Three essays on the economics of water resources and climate change
Date
2024
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Abstract
This dissertation investigates three broad topics in the economics of water resources and climate change. In the first chapter, I explore how changes in perceptions about water availability affect the adoption of conservation practices. I present a theoretical framework to examine how producer perceptions influence investment in irrigation efficiency, and a period of extreme drought and institutional change in Colorado is leveraged as a natural experiment to evaluate theoretical hypotheses empirically. The second chapter assesses the sensitivity of climate change impact estimates to the climate economy functional form in agriculture. I accomplish this through the development of a long-run dataset of county-level weather and climate metrics, including hourly temperature measurements across all counties in the conterminous US, and demonstrate the consequences of multiple modelling approaches that are common in the literature. I also create a composite vulnerability index that integrates the magnitude and consistency of impacts across all defensible models to generate a comprehensive measure of climate risk to a county's agricultural sector. In the final chapter, I compare the economic efficiency of different water allocation mechanisms. A combination of optimization models and water supply simulations are employed to compare prior appropriation with and without water markets, and alternative, share-based mechanisms. I illustrate how the physical and institutional components of a river basin, such return flows, user seniority, heterogeneous value functions, and user locations (i.e., upstream or downstream), impact allocative performance.