This dissertation represents an effort to advance interdisciplinary research in issues relevant for energy and environmental policy, combining economics with applied engineering and ecology. It includes work that is informed by theoretical and empirical studies, and is conceptually centered in the notion that competitive markets lead to inefficient combinations of risk and yield. In the first two chapters of the dissertation, I study this in the context of wind energy capacity investments, where profit-maximizing developers choose the location and timing of the construction of wind farms. The final chapter of the dissertation is an empirical study on the effects of intensive aquaculture on water pollution.

This thesis is concerned with the conceptual foundations of environmental law and policy in the Great Lakes basin, the world's largest freshwater ecosystem. The Great Lakes regime is now widely recognized as one of the most advanced international environmental management regimes in existence. Over the past two decades, toxic contamination has emerged as a highly pressing ecological issue in the Great Lakes basin. In Canada and the United States, the ecosystem approach, a comprehensive and integrated approach to environmental management, has been adopted both bilaterally and domestically in the Great Lakes' complex environmental policy framework to guide the protection of ecological integrity. There has been extensive discussion of the ecosystem approach, particularly from scientific and managerial perspectives; however, the economic content of the concept has been largely neglected, despite the importance of considering all relevant perspectives in the development of law and policy. This thesis is divided into five chapters. After discussing in Chapter 1 the ecological and institutional contexts and methodological issues of the analysis, this thesis defends, in Chapter 2, the view that economic theory has relevance to issues of environmental law and policy. In addition to highlighting the main contours of welfare and environmental economic theory, a main conclusion, and an essential premise upon which the analysis proceeds, is that economics remains a useful analytical approach to environmental issues, despite some important criticisms. Subsequently, in Chapter 3, the analysis shifts to an examination of four bilateral and domestic Great Lakes instruments that form the core of Great Lakes toxic pollution policy: (i) the Great Lakes Water Quality Agreement; (ii) the Great Lakes Binational Toxics Strategy; (iii) the Canada-Ontario Agreement; and (iv) the Final Water Quality Guidance for the Great Lakes System. After outlining key principles underpinning each instrument, the thesis underscores common themes running through the collective policy framework. The ecosystem approach constitutes a unifying concept in this framework. The ecosystem approach is examined from an economic perspective in Chapter 4. After identifying key elements of the ecosystem approach, this chapter highlights important parallels between fundamental welfare and environmental economic notions. One main conclusion is that economic concepts and approaches, such as environmental valuation, externalities, and self-interest, form an integral part of the ecosystem approach. Finally, Chapter 5 identifies some directions for further research. Given that, as the thesis seeks to establish, economic theory constitutes an important, albeit not sole, perspective on the ecosystem approach, a key challenge will be to facilitate interdisciplinary analysis and cooperation leading to effective operationalization of the concept.

This thesis is concerned with the conceptual foundations of environmental law and policy in the Great Lakes basin, the world's largest freshwater ecosystem. The Great Lakes regime is now widely recognized as one of the most advanced international environmental management regimes in existence. Over the past two decades, toxic contamination has emerged as a highly pressing ecological issue in the Great Lakes basin. In Canada and the United States, the ecosystem approach, a comprehensive and integrated approach to environmental management, has been adopted both bilaterally and domestically in the Great Lakes' complex environmental policy framework to guide the protection of ecological integrity. There has been extensive discussion of the ecosystem approach, particularly from scientific and managerial perspectives; however, the economic content of the concept has been largely neglected, despite the importance of considering all relevant perspectives in the development of law and policy. This thesis is divided into five chapters. After discussing in Chapter 1 the ecological and institutional contexts and methodological issues of the analysis, this thesis defends, in Chapter 2, the view that economic theory has relevance to issues of environmental law and policy. In addition to highlighting the main contours of welfare and environmental economic theory, a main conclusion, and an essential premise upon which the analysis proceeds, is that economics remains a useful analytical approach to environmental issues, despite some important criticisms. Subsequently, in Chapter 3, the analysis shifts to an examination of four bilateral and domestic Great Lakes instruments that form the core of Great Lakes toxic pollution policy: (i) the Great Lakes Water Quality Agreement; (ii) the Great Lakes Binational Toxics Strategy; (iii) the Canada-Ontario Agreement; and (iv) the Final Water Quality Guidance for the Great Lakes System. After outlining key principles underpinning each instrument, the thesis underscores common themes running through the collective policy framework. The ecosystem approach constitutes a unifying concept in this framework. The ecosystem approach is examined from an economic perspective in Chapter 4. After identifying key elements of the ecosystem approach, this chapter highlights important parallels between fundamental welfare and environmental economic notions. One main conclusion is that economic concepts and approaches, such as environmental valuation, externalities, and self-interest, form an integral part of the ecosystem approach. Finally, Chapter 5 identifies some directions for further research. Given that, as the thesis seeks to establish, economic theory constitutes an important, albeit not sole, perspective on the ecosystem approach, a key challenge will be to facilitate interdisciplinary analysis and cooperation leading to effective operationalization of the concept. / Law, Peter A. Allard School of / Graduate

The rapid urbanization of modern cities poses several economic challenges and questions, such as energy efficiency, environmental sustainability, and the distribution of businesses. These elements significantly shape the dynamics of housing markets and urban migration patterns. My dissertation explores the causal impacts of environmental amenities and informational transparency on housing market valuations and the interactions within business sectors. In the first chapter of this thesis, we study the equilibrium effects of building energy efficiency information on the housing market. Building energy efficiency is crucial for identifying energy-saving potential, yet such information was not publicly available in the past. We examine the equilibrium effects of a regulation in New York City that mandates increased public access to information on building energy efficiency. We find that the effectiveness of disclosure policies in achieving desired market outcomes hinges significantly on the salience of the information disclosed. Our findings suggest that enhancing the salience of building energy efficiency disclosures leads to the emergence of energy efficiency premiums and incentivizes buildings to make energy efficiency improvements. Particularly, luxury buildings exhibit more pronounced responses. We develop and estimate an equilibrium model of demand for homes and building energy efficiency, as well as buildings' choices of energy efficiency levels. The results indicate that the increase in housing prices attributable to energy efficiency improvements significantly exceeds the savings in energy bills. In the second chapter of this thesis, we the strengths of agglomeration spillovers in the local non-tradable service sector using a comprehensive list of grocery store openings in the U.S. in 2018 -- 2019. We combine deep learning tools with propensity score estimation to find counterfactual opening sites and compare business outcomes surrounding actual and counterfactual sites. We find openings of grocery stores lead to significant growth in foot traffic to their opening locations and a 39 percent increase in foot traffic to businesses within 0.1 miles. The spillovers of demand are strongest between new grocery stores and businesses in wholesale and retail and hospitality services. We also find that grocery store openings lead to a 6.9 percentage point higher growth in the number of businesses within 0.1 miles of the openings 0--3 years later. My third chapter investigates the economic impacts of cleaning up heavily polluted waterways in urban neighborhoods. We leverage the Black-and-Odorous Water Program, a major urban environmental campaign in China, as a natural experiment to identify the causal impact of cleaner waterways on local housing prices, housing supply, and business growth. Implemented in 2016, the program remediated heavily polluted waterways in China's 36 most developed cities. Using a difference-in-differences estimator, we find that the program mainly benefits properties within 1 mile of cleaned-up waterways: These properties saw a 2.3% appreciation in market value after the program. Beyond the impacts on the housing market, we identify two novel mechanisms associated with community revitalization following pollution management and examine their implications for housing prices. First, new real estate developments near treated waterways are more likely to offer high-end units after the program. Second, service businesses flourish in neighborhoods near cleaned waterways, indicating a commercial rejuvenation of these areas.

Despite the pollution control provisions provided in national and local legislation that explicitly or implicitly give effect to the polluter pays principle (PPP), certain rivers continue to suffer from persistent industrial pollution. This research focuses on one such river, the Bayne's Spruit, as a case study. The Bayne's Spruit is a small river that is located within an urban catchment, and which has been subjected to wet industrial pollution for over a decade. Much of this pollution is associated with the Pietermaritzburg edible oil industry. This pollution impacts negatively on a downstream community that uses the river for irrigation of subsistence crops, for recreation and for subsistence fish harvesting. The pollution has also severely degraded the riverine ecosystem. This research commenced with a literature review of the PPP in its international, national and local context. It was noted that the current legislative framework for implementation of the PPP with regard to pollution of rivers in South Africa comprises primarily of the National Water Act 36 of 1998 (NWA), the National Environmental Management Act 107 of 1998, and the Pietermaritzburg-Msunduzi industrial effluent bylaws of November 1998. The case study was approached using a largely qualitative methodology, although quantitative data was also relied upon where feasible. The historical context of the case study was provided by conducting a review of newspaper reports, a review of. government inspection records, and a review of water quality data (including biomonitoring and chemical data). The current status of the Bayne's Spruit was then explored by conducting in-depth historical interviews with community members, and by conducting direct observation of the environmental status of the Bayne's Spruit. This data was supplemented by an analysis of the test results of sampled industrial effluent, and by information obtained from representatives of two edible oil companies. In-depth, purposively selected interviews were conducted with various role players. (local government, regional government and industry) to identify what factors are preventing the successful implementation of the PPP in the case study area. Factors identified include a lack of environmental ethic within the edible oil industry, with some of these companies free riding on the Bayne's Spruit to maximize their profits. At a local level, factors preventing implementation of the PPP include deficiencies in the local industrial effluent bylaws, failures to administer and implement provisions contained in the bylaws, capacity restrictions and institutional paralysis. National legislation is not being successfully implemented because the government agency empowered under the NWA is deferring primary responsibility for dealing with pollution to the local authority. Factors also include difficulties associated with monitoring of rivers, including lack of capacity to engage in monitoring, and confusion over the functions of the various spheres of government. Finally, enforcement complexities are a major factor preventing successful implementation of the PPP. These problems relate to inadequate penalties, enforcement arrangements, capacity problems, separation of authority to operate the municipal sewer works and to enforce the industrial effluent bylaws, difficulties in identifying the offending polluter (causation), problems with access to company premises, the open access character of the storm water drainage system, previous failed prosecutions and reliance on the criminal justice system. / Thesis (M.Sc.)-University of Natal, 2002.

This study is a component of a research project on the economic costs of eutrophication in the Vaal River system. Its objective is to investigate the relationship between raw water quality and the chemical costs of producing potable water at two water treatment plants: Zuikerbosch Station #2 (owned by Rand Water) in the Upper Vaal Water Management Area (UVWMA), and Balkfontein (owned by Sedibeng Water) in the Middle Vaal Water Management Area (MVWMA). Time series data on raw water quality and chemical dosages used to treat raw water were obtained for Zuikerbosch Station #2 (hereafter referred to as Zuikerbosch) for the period November 2004 – October 2006 and for Balkfontein for the period January 2004 to December 2006. Descriptive statistics reveal that raw water in the Vaal River is of a poorer quality at Balkfontein compared to that at Zuikerbosch. Furthermore, the actual real chemical water treatment costs (measured in 2006 ZAR) averaged R89.90 per megalitre at Zuikerbosch and R126.31 at Balkfontein, indicating that the chemical water treatment costs of producing potable water tend to increase as raw water quality declines. Collinearity among water quality (WQ) variables at both water treatment plants was analysed using Principal Component Analysis (PCA). The dimensions of water quality identified in the analysis are similar to those reported in Pieterse and van Vuuren’s (1997) study of the Vaal River. For both water treatment plants, Ordinary Least Squares (OLS) regression was used to identify the relationship between real chemical costs of water treatment and the dimensions of water quality identified through the respective Principal Components Analyses. The estimated regression models account for over 50.2% and 34.7% of variation in real chemical water treatment costs at Zuikerbosch and Balkfontein, respectively. The coefficient estimated for PC1 at Zuikerbosch is statistically significant at the 1% level of probability with high negative loadings of total alkalinity and turbidity. Increases in the levels of total alkalinity and turbidity in raw water treated at Zuikerbosch is negatively related to the chemical costs of water treatment. An increased total alkalinity level was found to reduce the chemical costs of treating potable water. PC2 is statistically the most important variable in the estimated explanatory model for Balkfontein. The estimated regression coefficient for PC2 is statistically significant at the 5% level of probability. The estimated relationship between chemical water treatment costs and PC2 shows that there is a positive relationship between the raw water temperature and chemical water treatment costs. However, increases in the levels of chlorophyll and pH in raw water treated at Balkfontein is negatively related to the chemical costs of water treatment. Total hardness, magnesium, calcium, sulphate, conductivity, and chloride, being the highest positive loadings in PC1, relate negatively to the chemical cost of treating water. For predictive rather than explanatory purposes, a partial adjustment regression model was estimated for each of the two water treatment plants. Using this model, real chemical water treatment costs were specified as a function of real chemical water treatment costs in the previous time period, and of raw water quality variables in the current period. The R2 statistics for the two regression models were 61.4% using the data for Zuikerbosch and 59.9% using the data for Balkfontein, suggesting that both models have reasonable levels of predictive power. The chemical cost of water treatment for Zuikerbosch and Balkfontein are predicted at R96.25 and R90.74 per megalitre per day respectively. If raw water nitrate in the UVWMA increases by 1% per megalitre a day while other factors remain constant, chemical water treatment costs at Zuikerbosch can be expected to increase by 0.297% per megalitre and the cost accompanied this change is (R0.285*1998ML*365days) R207,841.95 provided that Zuikerbosch treats an average of 1998 megalitres per day. Likewise, if Zuikerbosch maintains its daily average operating capacity and is able to maintain an optimal level of total alkalinity in UVWMA, the estimated saving on chemical water treatment cost will be R150.063.78 per annum. At Balkfontein, chemical water treatment cost is expected to increase on average by 0.346% per megalitre per day for a 1% per megalitre per day increase in the level of chlorophyll-a, and the cost accompanied this change is R41,128.20 per annum. The prediction also shows a 2.077% per megalitre per day increase chemical water treatment cost for a 1% increase in turbidity and this accompanied with a chemical water treatment cost of R 249,003 per annum, provided that Balkfontein operates at its full capacity (i.e., 360 megalitres per day). / Thesis (M.Sc.Agric.)-University of KwaZulu-Natal, Pietermaritzburg, 2009.