Policy incentives and adoption of agricultural anaerobic digestion: A survey of Europe and the United States

Highlights

The first case-study analysis of the policy environment and adoption of agricultural AD in Europe and the US.

Policy leaders – who provided support to agricultural AD starting in the 1990s – were motivated by energy security concerns.

Policy followers – who enacted policies in the 2000s, were likely driven by policy learning, lower costs, and higher returns to waste management.

Germany’s stable feed-in-tariff reduced the uncertainty and improved the profitability of investing in agricultural AD, and adoption blossomed.

Differences in the policy support yielded major differences in adoption across countries, thus supporting the threshold hypothesis.

Abstract

Despite extensive and widespread knowledge of the advantages of agricultural anaerobic digestion (AD), adoption of the technology has not been uniform across the globe. What explains this uneven adoption across countries? Policy and empirical evidence from five case study countries – Germany, Denmark, Netherlands, Austria and the United States – indicate that rather than comparative technological advantage or abundance in feedstock availability, differences in adoption was the outcome of differences in policy incentives, notably the feed-in tariff, a finding that offers empirical support to the threshold model of adoption. The stable financial support of a feed-in tariff provided to investors in agricultural AD, particularly in Germany, led to wide adoption. The evidence also suggests that differences in the enactment of the feed-in tariff was influenced by energy security concerns for policy leaders, but by learning-by-doing in terms of policy implementation and lower operating costs for policy followers.

Keywords

  • Adoption;
  • Feed in tariffs;
  • Anaerobic digestion

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