Sustainable use of humid forest resources as a source of fertile land for cultivation requires long periods of fallow and the ability to move the zone of active cultivation from one location to another over time. At the individual field level, shifting cultivation is essentially a resource extraction problem akin to a pulse fishery – a short period of intensive use of the stock of soil fertility followed by a long idle period permitting regeneration. This paper describes a spatiotemporal model of resource extraction adapted to the use of forest resources by shifting cultivators. Theoretically grounded in the spatial and household modelling literature, it is a structural simulation model of household decision-making, and includes a demonstration of the concept with a limited data set from southern Cameroon. Use of a stated preference approach to modelling decision-making identifies individual preferences and spatial path-dependency as important sources of shortened fallows and resource degradation.

This paper examines future energy and emissions scenarios in China generated by the Integrated Assessment Model WITCH. A Business-as-Usual scenario is compared with five scenarios in which greenhouse gases emissions are taxed, at different levels. The elasticity of China's emissions is estimated by pooling observations from all scenarios and comparing them with the elasticity of emissions in OECD countries. China has a higher elasticity than the OECD for a carbon tax lower than US$50 per ton of CO2-eq. For higher taxes, emissions in OECD economies are more elastic than in China. Our best guess indicates that China would need to introduce a tax equal to about US$750 per ton of CO2-eq in 2050 to achieve the Major Economies Forum goal set for mid-century. In our preferred estimates, the discounted cost of following the 2°C trajectory is equal to 5.4 per cent and to 2.7 per cent of GDP in China and the OECD, respectively.

Plant pathogens are quite destructive to cash crops throughout the world, resulting in potentially devastating financial losses. This work expands recently developed optimal control theory for an integrodifference model to a mathematical system which includes an integrodifference component. This system models a highly simplified plant pathogen system for which the optimal harvesting scheme is derived. An adjoint system is introduced to characterize the optimal harvesting pattern. This analysis shows that, while it may not be possible to prevent losses upon discovery of the pathogen in an area, it is theoretically possible to significantly cut those losses by culling an area around the initial infection.

Conventional wisdom amongst environmentalists holds that the cutting of tropical forest for livestock production is not only bad business but also bad for the environment. In particular, it is thought that conversion to pasture leads to a rise in the sedimentation of waterways and reservoirs, an increase in flooding and loss of dry season water supply. Using the case of the Rio Chiquito watershed (which drains into Lake Arenal, Costa Rica), the paper questions this conventional wisdom. The paper demonstrates that both livestock production and the associated downstream hydrological impacts represent important values to the local economy; values that significantly outweigh expected returns from options for reforestation or forest regeneration. Given that non-hydrological externalities associated with livestock production are expected to be of minimal importance in the watershed, there is little reason – as is often proposed – to foster large-scale reforestation of the watershed or to purchase land for protection. Instead efforts should focus on how to maximize the complementary returns from livestock and the support to hydroelectric power provided by water production.

Cleaner cooking is an important policy objective in the bid to achieve sustainable development. Despite efforts to encourage cleaner cooking fuel use, biomass fuel is still widely used in many developing countries. This study investigates the role of behavioral factors, particularly risk aversion, in the choice of cooking fuels in Ghana. In addition, we investigate how the improvement of supply infrastructure and services mitigates the impact of risk preferences in fuel choices. By employing data from the recent round of the Ghana Living Standards Survey, we find that risk-averse households are less likely to choose liquified petroleum gas as their cooking fuel. However, the effect is mitigated for households located in districts with more supply infrastructure. Additional analyses reveal the influence of risk and time preferences in other household behavior.

Fuelwood scarcity creates a widespread environmental problem that places a major burden on women and children in the rural areas of developing countries. Consequently, many governments, donors and non-governmental organizations have encouraged on-farm fuelwood production and agroforestry practices. Whether, however, fuelwood from different sources can be easily substituted is an important empirical question as the degree of substitutability can depend on local markets and households' resource endowments and incomes. In this paper, we examine the substitution between three fuelwood sources among rural households in western Kenya: fuelwood collected off-farm, fuelwood produced on-farm, and that which is purchased. Using household-specific shadow prices for fuelwood and male and female wages, we find that strict gender divisions in household labor result in limited substitution between fuelwood sources. Among the implications are that programs and policies promoting agroforestry will have limited success without first addressing the structural differences in labor markets.

This paper describes the Fiscal Environmental Integration Model (FEIM) and its use to examine the merits of introducing a set of air pollutant emission taxes and stringent abatement requirements based on best commonly available control technology. These environmental protection strategies are examined both independently and in combination. In addition, Hungary has very high VAT, employment, and income tax rates and therefore might receive more than the usual advantage from using environmental tax revenues to reduce other taxes. We therefore also examine the economic and environmental implications of different uses of the revenues generated by the air pollutant emission taxes. FEIM is a CGE model of the Hungarian economy that includes sectoral air pollution control costs functions and execution options that allow examination of the key policy choices involved. We developed and ran a baseline and seven scenarios with FEIM. The scenarios centered on introduction of environmental load fees (ELF) on emissions of SO2, NOx, and particulates and emission abatement requirements (EAR) for these pollutants.

Environment and economy interact. Most economists and economic policy makers have tended to neglect this interaction as 'external' to mainstream market economics. The question is whether environmental externalities have reached a level where they overwhelm optimality and efficiency in resource allocation. Sustainability in growth and development has been advanced as a criterion for dealing with the social costs of environmental impacts. The article examines how this criterion can be operationalized for assessing the significance of environmental concerns in economic analysis and policy. Indicators of economic and ecological sustainability are defined and compiled for selected countries. Based on these indicators, operational paradigms of 'eco-nomics' and 'sustainable development' are advanced.

This paper investigates whether inherited colonial legacies influence deforestation rates in 60 former colonized developing countries. It is hypothesized that differences in deforestation among countries can be attributed to their colonial legacies shaping the current impact of the institutional background on deforestation. Overall, the author finds that institutions defined as the extent of democracy, the quality of property rights and the quality of government functioning (e.g., corruption), have a differential impact on deforestation rates according to colonial legacies as defined by the identity of the colonizer. More precisely, it is found that: (1) in countries characterized by ‘bad’ governance, former French colonies deforest relatively less than former British and Spanish colonies; whereas (2) in countries characterized by ‘good’ governance, the result is reversed. These results are robust when geography features are controlled for since the process of colonization was not random and depended on initial geographic and climatic conditions.

In Mali's current context, where the crops sector is particularly exposed and vulnerable to agricultural drought, this study assesses the economy-wide impacts of such events and the potential effectiveness of some adaptation strategies. Using a dynamic computable general equilibrium model, we conduct counterfactual simulations of various scenarios accounting for different levels of intensity and frequency of droughts over a 15-year period. We first show how mild, moderate and intense droughts currently experienced by the country affect its economic performance and considerably degrade the welfare of its households. We also show how these negative impacts could be aggravated in the future by the likely increased number of intense droughts threatened by global climate change. However, we finally show that there appears to be some room for Mali to maneuver in terms of drought-risk management policies, such as fostering the use of drought-tolerant crop varieties, improving drought early warning systems or extending irrigation capacities.

This paper analyzes the behavior of cross-country growth rates with respect to resource abundance and dependence. We reject the linear model that is commonly used in growth regressions in favor of a multiple-regime alternative. Using a formal sample-splitting method, we find that countries exhibit different behaviors with respect to natural resources depending on their initial level of development. In high-income countries, natural resources play only a minor role in explaining the differences in national growth rates. On the contrary, in low-income countries, abundance seems to be a blessing but dependence restricts growth.

This paper adopts soil scientific models of soil productivity and degradation in Tanzania into an intertemporal optimisation framework. The farmers choose labour input, capital investment and fertiliser input to maximise soil wealth, i.e., the present value of soil rent. First we focus exclusively on soil mining, considering the nutrient stocks as determinants of land productivity. Next, we focus on soil erosion, and include rooting depth as determinant of land productivity. We compute the soil wealth under the assumption that the opportunity cost of labour is equal to current wages, or alternatively equal to zero. Our estimates suggest that the potential gains from change in agricultural management are considerable. Moreover, the shadow price on root depth and hence the returns to land conservation investments are highly sensitive to our labour market assumptions. We also find that the value of the eroded soil amounts to 12–17 per cent of the value of Hicksian income, and the savings required to maintain consumption amounts to 13–29 per cent of the contribution to GDP.

This paper provides an overview of recent research on the interconnections between environmental and trade policies. It describes how the assumptions of these models can be important to the conclusions derived on the gains from coordination. The Harrison–Rutherford–Wooton CGE model of the European Union is used to illustrate the importance of these issues. This model was extended to include three air pollutants and their health effects as non-separable influences on household preferences in each region described by the model. The results suggest that the conventional assumption of separability in preferences between marketed and non-marketed goods is central to conclusions about the importance of coordination of these policies.

In order to significantly reduce global carbon emissions, it is necessary also to control CO2 emissions in fast growing emerging economies such as India. The question is how the Indian economy would be affected by including the country in an international climate regime. In this analysis we soft-link a global and a single-country computable general equilibrium model in order to be able to capture distributional issues as well as international repercussions. We analyze different options of transferring revenues from domestic carbon taxes and international transfers to different household types and the effects of different assumptions on exchange rates on transfer payments. Our results show (i) that welfare effects can differ significantly for different household types, which is generally ignored in analyses with global models, and (ii) that these effects are significantly influenced by international price repercussions and by accounting for transfers from international permit sales which is generally ignored in single-country models.

Small Island Developing States (SIDS) are characterized by high levels of biodiversity that are under threat. Simultaneously, the tourism sector plays a key role in many of these economies. In this paper, the Hausman-Taylor estimator is used to investigate a tourism demand function in SIDS in which marine and terrestrial biodiversity play a key role, in addition to the traditional economic and price variables. This estimator allows for both the presence of time-invariant variables, a standard feature of environmental data, and the existence of endogenous covariates. Levels of biodiversity are found to have a significant influence on tourism in SIDS and, in particular, a test for redundant variables shows that the biodiversity variables are jointly significant. This justifies their inclusion in a tourism demand function, over and above the conventional economic factors, and points to the importance of national and international policy in protecting the biodiversity of SIDS.

In a widely cited paper, Andreoni and Levinson (2001) argue that, under very mild restrictions on preferences, increasing returns to scale in pollution abatement are a sufficient condition for pollution to ultimately fall to zero with income growth. We show that the existence of an Environmental Kuznets Curve depends on the relative magnitudes of the returns to scale in abatement and in gross pollution, rather than on their absolute values. Increasing returns to scale in abatement by themselves are not sufficient for pollution to fall with income unless the returns to scale of abatement exceed the returns to the production of gross pollution.

In this paper, we conduct an investigation to assess the economic potential of payments for ecosystem services to conserve water through the conversion of land under irrigation into rain-fed land in the upper reaches of the Shiyang River basin, located in northwest China. We use an approach developed by Antle and Valdivia (2006, Australian Journal of Agricultural and Resource Economics, 50: 1–15) to estimate the supply of water. The analysis shows that it is theoretically possible to reduce agricultural water consumption and subsequently increase the water supply, which would aid the prevention of environmental degradation in the middle and lower reaches of the Shiyang River basin. In addition to the conservation of water, considerable income would be generated by local farmers, which would help to alleviate poverty. Furthermore, the analysis also suggests that more complete data on ecosystem services rates, transaction costs and other related factors would be of value for achieving a more comprehensive assessment.

The costs of living with wildlife are assessed using Namibian subsistence farmers' willingness to pay (WTP) for deterrents to attacks on crops and livestock. A utility-theoretic approach jointly estimates household WTP for deterrent programs in two ‘currencies’: maize and cash. This has a double payoff. Use of a non-cash staple increases respondent comprehension and provides more information about preferences, improving the accuracy of results. The household shadow value of maize is also identified. Significant costs from living with elephants and other types of wildlife are demonstrated. Compensation for farmers may be warranted on equity and efficiency grounds. Uncontrolled domestic cattle generate even higher costs to farmers than wildlife, highlighting the need to clarify property rights among these farmers.

Rivers can be both givers of life and takers of life. Investments that provide protection against flooding are often beneficial during normal or low flows. Investments such as storage reservoirs are long lived, separating construction and management operations. With international rivers, the absence of enforcement mechanisms may preclude infrastructure collaboration. Where physical infrastructure is in an upstream nation, downstream impacts may be ignored after the structure has been completed. Using a game theoretic model, it is shown that downstream cooperation may only be rational when flooding is the primary downstream impact. A stylized arid developing region and humid developed region are compared. Potential gains from collaboration are greatest in arid regions, but may be difficult to achieve. There may be little scope for capturing the gains from basin level management if economic integration does not extend beyond water issues.

We investigate the role that economic instruments can play in promoting economic sustainability and the preservation of biodiversity in agroforestry management in coffee production. Most of the world's coffee producers live in poverty and manage agro-ecosystems in regions that are culturally and biologically among the most diverse on the globe. Despite the relatively recent finding that bees may augment pollination and boost coffee crop yields, the short-term revenues from intense monoculture drive land-use decisions that destroy the forest strips serving as habitats for pollinating insects. Our study investigates whether farmers specialize in environmentally detrimental (sun-grown) or sustainable (shade-grown) farming, or both practices coexist. We calibrate an empirical model to characterize the equilibria and investigate the ecological and economic impacts of three alternative policy instruments: conservation fees, price premiums, and minimum wages.