Assessment of Social Welfare Impacts and Cost–Benefit Analysis for Regulations on Cattle Manure Treatment

As cattle are criticized for contributing to environmental problems by emitting pollutants, it is expected that environmental regulations on livestock will be strengthened. This will lead to an increase in the costs and benefits associated with these regulations. This paper develops a model that clearly shows the effects of environmental regulations on the production costs for cattle-breeding farmers and the changes in social welfare, as well as environmental benefits. The benefits associated with the regulation are measured by evaluating reductions in both greenhouse gas (GHG) and ammonia emissions. These benefits are then compared to the reduction in social welfare. According to the analysis, the reduction in social welfare, in terms of consumer and producer surplus, outweighs the environmental benefits. These results suggest that, in designing environmental regulations, policy measures are needed to alleviate producers’ economic burdens and minimize reductions in social welfare through byproduct utilization and technical support. Furthermore, this study contributes to laying the institutional foundation for the sustainable development of the livestock industry and the reduction in management costs associated with manure treatment.