The economic effects of ozone on U.S. agriculture : a sector modeling approach Public Deposited

http://ir.library.oregonstate.edu/concern/graduate_thesis_or_dissertations/fn107117f

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  • Tropospheric ozone is a pollutant which has detrimental effects on crop yields. The level of ambient ozone can be reduced by environmental policy changes and enforcement. The purpose of this study was to estimate the welfare effects of such changes in ambient ozone using recently available plant response data and an economically consistent approach. A 25 percent reduction in ambient ozone was estimated to increase total welfare by approximately $1.7 billion. About 40% of the benefits accrue to producers, 25 percent to domestic consumers and 35 percent to foreign consumers. These benefits estimates do not consider compliance costs. A variety of changes in ambient ozone are considered for ranges of crop sensitivity. The analysis was conducted using a mathematical programming sector model of the u.s. agriculture. The model is a long-run equilibrium model encompassing regional production of the major crops and livestock products, as well as processing and export activities. Proposals for improving the performance of sector models were examined. Alternative methods for incorporating aggregate response assumptions were found to have little effect on estimates of total welfare changes but had important consequences for the distributional effects between producers and consumers. An empirically based attempt to identify an appropriate producer response assumption was not successful due to problems inherent in validating sector models. The theoretically preferred response assumptions were incorporated in the sector model.
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