Efforts to identify the determinants of environmental policy success have largely been anecdotal and case study based. This article seeks to shift environmental policy analysis on to more analytically rigorous and empirical foundations. Using statistical analysis, we identify a set of factors that drive environmental performance as measured by levels of urban particulates, sulfur dioxide, and energy use per unit of GDP. Although the data are imperfect and causal linkages cannot be definitively established, the statistical analysis presented suggests that environmental results vary not only with income levels as suggested by the environmental Kuznet's curve literature but also with both the sophistication of a nation's regulatory regime and perhaps more notably, its broader economic and social circumstances.

Efforts to identify the determinants of environmental policy success at the national level have largely been anecdotal and case study based. This article seeks to identify empirically the factors that drive environmental performance as measured by levels of urban particulates and sulfur dioxide and energy use per unit of GDP. Although the data are imperfect and causal linkages cannot be definitively established, the statistical analysis presented suggests that environmental results vary not only with income levels as suggested by the environmental Kuznets Curve literature but also with both the sophistication of a nation's regulatory regime and, perhaps more notably, its broader economic and social context. Thus, at every level of development, countries face policy choices that determine environmental quality in important ways. Strong environmental performance appears to be positively correlated with competitiveness, putting into question the presumed trade-off between economic progress and environmental gains. Although preliminary, these results provide evidence that environmental decision making can be made more data driven and analytically rigorous.

The interrelationships between environmental regulations and firm location are essential features of economic development. This paper examines the optimal location of a competitive firm in response to environmental costs imposed by the abatement investment and taxes when the cost of the environmental regulation varies spatially under uncertainty. It contributes to the literature by incorporating the spatial setting into a risk-averse firm's location decision in the presence of environmental regulation uncertainty. An augmented cost of the abatement, input tax, or emission tax causes the risk-averse firm to locate closer to the output market. Uncertainty about environmental regulations also leads a risk-averse firm to locate closer to the output market. Policy implications of the results are discussed. The results have implications for the design and implementation of environmental and other development-related policies, environment–development debate, and trade–environment debate.

The Emissions Compensation (EC) Program in Santiago, Chile, has been affected from the beginning by the incidence of individual violations of maximum-emission capacity permits. Based on information at the individual source level, in this paper we develop and estimate a model explaining the individual compliance decision with emission capacity permits. Our results indicate that the compliance behavior of sources during the period 1993–1999 do in fact depend on their individual characteristics. Among other factors, type of equipment used, industrial sector to which the source belongs, fuel type used, the initial allocation of emission capacity permits to the source, and population density as well as average income in the area where the source is located, turn out to be relevant. Furthermore, the evidence does not allow us to reject the presence of structural change in the individual decision to comply with permit holdings because of the introduction of natural gas in the Metropolitan Region of Santiago at the end of 1997.

The paper examines how recent trends in agricultural productivity in Brazil, occurring both inside and outside the Amazon, affected deforestation and agricultural incomes. The analysis uses a computable general equilibrium model adapted to capture regional economic structures, and accounts for uncertainty concerning productivity improvements. Due to countervailing effects on deforestation of innovation inside and outside the Amazon – respectively, increasing and decreasing it – innovation in Brazilian agriculture in the period from 1985 to 1995 has not altered substantially deforestation rates. However, innovation inside the Amazon has to be reckoned as a driving force behind the continuing high levels of deforestation rates.

Innovation rates for livestock activities, inside and outside the Amazon, prove crucial in determining deforestation and agricultural income. Technological improvements outside the Amazon for small farm production systems and for farms in general in the North-East increase agricultural income, improve income distribution, and limit deforestation rates.

Recent micro-economic studies of in situ conservation of crop diversity focus on competition between modern and traditional varieties of major food crops. Our paper offers a different, crop system, approach and a limited-dependent variable econometric technique to model in situ conservation of both intra- and infra-species crop diversity in a context of heterogeneous ecological and market environments, using unique household-farm data from Mexico. Our findings reject separability and indicate that market integration significantly reduces crop diversity. They underline the importance of studying diversity in the context of larger cropping systems and economic environments.

The main objective of the paper is to estimate the costs of groundwater over exploitation and examine the costs and benefits from groundwater replenishing mechanisms in different ecological contexts. Using the public good and externalities framework, the study shows how groundwater exploitation in Andhra Pradesh, India is resulting in economic losses to individual farmers apart from ecological degradation. It is argued that policies towards strengthening the resource base (replenishment mechanisms) and equitable distribution of the resource (property rights) would be beneficial, economically as well as ecologically.

The analysis is in favour of investment in replenishment mechanisms such as irrigation tanks and percolation tanks. The situation of over extraction and the resultant environmental degradation is a consequence of lack of appropriate and adequate policies (policy failure) for managing the subsurface water resources. Hitherto, groundwater policies (subsidized credit, power, etc.) are in the nature of encouraging private initiatives in groundwater development. It is argued that community-based investments in replenishment as well as extraction of groundwater would make better economic as well as ecological sense.

The effects of deforestation in Cameroon such as the erosion of agricultural lands, drying up water bodies during dry seasons, desertification, disappearance of plant and animal species, modifications of both local and regional climatic conditions and global warming through its effect on the global carbon cycle are likely to affect agricultural activities and economic growth. This paper investigates the immediate causes and consequences of deforestation in Cameroon between 1970 and 2000. Quantitative estimates show that coffee, and cocoa producer prices, food crop prices, and the timber export price index, on the one hand, and the oil boom, the structural adjustment policies, and the devaluation of the CFA franc, on the other hand, are quite important in stimulating the clearing of forests. Equally, the agricultural value added per hectare increases the profitability of maintaining forests. The implication of these results is that the importance of non-forest policies is underappreciated in Cameroon.