Linda Fernandez

Wastewater pollution abatement across an international border.

A differential game model is developed to compare incentives for wastewater pollution abatement of upstream and downstream countries under cooperative and noncooperative strategies. The Tijuana River is the empirical setting of water flow from south (Mexico) to north (US) where pollution stock accumulates. Asymmetry between the upstream and downstream countries for costs, damages, and emissions influences incentives to abate pollution. Cost minimization is achieved as the US can finance pollution abatement in Mexico. Game sharing rules (Shapley value, Chander–Tulkens rule, Helsinki rule, egalitarian rule) are analyzed. Financial transfers from two North American Free Trade Agreement (NAFTA) institutions are examined. In most cases of cooperation, transfer payments are positive from downstream to upstream for reductions in flow and stock of pollution. Transfer size varies according to the rule and sensitivity analysis of changes in abatement costs and damages. The two institutions follow a variation of the Helsinki rule.

Solving water pollution problems along the US–Mexico border

The analysis demonstrates the importance of multilateral cooperation for water managers to tackle wastewater pollution along an international border. A differential game is applied empirically with data of abatement costs, environmental damages, trade flows and pollution dynamics. The framework offers a way to compare pollution control when the US and Mexico coordinate efforts and when they act independently. Results show that trade liberalization and cooperation are useful for dealing with transboundary pollution in a shared waterway. In order to investigate further the nature of cooperation along the entire border, an econometric estimation is performed that investigates the factors influencing Mexico and the US to initiate environmental improvement projects. Results show that cooperation depends on whether the project addresses transboundary wastewater pollution. Other types of pollution are not significant, nor are attributes such as how much a project costs. A projects ability to generate revenues to sustain itself significantly disadvantages the project for cooperative approval.

HOUSING, SPRAWL, AND THE USE OF DEVELOPMENT IMPACT FEES: THE CASE OF THE INLAND EMPIRE

This article is concerned with the economics of excessively large and socially costly suburbanexpansionandattemptstosummarizeandorganizethemaineconomicarguments associated with sprawl due to single-family residential home construction. We also apply standard welfare economics and price policy instruments to the issue of suburban sprawl in order to suggest ways in which economics can participate in and inform the debate over sprawl. The article uses the Inland Empire, which includes the valley regions of San Bernardino and Riverside Counties in Southern California east of Los Angeles, as a case study. (JEL R11, R14, Q24) I. INTRODUCTION This article is concerned with the economics of excessively large and socially costly suburban expansion and attempts to summarize and organize the main economic arguments associated with sprawl due to single-family residential home construction. The topic is of interest not only because the social costsof sprawl may be high but also because what seem like fairly clear economic issues have been at least partially obscured by the debate over sprawl. This has led to obfuscation to the point that wellaccepted economic notions have not been able to fulfill their clarifying potential and standard economic instruments to internalize externalities remain on the sidelines. This article presents some of these confusions and debates for review. We also apply standard welfare economics and price instruments to the issue of suburban sprawl in order to suggest ways in which economics can participate in and inform the debate. The article uses the Inland Empire, which includes the valley regions of San Bernardino and Riverside Counties in Southern California east of Los Angeles, as a case study. TheInlandEmpireisverylarge,withapopulation of about 3.8 million. Indeed, though dwarfed by Los Angeles County if the region were a state, it would be larger than exactly half the U.S. states (California Department of Finance Web site; Husing, 2005). The region is a good one for the purpose because key policy issues related to property rights, housing affordability, and externalities closely associated with housing choices that are of nationwide interest are being debated particularly actively in the region. Part of the reason sprawl and its effects are so much in the forefront in the Inland Empire is that the region has experienced an enormous building boom during the past 10 yr. In 2004, there were

An analysis of economic incentives in wetlands policies addressing biodiversity

This paper offers an economic analysis of economic incentives within the Habitat Conservation Plan and Wetlands Mitigation Bank policies. Both policies are relatively new policies for protection and restoration of ecosystems such as wetlands that support biodiversity. The components of the policies such as the measures of success, conversion of biological units into economic units, and timing of the actions by policymakers and landowners influence the incentives to carry out protection and restoration. A stochastic optimal control model is developed which incorporates ecological uncertainty of wetlands restoration. The model helps in examining the decisions of how much to invest in a wetlands mitigation bank or habitat conservation plan. The model is calibrated with data from California bioeconomic parameters. Numerical simulation of the model provides a sensitivity analysis of how model parameters of restoration costs, stochastic biological growth, discount rate, and the market value of credits affect the trajectory of investment and the optimal stopping state of wetlands quality when the investment ends. The analysis reveals that more restoration will occur when there is a reduction in restoration costs, an increase in biological uncertainty or an increase in the value of wetlands credits. Continued restoration is harder to justify at a higher discount rate and cost.

MARINE SHIPPING TRADE AND INVASIVE SPECIES MANAGEMENT STRATEGIES

Addressing the international threat of invasive species to biodiversity worldwide requires an international context due to the nature of the transboundary pollution. This paper presents a comparison of strategies to address the invasive species problem in noncooperative versus cooperative differential games. Asymmetry between the countries in terms of abatement costs and damages enables the investigation of sharing rules under cooperation. The empirical analysis includes data of maritime trade as a vector of invasive species pollution at ports along the Pacific coast of NAFTA countries. The Chander/Tulkens cost sharing rule induces countries to cooperate and achieve lower invasive species stock than under noncooperation.

Economics of Biodiversity

Biodiversity, or biological diversity, is defined as variations in gene, species, and ecosystem habitat (terrestrial and aquatic) (Chapman, 1999). The extinction of plant and animal species results in loss of biodiversity. Humans have increased the rate of extinction through direct and indirect human activity encroaching on natural ecosystems. Direct activity consists of killing flora and fauna for consumption. Indirect activity consists of destruction of the habitat by (1) land conversion through tropical deforestation and draining of wetlands for agricultural use, (2) introduction of exotic species that do not have predators, and (3) pollution.

The future of the marine Arctic: environmental and resource economic development issues

Abstract We approach questions of Arctic marine resource economic development from the framework of environmental and resource economics. Shipping, fishing, oil and gas exploration and tourism are discussed as evolving industries for the Arctic. These industries are associated with a number of potential market failures which sustainable Arctic economic development must address. The varying scales of economic activity in the region range from subsistence hunting and fishing to actions by wealthy multinational firms. The ways in which interactions of such varied scales proceed will determine the economic futures of Arctic communities and the natural resources and ecosystems upon which they are based.

Marine invasive species in the Arctic

Arctic marine ecosystems are among the most productive and most vulnerable in the world, both from an economic and ecological perspective of growing accessibility. The complexity of Arctic marine ecosystems and their location poses challenges for management, valuation, and the establishment of sound policy to protect them. This special issue of Temanord presents papers from a workshop devoted to this topic. In October 2013, a group of multidisciplinary experts on marine invasive species and the Arctic came together in Esbjerg, DK for a two-day workshop titled: “Marine Invasive Species in the Arctic: Management Issues.” Attendees of the workshop came from academic, governmental and scientific institutions in Denmark and the Faroe Islands, Sweden, Norway, Finland, Iceland, Canada, and the United States. This volume presents papers based on the presentations of the workshop speakers Marine invasive species in the Arctic em aN rd 204:547Arctic marine ecosystems are among the most productive and most vulnerable in the world, both from an economic and ecological perspective of growing accessibility. The complexity of Arctic marine ecosystems and their location poses challenges for management, valuation, and the establishment of sound policy to protect them. This special issue of Temanord presents papers from a workshop devoted to this topic. In October 2013, a group of multidisciplinary experts on marine invasive species and the Arctic came together in Esbjerg, DK for a two-day workshop titled: “Marine Invasive Species in the Arctic: Management Issues.” Attendees of the workshop came from academic, governmental and scientific institutions in Denmark and the Faroe Islands, Sweden, Norway, Finland, Iceland, Canada, and the United States. This volume presents papers based on the presentations of the workshop speakers Marine invasive species in the Arctic em aN rd 204:547

A binational, supply-side evaluation for managing water quality and invasive fouling species on California’s coastal boats

Integrated solutions are needed for sustainable management of risks posed by recreational boats to coastal water quality and ecosystems. Fouling organisms roughen vessel hull surfaces, creating friction that slows sailboats and increases fuel consumption by powerboats. Hull fouling control strategies for recreational boats that are stored in the water may include antifouling hull paints, newer alternative hull coatings, periodic in-water hull cleaning, and excluding propagules by surrounding the boat with a slip liner or raising it above water on a lift. Copper discharged to harbor waters from antifouling paints via passive leaching and in-water hull cleaning may elevate dissolved copper levels above government standards. Invasive species carried among boat-hull fouling organisms may be introduced as boats move among coastal areas. Some of these species tolerate copper in antifouling paints and copper-polluted harbor waters. Policy development must consider supply-side capacity, as well as economic and environmental sustainability, in managing these issues. This paper presents a supply-side evaluation useful in developing policies to co-manage water quality and invasive species risks for recreational boats navigating along the coasts of California, the Baja California peninsula and Californias Sacramento-San Joaquin Delta. Supply-side perspectives on services, materials, costs, and boat owner behaviors, such as residence and travel patterns, awareness of hull-coating choices and selection of hull coatings, are determined. Analyses include evaluation of risks, risk management capacity and costs, and role of education in risk management. The issues raised are broadly applicable, as they are appearing on research and policy agendas in diverse coastal areas.

Trade transport and environment linkages at the U.S.-Mexico border: which policies matter?

We apply a fixed-effects model to examine the impact of trade and environmental policies on air quality at ports along the U.S.-Mexico border. We control for other factors influencing air quality, such as air quality of cities near the border, volume of traffic flows and congestion. Results show the air quality improved after 2004, when the diesel engine policy was applied. We see mixed results for the trade policy, whose implementation time varies across ports along the international border. Controlling for air quality in cities near the border is essential for assessing the policy contributions to air quality.