Essays on the Environmental Economics of Land Use

Chenault, William, Economics - Graduate School of Arts and Sciences, University of Virginia
Colmer, Jonathan, AS-Economics (ECON), University of Virginia

I study how economic and environmental regulations affect land use decisions, and the environmental consequences of those decisions. In the first chapter, I study policy leakage, where regulated agents may respond to new regulations by reallocating their activity to unregulated areas nearby. Such leakages may undermine a policy goal of balancing economic activity and environmental quality. To study leakage, I examine how land developers respond to Municipal Separate Storm Sewer System (MS4) Permits. MS4 permits are issued to some local governments, which must then regulate development in the Urbanized parts of their jurisdiction. The increased costs for developers may induce them to relocate to unregulated areas. Using 30m-resolution land use data and exploiting variation in policy exposure over time, I separately identify the direct effect of regulation and the spillover effect to nearby areas. I estimate relative decreases in impervious surfaces in regulated areas, consistent with the goals of the program to reduce pollution from stormwater runoff. However, I estimate increases in impervious surfaces immediately outside of regulated areas, suggesting leakage. Back-of-the-envelope calculations suggest leakage of impervious surfaces of 55%, occurring in less-developed areas where environmental damages may be high.

In the second chapter, I study how policy changes affecting the returns to agriculture affect voluntary land conservation. I exploit the introduction of the Renewable Fuel Standard (RFS), which increased the return to growing corn near refineries relative to elsewhere. To measure land conservation, I use voluntary conservation easements, which are tracts of land over which landowners cede development rights to a third party conservator, who protects the land's environmental quality. Following the introduction of the RFS, I estimate relative declines in the area covered by new conservation easements in counties close to refineries. This suggests that easements cover land that would be at risk of development if not for the easement's restrictions, consistent with conservation goals.

In the third chapter, coauthored with Sheetal Sekhri (UVA), Aashutosh Aryal (UVA), and Venkataraman Lakshmi (UVA), we study the efficacy of regulations banning the agricultural practice of stubble burning in Northern India. Agricultural fires are responsible for air pollution in downwind areas, leading to increased mortality. However, there is little evidence of whether regulation can curb these fires to address this externality. Our study examines command and control bans on agricultural fires primarily in the context of Punjab in India, which burns the most amount of rice crop residue in the country. We leverage the variation in rice and wheat cultivation in Northern India and a long panel of satellite-based data on the area burnt to examine the consequences of the bans. We find that these bans were ineffective at curbing fires.

PHD (Doctor of Philosophy)
land use, stormwater, leakage, conservation easements, land development, renewable fuel standard, stubble burning, agricultural fires
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