Essays in Environmental Economics
Name
berman-bermana-phd-economics-2026-thesis.pdf
Size
29.77 MB
Format
Adobe PDF
Checksum (MD5)
8f34f9e0ccae5362a6b890d4b608d6b1
Author(s)
Berman, Aaron B.
Advisor(s)
Olken, Benjamin
Atkin, David
Date Issued
May 2026
Publisher
Massachusetts Institute of Technology
Abstract
This thesis comprises three essays in environmental economics. The first chapter studies inefficiencies arising from shared exploitation of international common-pool resources and the scope for trade agreements to alleviate these inefficiencies. Most contemporary environmental issues are global in scope, but international cooperation to address them has often remained elusive. Against this backdrop, the World Trade Organization has recently ratified a historic agreement to regulate industrial subsidies for fishing fleets, but several developing countries have resisted the agreement, citing a desire to industrialize their fishing sectors and extract resource rents in the way that developed countries have done historically. I propose a framework to estimate the potential gains from regulating activity in the global commons, tracing out both cross-country and intertemporal welfare tradeoffs. First, I develop a theoretical model of trade policy that features standard terms-of-trade motives and a new non-pecuniary channel that arises when resource stocks are shared. To shed light on the empirical importance of this channel, I assemble a comprehensive geospatial dataset on fishing activity since 2010 and provide econometric evidence of meaningful cross-country productivity spillovers from harvesting activity. I then use my data to estimate country-specific supply curves and a global demand curve for fish products. I estimate a quantitative version of my theoretical model to decompose the welfare gains from cooperation on both stocks and trade policy, and illustrate how the model can be used to simulate the counterfactual effects and welfare incidence of a multilateral agreement to reduce fuel subsidies. The second chapter, joint with Nathaniel Hickok, studies intensive- versus extensivemargin management of groundwater resources. Many of the world’s major aquifers are being rapidly depleted from agricultural irrigation, generating dynamic common-pool externalities by raising future extraction costs. Entry restrictions are commonly used to limit depletion because well drilling is easily monitored, but they are second-best compared to Pigouvian taxes that directly target the intensive margin of water use. When policies cannot be tailored to heterogeneous users, however, the relative effectiveness and political feasibility of entry fees and water-use taxes become theoretically ambiguous, depending crucially on the correlation between water users’ productivity and externalities. To study this question, we develop a dynamic model of farmers’ joint well-drilling and water-use decisions, integrated with a physically realistic model of groundwater flows, and estimate it using field-level data on aquifer levels, water use, and crop production in the Kansas High Plains Aquifer from 1959 to 2022. We find that field-level productivity and water-use externalities are strongly positively correlated due to the spatial concentration of high-productivity fields, leading uniform taxes to outperform entry fees in terms of aggregate welfare. Nevertheless, entry fees are preferred by most users because the optimal uniform tax exceeds the marginal social cost of water use for all but the most productive fields. However, driven by irreversible well investments that lock in depletion from high-externality early entrants, the effectiveness and popularity of entry fees decline rapidly over time. These findings highlight how heterogeneity and irreversibility jointly shape the efficiency and political feasibility of environmental regulation. The third chapter, joint with Clare Balboni, Johannes Boehm, Lorenzo Marzano, and Mazhar Waseem, quantifies the welfare costs and benefits of transportation infrastructure, with a particular focus on environmental damages. Investments in transportation infrastructure can yield sizable trade and commuting cost gains, but may also contribute to damaging local air pollution from increased vehicle traffic. Accounting for such costs is especially important in developing country cities, which are making significant investments in expanding road networks but where high ambient pollution concentrations contribute to severe health impacts. We develop a quantitative urban equilibrium model, integrating a novel granular atmospheric model of pollution dispersion, in order to estimate the impacts of investing in urban roads accounting for both gains from economic integration and costs from local pollution exposure. We estimate the model using high-resolution data on emissions, pollution transport, commuting and goods trade in Lahore, Pakistan, one of the world’s most polluted cities. Counterfactual simulations consider the aggregate and distributional implications of major road infrastructure projects in the city.
JEL Classification: Q22, Q25, Q27, Q53, R41
MIT Department
Massachusetts Institute of Technology. Department of Economics
Terms of Use
In Copyright - Educational Use Permitted
Copyright retained by author(s)
Persistent DSpace Link
