Context. Climate change and water scarcity are global challenges facing humanity. Animal agriculture generates considerable greenhouse gas (GHG) emissions and consumes large volumes of water from rivers, streams and lakes. Reducing consumption of animal agricultural products with a relatively high carbon or water footprint, such as dairy, is often promoted as a mechanism to reduce the environmental impacts of food production. Attributionally-based footprints do not, however, assess the consequences of a change in demand for a product. Aims. This study aimed to assess the water and climate change consequences of replacing NSW dairy production, and co-products of dairy production, with plant-based alternatives. Methods. Process-based consequential life cycle assessment was used. Key results. Water savings associated with the change would be limited and GHG emissions reductions would be ~86% of that as estimated by the carbon footprint of production. When NSW dairy production was replaced with soy-based alternatives and two GHG emissions reduction strategies were implemented across the industry, namely enteric methane inhibitors and flaring methane from effluent ponds, GHG emissions increased by 0.63 Mt carbon dioxide equivalent when dairy production was replaced. Conclusions. The environmental benefits associated with replacing NSW dairy production with plant-based alternatives should not be determined by attributionally-based approaches. Implications. Policies that aim to reduce the environmental impacts of agricultural production need to consider the market effects of a change in demand for products and not rely on estimated impacts of current production.