Optimal policy structure in natural resource and environmental economics
- Author(s): LaRiviere, Jacob Sean
- et al.
This dissertation consists of three separate papers that either derive optimal management strategies for environmental and natural resource management, develop theoretical models explaining observed effects government management of environmental and natural resources or both. Chapter 1 shows that sharing arrangements between capital owners and labor in renewable resource industries have substantial implications for the industry's profits, optimal resource management, and the resource's ecological state. Effectively, sharing agreements can interact with fluctuations in natural capital to cause inefficient investment levels and skew industry rents toward labor. As a consequence, optimal regulatory policy for such industries must account for the implications of such sharing arrangements. The model demonstrates why management tools like individual transferable quotas in fisheries, have had unexpected ecological benefits in terms of increasing and stabilizing fishery stocks. Chapter 2 extends the research joint venture (RJV) literature to cover government funded energy-related collaborations between private firms and national laboratories. It uses a game theoretic framework to explain why a RJV including a national lab will tend to have significantly more participants than a private RJV. The model predicts that regulatory capture is likely to occur from firms that work with national labs in RJVs and receive exogenous funding, such as federal grants, to perform RJV research. Further, it is possible that RJVs including national labs that do not receive exogenous funding are more likely to consist of more heterogeneous firms. Chapter 3 considers the implications on optimal pollution control when ambient levels of pollution are known but all emission sources are not. The model shows that if the dispersion models are misspecified due to incomplete inventories of emissions, optimal ambient pollution levels can actually increase. In this case, if R &D can increase the set of known emitters, a regulator may actually choose not to spend any resources to do as it can cause a decrease in expected welfare