Richard M. Adams

Amenities in an Urban Equilibrium Model: Residential Development in Portland, Oregon

This paper estimates the effects of open space and other amenities on housing prices and development density in Portland, Oregon, within the framework of an urban equilibrium model. Amenities are important: households are willing to pay more for newer houses located in areas of less dense development, with more open space, better views, less traffic congestion, and near amenity locations. For the developers, increases in housing prices results in providing more large houses, which will ultimately lead to higher density and lower housing prices. A simulation analysis evaluates policy implications and indicates substantial benefits from alterations in housing patterns. (JEL R11, R31)

The benefits to Mexican agriculture of an El Niño-southern oscillation (ENSO) early warning system☆

Abstract Weather agencies worldwide are attempting to determine if systematic disturbances in climate, such as the El Nino-southern oscillation (ENSO), can be detected far enough in advance so that decisions can be altered to better accommodate these disturbances. Mexico is one country where ENSO-related climatic disturbances have been observed. If climate forecasters were able to disseminate information on upcoming ENSO-induced weather patterns with sufficient lead time, Mexican farmers could adjust by altering a variety of crop decisions, such as growing less (or more) water consumptive crops, planting drought resistant varieties, or altering planting times. This could have a positive impact on crop production, enhancing food security, farmers’ incomes, and social welfare. The purpose of this paper is to value such forecasts in a Mexican agricultural setting. To assess the economic consequences of climate arising from various ENSO phases, estimates of regional crop yield sensitivity for key crops were modeled using a crop biophysical simulator. The value of a forecast is then measured by the expected increase in economic benefits due to changes in cropping patterns, production and consumption arising from the yield changes under each ENSO phase forecast. These economic estimates are derived from an economic model of Mexican agriculture. The value of the ENSO information will depend on its accuracy in terms of predictions of the weather consequences of each phase. The economic model is a stochastic, price endogenous, mathematical programming model that represents agronomic and economic conditions in a five-state Mexican region. This model depicts agricultural behavior across the three ENSO phases and provides the basis for calculating the value of information. The benefits of an ENSO early warning system for Mexico is approximately US

Cumulative Effects and Optimal Targeting of Conservation Efforts: Steelhead Trout Habitat Enhancement in Oregon

10 million annually, based on a 51-year time period of ENSO frequencies and when a forecast skill of 70% is assumed. This value translates into an internal rate of return for such an early warning system of approximately 30%. The values for higher skill levels are correspondingly higher. The values estimated here should be viewed as lower bound estimates of the value of an ENSO early warning system because benefits are not estimated for other parts of Mexican agriculture, such as non-commercial (subsistence) agricultural areas, areas where there is only a weak ENSO signal that is not very predictable, and the livestock sector. Also, benefits here do not include benefits that could occur with adjustments in energy generation, water management, or any other economic sectors that may be positively affected by the existence of an ENSO early warning system.

The Effects of Spatial Scale of Climate Scenarios on Economic Assessments: An Example from U.S. Agriculture

A major problem with some conservation programs is that they ignore potential cumulative (threshold) effects in environmental quality management. The objective of this study is to investigate the importance of cumulative effects in the targeting of conservation efforts. The empirical focus is on habitat investments to protect an important anadromous fish species in the Pacific Northwest, steelhead trout. Results of the analysis point to a substantial cumulative effect in the relationship between water quality and abundance in this fishery, which affects the efficiency of specific habitat investments. Copyright 2000, Oxford University Press.

Water banks and environmental water demands: Case of the Klamath Project

The appropriate level of spatial resolution for climate scenarios is a key uncertainty in climate impact studies and regional integrated assessments. To the extent that such uncertainty may affect the magnitude of economic estimates of climate change, it has implications for the public policy debates concerning the efficiency of CO2 control options. In this article, we investigate the effects that different climate scenario resolutions have on economic estimates of the impacts of future climate changeon agriculture in the United States. These results are derived via a set of procedures and an analytical model that has been used previously in climate change assessments. The results demonstrate that the spatial scale of climate scenarios affects the estimates of both regional changes in crop yields and the economic impact on the agricultural sector as a whole. An assessment based on the finer scale climatological information consistently yielded a less favorable assessment of the implications of climate change. Regional indicators of economic activity were of opposite sign in some regions, based on the scenario scale. Such differences in economic magnitudes or signs are potentially important in examining whether past climate change assessments may misstate the economic consequences of such changes. The results reported here suggest that refinement of the spatial scale of scenarios should be carefully considered in future impacts research.

Economics of Environmental Management in a Spatially Heterogeneous River Basin

[1]xa0Demand for water for environmental uses, such as to provide critical habitat for endangered species, has increased competition for agricultural water supplies. In the western United States, a significant portion of these water demands is to increase in-stream flows. Given that Endangered Species Act (ESA) requirements supersede prior appropriation rights, ESA water demands have the potential to reduce agricultural diversions, particularly in times of drought. This situation occurred in 2001 in the Klamath Basin of southern Oregon and northern California: an ESA-related judicial ruling on the needs of several endangered fish species resulted in a major reduction in water diversions to the Klamath Reclamation Project. Using the Klamath Basin as an empirical backdrop, this study examines the potential benefits and challenges of water banks to mitigate damages to appropriative water rights holders and to provide water for environmental purposes. Results from this case study indicate that water banks are a potentially cost effective way to meet environmental needs. This study, however, illustrated several of the challenges of implementing a water bank given that modifications to the proposed bank are needed to achieve cost efficiency. Specifically, expanded trading is needed, both intraproject and interproject, to achieve the objectives of providing environmental water at minimum cost to society.

Improving the Cost-Effectiveness of Ecosystem Management: An Application to Waterfowl Production

This article examines the allocative efficiency of water quality management activities to protect endangered salmonid species in a heterogeneous watershed in the Pacific Northwest. Using an integrated hydrological, biological, and economic modeling framework, the relative efficiency of alternative policy targets such as temperature reductions and enhanced fish populations is investigated. Results indicate that the heterogeneous nature of riparian conditions and stream morphology influence the choice of management activities. Localized effects of management efforts on temperature are important to achieve small temperature reductions. However, as the desired magnitude of temperature reductions increases, the cumulative (longitudinal) effects become more important, and management efforts in more distant reaches are more efficient than efforts nearer the point of monitoring. Finally, if the underlying objective is to increase fish populations, targeting conservation efforts based on physical criteria such as water temperatures or other total maximum daily load regulations may lead to substantial inefficiencies.

Impacts of climate change on land-use and wetland productivity in the Prairie Pothole Region of North America

Species conservation is an important global policy issue. The design of cost-effective species conservation programs requires resource managers to choose from a suite of conservation activities and sites. This article determines cost-effective conservation strategies for waterfowl using a bioeconomic modeling framework, which is developed using a biological simulation model for waterfowl and regression analysis. The model accounts for (a) a broad range of land-use and direct wildlife conservation activities, (b) the effect of landscape heterogeneity, and (c) interactions between conservation activities. Results indicate that accounting for the three factors listed above can improve the cost-effectiveness of waterfowl conservation on agricultural land.

THE VALUE OF IN-STREAM WATER TEMPERATURE FORECASTS FOR FISHERIES MANAGEMENT

Wetland productivity in the Prairie Pothole Region (PPR) of North America is closely linked to climate. A warmer and drier climate, as predicted, will negatively affect the productivity of PPR wetlands and the services they provide. The effect of climate change on wetland productivity, however, will not only depend on natural processes (e.g., evapotranspiration), but also on human responses. Agricultural land use, the predominant use in the PPR, is unlikely to remain static as climate change affects crop yields and prices. Land use in uplands surrounding wetlands will further affect wetland water budgets and hence wetland productivity. The net impact of climate change on wetland productivity will therefore depend on both the direct effects of climate change on wetlands and the indirect effects on upland land use. We examine the effect of climate change and land-use response on semipermanent wetland productivity by combining an economic model of agricultural land-use change with an ecological model of wetland dynamics. Our results suggest that the climate change scenarios evaluated are likely to have profound effects on land use in the North and South Dakota PPR, with wheat displacing other crops and pasture. The combined pressure of land-use and climate change significantly reduces wetland productivity. In a climate scenario with a +4xa0°C increase in temperature, our model predicts that almost the entire region may lack the wetland productivity necessary to support wetland-dependent species.

From Microlevel Decisions to Landscape Changes: An Assessment of Agricultural Conservation Policies

Water temperature is an important factor affecting aquatic life within the stream environment. Cold water species, such as salmonids, are particularly susceptible to elevated water temperatures. This paper examines the economic value of short‐term water temperature forecasts for salmonid management. Forecasts may have economic value if they allow the water resource manager to make better water allocation decisions. This study considers two applications: water releases for management of Chinook salmon in the Klamath River and leasing water from agriculture for management of steelhead trout in the John Day River. We incorporate biophysical models and water temperature distribution data into a Bayesian framework to simulate changes in fish populations and the corresponding benefit from recreational fishing and opportunity cost of water under different temperature forecast accuracies. Simulation results indicate that use of the forecasts results in increased fish production and that marginal costs decline and net benefits increase as forecast accuracy increases, suggesting that provision and use of such stream temperature forecasts would have value to society.