Abstract: As a main livestock and poultry fecal pollution management method, biogas project offers several advantages including clean energy, limited greenhouse gas emissions and environmental pollution. Using the Dongting Lake District (DLD) in Hunan Province as a case study, environmental cost control potential of livestock and poultry fecal pollution management via biogas projects was analyzed. The analysis was based on small scale CDM (clean development mechanism) project (ASM III.D-version14), approved by the CDM Executive Board under the United Nations Framework Convention on Climate Change and Environmental Cost Estimation Method. The results indicated that greenhouse gas emission was reduced by 2 891 614 ton equivalent CO₂, and the environmental cost by 0.452 billion Yuan (RMB) in terms of greenhouse gas emission, provided that for the pig breeding farms with annual productions of 5 000 pigs, the biogas project was used to generate electric power in DLD; and for other pig breeding farms, the biogas project was used for heating and lighting in the surrounding residents in 2006. Concurrently, the reduced environmental cost of water pollution, soil contamination and microbial contamination was 0.456 billion RMB, 0.169 billion RMB and 0.532 billion RMB, respectively. It was therefore concluded that farmers with biogas projects (to manage livestock and poultry fecal pollution) should be supported and encouraged to achieve the environmental, economic and social benefits harmonically of livestock and poultry fecal pollution management.