Environmental and Resource Economics最新文献

We study the decision to preserve diverse species when the value of biodiversity is uncertain, or even affected by ambiguity. Optimal decisions are derived both from the perspective of the producer/investor and the policy regulator (ecosystem planner). We find that while calculated risk creates a scope for biodiversity preservation, the presence of ambiguity aversion reduces it, thus accelerating the extinction of species with lower value. Our results suggest that effective conservation strategies would involve a reduction of ambiguity aversion by creating a stable and transparent policy environment. Furthermore, they may involve a two tier strategy, with one tier addressing output targets and the other conservation targets.

We study the stochastic dynamics of natural resources under the threat of ecological regime shifts. We establish a Pareto optimal framework of regime shift detection under uncertainty that minimizes the delay with which economic agents become aware of the shift. We integrate ecosystem surveillance in the formation of optimal resource extraction policies. We fully solve the case of a profit-maximizing monopolist, study its response to regime shift detection and show the generality of our framework by extending our results to other decision makers and functional forms. We apply our framework to the case of the Cantareira water reservoir in São Paulo, Brazil, and study the events that led to its depletion and the consequent water supply crisis.

Burning tropical forests to establish lucrative agricultural crops ignores potentially important health externalities of the resulting air pollution. These health externalities are often poorly understood, especially if other environmental hazards, such as indoor pollution, are not taken into account. Given the potential for joint, contemporaneous harms, we estimate the impacts of outdoor and indoor air pollution on respiratory health in Indonesia. To address the endogeneity of air pollution exposure, we use panel fixed effects estimation and instrument for outdoor pollution using upwind forest fire intensity. We find that outdoor air pollution exposure reduces lung capacity and decreases overall health status. Subgroup analysis reveals that these impacts are higher among the youngest and oldest individuals in our sample. Critically, we find suggestive evidence that outdoor air pollution exposure is more harmful to the health of individuals living in households that use clean cooking fuels. Thus, policies aimed at reducing environmental health harms are not substitutable—that is, reductions in both indoor and outdoor air pollution exposures are necessary for achieving health targets.

Antibiotic effectiveness can be viewed as a biological commons since one individual's current use may decrease future effectiveness for everyone else. The value of the biological commons declines when the targeted bacteria develop antibiotic resistance. Antibiotic resistance is a global threat to health and development, causing serious economic damage and loss of human lives. The greatest share of antibiotics is used in livestock production, leading to concerns that such use may threaten human health. While various policies are in place to promote judicious use of antibiotics, their effectiveness is unclear. One key challenge in antibiotics management is the uncertainty surrounding various decisions related to antibiotic use, including whether a suspect case has an infection, how likely an infection will spread, and how effective antibiotics can be if used. We develop a disease management model that incorporates linkages among diagnostic testing decisions, antibiotic use decisions, and alternative treatment costs. We show that many unintended consequences may arise from policies designed to promote judicious antibiotic use. Antibiotics and self-tests are complements (substitutes) whenever antibiotic cost is high (low), implying that a self-test subsidy can plausibly increase expected antibiotic use. With regard to a prescription regulation (PR) that switches an antibiotic from over-the-counter to prescription, we show that while PR can reduce therapeutic antibiotic use as intended it may not achieve the social optimum. In a simple real-world application, we find that PR induces excessive veterinary service demand but does not reduce antibiotic use among typical U.S. dairy farms. PR also leads to the substitution of veterinary services for self-tests in obtaining information. We discuss how our analytical framework can be applied to other contexts, including antibiotics for human use.

Recent research suggests that short-term exposure to air pollution is associated with an elevated prevalence of respiratory infectious disease. In this paper, we examine the relationship between the air quality index and weekly cases of COVID-19 and influenza-like illnesses (ILI) in the United States. We address potential bias from omitted variables and measurement error with an instrumental variable approach using atmospheric temperature inversions. Unlike other recent studies, we find no relationship between air quality and either COVID-19 or ILI cases.

In the 1990s there was a great deal of interest in the study of the role of endogenous market structure under oligopoly in the characterization of emission taxes. This interest was instrumental in providing policy guidance on the design of emission taxes based on market characteristics. However, the literature has been silent on offering policy recommendations on the design of emission taxes under endogenous market structure in the presence of new firm acquisitions. We build a model where new firms enter the market where some are acquired by an incumbent multi-plant firm, altering the initial market structure. In this framework, we characterize the second-best emission tax and examine the role of the resulting market structure, in particular the role of acquiring more/fewer of the new firms, in the optimal design of emission tax. We argue that, under certain conditions, the acquisition of new firms may lead to higher taxation consistent with the Pigouvian rule or even exceed marginal damages. Our contribution is at the intersection of emission tax design and M &A (new firm acquisition) literature.

Social costs for methane and carbon dioxide emissions, from the risk of climate tipping events and deterministic damages, are derived in an analytically tractable model. In the core model: social costs from tipping risks rise with income, just as they do for deterministic damages, and depend on only a few parameters. Consequently, methane’s weight (its social cost relative to carbon dioxide) is constant and independent of temperature projections. But other damage and tipping probability formulations assumed in the literature imply methane’s weight varies over time and with temperature projections. (JEL H23, O44, Q40, Q54, Q56, Q58).