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.

This paper uses a model of an inland fishery in Bangladesh to investigate the relationship between poverty and resource sustainability in a specific case. It makes use of detailed fieldwork to build a numerical model of fishery decision making, which incorporates extensions to standard fisheries models. In particular, it includes fish migration between lease units and models the choice of fishing gear, as well as fishing effort, over the year. The modelling of fishing gear choice allows an analysis of the effect of management policies on employment in the fishery, a major factor that influences poverty in the locality. The numerical results show that while some simple policies to improve sustainability are likely to increase poverty, it is possible to design policies which affect gear choice and lead to reduced poverty without harming the sustainability of the resource.

This paper examines whether and how experiencing climate-related disasters can improve the rural poor's adaptation to climate change through community-based resource management. Original household survey data in Fiji capture the establishment of community-based marine protected areas following a tropical cyclone. Controlling for the endogeneity of household-level cyclone damage reveals that a household's exposure to the disaster increases its support for establishing marine protected areas, presumably for future safety nets. Evidence suggests that community members' social learning from disaster experience might facilitate their consensual decision making.

Climate change is increasing the frequency of extreme weather events, such as drought and heat waves. In this paper, we assess the impact of drought and high temperatures on the employment outcomes of working-age individuals in South Africa between 2008 and 2017. We merge high-resolution weather data with detailed individual-level survey data on labor market outcomes, and estimate causal impacts using a fixed effects framework. We find that increases in the occurrence of drought reduce overall employment. These effects are concentrated in the tertiary sector, amongst informal workers, and in provinces with a higher reliance on tourism. Taken together, our results suggest that the impacts of climate change will be felt unequally by South Africa's workers.

Drought events have critical impacts on agricultural production yet there is little consensus on how these should be measured and defined, with implications for drought research and policy. We develop a flexible rainfall-temperature drought index that captures all dry events and we classify these as Type 1 (above-average cooling degree days) and Type 2 droughts (below-average cooling degree days). Applied to a panel dataset of Indian districts over 1966–2009, Type 2 droughts are found to have negative marginal impacts comparable to those of Type 1 droughts. Irrigation more effectively reduces Type 2 drought-induced yield losses than Type 1 yield losses. Over time, Type 1 drought losses have declined while Type 2 losses have risen. Estimates of average yield losses due to Type 1 droughts are reduced by up to 27 per cent when Type 2 droughts are omitted. The associated ex-post economic costs in terms of rice production are underestimated by up to 124 per cent.

The paper presents an analysis of the role of two forms of social capital – linking and bonding – on two key farm outcomes: on-farm crop diversity and household wellbeing. Where market transactions are limited, social capital is an important household asset for accessing seed and channelling information. The study is set in a drought-prone region of Ethiopia, with high rates of food insecurity and dependency on agriculture for livelihoods. The region is very rich in crop genetic diversity, particularly for sorghum. The data were collected for a production year that experienced a major drought shock. Results of the analysis indicate that social capital is an important determinant of farm level diversity and wellbeing, with opposing effects related to the two different forms of social capital. This suggests possible trade-offs between the two forms of social capital in terms of food security, production and diversity, which need to be considered in planning interventions.

Equity and efficiency are crucial issues behind any tax reform, but they are particularly relevant in countries with high inequality and large shares of poverty. This paper provides a comprehensive socio-economic empirical assessment of Mexico's proposed (and partially implemented) tax reforms in the energy domain, and of a hypothetical partial removal of existing electricity subsidies. Using a rich household income and expenditure survey within the context of a demand system adjustment of non-durable goods, the article provides the public-revenue, environmental and distributional impacts from the simulation of different combinations of energy taxation, subsidy-removal and distributive offsets. The paper also provides detailed ex-ante evidence on the effects of compensatory devices that may contribute to the successful implementation of energy reform packages and significant poverty alleviation in Mexico.

Traditional pastoralist land management institutions in sub-Saharan Africa have been stressed by an increasing human population and related forces, including private enclosure of grazing land; government-sponsored privatization; and the increasing prevalence of violent conflicts and livestock theft. We model the incompleteness and flexibility of traditional grazing rights using fuzzy set theory. We compare individual and social welfare under the traditional system to individual and social welfare under a private property system and a common property system. Whether the traditional system is preferred to private property depends on whether the value of mobility, as defined by the traditional system, is more valuable than the right of exclusion inherent in private property. We find that under some conditions the imprecision which characterizes traditional rights can result in higher social returns than a common property regime characterized by complete symmetric rights across all members of the user group and complete exclusion of non-members.

The paper analyzes the impact of environmental information dissemination by an information agent in a product market duopoly. The information agent performs the task of disseminating information regarding a green and a polluting firm's environmental profiles to consumers differing in their preferences for the two firms’ products. The result reveals that, in the absence of information dissemination, the green firm earns a lower market share which necessitates the information agent's intervention to encourage the consumption of green product. Moreover, complete information dissemination regarding the green firm's environmental profile is sufficient to generate a higher market share for the green firm. The paper also finds that an increase in information dissemination regarding either of the two firms’ environmental profiles decreases environmental damage accrued to the society and encourages a greener consumption pattern. An eco-efficiency drive is shown to be self-corrective as it negates the need for the informational intervention.

In many developing regions of the world conventional agriculture is failing to meet the needs of people and at the same time is becoming progressively less ecologically sustainable. It is proposed that in a number of these regions, both overall economic development and the welfare of the inhabitants would improve if the primary form of land use was based on multiple use of those regions' natural biological resources, rather than continuing the practice of replacing or displacing them with marginal forms of agriculture. Testing this proposition, and then (if appropriate) effecting it, requires answers to a number of ecological, economic and management questions, in particular to do with: identifying those regions where biodiversity use has high potential the appropriate spatial scales for planning and management compatible combinations of different types of resource use ecological and economic trade-offs between different resource use enterprises how to arrive at the most efficient form of resource use sustainable levels of biodiversity harvest resource use decisions in relation to ecological drivers (such as climate and fire) institutional and regulatory structures that dictate current resource use. These questions, it is proposed, should form the basis of an international 'virtual' institute, composed of three Biodiversity Centres, one each in Latin America, southern Africa and Southeast Asia. Examples of multiple use, such as of wildlife in southern Africa, are used to illustrate the potential, and the management scale and other issues involved. If the development of this form of land use is to succeed, it will require technical and management advice and, in many cases, removal of 'perverse incentives' that prevent a change to the more economically and ecologically sustainable form of land use. From the beginning, the emphasis in the proposed centres would be on collaborative work involving governments, landowners and resource-based industries.

This paper examines the dynamic effects of forest conservation measures. Both short-term and long-term impacts on timber markets are studied using a Finnish example. Forest conservation is interpreted as an exogenous negative shock in the standing timber growth owned by private forest owners, and its effects are retrieved through an impulse response analysis based on a dynamic demand–supply and timber stock model. The results show that timber markets are influenced by forest conservation. The conservation of forest assets reduces traded quantities and increases timber prices. These effects are of the same relative magnitude, thus leaving the annual timber-selling income of private forest owners unchanged. The results suggest that some of the negative short-run impacts of conservation on commercial timber stock will be compensated in the long run by intensified use of the remaining stock. This may to some extent reduce the ecological usefulness of the conservation policies. While the timber markets converge in the long run towards a new post-conservation state the short-term interruptions suggest that caution should be used in establishing set-asides in privately owned forestland.

The terminator gene can render seeds sterile, so forcing farmers to purchase fresh seed every year. It is a technological solution to the problem of market failure that could increase the appropriability of R&D investment more effectively than intellectual property rights legislation or patents. This paper shows that appropriability should be more than tripled and that this leads to greater private R&D investment, which may be expected to double or triple. This would bring open-pollinating varieties into line with F1 hybrids, for which seed cannot be saved. In turn, the increased investment should raise yield increases to levels similar to those for hybrid crops. Thus, there are benefits to set against the possible ecological and environmental costs and the clear distributional and social consequences. The paper discusses the way the seed market is developing, the possible impacts, especially from a developing country viewpoint, and considers the policy changes that are needed.

Against the backdrop of a community-based fishery management institution called kadakkodi, this paper addresses the question of how institutions evolve, innovate, or disintegrate. It explains how institutional evolution is determined by factors like relative resource endowment, technology, cultural endowment, and inherited institutional structures. The strength of such informal institutions in facilitating effective resource management admitted, the paper argues that in the wake of increasing resource-related, technological, cultural and institutional heterogeneities, they may fail to perform and hence are no panacea to the problems of resource management. Such predicaments may call for complementary formal institutions whose supply, however, would depend on the cost of collective action.

This paper evaluates policies for addressing forest degradation in developing country hill areas, where agriculture is the major activity and villagers depend on forests for important economic inputs. Population growth, poverty, and open access probably explain most 'overuse' in such areas, but these are very difficult, long-term problems. The paper argues that under such conditions interim demand-side policies should be seriously considered, but the case is also made that the set of feasible instruments is quite small. Focusing on the case of Nepal, two instruments for reducing fuelwood demand – promotion of more efficient, wood-burning cookstoves and policies that reduce the prices of alternative fuels (e.g., through subsidies) – are evaluated. Using a simple analytical model and results from two household surveys conducted in Nepal, it is concluded that promoting improved stoves is a much more efficient and equitable instrument than, for example, subsidizing the major alternative fuel, which is kerosene. The cost of fuelwood saved using improved stoves is predicted to be a very low $2.77 per metric ton.

A revenue-sharing arrangement is under consideration between the USA and Western and Central Pacific Island Parties. When the ex-vessel price for cannery-grade skipjack tuna is above a minimum price, Pacific Island Parties would share in the increased revenue. This arrangement would provide economic incentives to these island nations to control fishing capacity and thereby increase revenues and economic rents. This potential arrangement raises the issue of which market and species prices to use as a benchmark, Bangkok or Pago-Pago; American Samoa and skipjack or yellowfin tuna. This paper, through a time series analysis of spatial price linkages, finds price leadership for skipjack in Bangkok. Macroeconomic and regional economic implications of enhanced price stability and higher revenues in the region are also discussed.

Using data from the World Value Survey for the period 1981–2007, this paper shows that the level of trust is positively linked to the willingness to contribute to environmental goods in selected African countries. The results are robust to possible errors in measuring trust, to the presence of various controls, and the potential endogeneity bias. These findings complement and extend the existing literature in the sense that they provide evidence on the importance of trust in improving the collective management of natural resources in Africa.

A framework is provided for structuring programs aimed at reducing emissions from deforestation and forest degradation (REDD). Crediting reference levels and the coordination among different implementing entities at multiple geographic scales are discussed. A crediting reference level has an error component if it differs from the business-as-usual (BAU) without REDD. Both the BAU emissions and the impact of REDD actions are uncertain, implying that participating in REDD entails stakeholder risk, the distribution of which depends on REDD program design. To categorize REDD architectures we define scale-neutrality whereby, for a given REDD design, crediting relative to the reference level at a given scale is not affected by errors in reference levels at scales below it. Sufficient conditions are derived for scale-neutrality to hold. A Brazilian Amazon example is provided, comparing potential REDD architectures, and highlighting how a cap-and-trade approach may match the environmental outcome obtainable with perfect foresight of the BAU emissions.

High temperatures have been shown to affect human cognition and decision-making in a variety of settings. In this paper, we explore the extent to which higher temperatures affect judicial decision-making in India. We use data on judicial decisions from the Indian eCourt platform, merged with high-resolution gridded daily weather data. We estimate causal effects by leveraging a fixed effects framework. We find that high daily maximum temperatures raise the likelihood of convictions and these results are robust to numerous controls and specifications. Our findings contribute to a growing literature that documents that the negative impacts of rising temperatures are often more severe in low- and middle-income countries.

We consider the redistributive effects of privatizing a resource previously exploited under free access. We assume that illegal extraction is punished but that the sanction is bounded by individuals' wealth. First, we show that a segment of intermediate-wealth individuals is the most adversely affected from the regime change, while the poorest segment is not only less severely affected, but may actually gain from it. Next, we show how the authorities may prefer to choose an intermediate enforcement level in order to maximize the political acceptability of the regime switch among the local community.

Reliance of modern economic activities on the use of energy, most of which still comes from non-renewable sources, provokes concerns regarding the most efficient utilization of energy inputs in production. While most theory expects directed technological change to be biased towards the non-renewable input, there is rare macro-level evidence that technological change is actually biased towards energy rather than other main inputs. To fill this gap, we apply stochastic frontier analysis to country data regarding output produced with capital, labor and energy, and estimate a set of indicators for technological change. Findings show that technological change is biased the most towards energy in general. In particular, although different groups of countries exhibit various patterns, there is strong evidence that technological change favors energy more than labor. This is in line with the theoretical expectation that technological change ought to be biased towards the non-renewable input rather than the renewable ones.