UC San Diego

This dissertation explores environmental economics, focusing on the interaction between incentives and environmental policies. I use microeconomic theory, mechanism design, and empirical economic techniques to examine the importance of considering incentives and adverse selection when formulating environmental policy. Chapter 1 uses microeconomic theory to demonstrate the importance of considering adverse selection and perverse incentives when formulating environmental policy, with a particular focus on environmental trade ratios. Chapter 2 use mechanism design to demonstrate how heterogeneous outside options can be exploited to enhance screening in an environmental subsidy program setting. Chapter 3 uses both economic theory and empirics to measure the extent of an adverse selection problem in an environmental subsidy program.