At the community level, bylaws and other regulations are commonly used to manage natural resources. However, there is limited research on how communities enact these regulations and what determines awareness and compliance with these regulations. A survey of 273 communities was conducted in Uganda with an objective of analyzing the determinants of enactment, awareness and compliance with community Natural Resource Management (NRM) regulations. Presence in the community of programs and organizations with focus on agriculture and the environment increases the probability to enact and to be aware of NRM regulations. The probability to comply with regulations enacted by village councils was greater than the case with such regulations passed by higher legislative bodies, suggesting the important role played by decentralization in NRM. Poverty is associated with lower compliance with NRM regulations. This supports the poverty-natural resource degradation trap hypothesis, and suggests that measures to reduce poverty can also improve NRM.

Technological modernization is widely believed to contribute positively both to economic development and to environmental and resource conservation, through improvements in productivity and strengthening of business competitiveness. However, this may not always be true, particularly in the short term, as it requires substantial investments and may impose financial burdens on firms undertaking such investments. This study empirically examines the effects of technological modernization in China's iron and steel industry in the 1990s on conventional economic productivity (CEP) and environmentally sensitive productivities (ESPs). We employ a directional distance function that can handle multiple inputs and outputs to compute relative production efficiencies. We apply these models to the data covering 27 iron and steel firms in China between 1990 and 1999 – a period when the Chinese iron and steel industry modernized rapidly. We find that ESPs have continuously improved, even in the period when the CEP declined.

This paper is not concerned with advances in game theory. Rather, the paper is concerned with the relevance, if any, of game theory to a major resource management issue, namely the management of internationally shared fishery resources. It is argued that the economics of the management of such resources cannot, in fact, be understood, other than through the lens of game theory. The paper discusses several elementary game theory concepts that are of utmost policy relevance, but which are, as of yet, poorly understood by most policy makers. The paper does, in addition, discuss a key policy problem in the management of shared fishery resources that demands a game-theoretic analysis. The required analysis, however, has yet to be developed.

This paper while attempting to estimate the social benefits of cleaning the Ganges river in India highlights some of the emerging environmental and development issues in the river cleaning programmes. Methods involving the market and non-market valuation of environmental goods are used to estimate the benefits. The benefits estimated include user and non-user benefits, health benefits to the poor households living along the river, and agricultural benefits to farmers among other benefits. However, the benefits from fisheries, one of the important components of benefits from the river cleaning, could not be quantified in this paper. With the benefits that could be quantified, the program of cleaning the Ganges has positive net present social benefits at a 10 per cent social rate of discount and an internal rate of return as high as 15 per cent. Furthermore the estimates of benefits of river cleaning obtained in this paper provide guidance for designing the policy instruments to raise revenue for sustaining the river cleaning processes in India. A number of different mechanisms are considered to raise the resources for sustaining the cleaning of Ganges. They are a polluter-pays principle, a user-pays principle (with government involvement), a user-pays principle (without government involvement), and funding from the general tax system.

Using eight rounds of household survey data that span two decades, this paper analyzes the determinants of household fuel choice in urban China. Using the correlated random effects generalized ordered probit model, the authors find that household fuel choice in urban China is related to fuel prices, households’ economic status and size and household head's gender and education. The results suggest that policies and interventions that increase households’ income, reduce the price advantage of dirty fuels (e.g., taxing coal) and empower women in the household are of great significance in encouraging the use of clean energy sources.

Common property resources are often used by households of developing countries as insurance in case of economic stress. The aim of this paper is to consider the potential poverty-trap implications of this use. If the capacity of the resource is low, or if the population in need of insurance is too large, the households are trapped in CPR extraction activity and cannot get more than their subsistence requirement. In this context, cooperation between households and the introduction of a cooperative insurance mechanism may sustain an equilibrium outside the poverty trap and relax pressure on the resource. Moreover, private insurance schemes could also be a potential solution to this poverty trap.

This article develops a non-cooperative game with managerial quantity-setting firms in which owners choose whether to delegate output and abatement decisions to managers through a contract based on emissions (conventionally denoted as ‘green’ delegation, GD) instead of sales (sales delegation, SD), and the government levies an emissions tax to incentivise firms’ emissions-reduction actions. First, it compares the Nash equilibrium outcomes between GD and SD and then contrasts them also with profit maximisation (PM). A plethora of Nash equilibria emerges, especially in the case GD versus PM (the ‘green delegation game’), depending on the public awareness toward environmental quality, ranging from the coordination game to the ‘green’ prisoner's dilemma. Second, though the contract under GD incentivises managers for emissions, the environmental damage is lower than under SD. This is because the optimal tax more than compensates the incentive for emissions. These findings suggest that designing GD contracts paradoxically favours environmental quality.

As environmental goods such as fuelwood and fodder become more scarce, rural households in developing countries spend more time in their collection. It has been suggested that as a result households may reallocate labor away from own-farm agricultural production. This paper examines whether this is the case for a sample of agricultural households from rural Nepal. Cross-sectional estimates of agricultural labor demand equations give some indication that reallocation away from farm work may occur as environmental products become more scarce. However, these results disappear in random-effects estimation suggesting that time is instead reallocated from other activities or leisure. What little evidence there is for a labor reallocation from agriculture suggests that policies to relieve environmental good collection labor burdens should focus on leaf fodder and grass used as livestock feed rather than on fuelwood.

This paper conducts a novel empirical analysis of the effect of environmental regulation on local pollution emissions by taking 84 cases of local legislation among 31 provinces in China during 1990–2009. We combine the matching methodology and difference-in-difference method to estimate the causal effect of provincial environmental legislation. Our estimation uncovers that there is no significant pollution abatement effect, however, environmental legislation helps to decrease local pollution emission only for those provinces that have stricter enforcement. Such results remain robust while considering the time lag effect, different types of pollutants, choice of different comparison groups and using of synthetic control method. Generally, our study shows the importance of the enforcement for environmental legislation in China.

This paper examines factors that affect the trade of recyclable waste in both exporting and importing countries. To this end, we employ two important elements: first, we adopt a gravity model in our empirical methodology; second, we select five waste and scrap commodities and undertake estimations using commodity-level trade data. We demonstrate that, the higher the wage/per capita GDP/population of an importing country, the more recyclable wastes it imports. This result suggests that the demand for final goods and, accordingly, the demand for materials including recycled material, have strong effects on the import volume of recyclable waste. Moreover, this implies that the imports of a developing country from developed countries increase with expanding industrial activity and economic growth. We find no evidence for a pollution haven for wastes and recycling.

We analyze the impact of development on flood fatalities using a new data set of 2,171 large floods in 92 countries between 1985 and 2008. Our results challenge the conventional wisdom that development results in fewer fatalities during natural disasters. Results indicating that higher income and better governance reduce fatalities during flood events do not hold up when unobserved country heterogeneity and within-country correlation of standard errors are taken into account. We find that income does have a significant, indirect effect on flood fatalities by affecting flood frequency and flood magnitude, but this effect is nonmonotonic, with net reductions in fatalities occurring only in lower income countries. We find little evidence that improved governance affects flood fatalities either directly or indirectly.

REDD + is one of the tools under development to mitigate climate change, but it is not yet clear how to appropriately bring in the approximately 25 per cent of developing country forests that are managed by communities. Drawing on the economics of collective action literature, the authors attempt to shed light on whether forest collective action itself sequesters carbon. Using satellite imagery combined with household and community data from Ethiopia, they examine whether community forests (CFs) with high levels of collective action attributes known to be associated with better management have more carbon than other systems. Although these results should be considered indicative due to the nature of the data, the analysis suggests that in the absence of dedicated sequestration policies the quality of local-level collective action offers at best marginal carbon benefits. Specific incentives like REDD + may therefore play important roles in delivering climate change benefits from CFs in low-income countries.

This paper develops a simple model to investigate linkages between trade and environmental policy. In the case of purely local pollution, trade liberalization without constraints on environmental policy induces a non-cooperative game between countries in pollution policy. Without any agreement on environmental policy, trade negotiations are unlikely to lead to a point on the Pareto frontier. When pollution is global, countries may be expected to disagree on linkages between trade agreements and environmental agreements. Countries importing pollution-intensive goods have an incentive to try to link trade agreements with environmental agreements, while countries exporting pollution-intensive goods have an incentive to try to obtain a binding commitment to free trade prior to negotiations over global pollution.

Biodiversity ‘hotspot’ areas, which are characterized by concentrations of endemic species and severe anthropogenic loss of natural habitat, might be thought to present steep opportunity costs for maintaining forest cover against pressures of agricultural conversion. We examine this proposition for the southern part of the state of Bahia, a center of endemism within the Brazilian Atlantic Forest, which has less than 8 per cent of its original primary forest cover remaining. Using data from a survey of property values, we relate land price to land characteristics, including land cover, soil quality, slope, climate, and road proximity. We find median land values of R$725/hectare, or about US$400/hectare at recently prevailing exchange rates. Remaining land under forest has a market value 70 per cent below comparable cleared land.

The Hartwick–Solow rule for sustainability requires that depletion of natural capital be offset by a compensating increase in other forms of capital capable of generating as much income as the natural capital they replace. Many countries have not been successful in transforming natural capital into other forms of wealth. This paper investigates the process of wealth transformation for Botswana, one of the most successful resource-rich countries. Using an expanded measure of wealth that includes manufactured capital, natural capital and net foreign financial assets, Botswana's per capita wealth has increased over the past 20 years. Government has recovered and reinvested rent. However, examination of the public sector capital budget reveals considerable unproductive investment. While correction for unproductive investments still indicates sustainable development, results suggest that aggregate indicators such as national wealth or genuine savings may be misleading without further attention to the process by which natural capital is transformed into other forms of wealth.

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.

Aggregate shocks such as droughts and floods cannot be perfectly insured by risk sharing within a village. Given this inability, what type of households are more vulnerable in terms of a decline in consumption when a village is hit by such shocks and what kind of microeconomic mechanism underlies the household heterogeneity in vulnerability? These questions are investigated using two-period panel data collected in rural Pakistan in 2001 and 2004. We compare consumption response to droughts, floods and health shocks and investigate how the response differs across different types of households. Empirical results show that the impact of droughts was negligible, younger and more landed households were less vulnerable to floods, and households with greater access to formal financial institutions were less vulnerable to idiosyncratic health shocks. The empirical pattern suggests the possibility of risk sharing among households that are heterogeneous in both risk aversion and credit access.

There have been few applications of the contingent valuation method (CVM) to forests in developing countries. When applied, the method is seldom utilized to improve the implementation of development projects. In this paper an application of CVM to the Orissa Social Forestry Project is reported. The results show considerable variation between villages and the analysis of the bid function shows underlying factors to project success that can be used in project planning. The policy implications are to plant new VWL where natural forests are inaccessible, where people have prior experience of VWL, and where fuel consumption relies heavily on market purchases. Such plantations are expected to give greatest benefit to families with few men and many women. An analysis of the reliability of the study concludes that many of the observed biases originate from the enumerators. The study also recommends that one should be careful with the use of a discrete design in a cultural context such as this that is prone to yea-saying, and that strategic bias can arise from an open ended question that follows up the start bid in a culture characterized by bargaining.

The paper considers the transition of an economy from non-renewable to renewable energy. We set up a canonical growth model with damages in the household's welfare function and two energy sources – non-renewable and renewable energy. To produce renewable energy a capital stock must be built up. A socially optimal solution is considered that takes into account the negative externality from the non-renewable energy. We also study how the optimal solution can be mimicked in a market economy by policies using subsidies and tax rates. To solve the model numerically, we use Nonlinear Model Predictive Control. We study when a transition to renewable energy takes place and whether it occurs before the non-renewable resource is exhausted. In addition, we analyze the impact of the initial values of the non-renewable resource and of the capital stock on the time of paths of the variables.

The following paper is concerned with water sharing of the Ganges River between India and Bangladesh, with possible augmentation through water transfers from Nepal. We analyzed the case when water from Nepal can be transferred to Bangladesh through the upstream country, India, as the local geography only permits such water transfer. A game theoretic model is formulated to determine the optimal share of water diverted to Bangladesh by India, and the optimal amount of water transfer from Nepal. India may gain positive externalities from such water transfer. The positive externalities generated from water transfer from Nepal may influence the water share of both India and Bangladesh. In the absence of altruism, India would allow less water flow to Bangladesh than in the case when there is no provision to buy water from Nepal. We also explored whether positive externalities could induce India to buy water jointly with Bangladesh, and such a case will only occur if the countries possess altruistic concerns and share water according to an agreement.