ECONOMICS OF ENVIRONMENTAL AND SUSTAINABLE CHOICES: PLASTICS AND BIODEGRADABLE PRODUCTS

Thesis (Ph.D.), School of Economic Sciences, Washington State UniversityThe dissertation discusses the optimal choices for plastic products end-user and manufacturers in the context of environmental and the sustainable development concerns. Additionally, it will help to understand the formation of environmentally friendly norms, the adoption of environmentally friendly biodegradable plastics and effective risk management in the plastics industry. Three independent but related papers make up this dissertation.We first study the consumers and retailers' use of plastic shopping bags. A theoretical model is developed to establish a context for analysis of stores' voluntary rewards programs that encourage consumers to use reusable bags instead of plastic bags. This research characterizes the behavior of stores and consumers, especially the external effect of participation, as well as economic environments for the broader application of the model. The results show that voluntary reward programs can increase store profits and help reduce the use of plastic bags, providing policy makers with an alternative to bans and taxation.The second paper studies agricultural plastics use. In order to investigate the adoption of conventional (polyethylene) and biodegradable plastic mulches as well as their long-term environmental consequences in sustainable agriculture, a growers' decision model is developed. We theoretically show that growers integrating plastic waste management into their production decision making procedure help to achieve the long-tern stable amount of on-site plastic mulch residual. We find that increasing landfill tipping fees and decreasing tomato market prices would result in cessation of the use of polyethylene plastic mulches, but only one among three biodegradable plastic mulch brands is worth switching to replace polyethylene plastic mulches assisting the tomato production in Washington.The third paper explores the long-term price linkage and price volatility transmission among plastics, their conventional feedstock (crude oil) and the newly-developed feedstock (corn) markets in the United States. We confirm the causal relationship from the crude oil futures market to the corn futures and plastics market, and reveal significant volatility spillovers from the crude oil futures market to the corn futures and plastics market as well as the importance of Energy Independence and Security Act of 2007.School of Economic Sciences, Washington State Universit