Essays on Environmental Risks, International Trade and Public Policy

Policy makers in North America face a critical trade-off concerning the risk of accidental introduction of plant invasions as a result of the horticultural operations. The growth in demand for nursery products has led horticulture to be a profitable and expanding industry (Singh, 1999). The expansion of the horticultural industry and trade in North America carries a large risk of invasive plant species establishment in host ecosystems. Thus, commercial horticultural activities, especially increased exotic plant material imports and expansion of nursery operations, have become a significant pathway of invasive species to invade the natural environment in North America (Maki and Galatowitsch 2004).;Introduced non-native invasive plant species cause significant damages to the host environment and are regarded as a major threat to native biological diversity in North America (Mack et al. 2000; Reichard and White 2001). The negative consequences of introducing exotic plants include competition for resources with native species, increased nitrogen fixation in natural areas, changes in hydrological cycles, increased sedimentation, and increased frequency and intensity of fire cycles (Reichard and White 2001).;The private purchase of plants from the horticulture industry fails to take into account the external cost that is incurred if and when these plants become invasive. Thus, while the North American horticultural industry and its consumers may benefit from selling imported plants, they do not take into account the economic costs from accidental introduction of exotic invasive plant species. These costs are instead borne by the society, and constitute an externality arising from the accidental introduction of exotic invasives into the natural environment. Correcting this externality therefore requires the adoption of appropriate policy measures by the government, which should be based on assessing the risk of accidental introduction of a potential plant invasive species and the costs incurred.;The purpose of this dissertation is to advance the understanding of the risk of harmful plant invasion, trade and public policy. A general monopolistic competitive economic model is developed to address these questions: What is the theoretical framework for a commercial industry importing an exotic plant species with an environmental risk of invasion? What is the simulated level of tax policy intervention that could induce horticultural nursery firms to internalize the risk of potential invasion and its associated costs, and thus bring private incentives in line with socially optimal levels? How does the relationship between trade in nursery products, localized expected damages from risk of plant invasion and nursery firm migration affect public policy decision of Canada and United States? Thus, the dissertation contains three essays, each examining the links between the risk of harmful plant invasion and public policy.