Climate and institutions might be crucial in lowering the vagaries of climate change impacts in terms of productivity. This study measures the relationships of productivity measures adjusted for the regulation of carbon emission and institutions together with climate change throughout the world. This paper finds that there is higher potential for reduction of CO2 emissions in developing countries at lower cost. However, the cost to reduce emissions lowers their growth potential in terms of lost productivity growth. Better institutions help to lower the negative impacts of climate change by improving the process of technological adoption in developing countries. Climate change reduces the productivity growth in developing countries by lowering the process of technological adoption, and better institutions result in higher productivity.

The operation of a number of non-contiguous parcels of land as a single farming unit is known as land fragmentation. It is a widespread and persistent phenomenon and, at the same time, widely criticized by development agencies. Available evidence clearly suggests that the unqualified faith in the merit of consolidation is not justified; fragmentation may have some rationale. This paper substantiates the latter position with a case study of an irrigated agricultural system. Thereafter, it locates fragmentation within the broader context and analyses its role within a hierarchy of phenomena in the linked social and ecological local system. For this analysis an evolutionary game model is used. It is shown that fragmentation increases the resilience of the system of cooperation. The study concludes by suggesting an appropriate strategy for resilience management.

A better understanding of the relative importance of factors related to climate change and to changes associated with economic growth would serve to inform water policy and to focus scarce public resources on anticipated problems arising from distinct sources of changes in water demand. This article investigates the determinants of residential water consumption in Chile, a developing country that has seen noteworthy changes in incomes, household size, poverty rates and levels of urbanization, and which is projected to experience significant climatic but varied changes, depending on the region of the country. Panel data for 1998-2010 at the municipal level is used to analyze the sensitivity of residential water demand to climate and development-related factors. In the case of Chile, the effect on water consumption of these development-related changes is estimated to be several times that of the changes associated with climate projections for 50 to 80 years in the future.

This paper aims at identifying whether and how sustainable land management practices and livelihood diversification strategies have contributed to moderating the impacts of the El Niño-related drought in Zambia. This is done using a specifically designed survey called the El Niño Impact Assessment Survey, which is combined with the Rural Agricultural Livelihoods Surveys, as well as high resolution rainfall data at the ward level over 34 years. This unique panel data set allows us to control for the time-invariant unobserved heterogeneity to understand the impacts of shocks like El Niño, which are expected to become more frequent and severe as a result of climate change. We find that maize yields were substantially reduced and that household incomes were only partially protected from the shock thanks to diversification strategies. Mechanical erosion control measures and livestock diversification emerge as the only strategies that provided yield and income benefits under weather shock.

Using individual travel diary data collected before and after a rail transit expansion in urban Beijing, the impact of urban rail accessibility improvement on the usage of rail transit, automobiles, buses, walking and bicycling, as well as the cross-area externality induced by congestion alleviation, is estimated. The results show that rail transit usage significantly increased for commuters residing in the affected areas and that the additional rail passengers were previously auto users, rather than bus passengers. The cross-area externality is estimated as small, which implies that the congestion alleviation was not large enough (yet) to change the travel mode choices of commuters residing in areas that did not experience the improvement. Furthermore, the results show that neither the number of commute work trips nor their length increased, indicating that the quantity of travel was not increased by the rail transit expansion.

This study examines, in a developing-country context, the nature of the linkages between deforestation, land degradation and the movement of population from one region to another. While it is usually hypothesized that environmental degradation leads to stress migration from rural areas, changes in institutional arrangements and the subsequent regeneration of land and water may change the situation, decreasing the attractiveness of the option to migrate. Primary data from six villages in Rajasthan (a region in Western India) are used to set up alternative models using OLS, logit and 3SLS systems methods to test alternative forms of the hypotheses. It is found that the proper specification of group property rights, as a consequence of the existence of non-governmental organizations, does reduce migration. Further, a household's decisions to migrate and/or to participate in common property right creation are interrelated, being parts of its labour force allocation decisions. Other variables influencing household decisions to participate are levels of asset ownership, degree of dependence on common land and level of education.

Choice models and a referendum format contingent valuation survey are used to investigate household preferences for improved water services and decentralization levels (actual departmental administration vs. further decentralization to the municipality) in urban Matiguás, Nicaragua. Choice models suggest that households prefer the current departmental administration over municipal provision for service and capacity, but believe that the municipality would be more interested in improving services. Results also indicate that households are willing to pay an increment of at least 112 per cent above their current monthly water bill for reliable and safe drinking water services, regardless of administration type.

A discrete choice experiment, aiming to elicit public preferences for improvements in solid waste services, is carefully administered across socioeconomic zones in the city of Hawassa, Ethiopia. Observed and unobserved preference heterogeneity are analyzed using mixed logit choice models. The results show that there exists substantial willingness to pay to increase collection frequency and separate recyclable waste. A new issue is the focus on child labor in the waste management sector. Significant gender effects are found: women are more interested than men in increasing waste collection frequency and value the abolishment of child labor more highly, as do higher income households. As expected, respondents living in wealthier neighborhoods are more likely to pay higher service charges. Education indirectly influences preferences for waste separation. The study provides important insight into the social benefits of public investment decisions to improve the quality of solid waste management services in large cities in Ethiopia.

This paper develops four agricultural household models of forest clearing – as both an input for current production and an investment in future production – over two periods under distinct land and labor market institutions. Five different effects of policies on farmers' forest clearing decisions are identified. Careful comparison of their relative magnitudes reveals (potential) pro-forest policies under distinct market conditions. In Latin American countries, poor early settlers are often bid off their cleared land after or without cultivation by wealthy large holders. With this ‘sell-out effect,’ price transfer and technological transfer for soil management targeting poor colonists and policy reforms eliminating land price distortions are recommended to arrest deforestation. On the other hand, especially in places where land transaction opportunities are nil like Sub-Saharan African countries, policies promoting non-agricultural activities among poor farmers are needed.

In this paper, we analyze the effects of population aging on economic growth and the environment in a two-period overlapping generations model of growth, aging, and the environment. We show that aging may be beneficial to economic growth and the environment under perfect annuitisation, while possibly harmful under imperfect annuitisation. We also discuss the implications of our results for environmental policy in an aging economy.

While a large body of the literature on environmental policies has focused on the productivity impacts of regulations, less attention has been given to the link between environmental policies and market competition. In this paper, I develop a tractable model that incorporates variable mark-ups to study how a competitive environment is affected by environmental policies in a market with firm heterogeneity and endogenous abatement technology choice. The findings of this study are consistent with the Porter Hypothesis in the sense that environmental regulations motivate abatement technology adoption and enhance productivity and environmental quality. However, the productivity gain is mainly driven by reallocation of resources across firms rather than the induced abatement technological change. Tougher regulations harm the competitive environment by increasing average prices and market concentration. Social welfare also drops because in the absence of strong competition fewer variates are produced in equilibrium.

We analyse the relationship between individuals' subjective wellbeing (SWB) and measures of their country's sustainability. SWB data are sourced from the World Values Survey; sustainability is measured by ecological footprint (EF) and by components of the World Bank's adjusted net savings (ANS) series. ANS, a measure of weak sustainability, represents changes in a country's capital stock including financial, physical, human and natural capital. We show that an increase in strong sustainability, measured by EF and by ANS's natural capital component, is associated with reductions in SWB over the next decade followed by a rebound in SWB over the subsequent decade. We show also that the perfect substitutability assumptions on which ANS is calculated do not hold. Our findings highlight an important political challenge: governments that run sustainable policies may decrease the near-term wellbeing of citizens. This can reduce government's short-term popularity even though the improved sustainability may raise future wellbeing.

Lithuania is one of ten countries in Central and Eastern Europe that is aligning its environmental policies with those of the European Union (EU). The costs of harmonizing environmental policies are expected to be extremely high and to fall disproportionately on local governments. One policy option for financing these service upgrades is to use increased tariffs. We evaluate the feasibility of this strategy by estimating household willingness to pay for upgraded landfill, sewerage, and recycling programs. We then compare estimated benefits with costs from the literature. We find that household willingness to pay is substantial for upgraded landfill management and expanded sewerage service, but virtually zero for the two recycling programs considered. Relative to costs, households are willing to pay approximately 80–90 per cent of costs for landfill improvement, but less than 10 per cent for upgraded sewerage service and recycling programs. These results suggest that targeted subsidies will be critical to fund the municipal environmental expenditures required for Lithuania to join the EU.

The establishment of a private property regime is often proposed as a solution to the degradation of natural resources. While arguably more efficient than open access, private property often comes at a distributional cost (Weitzman, M. (1974), ‘Free access vs private ownership as alternative systems for managing common property’, Journal of Economic Theory 8(2): 225–234) as traditional users of the resource lose income and employment in the process. The present paper demonstrates that, in the case of renewable resources, traditional users may gain from privatization even if they are denied ownership of the resource. Indeed, a private owner maximizing profits tends to preserve the resource, which results in long-term increases in employment. We derive the conditions under which these long-term gains more than compensate traditional users for the short-run fall in labor demand and resource rents.

Excess capacity and overfishing are problems in the open-access, common-pool fisheries of the Java Sea. Data development analysis is used to estimate excess fishing capacity and the number of vessels to decommission in three Java Sea fisheries of Indonesia, the purse seine, mini purse seine, and longline. First- and second-best policy measures are discussed to reduce the excess capacity and give sustainable management and development. The importance of incentive design, asymmetric information, and the regulator's principal–agent problem are emphasized in license limitation programs.

The trade-off between short-term welfare and long-term agricultural development in the highlands of Ethiopia represents a challenge to successful economic development in a predominantly agriculture-based economy. We employ nearest neighbor and kernel-based matching techniques to measure the impact of sustainable land and watershed management (SLWM) on the value of production at the plot level. Analysis suggests that plots that received SLWM investments (terraces, bunds, check dams) within the first study period (1992–2002) had a 24 per cent higher value of production in 2010. In addition, continuous treatment effects analysis provides a robustness check and suggests that plots with existing SLWM infrastructure have a positive and increasing value of production seven years after construction. Although value of production increases over time, net benefits may not outweigh costs, and mechanisms to incentivize maintenance may be needed.

This study evaluates the effects of vegetative soil conservation practices (afforestation and/or bamboo planting) on farm profit and its components, revenue and variable cost. Since farmers self-select themselves as adopters of conservation measures, there could be a problem of selection bias in evaluating their soil conservation practices. We address the selection bias by using propensity score matching. We also check if there exists spatial spillover in adoption of vegetative conservation measures and how it affects matching. We use primary survey data from the Darjeeling district of the Eastern Himalayan region for the year 2013. Our results suggest strong spatial correlation. We find that the propensity score estimated from the spatial model provides better matches than the non-spatial model. While the results show that vegetative soil conservation can lead to significant gains in revenue, it also increases costs so that no significant gains in profit accrue to farmers.

The occupation of the last remaining tropical forests has been an initiative of many developing nations that is debated by the global community due to impacts on soil erosion, biodiversity loss and contributions to global climate change. Arguments against development range from the irreversible nature of tropical deforestation to the synergistic losses associated with environmental degradation and continued poverty. The focus of this paper is to determine if evidence of market advancements and growth can be found in an Amazonian settlement, thus providing counter-evidence for the boom–bust pattern of development that has been predicted for much of the Amazon. Using panel survey data (for four survey waves between 1996 and 2009), we find trends that are consistent with the industrial life cycle, suggesting a pattern that is more consistent with growth, development and consolidation.

Agriculture in Sub-Saharan Africa is regularly threatened by the occurrence of weather shocks. We wonder whether the way farmers respond to shocks can affect land use and induce deforestation. Reviewing the existing literature, we found that this question has only been marginally studied. Drawing from the adaptation and land-use change literatures, we then expose the mechanisms through which weather shocks can push farmers to induce land-use change, or conversely to foster conservation. As farmers cope with shocks, their responses can cause degradations in ecosystems which could, in the long term, encourage deforestation and land-use change. To prepare for the next growing season, or adapt to climate variability and risk in the longer term, farmers also make structural adjustments in their farm and land-use decisions, which may lead to changes in land holding. They also resort to adaptation strategies that can indirectly affect land-use decisions by affecting households’ resources (labor, income).

In the context of climate change and increasing occurrences of extreme events, it is essential to understand farmers' responses to weather shocks and adaptations. This paper uses a panel dataset of 311 selected Indian districts ranging from 1966 to 2009 to investigate how application of chemical fertilizers varies in response to rainfall shocks. Two rainfall shock measures are constructed based on deviation in rainfall from the normal, a categorical measure of rainfall shock; and another, a continuous index of negative rainfall deviation. Based on a panel fixed effect regression, the study finds no apparent reduction in the level of fertilizer use in negative rainfall shock years. However, with a one-year lagged rainfall shock, a reduction in fertilizer application rate is observed for the continuous drought index. Further, exposure to higher intensity droughts in the previous year leads to an increase in the amount of fertilizer application in the current year.