Environmental benefits of Vegetarianism
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The production of meat and animal products at current and likely future levels is often considered as environmentally and ecologically unsustainable. It is also argued that even if sustainable, modern industrial agriculture is changing ecosystems faster than they can adapt. While vegetarian agriculture produces some of the same problems as animal production, the environmental impact of animal production is significantly greater.  Environmental vegetarians can be compared with economic vegetarians, who consider the meat industry economically unsound, and both citing the same efficiency concerns, many vegetarians see natural resources as being freed up by vegetarianism and veganism. These in turn can be contrasted with moral vegetarians, who see the eating of meat (and other animal products, in the case of vegans) as morally wrong.
"The cost of mass-producing cattle, poultry, pigs, sheep and fish to feed our growing population... include highly inefficient use of freshwater and land, heavy pollution from livestock feces... and spreading destruction of the forests on which much of our planet's life depends." - Time Magazine 11/8/99
Water is becoming an increasingly scarce resource in many parts of the world. Overuse by humans is damaging to rivers and ecosystems and leads to salinity and desertification. A vegetarian diet uses considerably less water than a meat based diet. This is because to produce meat, water must be used in the production of feed for animals, which must be fed to the animals during their entire life. The loss of water (and energy) between trophic levels is very large. When the grains go directly to humans this inefficiency is avoided. As an illustration, the water needed to produce a pound of wheat in the USA is 14 gallons whereas the water needed to produce a pound of beef is 441 gallons. More than half of the water use for all purposes in the USA is used for livestock production.
For reasons of inefficiency similar to that of water consumption, animal protein demands far greater expenditures of fossil fuel energy — eight times as much for a comparable amount of plant protein.This is wasteful of non-renewable fossil fuels and produces carbon dioxide, a greenhouse gas.
Animal production also creates damaging animal waste. In the United States, livestock account for nearly 20% of total methane emissions.  One ton of methane has the global warming potential of 23 tons of carbon dioxide. Substituting meat products with protein containing alternatives such as soy or beans would greatly reduce the amount of land, water and energy needed to feed a population.
Grazing and Land use
Factory farm animal production, while having a smaller land-use footprint, still requires large quantities of feed that must be grown over large areas of land. Mass free-range animal production requires land for grazing, which has prompted encroachment on undeveloped lands and clear cutting. The move into wild lands has increased the rate of species extinction and damaged the services offered by nature, such as the natural processing of pollutants. Over-grazed lands, especially in semi-arid regions lose their ability to support animal production due to rapid topsoil erosion and desertification because of the trampling hoofs of animals at unusual concentrations on the land.  This makes further agricultural expansion necessary. According to the United Nations, ranching-induced deforestation is one of the main reasons for the loss of plant and animal species in tropical rainforests.
Trawling is similarly destructive to sea ecosystems, removing around 5-25% of an area's seabed life on a single run, although if conducted only at low levels and well managed it can be a sustainable practice.  Overfishing has been widely reported because of increases in the volume of fishing hauls to feed a quickly growing number of consumers. This has lead to the breakdown of some sea ecosystems and several fishing industries whose catch has been greatly diminished.   The extinction of many species has also been reported.  According to a Food and Agriculture Organization (FAO) estimate, over 70% of the world’s fish species are either fully exploited or depleted. 
“Overfishing cannot continue, the depletion of fisheries poses a major threat to the food supply of millions of people.” - Nitin Desai, Secretary General of the 2002 World Summit on Sustainable Development
Petroleum is one of the resources freed up for other usage by a vegetarian diet: Within the Pulitzer-winning book by John Robbins, "Diet for a New America," which uses data primarily sourced from the world's largest body of scientists, AAAS, Robbins explains how the petroleum used in the transportation of farm-animals, the later processing of them, and the raising and harvesting of the vast amount of crops fed to farm-animals (which is much greater than the amount of crops people would need if we were to eat the crops directly, rather than feeding them to animals, then eating the animals), adds up to greatly increase the amount of petroleum used. So, if more people adopt a vegan diet, not only is more food available, but more petroleum to deliver that food is.
Many believe that if everyone followed a vegetarian diet, thus freeing up resources that would be used in meat production, we would be many steps closer to eliminating world hunger. A popular saying is that even with more food, the problem is transporting all of that food to the starving people. The petroleum freed up by a vegetarian diet as shown above may answer that dilemma.
Critics of this view may observe that the root causes of world hunger are often traceable to harmful political structures rather than genuine resource shortages. Moreover in developing countries where hunger is more common, animals bred for meat are seldom fed food that is consumed by human beings; instead they are often free ranging cattle or goats or chicken that simply eat grass and other food stuff that is thrown away by people. The exact extent to which animals are free ranging against domesticated is not known, but there is no doubt that the trend is towards increased domestication, with only a small proportion of meat consumed coming from wild animals.