Great topic. I’d think that the answer depends entirely on how you define the term “environmental degradation.”
If were talking about damage to the overall ecosystem, I’d think pollution from agribusiness, industrial wastes, everyday pollution (from car exhaust to garbage in landfills) and damage from land development would be at the top of the list.
Livestock can create some pretty gross waste, no question, but most of that waste is organic and biodegradable. Manure, urine, blood, bones, flesh—all are part of the natural environmental decay process, and apart from the sheer volume, it’s exactly the kind of stuff you’d encounter in a forest. It’s filled with stuff you wouldn’t want in high amounts in your drinking water, but once bacteria get their cilia on it, it’s dealt with normally. There’s also secondary markets for a lot of that stuff, so a lot of the waste gets reused as fertilizer or goes to a rendering plant.
That said, I doubt having a large amount of animals collected in one place is good for the local environment, and if one tallied up all the waste products from animal-based products (raw waste, not counting indirect things like the impact of all the sewage), I’m sure it would be quite significant. If memory serves, one of the biggest issues is waste water from livestock, which can certainly pollute the local water table.
Then again, on the whole it’s probably less than the same sort of impact caused by growing non-native plant species for human consumption. Native plants, insects and animals become “pests,” and almost every effort is made to eradicate them from the area. It’s very damaging to the local ecosystem, particularly when you factor in the impact of the fertilizer, pesticide, the impact of the pollution from the farm machines and all the unused parts of the plant that have to be processed into a reusable form.