs (Aguirre-Villegas, and Larson, 1-2). Others include fodder feeds, grazing and the manufactured feeds that have a bearing on the pollution level (Leip, 6).
By definition a negative externality results to a third party incurring a cost or suffering from an economic transaction or process.

The eternality, therefore, comes into effect when the production of a good makes a third party to suffer like in these case emissions of the GHHs (Tejvan, N.p). Livestock farming thus resulting in the rising of the marginal social cost ( MSC) which is at a higher level than the private marginal cost ( MPC).

The result of this externality is a welfare loss to the society. For example the production of livestock whose rearing leads to emissions, its market equilibrium only develops if the marginal private Benefit is the same as the Private Marginal Cost hence point A below will be its true Market price. However due to the emissions, there are external cots hence the output is at Q1 at the point B (Economics, N.p). At the point Q then the MSC is greater than the MSB leading to a social loss. From the diagram, the marginal loss is 5 million dollars. This is the deadweight loss which is very significant. The emissions affect the real market equilibrium pushing it upwards leading to market failure (“Positive Externalities Vs. Negative Externalities – Quick comics”, N.p).

Work cited
Aguirre-Villegas, Horacio A., and Rebecca A. Larson. “Evaluating Greenhouse Gas Emissions From Dairy Manure Management Practices Using Survey Data And Lifecycle Tools”. Journal Of Cleaner Production, vol 143, 2017, pp. 169-179. Elsevier BV, doi:10.1016/j.jclepro.2016.12.133.
Economics. “Negative Externalities”. Economicsonline. Co.Uk, 2018, http://www.economicsonline.co.uk/Market_failures/Externalities.html. Accessed 2 May 2018.Herro, Marrio. “To Reduce Greenhouse Gases From Cows And Sheep, We Need To Look At The Big Picture”. The Conversation, 2018, https://theconversation.com/to-reduce-greenhouse-gases-from-cows-and-sheep-we-need-to-look-at-the-big-picture-56509. Accessed 2 May 2018.Jose, V. Sanjo et al. “Modeling Of Greenhouse Gas Emission From Livestock”. Frontiers In Environmental Science, vol 4, 2016. Frontiers Media SA, doi:10.3389/fenvs.2016.00027. Accessed 2 May 2018.Leip, Adrain. Evaluation Of The Livestock Sector’s Contribution To The EU Greenhouse Gas Emissions (GGELS). 2010, https://ec.europa.eu/agriculture/sites/agriculture/files/external-studies/2010/livestock-gas/exec_sum_en.pdf. Accessed 2 May 2018.
“Positive Externalities Vs Negative Externalities – Quickonomics”. Quickonomics, 2018, https://quickonomics.com/positive-externalities-vs-negative-externalities/. Accessed 2 May 2018.Tejvan.”Negative Externalities”. Economicshelp.Org, 2016, https://www.economicshelp.org/micro-economic-essays/marketfailure/negative-externality/. Accessed 2 May 2018.Zaks, David. Reducing negative environmental externalities from agricultural production: methods, models and policies. 2010, https://nelson.wisc.edu/sage/docs/profiles/thesis_1651.pdf. Accessed 2 May 2018.