Essays in environmental and natural resource policy

Abstract

This dissertation is a collection of investigations of environmental and natural resource policy. These three essays focus on the difficulty of rectifying the distortions caused by externalities associated with use of environmental and natural resource amenities. The first section is an investigation of the effects of an environmental regulation on the bluegrass seed industry in the State of Washington. The regulation in question had the curious effect of seemingly increasing bluegrass seed production in the state, despite industry predictions that the regulation would drastically increase production costs. The analysis shows that there is considerable evidence that the regulation actually spurred technological innovation within the industry to comply with the regulation at much lower costs than previously expected. The second section investigates the effects of increasing efficiency of agricultural irrigation on economic growth. In many areas of the world, agricultural users of water are under increasing pressure to implement more efficient methods of irrigation for various reasons. Current policies that support increased irrigation efficiency are, however, ineffective in improving water supply downstream, because they overlook the counter-intuitive positive externality of inefficient irrigation. A multi-sector agricultural economic model is used to investigate the effects of improving irrigation efficiency on economic growth, as well as to develop optimal policy for encouraging effective water policy. This research provides a very interesting counter-example to the claim that technological innovation will always promote sustainable resource use. The final third focuses on economic vaccination decisions and effects of those decisions on disease dynamics. This study of externalities arising from economic agents interacting with a natural system has many parallels in the fields of natural resource and environmental economics. A mathematical model of disease epidemiology is coupled with an evolutionary game theoretic component, and phase-space reconstruction is used to show that imitation-response models provide a plausible explanation for the existence of periodic disease outbreaks in a population, which are not well explained by bestresponse models. Secondly, optimal control theory is used to develop policy-relevant conclusions regarding infectious disease and vaccination.