This paper examines the impact of climate change on rich and poor countries across the world. We measure two indices of the relative impact of climate across countries, impact per capita, and impact per GDP. These measures sum market impacts across the climate-sensitive economic sectors of each country. Both indices reveal that climate change will have serious distributional impact across countries, grouped by income per capita. We predict that poor countries will suffer the bulk of the damages from climate change. Although adaptation, wealth, and technology may influence distributional consequences across countries, we argue that the primary reason that poor countries are so vulnerable is their location. Countries in the low latitudes start with very high temperatures. Further warming pushes these countries ever further away from optimal temperatures for climate-sensitive economic sectors.

Allowing water to be traded in an irrigation system with de facto riparian rights can increase the efficiency of water use. With irrigation supplementing uncertain rainfall, both supply and demand for water are uncertain. When rainfall events are positively correlated, water supply and demand movements are negatively correlated, causing large price fluctuations. Using a stylized two crop, two region irrigation system, numerical integration over a bivariate rainfall distribution is used to demonstrate the impact of varying rainfall correlation on water price, expected returns, and return variability. A spot market for water captures the majority of the returns to water rights transfers, relative to a complete market. This spot market results in higher returns and reduced return volatility for farmers in the water deficit region, while farmers in the water surplus region see greater returns but also greater return volatility.

This study uses an endogenous switching-regression model to examine the impact of slash-and-burn cultivation practice on the application of commercial fertilizer and pesticides, as well as yields and net returns. The empirical evidence of the study indicates that cross-section analysis of the impact of technology adoption on input demand and output supply should take into consideration sample selection, and also examine the impact separately for adopters and non-adopters. The results show that education, access to credit, land rights, and visits by extension agents reduce the probability of farmers adopting slash-and-burn farm practices. Environmental variables, such as soil quality and plot slope, do not impact on the adoption decision, but affect output supply of both adopters and non-adopters of slash-and-burn technology.

Many terrorist organizations around the world seek shelter in forests and this paper tries to address the impact of this phenomenon on forest conservation. We construct a framework to measure the social loss when a terrorist lives in the forest and has full control over the forest resources. We also consider a game between the terrorists and the government when the government tries to combat them to recover the social loss. We characterize the equilibrium of the game in which the terrorist chooses the optimum rotation length of the forest and the government chooses the optimum combat-effort. We derive the impact of two popular policy measures such as strengthening the combat operations and restricting the sale of timber by the terrorist groups in the market, on forest conservation and find both to be negative.

International climate negotiations have specified that projects under the Clean Development Mechanism (CDM) should not lead to a ‘diversion’ of official development assistance (ODA). It is however unchallenged that ODA can be used in capacity building for the CDM. Diversion can be interpreted in purpose, sectoral, and regional terms. There are possibilities to use ODA benchmarks to define diversion such as the UN 0.7 per cent target but they are unlikely to be politically acceptable. On the project level, three main options exist but none of them is perfect. The Development Assistance Committee of OECD endorses deduction of the value of emissions credits (CERs) from ODA. This however leads to a long-term pressure on the ODA level. Differentiating an ODA-financed baseline project and a ‘piggyback’ CDM option is likely to be arbitrary in many circumstances. Even if CERs do not accrue for the ODA share of the investment, still private CDM projects are crowded out due to the subsidizing of CDM projects.

This paper develops a bio-economic model to explore the effect on illegal hunting, wildlife conservation, and human welfare of the most common instruments of two different designs of Integrated Conservation and Development Projects (ICDPs) currently in existence. First, it is demonstrated that the distribution of game meat and money transfers to the local people fails if not explicitly linked to the conservation objective. Second, the analysis shows that ICDPs relying on such a link, implemented as a risk of being excluded from the project if caught in illegal hunting, may reach their goal of improved wildlife conservation and human welfare. The theoretical model is illustrated by numerical calculations using data from the Serengeti in Tanzania.