Something stinks in California’s climate policies.
Years ago, the state set up a system that pays cattle farmers across the country to turn the methane emitted from cattle manure into natural gas, encouraging the dairy sector to produce a gas we burn instead of one that just pollutes the air.
It’s become wildly popular because the subsidies are extremely lucrative. But a growing body of research suggests the program is a case study in the shortcomings of our preferred approaches to climate action. Instead of simply forcing industries to directly cut their pollution or pay for it as a cost of doing business, legislators have repeatedly opted to set up convoluted incentive systems that swap climate responsibilities between parties and regions. As studies have shown again and again, these carbon offsetting and trading schemes often dramatically overstate the emissions reductions actually achieved in the one place that matters: the atmosphere.
The dairy program illustrates a particular version of this problem, muddling the impacts of different types of greenhouse gases in a way that researchers argue will lock in more warming in the future.
Despite this and other concerns, California regulators decided in 2024 to extend parts of the program beyond 2050. And a recent proposal by the state’s air resources board could send millions of additional dollars to dairy farmers as part of a plan that would ease restrictions on major greenhouse-gas producers.
Here’s how the system works: The state’s climate regulations require the transportation fuels industry to lower the carbon dioxide levels in its products over time—or purchase credits from other parties that cut fuel emissions, including cattle farmers.
Dairies generally spray cattle manure into giant open lagoons, where microbes gobble up organic matter and produce methane as a by-product. But if farmers set up what are known as anaerobic digesters, the sludge is redirected into covered vessels that capture the biogas, which can be converted into natural gas and injected into a pipeline. It can then be used to fuel certain vehicles or generate electricity in a power plant. Either way, petroleum companies can pay those farmers for Low Carbon Fuel Standard (LCFS) credits, to meet regulatory requirements in lieu of reducing the emissions from their own fuels.
Burning biogas in a bus or turbine still releases carbon dioxide, but the idea is that this process reduces market demand to extract natural gas from the ground and avoids the release of methane, which is a far more powerful greenhouse gas (at least initially). In fact, methane is so much more powerful that under California’s program, “adding one average biogas-powered vehicle to the fleet would produce enough LCFS credits to cover the deficits incurred by 26 similar gasoline-powered vehicles,” according to Aaron Smith, a UC Berkeley economist.
But there’s a problem with this carbon math. California assumes that methane exerts about 25 times the warming effect of carbon dioxide over a 100-year period. That’s not how it really works in the atmosphere, though.
Methane is very powerful, but it also breaks down quickly, generally within a couple of decades. Meanwhile, carbon dioxide builds up cumulatively in the atmosphere—and much of whatever we emit will continue heating up the planet for hundreds to thousands of years.
So, in effect, the state has created a system that reduces short-term warming at the cost of increasing all-but-permanent warming. Any methane that digesters capture today would have caused extra-powerful warning if released, but by 2050 that effect would have mostly faded away. Meanwhile, that additional carbon dioxide we permitted in its place could continue warming the world for millennia.
It is a good idea to cut methane emissions, and dairy digesters achieve this (though not always as effectively as hoped). But we can’t swap a decrease in short-lived greenhouse gases for an increase in long-lived ones if we hope to keep global temperatures within relatively safe levels in the coming century, as researchers have long warned. We have to slash both.
The problem I keep returning to, after years of covering carbon markets and offsets, is this: We need to clean up every sector, completely, over the next few decades. It’s increasingly untenable for so many of our climate ambitions to turn on getting one industry to make progress on paper by paying another one to reduce emissions, at a point when every business in every industry needs to be racing toward net zero.
It’s time to move past the idea that we need to reward sectors for doing us the favor of not polluting the atmosphere, and simply require them to stop unloading the huge environmental burden of their business onto society.
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