| This dissertation examines how to improve the tradeoffs between the production of market and non-market ecosystem services on working landscapes in the context of market failures and institutional inefficiencies. These landscapes, which include agricultural land and managed forests, produce both market goods and ecosystem services for which markets generally do not exist, such as biodiversity conservation, clean air and water, and aesthetic amenities.;Chapter 2 analyzes the tradeoffs between the production of crops and habitat for juvenile salmon, through flood events, on the Yolo Bypass floodplain. In addition, I investigate the role of natural resource management institutions on the returns to ecosystem services. To understand how habitat provision affects the economic surplus of the farmers and fishers, I develop a bioeconomic model of the Yolo Bypass agriculture, salmon population, and California ocean fishery. The results reveal large total producer surplus gains from improving habitat management and the natural resource management institution. In contrast with previous studies on open access resources, I find greater gains arise from improving habitat management than improving the fishery institution. These findings have important policy implications because many fisheries are already regulated.;Chapter 3 focuses on the tradeoffs between the production of crops and climate regulation services in California, and investigates the role of agricultural greenhouse gas (GHG) offset payment design on abatement efficiency. I develop a disaggregated positive mathematical programming (PMP) model of California's agriculture calibrated to both economic and agronomic information. Using a biophysical model, I estimate regional yield and GHG responses to production practices for the three principal agricultural GHGs. The model allows simultaneous and continuous changes in water, nitrogen fertilizer, and tillage intensities. Results show that second-best policies that rely on regionally aggregated emission factors lead to small abatement efficiency losses relative to the first-best policy with fine-scale emission factors. Because the costs of such second-best policies are substantially lower, the findings suggest these policies would be cost-effective in California. In contrast, second-best policies targeting a single GHG or input use, such as nitrogen fertilizer or water, entail significant abatement efficiency losses.;Chapter 4 presents theoretical methodologies for improving the calibration of PMP models of agricultural supply. These models can be easily coupled with biophysical models for analyzing the tradeoffs between market and non-market ecosystem services. First, the essay extends previous results regarding calibration of land-constrained programming models of agricultural supply against supply elasticities to the general case of multiple constraints. Second, it demonstrates how the resulting calibration conditions can be used as a source of identification for regionalized crop supply elasticities. This method has value to analysts because information on acreage allocations is often available at a disaggregate level, while information on supply elasticities is not. The essay proposes an information-based disaggregation algorithm to systematically generate regionalized elasticities from a single prior, and offer an application to California's agriculture. |
