This essay introduces a special section of this issue containing a set of papers on the dynamics of coupled human and natural systems. We frame this introduction by setting out some of the major issues confronting researchers who wish to incorporate both economic and biophysical dynamics in their analysis. We contrast the three papers contained in this section in terms of how they respond to these different issues. We conclude that these papers provide important new insights on both how to model and analyze dynamic coupled human and natural systems and how to define policies that will lead to improved human well being and environmental conditions.

Food-for-work (FFW) programs are commonly used both for short-term relief and long-term development purposes. This paper assesses the potential of FFW programs to reduce poverty and promote sustainable land use in the longer run. There is a danger that such programs distort labor allocation or crowd out private investments and therefore have unintended negative effects. We explore this issue using survey evidence from northern Ethiopia that we use to motivate a simple theoretical model, a more detailed version of which we then implement through an applied bio-economic model calibrated to northern Ethiopia. The analysis explores how FFW project outcomes may depend on FFW project design, market conditions, and technology characteristics. We show that FFW programs may either crowd out or crowd in private investments and highlight factors that condition whether FFW promotes or undercuts sustainable land use.

Agricultural systems are complex and dynamic, being made up of inter-acting bio-physical and human sub-systems. Moreover, agricultural systems are re-markably diverse, both within geographic regions and across regions. Accordingly, this paper focuses on dynamics and heterogeneity in coupled, multi-disciplinary simulation models of agricultural systems. We begin with a discussion of the principal features of agricultural production systems. We then present an example of a ‘loosely coupled’ model, the type of model most researchers have used to represent agricultural systems. We discuss the loosely coupled model's features and limitations, and show how it can be modified to incorporate feedbacks among sub-models. Finally, we use a case study of a hillside production system in Ecuador to illustrate the importance of model coupling, dynamics and heterogeneity in the analysis of production systems. This example shows that feedbacks and threshold effects are most important at sites most vulnerable to tillage erosion.

This paper examines environmental and labour market linkages between two agricultural systems-one upstream and another downstream. Using data from the Philippine province of Palawan as a point of departure, the paper develops a dynamic, two-sector model of an agricultural watershed to study the evolution and impact of an erosion externality. Attention focuses on the interplay between erosion generated by the extensive upstream sector and labour productivity in a labour-intensive downstream sector. A key feature of the model is that labour productivity and labour demand downstream are influenced by the externality generated upstream. Production of the externality, in turn, is influenced by wage employment opportunities downstream. Time paths of equilibrium wages are derived. A simulation is used to study the impact of environmental payments to upland households in exchange for allocating labour away from the externality-producing activity. The analysis shows how natural processes and economic interactions between two groups influence the benefits of agricultural intensification.

This paper adapts the safe minimum standard (SMS) approach so as to explore its use as a potential policy decision support tool that can be applied to issues related to the conservation and sustainable use of farm animal genetic resource (AnGR) diversity. Empirical SMS cost estimates are obtained using data from three AnGR economics case studies in Mexico and Italy. The findings support our hypothesis that the costs of implementing an SMS are low, both when compared with the size of subsidies currently being provided to the livestock sector (<1 percent of the total subsidy) and with regard to the benefits of conservation (benefit-cost ratio of >2.9).

Nevertheless, despite providing a potentially useful AnGR conservation decision support tool, a critical assessment of the application reveals that a much more extensive quantification of the components required to determine SMS costs needs to be undertaken before this tool can be applied in practice.

This paper explores economic development in the floodplain of large rivers, where both economic and ecological factors need to be considered for effective management. Floodplain management policies in Bangladesh emphasize structural changes to enhance agricultural production. However, these structural changes reduce fisheries production, an important natural resource sector and a source of subsistence for the rural poor. We develop a model where net returns to agriculture and fisheries are jointly maximized, taking into account the effect of flooding depth and timing on production, and value of catch in markets and for subsistence nutrition. Results for a region in Bangladesh show that optimal production in a natural floodplain yields higher net returns compared with a floodplain modified by flood control structures. This finding implies that neglecting the bio-economic relationship between fisheries and land use may significantly affect the long-run economic role of a river floodplain, particularly where subsistence consumption is important to social welfare.

Collective action can play a significant role in sustainable management of common grazing lands through restricting access and regulating use. However, it is not clear why there are often violations of grazing restrictions in equilibrium. This paper first presents a theoretical framework of collective action in community management of grazing lands that explicitly models individual violations behaviour. Then data from the highlands of Amhara region of Ethiopia are used to test the model predictions to examine the impact of policy-relevant factors on collective establishment of grazing restrictions and violations of grazing restrictions. Econometric results show that collective action in community grazing land management is likely to be more beneficial and effective in communities with better market access or higher populations. Collective action, on the other hand, is less likely to be successful in communities with greater social, economic, or cultural heterogeneity or more affluent members. Factors related to greater livestock profitability, such as rainfall, or fixed costs of negotiating agreements, such as total land area of the community, have ambiguous effects, as they are associated with establishment of grazing restrictions as well as violating the restrictions.