Economic and environmental impacts of mitigation technologies on dairy and cattle farms in the Republic of Ireland

Abstract This paper analyses the economic effects of adopting greenhouse gas mitigation measures on Irish dairy and cattle farms. Using an unbalanced panel dataset from 2018 to 2022, we estimate a translog cost function to assess input price elasticities, focusing on grass and crop production for animal feed. Farms are grouped according to soil and climate conditions to capture heterogeneity in environmental performance. Our findings reveal consistent substitution patterns between home-produced forage and purchased feed, with three key insights: (i) substitution is stronger in dairy systems; (ii) farms adopting mitigation measures show greater substitution, likely due to higher investment capacity; and (iii) substitution is more prevalent under poorer environmental conditions, reinforcing the economic and environmental advantages of on-farm forage production. This research contributes to the literature by integrating environmental heterogeneity and mitigation strategies into input substitution analysis. The results underscore the need for aligned policy supports to promote the adoption of sustainable practices, particularly in the context of Ireland's climate targets.