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BSB113 Economics Semester XXXXXXXXXXAssessment 2: Research essay Submission date FRIDAY 4th MAY 12 noon (12:00hrs) Please note that the submission time of this essay has been set for 12 noon as this...

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BSB113 Economics Semester XXXXXXXXXXAssessment 2: Research essay Submission date FRIDAY 4th MAY 12 noon (12:00hrs) Please note that the submission time of this essay has been set for 12 noon as this is during working hours and you will have access to IT help desk should you require help submitting your essay via SafeAssign Research essay requirements  This assessment has a MAXIMUM WORD limit of 1400 words (excluding your reference list – but inclusive of in-text citations)  The essay is to be submitted through SafeAssign via the BSB113 blackboard website (see BB assessment 2 folder for detail. You are advised to keep a copy of your work for your own records.  The assessment should be submitted as a WORD document or PDF. Please note that other file formats may not be able to be opened and will be assumed to be a non-submission.  It is your responsibility to check that the document has uploaded to SafeAssign and that it is the correct document. If you need help on how to check contact IT support (do not contact your tutor or UC).  Work that has been submitted for assessment in BSB113 in previous semesters cannot be resubmitted for assessment. If identified, re-submitted work from previous semesters will be treated as plagiarism.  QUT exercises zero tolerance on late submissions without an approved extension.  If special circumstances prevent you from meeting the assessment due date, you can apply for an extension. If you do not have an approved extension prior to the submission date, you should submit the work you have completed by the due date and it will be marked against the assessment criteria.  You will NOT be able to view your plagiarism report. Refer to the FAQs in the supporting assessment document (BB assessment 2 folder) as to why.  We strongly recommend that prior to submission you ensure that you have read ALL the related assessment documents.  Your essay will be marked against the published CRA for this assessment. (At the end of the Assessment Documentation). 2 Scope of research essay Meat and Livestock Australia (MLA) take a proactive approach to reducing their sectors carbon emissions. MLA have approached BSB113 Consulting1 requesting an economics analysis of greenhouse gas emissions associated with farming livestock (specifically cows and sheep). They have requested that the economic analysis is framed around the following article: Herrero, M. (2016, 22 March). To reduce greenhouse gases from cows and sheep, we need to look at the big picture. The Conversation. Retrieved from https://theconversation.com/to-reduce-greenhouse-gasesfrom-cows-and-sheep-we-need-to-look-at-the-big-picture-56509 The economic analysis should be presented in essay format and address the following tasks. 1. An overview of the contribution of livestock digestions to greenhouse gas emissions. Both global and Australian data comparisons are requested by MLA. 2. An analysis of the effect of greenhouse gas emissions from livestock digestions on the economic efficient equilibrium of the market. This analysis should be framed around a diagrammatic exposition of the economic theory of externalities, and as a minimum, should clearly identify the theoretical market and efficient equilibrium and any deadweight loss. 3. An analysis of policies to reduce livestock industry’s carbon emissions from livestock digestions (shifting the industry from the current market equilibrium towards an economic efficient equilibrium). This is to be limited to consideration of: (i) a livestock methane tax on producers (ii) a non-price policy on producers. MLA have requested that the focus is on the introduction of a new production technology (iii) an increased consumption of substitutes for meat that are not derived from livestock. MLA has indicated that they are particularly interested in the potential impact on the sector’s emissions from increased consumption of near perfect substitutes. A brief summary of the potential economic effects (costs and benefits) of each of the above policies (i, ii and iii) is required. However, MLA understands that a full analysis of the dynamic effects of these policy solutions in beyond the scope of this work, as the focus is on using a partial equilibrium analysis. 1 BSB113 Consulting provides economic analysis to Australian Government and Industry. BSB113 Consulting, real economics for real world problems. 3 Recommended reading Beavan, K. (2017, 22 Nov.) Australian red meat sector sets 2030 carbon neutral target at Alice Springs producer forum. ABC News. Retrieved from http://www.abc.net.au/news/rural/ XXXXXXXXXX/meat-livestockaustralia-sets-cattle-industry-carbon-target/ XXXXXXXXXXCoglan, L. (Compiler XXXXXXXXXXBSB113: Essentials of Economics (4th ed.). Australia: Pearson Australia, Chapter 11. 2 Department of Agriculture XXXXXXXXXXAustralian agriculture: reducing emissions and adapting to a changing climate. Key findings of the Climate Change Research Program. CC BY 3.0. Retrieved from: http://www.agriculture.gov.au/Style%20Library/Images/DAFF/__data/assets/pdffile/0006/2359815/reducin g-emissons-adapting-changing-climate.pdf Gerber, P.J., Steinfeld, H., Henderson, B., Mottet, A., Opio, C., Dijkman, J., Falcucci, A. and Tempio, G XXXXXXXXXXTackling climate change through livestock – A global assessment of emissions and mitigation opportunities. Food and Agriculture Organization of the United Nations (FAO), Rome. Retrieved from http://www.fao.org/docrep/018/i3437e/i3437e.pdf Heffernan, O XXXXXXXXXXSustainability: A meaty issue. Nature, 544, S18. doi: XXXXXXXXXX/544S18a. Retrieved from https://www.nature.com/articles/544S18a Herrero, M. (2016, 22 March). To reduce greenhouse gases from cows and sheep, we need to look at the big picture. The Conversation. Retrieved from https://theconversation.com/to-reduce-greenhouse-gases-fromcows-and-sheep-we-need-to-look-at-the-big-picture-56509 Herrero, M., Henderson, B., Havlík, P., Thornton, P. K., Conant, R. T., Smith, P., . . . Stehfest, E XXXXXXXXXXGreenhouse gas mitigation potentials in the livestock sector. Nature Climate Change, 6, 452. doi: XXXXXXXXXX/nclimate2925. Retrieved from https://www.nature.com/articles/nclimate2925 Philips, C. and Wilks, M. (2017, 22 February). No Animal required, but would people eat article meat? The Conversation. Retrieved from https://theconversation.com/no-animal-required-but-would-people-eatartificial-meat-72372 Wilks, M. and Phillips, C.J.C XXXXXXXXXXAttitudes to in vitromeat: A survey of potential consumers in the United States. PLOS ONE, 12(2): e XXXXXXXXXXhttps://doi.org/10.1371/journal.pone XXXXXXXXXXThis material will be covered in the week 7 lecture after the semester break. 4 General guidance notes The content In economics we generally start by framing the problem. We also refer to this as setting the context. In this part of your essay (Task 1), you need to articulate what the issue is. This is not simply a case of stating “I think it is a problem because …” You need to present an informed context which is supported by peer reviewed published research (not the Courier Mail) and data from reputable sources. In setting the context, you should also include details of the economic and social costs associated with the problem. The case that you make in this section provides the basis for economic policy solutions you will present in part 3. The theory needs to relate to the economics issue(s) identified in part 1. You will need to present the correct theoretical economic model and explain it using appropriate economic terminology (Task 2) In Task 3, potential policy solutions are critical analysed from an economic perspective. Your analysis should be framed with reference to the economic theory presented in Task 2. That is, how does each policy shift the market to the efficient equilibrium? The key to this part of the essay is to keep it simple. Give an overview of each policy, detail how it will work to address the issue under consideration and give a brief summary of the potential strengths and limitations of that policy approach based on what you find from the research literature. Note, you are not required to say that one policy is better than another. A key feature of economic analysis is that it is objective. Whilst this work has been commissioned by a particular stakeholder, it should be an unbiased and informed critical economic analysis and not a political document. For example, a particular policy solution may shift the market towards an economic efficient solution, but may not be great for the stakeholder (e.g. it may increase their costs and reduce their revenues etc.). In contrast, a policy solution may potentially improve the position of the stakeholder, but at the expense of economic efficiency. The latter should not be given a greater weight because of the audience. In summary:  clearly frame the “problem” by setting the context  use an appropriate economic theory to show how economist’s view this problem  write an unbiased and informed critical economic analysis and not a political document. Do not get drawn into reporting emotive arguments (interesting as they are).  be academically rigorous, ensuring that your analysis is underpinned by references to peer revie 5 Examples of scholarly sources include:  Academic journals  University working papers/publications  Government and related departments/organisations reports (e.g. Australian Bureau of Statistics (ABS))  International economic organisations articles and reports (e.g. OECD, United Nations and World Bank)  Central Bank articles and reports (e.g. Reserve Bank of Australia) Examples of high quality sources of relevant data would include ABS, OECD, World Bank, Government reports etc. A common theme of all of the above published literature is that it is peer reviewed. Peer review is a process that is used to ensure that published work represents the best scholarship currently available (and is also technically correct, not misleading etc.). In contrast, non-peer reviewed literature represents the opinion of the authors with only their guarantee that it is the best work possible. Reliance on non-scholarly sources as part of your research is to be avoided. Examples of non-scholarly sources include:  newspaper reports  magazines articles  non-peer reviewed articles and reports (be careful of private consultation reports, political papers etc.)  subject-based dictionaries and/or glossaries (including Wikipedia)  personal blogs/websites Non-scholarly sources do have a role. As a matter of course you should be informing yourself about contemporary issues by reading a range of non-scholarly sources (e.g. by reading the newspaper). Within nonscholarly sources there is a hierarchy of more acceptable publications that you should engage with. These include good quality newspapers (e.g. The Australian and The Financial Review) and specialist magazines (e.g. The Economist)). Similarly, Wikipedia is a great starting point for looking up definitions or getting an overview of a subject. However, using Wikipedia as a key source in your work simply demonstrates that you have failed to engage in the challenging, but rewarding, academic exercise of researching high-quality scholarly resources. Reading hints and tips Is there a “trick” for working your way through the reading list. Fortunately there is.  scanning the documents and locating specific words or phrases that are of interest. Focus on headings and subheadings, the contents page itself and the index for specific words (Top tip: it is easy to search PDF documents for keywords).  when reading, be strategic. Some papers may be useful to support your arguments, other may not.  get some help on how to read research papers. Studywell (http://www.studywell.library.qut.edu.au/) has some excellent advice on how to read (fast) and digest research papers. Maximum word length Your research essay has a MAXIMUM WORD limit of 1400 words (excluding your reference list – but inclusive of in-text citations). Your word count for each section will be specific to your individual essay (informed by the weighting in the criteria reference assessment table at the end of this document). Note that your essay should include both an introduction and conclusion (but do not overdo the introduction or conclusion as that means fewer words for the important bits). 6 Presentation You are advised of the following stylistic requirements:  use font type Arial, font size 10 (minimum)  line spacing should be single or no greater than1.25  margins should be set at 2.3cm  all diagrams should be reproduced either by hand or imbedded in your document using a draw tool. For example, Paint or the draw tool in Word,3 or Excel. If you draw the diagrams by hand you will need to scan them so they can be incorporated in your SafeAssign submission. Cutting and pasting of diagrams from other documents is not acceptable and will be marked as copying (refer to CRA).  all pages should be numbered (bottom footer right hand side) and include your student number (top header, right hand side)  include a title page. This should include your name, student number and tutor’s name. Late submission Assessment submitted after the due date without an approved extension will not be marked and will receive a grade of 1 or 0%. If special circumstances prevent you from meeting the assessment due date, you can apply for an extension. If you do not have an approved extension you should submit the work you have completed by the due date and it will be marked against the assessment criteria. Helpful advice on writing your research essay Your writing style needs to be clear and efficient (after all you only have 1400 words). Some key advice would be:  remember structure in writing - introduce, discuss and conclude.  use short sentences - long sentences lose the reader.  one argument/idea per paragraph. This assessment is a formal academic piece of writing. The words and language style you use will convey this. Language used should be appropriate. Things to avoid include informal language, shorthand or colloquialisms. A short check list of advice would include:  use “do not” instead “don’t”  use “cannot” instead of “can’t”  write in the third person – avoid using personal pronouns. For example: “Research shows that ….” rather than “I think that …”. Descriptions should be quantified and/or relative to a comparable benchmark. For example:  instead of saying “there was a massive increase in China’s economic growth” you would phrase it as “China’s economic growth, as measured by GDP, increased by X% over the period (include citation of where your evidence came from)”.  instead of saying “GDP in China was better than everyone else’s” you would phrase it “GDP in China increased by X%. In comparison it fell by X% in USA and X% in the UK (include citation of where your evidence came from).” Tables and figures in themselves do nothing to enhance an argument unless they are clear AND explained AND interpreted by you for the reader. When inserting a table or figure into your work it is good practice to give each a number (e.g. Figure 1, Table 1) and title it (the title should describe what the table or figure is presenting) and refer to the table or figure number explicitly in the text. 3 See http://office.microsoft.com/en-au/word-help/draw-a-curve-or-circle-shape-HA XXXXXXXXXXaspx?CTT=3#BM14. There are also a lot of good instructions on the internet (including Youtube) on how to construct diagrams using the Draw tool in Word. 7 Place the table or figure as near to the paragraph that you are going to discuss it in (either directly above or below). An example is given below in Figure 1. If you have hand drawn your tables and figures attach them to the end of your document. Figure 1. How to present diagrams and tables In your reading, you will come across tables and figures that may be useful in explaining or supporting a point that you want to make in your own work. Try to avoid cutting and pasting from articles and the text book. Relevant tables and figures should be adapted to support your work and referenced. Figures (especially those relating to theory) can be redrawn in Paint or Word (using the draw tool). Similarly, tables of data can be created in Excel and imported into Word (or created in Word using the table tool) to reflect the information that is relevant to your analysis. Further support for Assessment 2 Support for this assessment item includes:  Lecture 7/ tutorial 7  Consultations with tutors  Supporting documentation (including this document) Please note tutors will be prepared to discuss your approach but will not read drafts. In addition to the above, generic skills support and help can be sought from a range of sources:  4S workshops o See Blackboard announcements for 4S workshops. Information of other generic skills workshops can be found at https://www.student.qut.edu.au/learning-and-assessment/workshops-andacademic-help/workshops  Student Learning Advisors o https://www.student.qut.edu.au/about/faculties-institutes-anddivisions/faculties/business/manage-your-studies/study-support/student-learning-advisers  Study smart o http://studysmart.library.qut.edu.au/
Answered Same Day Apr 01, 2020 BSB113

Solution

Deepika answered on Apr 07 2020
133 Votes

Student’s No.
Economic Analysis of the Problem of Greenhouse Gas Emissions from Livestock Secto
Student’s Name -
Student’s No. -
Tutor’s Name -
Introduction
Climate change is threatening the ecosystem and has implications for the present as well as future generations. One major cause of global warming is rising greenhouse gas emissions. Livestock sector is a major contributor of gas emissions due to livestock digestion. There is an urgent need to take measures to reduce these emissions and frame the economic policy to shift the market equili
ium to efficient level. This paper aims to discuss the present statistics on these emissions, how these emissions are causing market failure i.e. inefficient outcome and suggest ways in which the market could be shifted towards efficiency by reducing greenhouse emissions arising out from the livestock sector.
1. Overview of the contribution of livestock digestions to generate greenhouse gas emissions
There has long been huge concerns about the sustainability of livestock sector due to rapidly rising greenhouse gas emissions from livestock digestion. The livestock sector is contributing to the emissions in the following way:
a) Each year around 1.6-2.7 billion tonnes of greenhouse emissions, mainly methane, are produced from livestock digestion.
) Production of feed for livestock produces nitrous oxide which contributes 1.3-2.0 billion tonnes of emissions.
c) Land use change like clearing land for animal pastures contributes another 1.6 billion tonnes of emissions. (He
ero, 2016)
The annual inventory of 2015 conducted by Australian Government shows that agriculture contributed for about 16 % of Australia’s greenhouse gas emissions in 2013. The
eakup of the sources is:
    Enteric fermentation in ruminant livestock
    66.3 %
    Agricultural Soils
    15.5 %
    Prescribed burning of savannas
    10.8 %
    Manure Management
    3.9 %
    Liming and urea application
    2.4 %
Table 1 Australia’s Agricultural Sources of greenhouse gas emissions in 2013
(Source: Department of Agriculture and Food)
Table 1 indicates that within the agriculture sector which contributes to almost 16 % emissions, one third are from enteric fermentation in ruminant livestock. If we look at the world data based on global emissions from 2010, agriculture, forestry and other land use contributes 24 % of greenhouse gas emissions. (IPCC, 2014)
The amount of emissions varies across the globe, with developing world contributing around 70 % of emissions mainly because they account for a large population of animals which are used for a variety of purposes beyond production of meat, milk and eggs. (He
ero, 2016) Though Australia is not among the top ten emitters of the world, but the share of livestock is still high and has to be curtailed using appropriate policy measures.
2. Impact of emissions from livestock digestions on the economic efficient equili
ium of the market
Market failure is when the market is not functioning efficiently. One of the reason for market failure is the presence of externalities. Externalities could be positive or negative. In either case, these result in inefficient outcome in the market. There is negative externality associated with livestock industry. Negative externality also called external cost, occurs when the producer does not take into consideration the external cost of its production process in its total cost of production. This means that Marginal Private Cost (which is lower than Marginal Social Cost) is considered and its intersection with Marginal Social Benefit curve is used to determine the free market allocation. At this point quantity produced is higher than what is socially desirable. This is shown in Figure 1 as QP. However, the socially efficient output is QS (where MSC = MSB). This means that the amount of the product that will be produced is more than the socially efficient amount in case of a negative externality. There is net welfare loss to the society in this case, which is equal to the triangle formed in between the three grey dots. This welfare loss is also called as the deadweight loss, as this does not go to either the producer or consumer or government. Rather this is wastage for the society as a whole. This is because too much is being produced in the market and marginal cost to society is greater than the marginal benefit to society.
Figure 1 Negative Externality
Where
MEC = Marginal External Cost
MPC = Marginal Private Cost
MSC = Marginal Social Cost
MSB = Marginal Social Benefit
QS = Socially desirable quantity
QP = Quantity produced considering only private cost
This way we can say that livestock sector is also operating at socially inefficient level of output, producing at point QP it is not taking into consideration the external cost of its operations in the form of greenhouse gas emissions. Livestock digestion, farting, urination, all these activities release gas emissions.
3. Possible Policy initiatives to reduce emissions from livestock secto
i) A livestock methane tax on producers
A methane tax on producers is based on the polluter pays principle. The imposition of methane tax on producers is likely to generate the greatest reduction in emissions at the lowest social cost per unit of abatement. This tax will internalise the externality. The producers who consider private cost will consider social cost of their production while deciding output to be produced. When methane tax is imposed, it shifts the supply curve leftwards from S to S’ as shown in Figure 2.
This raises price and reduces quantity to socially efficient level. This also generates revenue for the government, the proceeds of which could be used in supporting the livestock industry itself. Methane tax would also encourage producers to upgrade their technology so that they could limit their emissions. However, the efficient rate of taxation, administrative cost associated with it, tax evasion could pose as challenges in the imposition of methane tax. Also, if the demand for livestock products is inelastic, the whole of increased cost due to methane tax could be passed on to the consumers in the form of higher prices without any effect on production. To avoid this, people could be made aware about the possible consequences of their consumption of livestock products.
Tax
Figure 2 Impact of Methane Tax on Producers
ii) A non-price policy on producers
Taxes interfere in the cost and price structure and fail to affect the economic outcome if the demand is inelastic. Due to this reason some non-price policy initiatives could be taken which include adopting such practices which could reduce the level of emissions originating from the digestion and farting of livestock, mainly cattle and sheep.
Laboratory trials for testing the effectiveness of dietary supplements and feed alternatives like oils, fats, enzymes, algae, legumes etc. to reduce methane emissions are going on. One such measure is to include seaweeds in cattle diet. Research and trials on sheep resulted in “60 percent methane reduction for a 1 percent diet of seaweed, but a 2 percent seaweed diet caused a 70 percent reduction, and a 3 percent diet caused an 80 percent reduction,” Dr Kinley. (McCarthy, n.d.) However, such feed changes could have implications for the total productivity of livestock. This may reduce their production levels.
The grazing pastures of livestock pile up the stocks of nitrous oxide as urea (found in animal urine and manure) gets converted into nitrous oxide. Producers could be asked to use Urease inhibitors (chemical additives) on such lands to decrease the rate of nitrous oxide that is emitted from manure. (Department of Agriculture, Australia)
Potential vaccines could also be used to reduce methane production. Improved
eeding and animal health could help to shrink the herd overhead (i.e. unproductive part of the herd and related emissions. (FAO, 2013)
These non-price mitigation measures require active governmental support in terms of doing viability analysis, promotions and providing credits to the mitigators in order to encourage them.
iii) An increased consumption of near perfect substitutes that are not derived from livestock
Livestock sector has the twin challenge of reducing emissions and of raising output of livestock products due to high demand it faces. The demand for livestock products including meat, eggs, milk is continuously rising as a result of rising population and u
anization.
An alternative to solve this problem is to promote the consumption of plant based proteins and cultured meats in place of animal protein and traditional meat products. The pasture land could then be used for plantation of other non-animal based protein rich foods. But this could result in the interference in the dietary patterns of the population and may also hinder with the nutritional requirements of people. Another point that should be noted before doing any transition in the food system is that agriculture is a major contributor in the GDP and a significant employer too. Any change could have implications for the sustainable development goals.
Conclusion
Australia has a good amount of share in the global livestock greenhouse gas emissions. Livestock mainly produce methane and nitrous oxide emissions which are major greenhouse gases having much greater global warming potential than ca
on dioxide. The presence of these emissions are resulting in socially inefficient outcomes in the livestock sector. Possible policy initiatives to reduce these emissions include the imposition of methane tax on producers which has
ight prospects of being a successful measure; non-price policies like introducing dietary supplements and feed alternatives and a boost to the consumption of near perfect substitutes for livestock products need to be provided by the active involvement of government in this task.
References
Department of Agriculture, Australia
https:
www.agriculture.gov.au/ag-farm-food/climatechange/australias-farming-future/livestock-emissions
https:
www.agric.wa.gov.au/climate-change/how-australia-accounts-greenhouse-gas-emissions
Ge
er, P.J., Steinfeld, H., Henderson, B., Mottet, A., Opio, C., Dilkman, J., Falcucci, A. and Tempio, G.(2013). Tackling climate change through livestock – A global assessment of emissions and mitigation opportunities. Food and Agriculture Organization of the United Nations (FAO), Rome. Retrieved from
http:
www.fao.org/docrep/018/i3437e/i3437e.pdf
He
ero, M. (2016, 22 March). To reduce greenhouse gases from cows and sheep, we need to look at the big picture. The Conversation. Retrieved from
https:
theconversation.com/to-reduce-greenhouse-gases-from-cows-and-sheep-we-need-to-look-at-the-big-picture-56509
McCarthy M. (n.d.), Seaweed-fed cows could solve livestock industry’s methane problems. ABC News. Retrieved from
http:
www.abc.net.au/news
ural/2017-04-21/seaweed-fed-cows-could-solve-livestock-industry-methane-problems/8460512
US Government
https:
www.epa.gov/ghgemissions/global-greenhouse-gas-emissions-data
Cost and benefit
MSC = MPC + MEC
MPC
MEC
MSB
QS
QP
Quantity
Price
MSC = S’
MPC = S
MPB = MSB = D
QS
QP
Quantity
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