The debt-resource-hypothesis suggests that high indebtedness leads to increased natural resource exploitation as well as more unsustainable patterns of resource use. Countries with high debt burdens supposedly increase their extraction of fossil fuels and mineral resources as well as their production of so-called cash crops in order to service their debt obligations. In spite of its popularity, there have been few attempts to systematically test the hypothesis. Existing analyses refer to deforestation only and come to mixed results. This study fills a gap in testing the hypothesis more comprehensively for 23 natural resources and cash crops. It uses first differencing, period-specific time dummies, and a lagged dependent variable to mitigate omitted variable bias. No evidence is found that would support the debt-resource-hypothesis.

This study examines the relationship between groundwater irrigation and off-farm employment with a set of household level data collected in North China. The results provide evidence that off-farm employment reduces both time spent on irrigation in terms of total hours of irrigation and the amount of groundwater pumped. However, these effects have not resulted in losses of crop production. In fact, water productivity measured as output value produced per m3 of groundwater pumped is higher among households with off-farm employment. These seemingly contradictory findings are explained by the increased use of water-saving technologies such as furrow irrigation, underground pipes and/or lined canals. These technologies reduce seepage losses during the conveyance of groundwater as well as during irrigation of the fields. As a result, less groundwater needs to be pumped to achieve the same level of groundwater irrigation application rate in the field.

Development agencies spend approximately US$ 400 million per year on landmine clearance. Yet many cost–benefit evaluations suggest that landmine clearance is socially wasteful because costs appear to far outweigh social benefits. This paper presents new estimates of the benefits of clearing landmines based on a contingent valuation survey in two provinces in rural Cambodia where we asked respondents questions that elicit their trade-offs between money and the risk of death from landmine accidents. The estimated Value of a Statistical Life (VSL) is US$ 0.4 million. In contrast, most previous studies of landmine clearance use foregone income or average GDP per capita, which has a lifetime value of only US$ 2,000 in Cambodia. Humanitarian landmine clearance emerges as a more attractive rural development policy when appropriate estimates of the VSL are used.

Game theory has been useful as an analytical framework for assessing environmental and resource regulations and policies. The papers in this volume provide the latest methodological and applied works in game theory to a wide range of natural and environmental resource problems such as fishing, grazing, pollution, climate change, water allocation, and stochastic production processes. The findings in the papers suggest that game theory is an effective tool for the analysis of the efficient use of shared natural resources; it can be used to identify stable agreements between parties to a resource conflict, and show how non-cooperation over global public goods/bads has a high social cost tag.

We investigate the consequences of remittances inflows on the macroeconomic performance of West African countries over the 1985–2007 period. We take into account the exposure of those countries to climate variability by estimating a PCHVAR model which allows heterogeneity between countries’ responses to rainfall shocks. Our results show that the impact of remittances on macroeconomic performance is highly sensitive to those shocks. In particular, when drought conditions prevail, remittances no longer exert any short-term spillover effects on growth and may increase a situation of economic dependence, by spurring agricultural imports.

The European Union (EU) is now discussing a legislation proposal to ban illegal timber from the EU market. We use the ICES model to estimate the reallocation of global demand and timber imports following the EU legislation. We aim to assess the economic impacts and measure the potential emission reduction resulting from the introduction of this policy. Results show that an EU ban targeting only log imports is not effective in reducing illegal logging, but its main effect is the removal of illegal logs from international markets. Additionally, the unilateral EU ban increases secondary wood production in illegal logging countries as their exports become relatively more competitive. Through this mechanism, part of the banned illegal timber will re-enter international trade flows ‘hidden’ as processed wood. Extending the ban to timber processed products eliminates this effect and reinforces direct carbon emissions reduction from logging activities.

An environmental accounting approach is adopted to adjust current measures of national income and net savings in SA for the value of net accumulation in timber and carbon stocks as well as for the value of water abstraction externality of cultivated forests. Results indicated that the said values missing from current measures of income and capital formation are substantial, amounting to about 0.6 per cent of NNP, on average over the study period. Potential VAD lost to agriculture due to water abstraction by cultivated forests was estimated at R104 million per annum, on average since 1981. This estimate, however, did not account for the social costs associated with potential losses of environmental services from affected ecosystems.

This paper presents an adoption model of a resource management technology derived from a three-step decision process (information, adoption, and intensity of adoption).

From the theoretical results it is found that while the levels of technical parameters such as duration and regeneration rate of soil fertility by improved fallow are relevant for adoption, it is misleading to ignore economic and social factors as they are reflected in the discount rate, risk, information, and prices of inputs and outputs.

It is also shown that models that do not take account of the problems of self-selection due to the ability of the potential adopters to acquire and process the relevant information about a technology, lead to biased estimators.

Empirical estimations generally confirm the theoretical results. It is found that the acquisition of information about resources management technology is influenced by age of farmers and actions of official extension services; the adoption decision is influenced by prior utilization, the bundle of land property rights owned, and the level of financial liquidity; and the intensity of adoption is influenced by the percentage of the farm that is degraded.

How do people learn from disasters? Do they constantly develop and accumulate new knowledge that enables them to address recurrent disaster risks? This paper investigates whether social learning and, in particular, the development of earthquake-mitigating technologies reduces earthquake-induced fatalities. Combining patent data with a global cross-section of 894 earthquakes that occurred between 1980 and 2010, we find that countries with more disaster-mitigating innovations and more earthquake exposure in the past suffer fewer fatalities. This study is the first to empirically examine the role of technological change and social learning in disaster mitigation. It sheds light on knowledge as a key element of adaptive capacity, and suggests the importance of incorporating technology development into a long-term hazard mitigation and adaptation policy. The paper also contributes to the empirical disaster literature as the first to address the problem of missing data on disaster losses.

Environmental protection is an issue that all developing countries must cope with when inviting foreign direct investment (FDI). However, the high correlation between FDI and pollution does not necessarily indicate that foreign firms are to blame. In this study, we apply firm-level panel data from Vietnam and unique information on waste discharge to demonstrate that foreign firms are actually more proactive in acquiring ISO14001 certification. ISO14001 is a voluntary environmental standard, the adoption of which improves a firm's performance in terms of waste control, and increases its welfare and productivity level. This study provides robust evidence that firms' efforts toward corporate social responsibility eventually benefit them as well.

Located in a high Andean valley, Ecuador's capital city suffers from severe air pollution, emitted by manufacturing plants as well as motor vehicles. Improving air quality would result in diminished respiratory illness, which currently costs Quito's residents several millions of dollars annually in lost earnings and medical expenditures. Technology transfer has succeeded in reducing industrial emissions at a modest cost. But diesel-fueled trucks and buses, which are a major source of various pollutants, have been the primary focus of the local government's strategy for air quality improvement. To date, that strategy has met with some success, although future initiatives will involve higher abatement expenses and therefore will test the commitment of municipal authorities and the citizens they represent to pollution control.

This paper analyzes North-South negotiations over climate change abatement. We consider that northern countries have an incentive to negotiate over a transfer to the southern countries in exchange for their abatement efforts rather than reducing their emissions at home. We study the incentives for northern and southern countries to form negotiation-coalitions at each side of the bargaining table and the impact of these negotiation-coalitions on the final outcome. We show that the incentives can be separated into direct efficiency gains, as fixed costs savings, and indirect bargaining power gains. Depending on the relative values of these gains, we determine the equilibrium of the game. We also show that bargaining power gains encourage southern countries to negotiate separately while they encourage northern countries to unite, and that this hinders the formation of the grand coalition.

The analysis demonstrates the importance of multilateral cooperation for water managers to tackle wastewater pollution along an international border. A differential game is applied empirically with data of abatement costs, environmental damages, trade flows and pollution dynamics. The framework offers a way to compare pollution control when the US and Mexico coordinate efforts and when they act independently. Results show that trade liberalization and cooperation are useful for dealing with transboundary pollution in a shared waterway. In order to investigate further the nature of cooperation along the entire border, an econometric estimation is performed that investigates the factors influencing Mexico and the US to initiate environmental improvement projects. Results show that cooperation depends on whether the project addresses transboundary wastewater pollution. Other types of pollution are not significant, nor are attributes such as how much a project costs. A project's ability to generate revenues to sustain itself significantly disadvantages the project for cooperative approval.

This paper assesses how the economics of biodiversity, as a field, has evolved in response to developments in biodiversity science and policy over the life of the journal, Environment and Development Economics. Several main trends in the economics of biodiversity are identified. First, biodiversity change has come to be analyzed largely through its impact on ecosystem services (in the sense of the Millennium Ecosystem Assessment). Second, there has been a growing focus on factors that optimally lead to biodiversity decline, i.e., the benefits to be had from reducing the abundance of pests, predators, pathogens, and competitors. Third, increasing attention is being paid to two global drivers of biodiversity change, climate and global economic integration, and the effect they have on the distribution and abundance of both beneficial and harmful species. Fourth, there has been growing interest in the development of instruments to deal with the transboundary public good aspect of biodiversity, and in particular in the development of payments for ecosystem services. The paper identifies the influence of these trends on attempts to model the role of biodiversity in the production of goods and services.

In many countries, and particularly in the economies in transition in Central and Eastern Europe, public environmental funds play an important role in financing environmental investments. These funds provide subsidized financing through grants and soft loans in response to market failures that limit environmental investors' access to capital markets or poorly account for the benefits of environmental improvements. The principal question explored in the paper is whether environmental funds are too generous or too selective in co-financing environmental projects. The authors conducted a survey of applicants whose applications to Polish environmental funds were rejected following appraisal by the funds in 1994. Applicants were contacted to determine whether they had been able to close the financing 'gap' by the end of 1995 that had resulted from the rejection of their application by the Fund. Survey results indicate that a large majority of respondents have secured substitute gap financing and proceeded with their planned investments, suggesting that the fund's assistance was not essential for these projects to be implemented. Generally, the financing gap had been closed by financing from another environmental fund, from own resources, and less frequently from the same fund (after resubmitting a modified proposal). Only in few instances have proposed projects been abandoned.

Economic instruments such as taxes and tradable permits have been promoted as efficiency improving policies in the transition economies of Central and Eastern Europe and elsewhere. The little noticed potential for a symmetric equity impact from the two instruments in a world without distortions is first discussed. A specific policy option is suggested in which existing environmental taxes in Central and Eastern Europe can be increased without imposing additional financial burdens in industry if appropriate tax credits are provided. Second, conditions in Central and Eastern Europe are identified that reduce the change of efficiency losses in a general equilibrium setting when distortions exist. The trade-off between efficiency and equity in such a setting is found to depend on country-specific parameters and to be reduced if: (1) a cost-effective policy is implemented, (2) environmental assets can be distributed prior to privatization, and (3) government expenditures can decline.

The authors develop a simple analytical framework to study the welfare-maximizing environmental standards when market entry is endogenous and firms can circumvent regulation by bribing corrupt officials. Corruption changes the tradeoff in environmental policy. Corruption leads more polluting firms to enter into the market, which requires tighter environmental regulation. However, corruption also makes trading in some environmental protection for a marginally higher market entry optimal for the government.

Most resource management studies model the resource in isolation from the rest of the economy of which it is part. In many developing economies, agents participate in multiple activities, creating linkages between resource exploitation and other sectors (e.g., agriculture). In Northern Honduran fishing communities, households allocate effort to fishing according to the opportunity cost of their time, which depends on returns in other activities. We develop a model that demonstrates how market structure impacts fishery exploitation. Agricultural price increases have an ambiguous effect on labor allocated to fishing because they reduce the value of labor in fishing but increase the demand for fish via an income effect. The size and magnitude of impacts depend strongly on the tradability of inputs and outputs in the community economy. The findings point to a need to account for economic linkages and market structure when designing policies to reduce pressure on a natural resource.

We estimate the technical efficiency gains of introducing individual quotas (IQs) in fisheries. Our estimates are based on two samples of vessels, considering a potential self-selection bias and controlling for quality changes in landings induced by the IQ system. The results suggest that the introduction of IQs has an important positive impact on fleet efficiency, and that properly measuring this impact requires controlling for the self-selection bias and quality changes induced by the regulatory shift.