Environmental regulations typify a large class of activities in the public sector where government agencies are required to monitor the degree of compliance. These tasks are usually delegated to bureaucrats who, as self-interested agents, may engage in corrupt behavior. Such problems abound, particularly in developing countries, where corruption is regarded as one of the major causes of environmental degradation. This paper investigates the implications of corruption for the optimal design of environmental regulations and analyses the interaction between the prosecution rate, monitoring rate, and fines. It is shown that even if corruption can be deterred the fact that it may occur substantially impedes the ability of a regulator to control environmentally degrading activities.

The environmental Kuznets curve (EKC) is a hypothesis stating that pollution rises with income at low income levels but falls at higher ones. We analyse the EKC in a representative consumer model in which pollution is generated by consumption and can be abated. We show that at low income levels no abatement is optimal and pollution increases with income. Once abatement expenditures are positive, we demonstrate that satiation in consumption is not only sufficient to find an EKC, but a tendency to satiation—or in other words the condition that environmental quality is a normal good—is even necessary if we assume a standard functional form for the pollution function. Finally, we reconsider the results of two related models of the literature: We verify that the relationship between the income elasticity of demand for environmental quality and the EKC is ambiguous.

(JEL: D62, O40, Q20)

The Clean Development Mechanism (CDM) offers abatement cost savings under the Kyoto Protocol by allowing credits for emission reductions obtained in signatory developing countries. The paper argues that technology transfers can improve incentives for cost-effective emission reductions under bilateral CDM contracts when there is asymmetric information between the investor and the host party.

JEL classification: Q20; D82

This paper attempts to estimate the maintenance cost of water pollution abatement measures to the Indian industry using the methodology of distance function in the theory of production. The distance function is estimated using both programming and stochastic frontier models for a sample of water polluting industries in India. The firm-specific shadow prices for pollutants, measures of efficiency, and scale economies are estimated. Estimates show that on average the cost to the Indian industry for reducing one ton of BOD and COD are respectively, Rs 0.246 and 0.077 million. Large differences in the estimates of firm-specific shadow prices of pollutants reflect the use of inefficient water pollution abatement technologies. The relationships between firm-specific shadow prices or marginal costs of abatement of BOD and COD and the index of compliance (ratio of effluent load to sale value) and the pollution load reductions obtained confirm the earlier empirical results of studies on water pollution abatement in Indian industries. The earlier studies have found increasing marginal costs with respect to reductions in pollution concentrations and decreasing marginal cost with respect to the pollution loads reduced by the firms.

This paper investigates the possibility of using public works to stimulate farmers' fertiliser use in India's SAT. Inadequate replenishment of removed nutrients and organic matter has reduced fertility and increased erosion rates. Fertiliser use, along with other complementary measures, can help reverse this process, which ultimately leads to poverty, hunger, and further environmental degradation. In a high-risk environment like India's SAT, there may be a strong relation between off-farm income and smallholder fertiliser use. Farmers can use the main source of off-farm income, wage income, to manage risk as well as to finance inputs. Consequently, the introduction of public works programmes in areas with high dry-season unemployment may affect fertiliser use. This study confirms the relevance of risk for decisions regarding fertiliser use in two Indian villages. Nevertheless, governments cannot use employment policies to stimulate fertiliser use. Public works even decrease fertiliser use in the survey setting.

The degree to which prevailing land tenure arrangements constrain agricultural productivity, and the sources of inefficiency associated with land tenure systems in sub-Saharan Africa are unresolved. Using a stochastic frontier production function, this paper examines the economic efficiency and the determinants of inefficiency of alternative land tenure arrangements in Ethiopia. The results show that sharecropping and borrowing are less technically efficient than owner-cultivation or fixed rentals due to restrictions imposed on them by landowners and the interactions of the land market with other imperfect and absent input markets. Thus, a policy to facilitate more efficient transactions of land between farmers and functioning of input markets are expected to reduce inefficiencies associated with these tenure systems.

The risks associated with increasing climate variability pose technological and economic challenges to societies which are dependent on agriculture for their livelihood. In Southwestern Cameroon the natural variability of rainfall and temperatures contribute to variability in agricultural production and food insecurity. This paper explores the impact of climate variability in Southwestern Cameroon on food availability. It examines farm household's vulnerability to food availability relating to climate, and reviews the interplay of climate, agriculture, and prospects for food security in the region. An econometric function directly relates farm income and precipitation, in order to statistically estimate the significance of farm-level adaptation methods. The results reveal that precipitation during growing and adaptation methods through changes in soil tillage and crop rotation practices have significant effects on farm returns. An essential precondition for food security and overall agricultural development in Southwestern Cameroon is a dynamic agricultural sector brought about both by steady increase in agricultural production and by greater efforts in farmer support, to enable farm households to take advantage of the opportunities and to minimize the negative impacts of climate variation on agriculture.

The purpose of this paper is to discuss the greenhouse gases (GHG) emission target adopted by Argentina. It contains a summary of the process that led to the formulation of the emission target, including GHG inventories, macroeconomic and sectoral projections, and mitigation options. Fixed and dynamic indexes such as the Carbon Intensity Index are discussed, concluding that the latter is not appropriate for most developing countries. This is the case, in particular, for countries whose GHG emissions are not solely dependent on GDP growth, but also on other variables, such as international prices and market conditions for their agricultural products. The index recommended for Argentina was based on the square root of GDP. It went a step further by producing, for the chosen level of reduction, not only a positive relation between GDP and allowable emissions, but also a relation of the same sign between GDP and emission reductions.

This research uses field-level data from Burkina Faso to ask what determines farmers' investment in two well-known soil and water conservation techniques: field bunds (barriers to soil and water runoff), and microcatchments (small holes in which seeds and fertilizers are placed). Survey data for 1993 and 1994 are used to estimate Tobit functions, compute elasticities of adoption and intensity of use, perform robustness tests and estimate alternative models. Controlling for land and labor abundance and other factors we find that those who have more ownership rights over farmland, and who do more controlled feeding of livestock, tend to invest more in both technologies. The result suggests that responding to land scarcity with clearer property rights over cropland and pasture could help promote investment in soil conservation, and raise the productivity of factors applied to land.