Environmental policy in the U.S. is often enacted at both the federal level and the state level. This dissertation uses unique data derived from a combination of a detailed simulation model of the U.S. electricity sector and an integrated assessment model of air pollution dispersion and valuation to examine three problems in state and federal environmental policy. These data represent the “taxes” (or shadow cost of abatement) on sulfur dioxide and nitrogen oxides that are efficient for each state when considering only their own costs and benefits, and also the level of federal uniform tax on the same pollutants that maximizes each state’s net benefits. This data is used in three analyses. First, we examine the case of environmental federalism. Differences in spillovers across states, together with differences in population density and local cost structures create substantial spatial heterogeneity in the economics of air pollution. Uniform federal control and state level control both have advantages and disadvantages, and it is unclear which is more efficient. For the case of sulfur dioxide (nitrogen oxides), when states choose their own level of pollution, 31.5% (76.2%) of the potential benefits under the nationally optimal scheme are lost. The uniform tax only results in a loss of 0.19% (2.32%) of the potential benefits. The data derived, which are directly based on the costs and benefits of air pollution, provide a broad measure of constituent interest. These variables are used to explain state adoption of green electricity policies and federal legislative voting on environmental issues. In contrast to previous studies, it is found that constituent interest and ideology are both important determinants in the formation of environmental policy. Lastly, it is widely known in the literature that states act strategically when choosing policies. This result also persists for state-level environmental stringency. We use unique weighing matrix specifications to distinguish between tax competition and competition based on spillover effects. It is also shown that higher marginal damages of pollution limit strategic behavior.

This dissertation investigates whether higher levels of “governmental fragmentation” in metropolitan statistical areas (MSA) leads to worse environmental outcomes. Fragmentation refers to the number of local governments in a given region or MSA as defined by the census. This research contributes to two bodies of literature, that of environmental federalism and that of urban growth and local government form. In the area of environmental federalism this dissertation extends the collective action model to include local governments. An empirical framework is developed that includes cross-sectional and panel data. In the urban growth and local government form literature, this dissertation comprehensively tests many existing measures of local government fragmentation within an environmental policy framework. It also modifies and extends some of the fragmentation variables. The results suggest that local government fragmentation does hinder MSAs from attaining the ozone standard. This dissertation extends the literature by examining the effect that local government fragmentation has on regional environmental quality. Six local government structure variables, jurisdiction count, special district dominance, central city dominance, county primacy, central city growth, and metropolitan power diffusion index are comprehensively tested to determine which might affect regional environmental quality. In addition, this research extends the use of the computationally complex measure of metropolitan power diffusion index to include additional local government expenditures as well as additional years of panel data. Two empirical estimation strategies were implemented, a cross-sectional approach and a panel data approach. The cross-sectional approach estimates the effects that long-term changes in local government structure have on attaining the ozone standard by measuring differences across MSAs. The panel data model’s primary purpose was that of a robustness check on the cross-sectional results. Three of the six tested fragmentation variables were found to have statistically significant effects on MSA attainment of the ozone standard in the cross-sectional model. Higher levels of metropolitan power diffusion index and jurisdiction count were found to hinder attainment of the ozone standard, while greater values of central city growth aided in reaching the attainment standard. Generally, the panel data results’ supported the results from the cross-sectional models. In addition, the panel model resolved some important estimation issues. Metropolitan power diffusion index was found to be correlated with unobservables in the random effects model, indicating that the cross-sectional results for metropolitan power diffusion index may be biased as well. This was not an issue for the variable jurisdiction count. Metropolitan power diffusion index and jurisdiction count are highly correlated with each other and this relationship was used to estimate a reasonable range for the effect metropolitan power diffusion index might have on the attainment of the ozone standard.

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This research sought to explain the emergence of the Wyoming Core Area Strategy (WCAS), a state-based Greater Sage Grouse conservation plan. It presents a theoretical framework that is based on and adds nuance to the Advocacy Coalition Framework (ACF). The hypothesis this study explored was: if a subsystem's jurisdiction is threatened by a hierarchically superior subsystem's policy outputs and this jurisdiction is necessary to meet the threatened subsystem's goals, then policy change may occur as a result of a strategy by the agents in the threatened subsystem. The data used to examine the hypothesis included expert interviews, historical documents, and interviews from media sources (secondary source interviews). The hypothesis was supported; the WCAS emerged because the Endangered Species Act listing outputs within the Species Conservation Policy Subsystem threatened the Wyoming Land Use Policy (WLUP) Subsystem's jurisdiction, which was necessary to meet the WLUP Subsystem's economic and lifestyle goals; the Governor of Wyoming drove the development and enactment of the WCAS as a strategy to retain jurisdiction. The research demonstrated that in order to fully account for the WCAS's emergence, a less mechanistic view of the framework, one that accounts for the ability of agents in a subsystem to act strategically, was needed. The research also demonstrated that the Greater Sage Grouse conservation benefited from the ESA listing process despite its warranted but precluded listing status. The time frame the research explored was 2002 through March 2012. / Master of Arts

Environmental positive externalities from public provision, such as the benefits yielded from the public measure of nature conservation, are often not internalized. Potential sub-optimal public service provision can be expected from such a condition, leading to inefficiency, if the benefits at a greater territorial scale are not acknowledged. This holds particularly true for intergovernmental fiscal relations in a decentralizing multi-tiered governmental system. Moreover, in developing countries the fiscal capacities to perform measures of ecological public functions are limited with their fiscal needs for these functions often appearing to outweigh their fiscal capacities. Research at the interface of the economic theory of fiscal federalism, the sustainability concept, and policies related to conservation and the environment is relatively new. Furthermore, in the literature on environmental federalism the emphasis tends to be comparatively less on the benefits of positive environmental externalities. The essential contribution of this study is an extension of this research field that is still in its infancy by applying the specific case of Indonesia as the context, on account of this tropical country‟s ecological significance as well as its recent developments during the fiscal decentralization process. The overall aim of this study is to assess the possibilities of ecological fiscal transfers as a set of instruments in the public sector to internalize environmental externalities. To this end, the study traces the development as well as the current state of intergovernmental fiscal transfers in Indonesia in terms of ecological purposes. On the basis of this knowledge, the study offers new policy perspectives by proposing a number of policy options for ecological fiscal transfers in the context of the functioning fiscal transfer system and institutions between the national and the subnational (province and local) governments as well as among jurisdictions at the same governmental level. The incorporation of an explicit ecological indicator into general-purpose transfers is the first option. The second option is derived from a revenue-sharing arrangement. In this arrangement, two sub-options are proposed: first, shared revenues from taxes are distributed on the basis of the ecological indicator and, second, shared revenues from natural resources are earmarked for environmental purposes. Finally, the third option suggests an extension of existing specific-purpose transfers for the environment. The potential and limitations of the respective options are addressed. Additionally, a short treatment is given to the discourse on the possible mobilization of fiscal resources in the context of tropical deforestation and global climate change. The research concentrates mainly on the first option, namely the incorporation of an ecological indicator into the structure of general-purpose transfer allocation. In order to substantiate an explicit ecological dimension in the transfer, it extends the present area-based approach by introducing a protected area indicator while maintaining the remaining socio-economic indicators in the fiscal need calculation. The parameter values of area-related indicators are adjusted and subject to the properties of the existing formula. The simulation at the provincial level yields the following results. First, more provinces lose rather than gain from the introduced ecological fiscal transfer when compared to the fiscal transfer that they received in the reference fiscal year. Second, on average the winning provinces obtain a higher level of transfer from the introduction of an ecological indicator in the fiscal need calculation. The extent of the average decreases for the losing provinces, however, it is lower compared to the extent of the average gain by their winning counterparts. In terms of spatial configurations of the general-purpose transfer with an ecological indicator, provinces in Papua would benefit most from the new fiscal regime whereas provinces in Java and Sulawesi, with a few exceptions, would suffer a transfer reduction. Kalimantan and Sumatera show a mixed pattern of winning and losing provinces. The analysis on the equalization effects of the general-purpose transfers makes the following important contributions. It suggests that, first, the transfers are equalizing and, second, the introduction of the protected area indicator into the structure of these transfers plays a significant role in the equalizing effect, particularly in the presence of provinces with a very high fiscal capacity and when the area variable is also controlled. All of these new insights are imperative in the design of fiscal policy which intends to integrate explicit ecological aspects into the instruments of intergovernmental fiscal transfers. Since a formula-based fiscal transfer distribution is intrinsically zero-sum, the aforementioned configuration of winning and losing jurisdictions is conceivable. Among other future perspectives, it is the task of further research to explore ecological fiscal transfer instruments and associated measures that on the one hand seek to induce the losing provinces to join their winning counterparts and, on the other hand, are still subject to the requirements of the rational fiscal transfer mechanism.

This habilitation thesis consists of seven published journal articles and one published book chapter. Part I, consisting of chapter 1, introduces the overarching theme of environmental policy instruments and discusses the current use of and prospects for economic instruments in conservation policies. A number of research gaps are identified which are addressed in the subsequent chapters. Part II, consisting of chapters 2–5, encompasses four papers focused on a single type of policy instrument: intergovernmental fiscal transfers. Although well documented in public finance literature, intergovernmental fiscal transfers remain a somewhat neglected instrument in environmental policy. Despite being well suited to address the spillover benefits that often accrue with conservation policies, there is scant research literature on ecological fiscal transfers compared to other economic instruments such as environmental taxes or tradable permits. In fact, very few countries make practical use of them to achieve conservation objectives. Thus intergovernmental fiscal transfers are an innovative instrument in conservation policies in particular, so that advances in both theory and applied research may prove especially beneficial here. Part III, consisting of chapters 6–9, combines a number of articles in integrative biodiversity research and applied biodiversity governance, themes that are often neglected in the economic analysis of environmental policy instruments. However, when implementing policy instruments in societal settings, interdisciplinary research bridging the natural and social sciences is as much a prerequisite as policy-relevant research that responds to the needs of decision makers and other stakeholders. Both policy design and policy evaluation yield the best outcomes when they involve ecologists, economists, legal and other social scientists, as this ensures that consideration is given to ecological effectiveness, economic efficiency, administrative feasibility, social acceptance, and perception by stakeholders. Policy-relevant research also responds to current societal developments and prospective changes in legislation which may provide windows of opportunity to propose new instruments. Meanwhile, sound empirical research and case study design are indispensable in making concrete policy recommendations, taking into account existing formal and informal institutions.

Cette thèse s'inscrit dans une perspective d'économie politique pour aborder les contraintes institutionnelles engendrées par la mise en œuvre des réglementations environnementales à l'échelle locale. La pertinence des dispositifs institutionnels environnementaux (DIE) comme solution coopérative à la fragmentation de la structure politico-administrative française focalise l'analyse. La thèse développe deux types de travaux. Les propositions du fédéralisme environnemental, sur la supériorité de la centralisation des compétences de gestion en présence d'un enjeu environnemental avec effets de débordement, sont évaluées à l'aune des réalités politiques locales. Une analyse économétrique des votes des élus locaux pour le cas du SAGE « Estuaire de la Gironde » permet d'apprécier la coïncidence entre le plan de gestion du bassin versant et les enjeux économiques auxquels les élus sont confrontés, via les groupes d'intérêts. La portée incitative des DIE est ensuite abordée. La théorie des coûts de transactions permet de les considérer comme des contrats relationnels basés sur la spécificité des acteurs et leur positionnement les uns vis-à-vis des autres. La reconstruction du réseau des acteurs qui portent les enjeux environnementaux de l'estuaire de la Gironde montre l'importance des acteurs publics locaux. L'analyse statistique de la formation des liens de collaboration intègre cette particularité en se concentrant sur la relation élu-technicien. La thèse montre que les dimensions politique, administrative et économique des interactions entre les acteurs altèrent l'utilité et la portée des DIE pour la coordination autour de la gestion environnementale à l'échelle locale. / This thesis adopts a political economy perspective to address the institutional and political constraints influencing the implementation of environmental policies at a local level. A central focus of the analysis is on assessing the continued relevance of Environmental Institutional Devices (EIDs) as solutions for addressing French political and administrative fragmentation. The thesis pursues two core lines of inquiry. First, proposals developed within an environmental federalism tradition, which state that centralization of power is preferable in cases when environmental problems generate spillover, are evaluated against the realities of local community interests. Through carrying out an econometric test based on local elected representatives' votes, the thesis compares the contents of a watershed policy project in Gironde estuary with the types of issues representatives face on a daily basis, in particular from economic interest groups. Second, the thesis analyses incentives contained in EIDs. Transaction costs theory provides the tools for interpreting EIDs as relational contracts based on an actor's specificity and his/her respective positioning vis-à-vis others. Through this reconstruction of an environmental governance network on the Gironde estuary, I reveal the prevalence of public actors. A statistical analysis of network formation integrates this feature by focusing on the politician-bureaucrat relationship. The results show how political, administrative and economic dimensions of environmental coordination mitigate against the usefulness and the incentive-compatibility of EIDs as tools for environmental policy implementation at local level.

This habilitation thesis consists of seven published journal articles and one published book chapter. Part I, consisting of chapter 1, introduces the overarching theme of environmental policy instruments and discusses the current use of and prospects for economic instruments in conservation policies. A number of research gaps are identified which are addressed in the subsequent chapters. Part II, consisting of chapters 2–5, encompasses four papers focused on a single type of policy instrument: intergovernmental fiscal transfers. Although well documented in public finance literature, intergovernmental fiscal transfers remain a somewhat neglected instrument in environmental policy. Despite being well suited to address the spillover benefits that often accrue with conservation policies, there is scant research literature on ecological fiscal transfers compared to other economic instruments such as environmental taxes or tradable permits. In fact, very few countries make practical use of them to achieve conservation objectives. Thus intergovernmental fiscal transfers are an innovative instrument in conservation policies in particular, so that advances in both theory and applied research may prove especially beneficial here. Part III, consisting of chapters 6–9, combines a number of articles in integrative biodiversity research and applied biodiversity governance, themes that are often neglected in the economic analysis of environmental policy instruments. However, when implementing policy instruments in societal settings, interdisciplinary research bridging the natural and social sciences is as much a prerequisite as policy-relevant research that responds to the needs of decision makers and other stakeholders. Both policy design and policy evaluation yield the best outcomes when they involve ecologists, economists, legal and other social scientists, as this ensures that consideration is given to ecological effectiveness, economic efficiency, administrative feasibility, social acceptance, and perception by stakeholders. Policy-relevant research also responds to current societal developments and prospective changes in legislation which may provide windows of opportunity to propose new instruments. Meanwhile, sound empirical research and case study design are indispensable in making concrete policy recommendations, taking into account existing formal and informal institutions.

Environmental positive externalities from public provision, such as the benefits yielded from the public measure of nature conservation, are often not internalized. Potential sub-optimal public service provision can be expected from such a condition, leading to inefficiency, if the benefits at a greater territorial scale are not acknowledged. This holds particularly true for intergovernmental fiscal relations in a decentralizing multi-tiered governmental system. Moreover, in developing countries the fiscal capacities to perform measures of ecological public functions are limited with their fiscal needs for these functions often appearing to outweigh their fiscal capacities. Research at the interface of the economic theory of fiscal federalism, the sustainability concept, and policies related to conservation and the environment is relatively new. Furthermore, in the literature on environmental federalism the emphasis tends to be comparatively less on the benefits of positive environmental externalities. The essential contribution of this study is an extension of this research field that is still in its infancy by applying the specific case of Indonesia as the context, on account of this tropical country‟s ecological significance as well as its recent developments during the fiscal decentralization process. The overall aim of this study is to assess the possibilities of ecological fiscal transfers as a set of instruments in the public sector to internalize environmental externalities. To this end, the study traces the development as well as the current state of intergovernmental fiscal transfers in Indonesia in terms of ecological purposes. On the basis of this knowledge, the study offers new policy perspectives by proposing a number of policy options for ecological fiscal transfers in the context of the functioning fiscal transfer system and institutions between the national and the subnational (province and local) governments as well as among jurisdictions at the same governmental level. The incorporation of an explicit ecological indicator into general-purpose transfers is the first option. The second option is derived from a revenue-sharing arrangement. In this arrangement, two sub-options are proposed: first, shared revenues from taxes are distributed on the basis of the ecological indicator and, second, shared revenues from natural resources are earmarked for environmental purposes. Finally, the third option suggests an extension of existing specific-purpose transfers for the environment. The potential and limitations of the respective options are addressed. Additionally, a short treatment is given to the discourse on the possible mobilization of fiscal resources in the context of tropical deforestation and global climate change. The research concentrates mainly on the first option, namely the incorporation of an ecological indicator into the structure of general-purpose transfer allocation. In order to substantiate an explicit ecological dimension in the transfer, it extends the present area-based approach by introducing a protected area indicator while maintaining the remaining socio-economic indicators in the fiscal need calculation. The parameter values of area-related indicators are adjusted and subject to the properties of the existing formula. The simulation at the provincial level yields the following results. First, more provinces lose rather than gain from the introduced ecological fiscal transfer when compared to the fiscal transfer that they received in the reference fiscal year. Second, on average the winning provinces obtain a higher level of transfer from the introduction of an ecological indicator in the fiscal need calculation. The extent of the average decreases for the losing provinces, however, it is lower compared to the extent of the average gain by their winning counterparts. In terms of spatial configurations of the general-purpose transfer with an ecological indicator, provinces in Papua would benefit most from the new fiscal regime whereas provinces in Java and Sulawesi, with a few exceptions, would suffer a transfer reduction. Kalimantan and Sumatera show a mixed pattern of winning and losing provinces. The analysis on the equalization effects of the general-purpose transfers makes the following important contributions. It suggests that, first, the transfers are equalizing and, second, the introduction of the protected area indicator into the structure of these transfers plays a significant role in the equalizing effect, particularly in the presence of provinces with a very high fiscal capacity and when the area variable is also controlled. All of these new insights are imperative in the design of fiscal policy which intends to integrate explicit ecological aspects into the instruments of intergovernmental fiscal transfers. Since a formula-based fiscal transfer distribution is intrinsically zero-sum, the aforementioned configuration of winning and losing jurisdictions is conceivable. Among other future perspectives, it is the task of further research to explore ecological fiscal transfer instruments and associated measures that on the one hand seek to induce the losing provinces to join their winning counterparts and, on the other hand, are still subject to the requirements of the rational fiscal transfer mechanism.