Essays in Environmental Economics

This dissertation considers how spatial targeting of environmental policy trades off economic development and environmental surplus. In Chapter 1, I quantify global inefficient and spatially misallocated agricultural deforestation: carbon emissions-intensive deforestation on land with low agricultural yields. I incorporate spatial cost differences, agricultural trade, and cross-country non-agricultural productivity in a general equilibrium trade model to estimate how they contribute to misallocation. Against a benchmark case with a Pigouvian tax at a \$190 per ton social cost of carbon, 97\% of carbon emissions from deforestation since 1982 are inefficient. Strikingly, these emissions are produced by only 13\% of global agricultural land. Preventing these emissions would have costed only 7\% of status quo agricultural production, yielding welfare gains of \$6.6 trillion since 1982. However, an equity-efficiency tradeoff results: the tax burden falls on the poorest landowners. Lastly, if countries with carbon pricing policy apply these prices to deforestation, they would deliver 5\% of emissions reductions achieved under the Pigouvian benchmark. In Chapter 2, co-authored with Arthur van Benthem, Mathias Reynaert, and Tristan Grupp, I turn to land protection policy as a tool of spatial organization for economic and environmental activity. The European Union designates 26\% of its landmass as a protected area, limiting economic development to favor biodiversity. We use the staggered introduction of protected areas between 1985 and 2020 to study the selection of land for protection and the causal effect of protection on vegetation cover and nightlights. Protection did not affect these outcomes in any meaningful way across four decades, countries, protection cohorts, population density, or land, soil, and climate characteristics. We conclude that European conservation efforts lack ambition because policymakers protect land not threatened by development or choose weak protection levels on lands that face development pressure. Finally, in Chapter 3, co-authored with Arthur van Benthem, Mathias Reynaert, and Augusto Ospital, I explore the role of agricultural subsidy policy. The European Common Agricultural Policy is one of the largest food subsidy programs in the world. This paper provides suggestive evidence as to the role of European subsidy allocation across countries in reallocating farm production.

Author dc:creator

• Mishra, Prakash

Advisor dc:contributor.advisor

• van Benthem, Arthur

• Economics

Language dc:language.iso

en

Repository record dc:identifier.uri

https://repository.upenn.edu/handle/20.500.14332/61301

OAI identifier oai:identifier

oai:repository.upenn.edu:20.500.14332/61301