Theoretical and Empirical Essays on the Effects of Proposed and Existing Environmental Policies

This dissertation consists of three chapters that explore environmental policy. Chapter 1 empirically investigates the potential for incentives to encourage the adoption of low-emission alternatives to gasoline motorcycles. Hanoi, Vietnam, like many Asian cities, is experiencing rapid growth in the ownership of personal gasoline-powered motorcycles and scooters, and along with this heightened air quality issues. Electric scooters have the potential to reduce air pollution as an alternative to gasoline-powered motorcycles; however, electric scooters have yet to penetrate the Vietnamese and other large Asian markets. This study uses a choice experiment survey to elicit the demand for electric scooters, with focus on the effects that economic incentives and technology improvements have on adoption. Chapter 2 takes the first steps toward incorporating point sources into the theoretical discussion on nonpoint pollution ambient taxes. Previous investigations into the use of ambient taxes for nonpoint source pollution have not addressed the role of point sources, even though many watersheds have both source types. This paper examines the use of taxes for jointly regulating point and nonpoint sources. A model of point-nonpoint pollution is developed, and within this framework taxes are applied to achieve different regulatory objectives, including implementing optimal emissions reductions, as well as meeting exogenously specified environmental goals at least cost. Discussion centers on comparison of the point and nonpoint taxes in each scenario. Chapter 3 is an experimental economics examination of the design of markets for water quality trading. Water quality trading is endorsed by policymakers as a tool for reducing pollution in watersheds in a cost-effective manner, and many watersheds in the U.S. have established water quality trading programs. As a whole, these programs have not been successful. It is hypothesized that common features of these programs, such as the market institutions in place, may contribute to the limited success. As a first step in empirically investigating water quality trading markets, this study uses laboratory experiments to isolate how different institutions affect economic efficiency. In particular, we compare cap-and-trade, two forms of baseline-and-credit institution, and a tax/subsidy regulation, and examine the effect of introducing fixed technology costs with these four institutions