Animal husbandry in high-income countries is increasingly criticised for its low animal welfare levels and its high environmental impact. This chapter explores the key challenges and options of governing the transition to a more sustainable livestock sector in high-income, open economies. Raising animal welfare standards can significantly increase production costs, which—in open economies and within integrated markets—may lead to domestic production being replaced by imports produced at lower welfare standards. This could theoretically be prevented by international harmonisation of animal welfare standards, public animal welfare payments to offset the cost gap resulting from stricter standards, or by requiring imports to comply with the domestic animal welfare standard (national treatment). International agreement on high levels of common animal welfare standards seems practically infeasible, and no country has so far engaged in sectoral increases of animal welfare accompanied by compensatory animal welfare payments. National treatment, in contrast, has been applied by several states in the United States and may also be considered by other countries, particularly when the political and societal will to provide public funding is lacking. Animal husbandry also has a substantial environmental footprint, impacting biodiversity, greenhouse gas (GHG) emissions, as well as air and water quality. The most effective strategy for reducing the environmental impact of animal husbandry in high-income countries is a significant reduction in animal product consumption—which can be achieved through price incentives, improved public food environments and sustainability labelling. For several reasons, the decline in consumption is likely to lead to similarly declining production of pork and poultry in high-income countries. Additional measures such as fertiliser policy to reduce nutrient surpluses and the adoption of technologies to reduce the environmental footprint of animal farming are also needed. Overall, transitioning to sustainable animal husbandry in high-income, open economies is feasible, though it requires the political will to establish an enabling political framework.