Doctor of Philosophy / Department of Agricultural Economics / Jeff Peterson / This dissertation is composed of three chapters each investigating the Environmental Kuznets Curve (EKC) for water pollution. The first chapter looks at downstream dependence, the second chapter looks at the effect water abundance has on an EKC for water pollution, and the third chapter looks at different ways to control for population across countries in an EKC empirical model. Of particular note a theoretical model is developed in the first chapter that links directly with the empirical EKC model and marginal effects of consumption and effort on pollution are derived. This model specification may be particularly useful in future EKC studies. In general, there is some evidence of an EKC although it appears to depend on the country.

Master of Science / Department of Agricultural Economics / Andrew Barkley / This study examines the effect of extreme climatic conditions (drought, flood, and bushfires) on the livelihood of households in the Bawku West district of Ghana. The research identified the mechanisms with which households cope in such situations, and analyzed factors influencing the adoption of coping strategies for flood, coping strategies for drought, and coping strategies for bushfires. Data for the study were collected in selected villages across the district in the aftermath of the 2007/2008 extreme climatic events (a prolonged drought period followed by an erratic rainfall). A binary logit regression (BLR) model was then specified to estimate factors that influence the adoption of a given coping mechanisms. Results from the BLR model indicate that literacy level, membership with an FBO, household income, and location of households had positive and significant impacts on adaptation to drought. Similarly, source of seeds for planting, membership with an FBO, household income, and farm size had positive significant influence on adaptation to flood. Adaption to bushfire was positively influenced by radio ownership, seed source and income. The main effect of these climatic extreme events on households included destruction of crops, livestock and buildings; food and water shortage; poor yield or harvest and limited fields for livestock grazing. Therefore, government policies should be geared towards creating revenue generating channels and in strengthening institutions that provide access to farm credit, readily available improve seeds and extension. Additionally, policies that expedite information dissemination through radio and other public media will enhance households’ adaptive capacity.

Doctor of Philosophy / Department of Hospitality Management and Dietetics / Elizabeth Barrett / Water is essential for many aspects of daily life including restaurant operations and is necessary for generation and service of properly produced, safe food. However, water is becoming more scarce and expensive due to climate change, infrastructure needs, governmental budget constraints, and shifting water sources. The purpose of this study was to develop benchmarks for water usage and costs for casual dining restaurants (CDRs) in Kansas and identify demographics that may impact water usage and costs. The population for the study was the 952 CDRs in Kansas. Stratified random sampling selected 60 restaurants from five Kansas demographic regions. Data were collected from the local municipal water utilities, Kansas Department of Revenue, Google’s Place Page, and through telephone or on-site interviews with a manager. Results for 221 of 300 (74%) CDRs that responded indicated that on average 1,766 gallons of water were used each day per restaurant, 12.79 per gallons per day for each seat, 68 gallons per employee, and 0.73 gallons per interior square foot. These results were as much as 69% lower than those from a 2000 study conducted by Dziegielewski et al. Significant demographics that impacted water consumption were season of year, population (F= 9.763, p≤.001), menu (F= 2.921, p≤.035), type of ownership (F= 56.565, p≤.000), water source (F= 10.751, p≤.032), irrigation (F= 46.514, p≤.001) and days open (F= 6.085, p≤.000). A stepwise linear regression model (F= 33.676, p≤.000) found ownership (β= -.329, p ≤ 0.000), irrigation (β= -.290, p ≤ 0.000), and population (β= -.176, p ≤ 0.003) impacted water consumption. For water costs, CDRs paid an average of $6.54 per 1,000 gallons of water consumed and had mean annual expenses of $5,026 on revenues of $2,554,254 which was the equivalent of a water cost percent of 0.42. Demographics that impacted water costs were season of year, region (F = 3.167, p≤ 0.015), and water source (F = 4.692, p≤ 0.032). However, a stepwise linear regression model (F= 4.485, p ≤ 0.036) found only water source (β= -.152, p ≤ 0.036) was an indicator of the percentage of revenues related to cost of water. This study did identify benchmarks for water consumption and water costs that can be used in the future by restaurateurs. The primary limitations of the study were that results can only be generalized to casual dining restaurants in Kansas. Future studies can be conducted with different types of restaurants in Kansas and with CDRs in other areas.

Master of Agribusiness / Department of Agricultural Economics / Michael Boland / Greenhouse gas (GHG) emissions and their negative effect on the environment is a growing concern in the world. It is estimated that agriculture is responsible for 7% of the total GHG emissions in the United States. Currently, environmental policies to regulate GHG are in place in different countries and are expected to increase in the future. Increased awareness about climate change by customers also represents an incentive for companies in measuring their emissions. The objective of this study is to estimate carbon dioxide-equivalent emissions from eight agribusiness retailers in Kansas. Data consisted of two years of energy inputs from the operation of the agribusiness retailers. Carbon emission coefficients were employed to determine carbon dioxide-equivalent emissions associated with the use of each energy input during their operations. Results suggest that electricity is the largest source of total carbon dioxide emissions from the retail operations followed by diesel fuel. Diesel fuel represents the main source of direct emissions and gasoline represents the second largest source of direct emissions. Emissions from the agricultural sector will not be regulated under the current American Clean Energy and Security Act of 2009 but information on their potential carbon footprint may be used in identifying specific processes where emissions could be reduced and to analyze possible climate legislation implications for their operations. If agribusinesses were to be regulated, none of the eight retailers have locations with emission levels that would be subject to the current cap and trade bill passed by the U.S. House of Representatives. But, if they were regulated and had to comply by purchasing carbon credits equal to 5 to 20% of their direct emissions, the cost would be low given estimation of future carbon prices in the literature. Even if agricultural retailers are not directly restricted, they will likely be affected by increases in energy input prices if such legislation is enacted.

Doctor of Philosophy / Department of Economics / Yang-Ming Chang / Innovation is development of new ideas that leads to better solutions to current problems. From an economic standpoint, innovation is the engine of economic growth. The appearance of innovation is not uniform in the market, and neither are its affects. The development of new products and technology is significant in any industry. As a result, understanding the path of progress within an industry is necessary to maximize the benefit from innovation. The focus of this research is to further understand the relationship between producers, consumers, and the environment, in the context of innovation. Three scenarios are evaluated. First, innovation evaluated in the context technology intensive industries with product differentiation. Using an optimal control approach with product differentiation and firm outlook we examine conditions that maximize social welfare. When firm(s) have the same discount rate regardless of market structure, a monopoly will develop more innovative products. However, it is shown that competition may increase innovation if firms alter their outlook in a duopoly market structure. Next, influence of consumers on producer adoption of clean technology is evaluated. A spatial model is developed to analyze welfare implications of environmental policies in a competitive market with production and consumption heterogeneity. Consumers with heterogeneous preferences choose between non-green and certified green products, while firms with heterogeneous production costs decide whether to engage in green production. In order for green products to be recognized by consumers, firms must join a green club. The number of green firms, environmental standard, and overall welfare under the market solution are all found to be socially sub-optimal. Finally, producer innovation in markets characterized by public policy due to emission concerns is evaluated. Using a dynamic approach, we derive a firm’s optimal R&D investment strategy to develop clean technology. Explicitly allowing for the cumulative nature of R&D shows that emissions per unit of output are lowest when the firms cooperate in R&D, and show that a profit-maximizing merged entity will never choose the most efficient investment strategy in clean technology, which has implications for emission tax policy and environmental innovation to improve overall welfare.

Master of Arts / Department of Economics / Tracy M. Turner / This report provides a summary of the state of wind energy in the United States, the policy instruments used to encourage renewable energy and the research finding on the benefits of wind energy. It provides insight from a Texas case study, as well as international perspectives. Renewable and non-renewable energy sources are defined and compared. The report discusses the negative environmental impacts of conventional power generation, in contrast to lack of emissions from renewable power. Background information on U.S. energy consumption and climate change are provided. The primary policies used to promote renewable energy, which apply to wind power, are explained. The economic theory behind the relationship of subsidies and externalities is explained, as well as the implications that firm profit-maximization has on market outcomes. This report finds that the benefits derived from wind energy production and the promoting policies outweigh the costs associated with them.

Doctor of Philosophy / Department of Agricultural Economics / Jeffery R. Williams / The two topics addressed in this dissertation are both related to surface water quality. Reservoir sedimentation and water quality trading are examined from economic and environmental perspectives. Each topic and the resulting policy implications are relevant to stakeholders at the local, state, and federal levels. Reservoir sedimentation has been recognized as a major environmental, social, and economic issue in much of the Midwestern US. There is an effort to focus public and private funds to achieve the greatest return on the investment from soil erosion and sediment reduction strategies. How can physiographical and economic relationships within the watershed be quantified in such a way to provide insights into the selection of alternative management strategies? This study focuses on answering that question by integrating a physically-based watershed model with an economic analysis of alternative sedimentation reduction strategies for the case of Tuttle Creek Lake located in northeastern Kansas. Several key finding of this study are that both physiographical and economic factors must be considered for cost-effective conservation to occur. Considering these factors and targeting BMP implementation from 8 to 23 times more cost-effective than random implementation. If targeting cannot be done effectively or if “intangible” costs of BMP implementation are too large, dredging is likely to be more cost-effective. While this research compares the cost-effectiveness of various BMP implementation approaches in Kansas with dredging, the benefits associated with each of these strategies is not addressed. While there is substantial evidence that nonpoint sources have lower nutrient reduction costs than point sources, experience with water quality trading (WQT) reveals a common theme: little or no trading activity. These outcomes suggest the presence of obstacles to trading that were not recognized in the design of existing programs. To examine the ways that various market imperfections may impact the performance of a WQT market, an agent-based model is constructed, which simulates a hypothetical point-nonpoint market. This study first presents an overview of the concepts and simulation modeling technique used and then analyzes the effects of two prominent market impediments identified in the WQT literature: information levels and trading ratios. The results imply that if market designers feel that only a limited number of trades will be consummated, creating an institution that provides accessible information about buyers’ prices is preferred to providing information about sellers’ prices. Overall, more information is always better, but it becomes less important with higher trading ratios.

Doctor of Philosophy / Department of Agricultural Economics / Jeffery R. Williams / Over the last few decades there has been a shift in electricity production in the U.S. Renewable energy sources are becoming more widely used. In addition, electric generation plants that use coal inputs are more heavily regulated than a couple decades ago. This shift in electricity production was brought on by changes in federal policy – a desire for electricity produced in the U.S. which led to policies being adopted that encourage the use of renewable energy. The change in production practices due to policies may have led to changes in the productivity of electric generation plants. Multiple studies have examined the most efficient electric generation plants using the data envelopment analysis (DEA) approach. This study builds on past research to answer three questions: 1) Does the level of aggregation of fuel input variables affect the plant efficiency scores and how does the efficiency of renewable energy input compare to nonrenewable energy inputs; 2) Are policies geared toward directly or indirectly reducing greenhouse gas emissions affecting the production efficiencies of greenhouse gas emitting electric generation plants; and 3) Do renewable energy policies and the use of intermittent energy sources (i.e. wind and solar) affect the productivity growth of electric generation plants. All three analysis, presented in three essays, use U.S. plant level data obtained from the Energy Information Administration to answer these questions. The first two essays use DEA to determine the pure technical, overall technical, and scale efficiencies of electric generation plants. The third essay uses DEA within the Malmquist index to assess the change in productivity over time. Results indicate that the level of aggregation does matter particularly for scale efficiency. This implies that valuable information is likely lost when fuel inputs are aggregated together. Policies directly focused on reducing greenhouse gas emissions may improve the production efficiencies of greenhouse gas emitting electric generation plants. However, renewable energy policies do not have an effect on productivity growth. Renewable energy inputs are found to be as efficient if not more efficient than traditional energy sources.

Master of Arts / Department of Economics / Tracy M. Turner / Economic growth requires growth of energy consumption. In the second half of the twentieth century energy consumption began to outgrow its production and the United States. Consequently, we observe growing dependence of the U.S. economy on energy imports which is causing political and economic insecurity; increasing pollution and depletion of natural resources. One way to alleviate these problems is to encourage renewable electricity production. Because the electric power industry is the largest consumer of energy sources, including renewable energy, it has become one of the most frequent subjects of the regulatory policies and financial incentives aiming to stimulate renewable electricity production. One of the most promoted renewable energy policies in this industry is a renewable portfolio standard (RPS), which requires electric utilities and other retail electric providers to supply a specified amount of electricity sales from renewable energy sources. Currently 29 states and District of Columbia have the RPSs, while 7 states have goals; but only about two third of those with the RPS have certain targets to meet. To my best knowledge, there are no studies analyzing compliance with the RPSs targets or the role of penalty mechanism in the RPS design on meeting its goal. In my Master Thesis I estimate which states are in compliance with their individual RPSs goals and analyze which factors affect the probability of compliance, with the focus on the role of penalty size, and controlling for complimentary policies promoting renewable energy production. I use a fixed effects linear probability model and state level data. Results indicate that including a penalty in the RPS design significantly increases the probability that states will comply with their goals.

Master of Science / Department of Agricultural Economics / Timothy J. Dalton / Given the changing climate paradigm, food and poverty are likely to become more severe in Africa. Farmers can adapt to climate change, especially through conservation agriculture. This study relies on a minimum data approach developed by Antle and Valvidia (2006) to estimate the spatial distribution of opportunity cost for farmers in switching to conservation practices in Wa, Ghana. It assesses the economic feasibility of several scenarios that rely on production techniques currently studied by the CRSP SANREM project. We also explore the possibility that these practices can provide income from carbon sequestration payments implemented by the Kyoto protocol’s Clean Development Mechanisms. The methodology uses data from both a recent survey and information from secondary sources to assess simulated management practices. Results indicate that all the simulated management practices would theoretically benefit farmers. In fact, adoption rates for the four scenarios range from 52% to 65%, even without any carbon payment. Adding a proportional payment to the amount of carbon sequestered with these practices does not seem enough to influence farmers switch to switch to alternative scenarios. The analysis shows that these results hold even when additional fixed costs to adopt these practices are included. This case study demonstrates the usefulness of the minimum data approach in estimating the economic potential of conservation practices in Ghana. These production techniques may represent environmentally-friendly alternatives that are more profitable for farmers than current practices. The next step in assessing implementation of such practices would require studying farmers’ willingness to adopt these production systems, given their ex-ante economic returns.