Essays on economics of information in environmental management.

Abstract

This manuscript is a collection of essays that investigate the effects of information on optimal environmental and resource policies. Two essays are paired, and each pair examines a well-defined policy problem. The first and the second essays study how a regulator should determine efficient levels of public pollution control, private abatement, and information provision efforts in an environment where environmental pollution risks are endogenous in private self-protection. The first essay proposes a welfare valuation theory amenable to analyses in this context. The second essay proposes an empirical strategy to implement the theory in practice, and demonstrates how policies may be misguided if regulators follow conventional valuation strategies. The third and the fourth essays jointly study the economic consequences of binary ecolabeling. I propose a theory of green consumerism, which correctly accounts for asymmetric information and is consistent with empirical evidence. Given the consumer theory thus established, the fourth essay finds an empirically executable way to set an optimal level of environmental standard for binary ecolabeling.