Madhu Khanna is one of the leading scholars working at the intersection of agricultural and environmental economics. She has conducted path-breaking research in two broad areas: non-mandatory approaches to environmental protection and agro-environmental technology adoption and policies. Madhu began her academic career at the Department of Agricultural and Consumer Economics at the University of Illinois at Urbana-Champaign in 1995. Her initial publications on the effectiveness of non-mandatory approaches to environmental protection demonstrated the rigor and originality of scholarship that she has maintained throughout her career. She was among the first scholars to challenge the conventional wisdom that profit-maximizing firms have no incentives to control pollution in the absence of mandatory regulations because it only imposes costs that are non-productive. Through her pioneering analysis of voluntary approaches to environmental protection, she demonstrated that firms can be effectively motivated to reduce their pollution voluntarily because it may preempt future regulation, while also improving a firm’s reputation with investors and consumers. Her research also showed the negative effect of repeated public disclosure of toxic releases by publicly traded firms on their stock market returns and its effectiveness in inducing them to subsequently lower their toxic releases. Following her research, the design and effectiveness of environmental information disclosure and voluntary approaches to environmental protection have emerged as a major area of research in environmental economics.
Khanna is also an internationally recognized leader in the economics of technology adoption, with a focus on agro-environmental technologies, such as precision farming and biofuels. She has contributed innovative methodology and significant new insights on the economic and policy factors that influence adoption decisions and the environmental implications of these decisions. She has also analyzed challenging and complex problems related to the design of agro-environmental policy incentives and conservation programs such as the Conservation Reserve Program. Her research provides a comprehensive understanding of the implications of risk, uncertainty and absence of well-designed policies for the adoption of input-efficiency enhancing technologies, using option value models, optimal control models and expected utility theory.
More recently, Khanna is leading the field in developing both conceptual and integrated multi-sector models to understand the food and fuel price impacts of biofuels and the effect of biofuel policies on land use, greenhouse gas emissions and water quality. Her research charts new territory by going beyond an analysis of corn ethanol to examining the land use, economic and environmental implications of the emerging second-generation of biofuels from cellulosic feedstocks.
Madhu’s research on biofuels provides insights across multiple scales, from the farm level to the economy level, and has strong interdisciplinary components. She was among the first researchers to show the cost and land requirements for meeting US policy goals for cellulosic biofuels. Her research provides a conceptual framework to analyze conditions under which biofuel mandates and fuel intensity standards can lead to a reduction in greenhouse gas emissions and a modeling approach to quantify the social welfare implications of renewable energy policies in the US. Her recent papers are advancing the field of environmental sciences by demonstrating ways in which agricultural economic methods contribute to understanding the costs of achieving the environmental benefits of climate change mitigation and water quality improvements using cellulosic biofuels.
Madhu has a strong commitment to professional service. She has chaired the Environmental Economics Advisory Committee and other panels of the EPA’s Science Advisory Board. She has also chaired review panels for the USDA’s National Institute for Food and Agriculture. She has served on the board of directors for the Association of Environmental and Resource Economists, the Committee on Women in Agricultural Economics and the South Asian Network for Environmental and Development Economics.