This paper attempts to explore how the Taiwan government can effectively use subsidies to retire aquacultural farms based on the externality ground subsidence from pumping groundwater, using the town of Budai in Chia-Yi county as an example. The research first constructs the relationship between ground subsidence and groundwater consumption after taking the externality into consideration. An economic model that minimizes the total subsidy expenditure is then used for targeting the fish farms that need to be retired first in order to meet environmental goals. The results show that when the interaction caused by pumping groundwater among neighborhood farmers is considered, the responsibility for achieving the targets of environmental control is not evenly shared by aquacultural farmers. The location, and not the farm size, plays a more important role in determining whether environmental goals can be met.

We investigate households' decisions regarding livelihood activities in response to future climate change in the Eastern Cape, South Africa. We use the contingent behavior method and account for unobserved heterogeneity in order to overcome problems associated with limited data, collinearity and endogeneity. We characterize the climate change with two types of climate change scenarios: dry-spells and wet-spells. Results show that moderate and extreme increases in dry-spells increase adoption of off-farm activities such as casual labor and small business, and decrease adoption of on-farm activities such as gardening. We find opposite cases for mild or moderate wet-spells. Our results also show that households tend to diversify their livelihood portfolios in response to a moderate increase in dry-spells and a mild increase in wet-spells. Some household characteristics are also important in influencing some types of activities, including household's health status, gender of the household head, and household's prior experience.

Shocks related to weather variations have strong effects on developing countries’ economies. Climate change is expected to increase the occurrence and magnitude of extreme weather events such as droughts, floods or hurricanes that strongly affect agriculture and other activities. This special issue gathers literature reviews and case studies that aim to better understand heterogeneous impacts and their transmission channels, as well as to evaluate the impact of such weather shocks on developing economies, including Sub-Saharan African countries, India and Brazil.

This paper provides a Ricardian general equilibrium model to study the effect of foreign aid aimed at abating pollution in a small southern recipient economy. The government faces a dynamic problem as it chooses the emission level and abates pollution. The stock of pollution damages consumers and its law of motion is influenced by emission level and the stock of pollution as well as the level of abatement. We show that such type of aid increases emissions, but its effect on pollution stock is ambiguous in the absence of trade. With trade, aid reduces both pollution and emissions given that the recipient country has comparative advantage in the pollution-intensive good. Moreover, such type of aid can be immiserizing with or without trade.

Previous studies of deforestation have focused on agriculture, population and migration, timber exploitation, macroeconomic policies and geographic factors to explain the variability of deforestation rates among countries. This study tests the hypothesis that countries with a high proportion of petroleum or non-petroleum mineral exports in total exports experience a relatively low deforestation rate because of macroeconomic ‘Dutch disease’ effects. Bivariate and multivariate analyses provide preliminary support for the hypothesis, although they give little insight on how precisely mineral exports might exert their influence on forest cover. One reason for the limited utility of these methodologies is that they do not adequately explain the various effects of mineral windfalls that go beyond the Dutch disease's ‘core model’. Future research must attempt to understand these effects, which include: levels of funding for agriculture, roads, and directed settlement; agricultural protectionism; levels of rural poverty, urbanization, and consumer demand; the site-level effects of mineral extraction; and the variability of state autonomy.

This paper studies the impact of trade openness and the proportion of exporters on environmental quality through the scale, composition and technique effects from 1998 to 2007 using firm- and city-level data for 287 Chinese cities. Our results reveal that, on average, trade openness has a detrimental impact on the environment in Chinese cities, but this impact remains heterogeneous across regions. A higher proportion of exporters improves the environment in central and eastern cities while generating nevertheless more pollution in western cities. As regards the sector-specific impact, we find that the higher proportion of exporters in the mining and less-polluting manufacturing sectors in eastern cities diminishes the emissions of particulate matter 2.5 (PM2.5). Our finding also suggests that a pollution haven effect emerges in China at the city level. Finally, our results confirm the presence of an environmental Kuznets curve effect for the PM2.5 pollutant across Chinese cities.

Rare earth element extraction induces environmental damages and the balance problem. In this article, we show that recycling can challenge both problems in a two-period framework. We also find other results depending on the amount of scrap that can be recycled. If the recycling activity is not limited by available scrap, it does not change extraction in the first period. Environmental taxes on extracted quantities reduce extraction and favor recycling. But if the recycling is limited, the extractor reduces extraction in period one, adopting a foreclosure strategy, and environmental taxes can decrease recycling. In all cases, environmental taxes are never equal to the marginal damage from pollution, in order to take into account the recycling effect.

Cash is often used in economic experiments as an incentive to encourage realistic decision making or to compensate participants for their time. However, in many less developed countries, remunerating participants with cash can upset existing relationships with local institutions. In cases where the use of cash is not feasible, an alternative type of payment is required. Using a framed field experiment in Odisha, India (formerly Orissa), we explore an alternative payment method, in-kind, where typical household items are used in place of cash. We compare the differences in the valuation of yield stabilizing seed traits between in-kind and cash. Our results suggest that farmers are willing to pay less for seeds when they are paid cash than when they are paid in-kind. Bids are higher by 1.18 Indian Rupees when farmers are paid in-kind, corresponding to about a 7 per cent higher valuation.

I consider that the field of environment and development economics (EDE) began with the publication of The Control of Resources by Partha Dasgupta (1982). Although he did not confine his focus to developing countries, Dasgupta (1982: 10) suggested that managing environmental resources was much broader than conventional resource stock depletion or pollution control:

This paper uses two recent household surveys, together with data from the College for Control and Monitoring of Oil Revenues, to analyse the impact of oil revenues on wellbeing in Chad. Following a multiple-correspondence analysis to estimate a synthetic household-based multidimensional wellbeing (MDW) index, we used the difference-in-difference approach to assess the impact of oil revenues on average MDW at the department level. We found evidence that departments in Chad that received significant oil transfers have a higher MDW compared to those disadvantaged by the oil-revenue-redistribution policy. We conclude that, in order to promote economic inclusion, the government of Chad should better develop oil-revenue-redistribution policies according to local development needs and target the poorest departments.

The vulnerability of small firms to price shocks may partly explain why fossil fuel subsidy removals in developing countries are so difficult to implement. This paper analyzes the effects of fuel and electricity price increases on profits of micro- and small-sized enterprises in Mexico. Using representative cross-sectional data, simulations of profit losses hint at potentially large short-term effects. First-order profit losses of a 1 per cent price increase are 0.2 per cent for fuels and 0.07 per cent for electricity, but are higher than 1 per cent for fuels in the transport sector. These effects are larger for formal than for informal firms, with energy-using low-profit firms being most vulnerable. Second-order impacts – predicted using estimated input-demand elasticities – indicate that firms react to price shocks by substituting labor for energy, while the self-employed appear to increase their own labor input. Reduced-form regressions show that some firms pass on higher fuel costs to customers.

We examine the substitutability of waste and scrap exported from different countries by estimating the export demand functions of China. In particular, we focus on the export of other ferrous waste and scrap (HS code 720449) and other waste, parings and scrap of plastics (HS code 391590). It is shown that the substitutability of these wastes and scraps is weak among the exporting countries. Our empirical results imply that a uniform ban on trading hazardous waste, represented by the Basel Ban, could be an inefficient environmental policy.

This paper presents an econometric test of two hypotheses underlying the occurrence of non-indigenous species (NIS) at the global scale: openness of recipient nations which allows for international trade to act as a vector of NIS, and habitat fragmentation in recipient nations which facilitates establishment of introduced NIS. Explorative econometric methods have been utilised that combine the analysis of dimensionality with subset variable selection and multiple linear regression. Both NIS hypotheses are thereby supported, although slightly different in the cases of the mainland and island nations. It is concluded that expressions of openness have a larger impact on the number of NIS per unit territorial area in the mainland nations, whereas biota variables play a more dominant role in the case of the island nations. It is also concluded that different expressions of NIS occurrence affect the result, where NIS per area unit facilitates excellent explanatory performance.

The provision of environmental services on-farm by the improved fallow (an agroforestry technology) has largely remained empirically untested in sub-Saharan Africa. Where effects of planting trees have been used to estimate the impacts on consumption of fuel wood from public land, actual estimates of the size of fuel wood consumption changes have been lacking. Using data from a survey of 324 households in the Chongwe district of Zambia, we tested the hypothesis that households embracing improved fallows use less fuel wood from public land since the technology provides wood as a by-product. Estimates from ordered probit and matching strategies showed that the technology had a significant causal effect of reducing the consumption of fuel wood from public land. Therefore, in addition to promoting it for soil fertility improvement, the extension messages should explicitly reflect the technology's potential to provide on-farm environmental quality.

In the present study, integrated models have been developed to find out the most appropriate cost of municipal solid waste (MSW) disposal using two potential and widely used methodologies, viz. landfill system with gas recovery (LFSGR) and aerobic composting (AC). Objective functions with important costs and benefits including externalities were developed to find out the net unit cost of disposal. Multivariate functional models have been developed for each activity of the objective functions. These integrated techno-economic models can be used not only to determine the most appropriate cost of waste disposal, but also to explain the interparametric linkages and even to compare the potentiality and suitability of a particular methodology for a set of conditions. This can give valuable information that can enhance environmental management leading to sustainable development.

In the simulation studies carried out, LFSGR with its proven energy generating potential from MSW in the form of landfill gas, was found to perform better than aerobic composting (AC) for rates of waste generation greater than 1,000–2,000 t/d (tons per day). LFSGR showed a better performance irrespective of the landfill collection system installation and operation costs. For both methodologies, unit cost of disposal was most sensitive to land rent followed by, in the case of LFSGR, the organic content.

Since the beginning of the 1980s the Bretton Woods institutions (World Bank and International Monetary Fund) have introduced structural adjustment loans and stabilization programmes to correct balance-of-payments distortions and to realize the conditions necessary for economic growth in developing countries. In the course of the 1980s, the concept of sustainable development was launched which asked for a qualitatively different orientation of growth. This paper presents a summary of what has been learned with respect to the relationship between Bretton Woods intervention programmes and development. Adjustment programmes appear to have evolved through three different stages, with attention for environmental aspects of sustainable development emerging in the third stage. A sectoral analysis is presented of the possible environmental impacts of the various components of intervention programmes. Recommendations are made regarding possible improvements of WB and IMF adjustment strategies in the light of sustainable development, without fully translating them into actual changes at the level of specific programmes.

In this paper, we develop a simple two-period model of natural capital investment under Knightian uncertainty and analyze the effects of changes in the degree of ambiguity on the optimal natural capital investment. We find that the degree of Knightian uncertainty affects a government's natural capital investment. Moreover, we find that the direction of the effect of the Knightian uncertainty depends on the nature of uncertainty, that is, on whether the uncertainty is about the future level of natural capital or about the return from saving.