Agricultural & Resource Economics Theses and Dissertations
Permanent URI for this collectionhttp://hdl.handle.net/1903/2739
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Item The Economics of Spruce Budworm Monitoring and Management in Eastern Canada(2024) Holm Perrault, Alexandre Ismaël Eliot; Olson, Lars J; Agricultural and Resource Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)This dissertation uses techniques that were developed for renewable natural resource and invasive pest management to describe the two principal challenges of eastern spruce budworm (SBW) monitoring and management in Eastern Canada, with a specific focus on the province of Quebec. The primary empirical components of this dissertation can be found in Chapters 2 and 3. Chapter 1 provides the necessary historic, entomological, ecological and policy context to understand Chapters 2 and 3. Chapter 4 provides a conclusion to this dissertation by proposing extensions that would make the models presented in Chapters 2 and 3 more readily applicable to real-world spruce budworm management. These extensions involve making the models spatially explicit, as the models presented in Chapters 2 and 3 are spatially crude for the sake of tractability. Chapter 2 describes the management of an endemic irruptive forest pest and, using the spruce budworm-balsam fir forest interaction, proposes an optimization model that determines optimal pest treatment and forest harvest levels for a single, dimensionless forest stand that is currently undergoing an active budworm outbreak. Budworms cause both growth reductions and mortality on the forest biomass stock, and increasing forest biomass will provide budworms with more prey, causing their growth rate to increase. Treatment decisions are limited to three discrete possibilities (0, 1 or 2 on the landscape) that impose mortality on budworms, while harvests remove a proportion of the forest biomass. Using a numerical solution algorithm, we find that the optimal policy is generally to apply treatments over budworms and to harvest the forest at a sustainable rate, which confirms that the current management programs used in Eastern Canada are welfare-improving relative to letting an outbreak run its course. The time path for our baseline scenario indicates that budworms can be treated down to endemic levels quickly. Sensitivity analysis describes scenarios where budworm levels will rebound every year as well as scenarios where the optimal policy is to clearcut the forest as quickly as possible. Chapter 3 considers the pre-outbreak monitoring phase for spruce budworm management. This context is informed by the Early Intervention Strategy, a management practice that is currently being successfully employed in New Brunswick and other Maritime provinces. EIS requires extensive monitoring and proactive treatment. As such, we adapt a model known as CESAT to determine the locations for which EIS would yield positive net benefits in eastern Quebec. Under our baseline scenario, we find that EIS is optimal in some zones bordering New Brunswick, which indicates that EIS is unlikely to be welfare-improving over current management practices used in Quebec. Under different assumptions, however, we find that EIS is optimal across a much larger landscape, yielding millions of CAD net benefits over a thirty year horizon.Item Essays on Regulatory Uncertainty & Energy Development in the American West(2021) Hunt, Jeffrey; Linn, Joshua; Agricultural and Resource Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)This dissertation undertakes an analysis of regulation in the American West, investigating the effects of expropriation uncertainty and technological change in the leasing process.The first chapter explores the possible expropriation of drilling rights due to the addition of the sage-grouse under the Endangered Species Act. Leveraging prior decisions of the US Fish and Wildlife Service, I estimate there was a 52.6% chance the sage-grouse would be listed. Using the real-options framework of Kellogg (2014) and constructing an extension of his simulation to accommodate expropriation risk parameterized by real-world drilling data, I find that developers are expected to delay spudding wells to wait out the uncertainty. This result is corroborated with a Cox proportional hazards model. Additionally, using a difference-in-differences model I find robust evidence that developers reduce their bids for leases commensurate with the expected reduction in profits from possible regulation, and using a conditional logit discrete choice model I find evidence that firms abandon core sage-grouse habitat. Lastly, I find no evidence that developers increase the extraction rate of drilled wells. The second chapter investigates expropriation risk in the context of ozone pollution controls from the Environmental Protection Agency. Here, I find a hurry-up-and-drill response. I place this result within the literature of the green paradox, and find that the EPA regulation did not produce a green paradox but if costs were lower, or if the regulation were modified, a green paradox would have existed and briefly result in higher emissions under a stricter regulatory regime. The policy takeaway is that regulators should avoid a long announcement period, as it gives developers time to drain wells before regulation occurs. The third chapter is a cost/benefit test of auctioning drilling leases online rather than in-person. I leverage the fact that only specific leasing jurisdictions transitioned to an online system called EnergyNet in late 2016 to estimate the causal effect of moving to online leasing. I estimate that a given parcel sold online versus in-person will generate 40% higher bids against only a 2% extra cost.Item ON THE ANALYSIS OF THE EFFECTS OF ENVIRONMENTAL RANDOM SHOCKS: AN APPLICATION TO THE AMERICAN LOBSTER FISHERY OF LONG ISLAND SOUND(2012) Baggio, Michele; Lichtenberg, Erik; Olson, Lars J; Agricultural and Resource Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)In this dissertation, I examine how environmental and anthropogenic factors and autocorrelated disturbances affect the dynamics of an exploited renewable resource. The analysis focuses on Long Island Sound (US) for which environmental factors play an important role. This objective is addressed first by investigating the relative importance of high temperatures, low dissolved oxygen, and overexploitation in the die-off experienced by the fishery after the fall of 1999. Second, I analyze the effects of temporally correlated environmental disturbances on the stationary distribution of the dynamics of a harvested population with an application to the LIS lobster fishery. In the fall of 1999, the American lobster population in Long Island Sound experienced a significant die-off. Biologists attributed the cause to a period of prolonged high temperatures that in concert with hypoxia suppressed lobsters' immune system making them more susceptible to diseases and infections. The relative importance of environmental factors like high temperatures and anthropogenic factors like overfishing and hypoxia is investigated. Data from annual trawl surveys and the fishing industry are combined to construct a model of lobster population dynamics and fishing effort. The model is used to investigate the relative importance of high temperatures, low dissolved oxygen, and incentives for more intensive fishing effort experienced in 1999. Simulations show that low dissolved oxygen and economically induced fishing pressure were the major factor underlying the die-off. These results indicate that stricter regulations of nutrient emissions and resolving institutional failure may be the most effective way to protect fisheries like the Long Island Sound lobster fishery. Furthermore, to mitigate the effects of global climate change, it may be advisable to impose stricter regulations of nutrient emissions in anticipation of more acute episodes of hypoxia. Standard models of renewable resource allocation under uncertainty typically assume that environmental disturbances are identically and independently distributed. When weather patterns impact environmental conditions, shocks may be serially correlated. This serial correlation has implications for the long run conservation of harvested renewable resources. This issue is analyzed by investigating the dynamics of a harvested, open-access renewable resource whose productivity is influenced by serially correlated random environmental disturbances. The main question that is addressed is: how does the expected value of stock escapement depends on the parameters that determine the distribution of environmental shocks? In answering this question I also characterize how the maximum and minimum escapement policy functions depend on these parameters. An application of the conceptual framework to the American lobster fishery of Long Island Sound is used to analyze these issues qualitatively and quantitatively. In the application, the model is parameterized using an econometric model of population dynamics for the Long Island Sound lobster fishery. Results show that shocks are negative correlated and transient so a high current productivity shock decreases the probability of high future shocks. Further, the results suggest that population variability is increasing in the degree of autocorrelation of the random shocks as well as the underline uncertainty of the environmental disturbances. As a result, population may experience ample fluctuations which could increase the likelihood of extinction. This suggests the adoption of management strategies that focus on maintaining a minimum population level and increasing the stability of the natural resource in the face of environmental variability.Item Modeling Fisheries Agreements with Side Payments: The Case of Western Atlantic Bluefin Tuna(2012) Reppas, Dimitrios; Chambers, Robert G; Agricultural and Resource Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)Though the management of internationally shared fisheries with side payments is often considered politically difficult, quota transferring is now a policy alternative in specific fisheries treaties. Nevertheless, a theoretical framework capturing the details of the side-payments solution is, to a large extend, missing. My thesis tries to fill this gap in the literature, by proposing a static and a dynamic model in the context of a stochastic sequentially harvested stock. The conditions characterizing the solution of the dynamic model are the analogue of the Martingale Property from finance literature. The Western Atlantic Bluefin Tuna fishery is used as an example to calibrate the theory. The objective is to estimate the amount of compensation Canada should provide to the US, such that the latter restricts fishing activities. The compensation scheme could supplement/reform the existing management strategies.