Following my posts on this a few weeks ago (here and here), I spoke with Andy Pratt, a very smart biochemist in the Department of Chemistry here at U of C.
My question was why we should care about methane emissions from cows that are part of a closed cycle in which the carbon in the grass is converted into methane inside the cow, belched into the atmosphere as a highly potent greenhouse gas that then relatively quickly breaks down into CO2, and then gets reasorbed as renewed pasture growth.
The faithful readers of this blog suggested two reasons why it may not be a closed cycle. One was that the carbon content of urea derived from fossil fuels might represent a net injection of carbon into the atmosphere. The other was that pasture that is not eaten would otherwise degrade and form a carbon sink in the ground.
Andy tells me that neither is an issue. Urea is potentially a contributor to GHG emissions, but that is because of the enormous amounts of energy required in its production, rather than the carbon content of the urea per se.
So we should think about methane issues as a closed cycle and be concerned only about the effect of the flow on the steady-state stock, not on the flow itself.
There are two reasons, however, why we might want to focus on methane, one economic, one political. The economic reason is that, despite the impact of methane emissions being far less than the "20 times as potent as CO2" mantra would suggest, it could still be the case that reducing the steady-state of methane in the atmosphere would be a more cost-effective strategy for limiting the growth in the stock of GHGs (in CO2 equivalent units) than reducing use of fossil fuels.
The political reason is that international agreements such as Kyoto focus on reducing emissions below a benchmark set by the country's prior behaviour. In this context, it makes sense for us to overstate the contribution our methane has made to GHG emissions in order to give us an easier benchmark from which to make our reductions.
I am now convinced, however, that my original logic is right. If methane is 20 times as potent a GHG as CO2, it is not the case that the optimal Pigouvian tax on methane emissions would be 20 times that on CO2 emissions.