THREE ESSAYS ON ENVIRONMENTAL DECISION MAKING UNDER UNCERTAINTY

This dissertation consists of three essays in the field of environmental economics. The essays address issues in the economics of environmental investments under uncertainty, adaptation to climate change, and information in environmental management. The unifying theme across the three essays is environmental decision-making under uncertainty.The first essay examines the value of information from integrated sampling of the economy and the environment for nonpoint pollution management. Ideally, the regulator ought to be able to set different levels of the pollution control instrument for polluters based on their productivity and pollution types. The deficit of information on productivity and pollution types of the polluters forces regulators to select uniform control instruments that do not minimize the abatement costs of pollution. Essay 1 tests and finds, in context of a particular watershed, that there is value of information in integrated sampling procedures of the environment and the economy. Information obtained from integrated sampling does result in more efficient pollution control policies.The second essay looks at the economics of adaptation to climate change. Specifically, the essay examines the Submerged Aquatic Vegetation restoration program of the Chesapeake Bay as a problem of optimal investment decision-making in ecological projects under climate change. The essay highlights the importance of considering climate change as a possible stressor in ecosystem management and restoration strategies.The final essay addresses the optimal timing of investments in adaptation measure to climate change as part of the adaptation policy design; specifically it addresses the question of when to invest resources in adaptation measures. The timing question is important, but neglected in the literature. The presence of uncertainty, irreversibility, and adjustment costs that characterize adaptation problem complicates the analysis of optimal timing of adaptation measures. The essay examines how these elements influence timing decisions of adaptation measures and determines conditions under which immediate investment in adaptation is justified.