Moore, Chris

January, 2015

Ocean acidification has the potential to adversely affect a number of valuable marine ecosystem services by making it more difficult, and eventually impossible, for many marine organisms to form shells and skeletons. Reef-forming corals, commercially valuable shellfish, and primary producers that form the base of the marine food web are among the affected organisms. Despite the range and magnitude of likely impacts, very few economic analyses of ocean acidification’s consequences have been conducted. This paper adds to the emerging body of literature by taking a distance function approach to estimating the benefits of avoided ocean acidification in the U.S. mollusk market. A nonlinear inverse almost ideal demand system estimates the utility parameters needed to calculate the exact consumer welfare measures compensating and equivalent surplus for two hypothetical policies that would reduce global greenhouse gas emissions relative to a business-as-usual scenario.