Estimating learning benefits from research and development in anaerobic digestion systems for animal waste disposal and energy recovery

Published in 1978

This study presents an economic evaluation of anaerobic digestion systems as an alternative energy source, both from the view of the individual firm considering adopting this technology and from that of the public decision maker seeking to estimate the potential net benefits accruing from research and development expenditures in this area. Parameters of learning functions are estimated for four capacity ranges of animal production units using multiple regression techniques. The estimated relationships indicate that with each doubling of cumulative gross investment, there is a 13-18 percent decrease in the unit cost of gas production. These equations were used, along with equations representing the real rate of increase in natural gas price, to calculate breakeven points for firms and also the net benefits from adoption of manure/methane systems. Input parameters were varied to consider several states of nature. Results indicate that in most cases, operations with more than 750 head of feeder cattle will attain the breakeven point within the next decade. The greatest proportion of net benefits will accrue to states with; large cattle feeding operations. Externalities were determined to exist as a result of learning and nonmarket pricing of natural gas, and quantitive estimates of these externalities were made.

AZU_TD_BOX129_E9791_1978_329.pdf (4.94 MB)

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