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Three Essays on Environmental and Natural Resource Economics

By Rong Zhou

Abstract

This dissertation evaluates some innovative policy instruments in environmental and natural resource management that have been developed in the last few decades. The first chapter presents an economic model of the efficiency and industry impacts of individual vs. collective approaches to rights-based management in fisheries. Key features of the model are the inclusion of uncertainty and an optimally designed mechanism for paying penalties or buying additional quota when harvests exceed allowances. We find that a risk pooling mechanism does not necessarily reduce the probability of quota overages. The ability of regulators to optimally adjust the enforcement mechanism plays a critical role in determining the efficiency of the different approaches. Finally, the optimal quota prices and the conditions that trigger them differ across the approaches; hence the impacts on expected profits differ as well. The second chapter is motivated by the argument by Lyon and Maxwell (2007) that the traditional program evaluation method is not appropriate for voluntary programs with the potential for strong treatment spillovers. This paper studies the role of information diffusion in the Combined Heat and Power Partnership (CHPP) program. Based on the traditional method used in the VA literature, the result indicates that the program has had little impact. After incorporating national information diffusion, the new results show that, although the program has had little effect on increasing participants’ adoption rate, it increases adoption by nonparticipants, providing empirical support for the Lyon and Maxwell’s (2007) argument. The third chapter provides some new evidence regarding the performance of discriminatory vs. uniform auctions in the context of emission allowance auctions. It employs a structural model from the divisible good auction literature, which allows me to recover bidders’ actual valuations non-parametrically from the observed individual-level bid data, and then conduct counterfactual comparisons. In contrast to some previous experimental studies (e.g., Cason and Plott 1996), this paper finds that the gain from switching from the current discriminatory mechanism used in the SO2 allowance auction to a uniform one would be very small or even negative, in terms of efficiency and revenue generation

Topics: Environmental policies, fisheries management, voluntary program with information spillover, environmental allowance auction
Publisher: OpenCommons@UConn
Year: 2015
OAI identifier: oai:opencommons.uconn.edu:dissertations-7235
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