Anaerobic digestion allows farmers to create renewable energy and significantly reduce manure methane emissions. Methane emission reductions have the potential to be an important source of carbon dioxide offsets under cap and trade climate legislation. Estimates of the aggregate supply curve for CO2e offsets were developed based upon dairy farm data collected by the USDA/ERS Agricultural Resource and Management Survey (ARMS). The results provide insight regarding the potential for methane emission reductions and renewable energy generation on U.S. dairy farms. Offset prices in excess of $15 per ton of carbon dioxide equivalent would be required to reduce methane emissions from manure storages by 50 percent from 2005 levels.