Farm households in developing countries are generally credit constrained. This forces them to simultaneously take production and consumption decisions. In this paper, a two-period lifecycle model of the farm household is constructed and the household's investment response to changes in land and agricultural output prices are derived theoretically. It is shown that in the absence of credit markets household responses to exogenous price changes may differ from the predictions of cost–benefit analysis. Farm household responses are also derived for the case where price increases for land and agricultural output are accompanied by the introduction of a credit market. For this case the results show that farm household reactions are in accordance with predictions made by cost–benefit analysis. An empirical case study from Bénin underscores the relevance of considering access to credit in establishing whether investments in soil conservation are beneficial to farm households.

As different regions of the world integrate, many questions arise regarding the effect on the location of firms. A firm's decision to relocate operations when its home country integrates with another region is in general influenced by the relative marginal cost of production between the regions, the cost of relocation, the cost of exporting its good across borders, as well as the relative size of the two regions. Except for market size, these variables crucially depend upon the degree of economic integration, ranging from simple bilateral trade agreements, to agreements that make foreign direct investment easier and cheaper, to full economic integration that harmonizes policies across the regions. We develop a model in which we explore the possible forms of integration in the context of two illustrative applications: US–Mexico under NAFTA and Central and Eastern European countries and the European Union.

This paper aims to consider the meaning of the dismal theorem, as presented by Martin Weitzman [(2009) On modeling and interpreting the economics of catastrophic climate change. Review of Economics and Statistics91, 1–19]. The theorem states that a standard cost–benefit analysis breaks down if there is a possibility of catastrophes occurring. This result has a significant influence on debates regarding the economics of climate change. In this study, we present an intuitive similarity between the dismal theorem and the St. Petersburg paradox using a simple discrete probability distribution.

If the demand for environmental goods is increasing with income, democratization shifts the decisive power from a rich autocrat to a poorer individual (decisive voter), so it should be associated with worse environmental conditions. In this paper, it is shown through a theoretical model that: (i) democratization may have mixed effects on the level of environmental quality, depending on the size of the price and income effects on the demand for environmental quality associated with a decrease in the decisive political actor's wealth; and (ii) assuming that society is composed of two classes of individuals with different levels of exposure to pollution, and assuming moreover that the decisive voter belongs to the most exposed class of individuals while the autocrat does not, democratization is beneficial for the environment, and the better the effect on the environment, the bigger the difference in wealth between the two decisive political actors.

To improve wildlife conservation incentives in community-based natural resource management programs, a better understanding of rural communities' willingness to engage in wildlife conservation jobs is needed. We implement a discrete choice model explaining reservation wages for nine conservation jobs using contingent behavior data from rural Botswana residents. We present a model in which the conditional indirect utility function incorporates a more general value of time than has previously been used, and this specification outperforms the standard model. Sample estimates indicate that reservation wages are modestly higher for women than for men, and that residents have higher reservation wages for jobs requiring more exertion or involving more danger.

Exposure to extreme shocks in early life is found to have a lasting impact in adulthood. Exploiting the variation in exposure measured by age and intensity of an earthquake, we evaluate the impact of a 7.7 MW earthquake in Gujarat, India, on the health stock of children who were in utero or below three years. Using the India Human Development Survey data from 2004–05 and earthquake intensity data, we find an affected girl child to be shorter by at least 2.5 cm at the age of 3–6 years. The earthquake seems to have destroyed the household infrastructures and health facilities, affecting the expecting mothers and newborn children. The households using services to meet nutritional needs of children and pregnant women seem to be least affected. Our findings recommend faster reconstruction activities and highlight the importance of universal healthcare and nutritional delivery services to mitigate the impacts of early-life shocks.

The paper reviews two alternative rules for allocation of property rights in a global greenhouse-gas emissions budget, assuming implementation of a tradablequota arrangement. These are the per capita rule and no-regrets-for-the-South (NRFTS) rule. The operation of a quota market under these alternative regimes is simulated on a spreadsheet, using 1990–1 data from 125 countries. A significant result is that once the South has secured a quota allocation based on the per capita principle, it stands collectively to lose from progress in abatement technology because of the strong link from technical progress to the world market price of quota. The more restricted NRFTS rule gives the South smaller gains from the quota system, but enables it to retain some of the rents from its own technical progress. Some implications for the South's position in future negotiations are noted.

The Pollution Haven Hypothesis (PHH) states that with weak environmental policies a country can create comparative advantage in the polluting sector. This paper formulates a 3-good-3-factor model where the abatement input is a pure intermediate good. In our model, the PHH as well as the neoclassical trade theorems are valid only when environmental policies are distribution neutral. Inspired by the US Clean Air Act, we develop and estimate a dynamic panel model. We find that US environmental policies are consistent with distribution neutrality. Our results indicate that lowering abatement standards in all industries is the only way the US can become a pollution haven. In the context of our model, the PHH has damaging implications for the world environment.

In this paper we study the cost-effective allocation of the land in the Cordilleran Protection Area (CPA), Region VIII, Chile, for the conservation of a highly threatened species: the Huemul (Hippocamelus bisulcus). Using a production possibilities frontier (PPF) approach, a linear programming optimization model for a ten-year time period is proposed. Our model takes into account both the preferences of the species for different habitats and the opportunity cost of the land. We evaluate different possibilities of land allocation and identify cost-effective alternatives in the provision of both conservation and income.

The results confirm the hypothesis that both the population of Huemul and income from economic activities can be increased compared with current levels. Therefore the current allocation of the land in the CPA is not cost-effective.

Previous empirical studies assessing sustainability have adopted the weak sustainability indicator (WSI) which measures changes in the stock of physical and natural capital. Whereas these studies have been retrospective, we use a dynamic general equilibrium model to investigate global and regional sustainability over the period 1985–2050, focusing on fossil fuel extraction. Our standard scenario predicts increasing WSI values suggesting global sustainability in all periods to 2050 as, despite a rising world oil price, the introduction of backstop fuels in 2010 provides an alternative source of energy. A more pessimistic scenario examines possible outcomes in the absence of energy saving technological change and backstops fuels. WSI values still indicate global sustainability, though economic growth is only half that predicted by the more optimistic model, and two countries—USA and Brazil—are unsustainable.

This paper explores the short-run impact of work resumption, extensively launched on February 10, 2020 in China, on air quality after the subsiding of COVID-19. Utilizing the data of 1012 air-quality monitoring sites in 233 cities derived from the Real-time Release Air Quality Platform and the difference-in-differences method, we find that alternative measures of air quality index in non-Hubei provinces increase significantly, compared with those in Hubei province which was temporarily not allowed work resumption due to the severity of epidemic. Specifically, our results reveal a rise in AQI of 11.28 per cent, in PM2.5 of 12.47 per cent, in PM10 of 10.49 per cent, and in NO2 of 23.64 per cent, relative to the baseline mean. Moreover, the deterioration of air quality is found to be caused by intracity rather than intercity migration.

The outcome of environmental actions from participation in the export market are examined by unpacking some mechanisms that explain the estimated relationship. The empirical strategy utilizes the variation in the distance between the location of the sampled enterprises and the top 25 destinations of Vietnamese exports across sectors, and the weight of each sampled export to total exports in each period, to obtain exogenous variation in the enterprise's export market participation. The result shows a positive relationship between the enterprise's export participation and its overall engagement in environmental actions (such as the sum of its environmental actions, the sum of actions in the investments in equipment towards environmental issues, and total expenditure for the purchase of equipment for environmental actions). Possible mechanisms are international standardization, national certification, and strong enforcement of environmental regulations from export market engagement.

The non-market values of changes in grassland management stimulated by changes in policies were estimated by choice modeling. Four-hundred twenty-seven residents of Hohhot city in Inner Mongolia were selected using the popular mobile phone application WeChat. Conditional logit (CL) and random parameter logit (RPL) models were estimated to analyze the preference of respondents for environmental and social attributes. Based on the preferred RPL model, the average per household willingness to pay over 10 years for the best policy outcome scenarios was estimated to be CNY892 (US$141). The total willingness to pay for this policy change, extrapolated to the population of Hohhot, was CNY208 million (US$33 million). The findings suggest that environmental and social outcomes are valuable to Chinese residents of a regional urban center. Such values should be viewed as a public financial base for market-based mechanisms for grassland protection both in China and internationally. WeChat proved to be convenient but required the application of extrapolation caveats relating to sample representation.

The concern for inequality, growth and development is undoubtedly crucial in the context of climate change mitigation and adaptation. However, most studies either rely on the nation-state estimates of carbon emissions to propose a uniform nation-wide growth (or degrowth) strategy, or they tailor the method to assess the inequality of one country at a time, making a cross-country cross-income comparison difficult. To fill this analytical gap, we synthesize the existing methods of emission calculations and calculate the level of carbon emissions associated with given income deciles of household consumption in five countries, namely China, Germany, India, the UK and USA. We find that the within-country inequality varies among countries, with the ratio between the top and bottom income deciles ranging from three to nine at the household level. We also find that the carbon emissions of the top income group in urban China is almost comparable to that of their peer group in the US, UK and Germany. Based on these results, we discuss the use of the remaining global carbon budget in the context of development and inequality.

This work examines the interaction between demographic features and environmental constraints in Caribbean small island developing states. Specifically, it aims to clarify human capital dynamics when migration and environmental quality matter. To do so, two main ingredients are introduced in an overlapping generations model: countries may benefit from migration through a brain gain or remittances, and production emits pollution that hinders the accumulation of human capital. Two cases emerge from the analysis. In the first case, an environmental policy is sufficient to correct the externality, and migration should stay at a relatively low level. In the second case, if pollution emissions are high relative to the effectiveness of environmental policy, migration leads to an increase in per capita output and human capital. This only happens if the emigration rate is already high, because it leads to a reduction in demographic pressure on the environment.

This paper examines the implications of tenancy legislation and privatization of community lands in Goa on the supply of local public goods for soil conservation. In the post-tenancy period our survey reveals an increasing number of farmers being affected by salinity ingress. These findings support the hypothesis that when community institutions break down, individual agents who become new resource owners do not have sufficient incentive to undertake supply of local public goods, which leads to a decline in productivity and affects long-term sustainability.

We analyze non-cooperative environmental policy when the only strategic interaction between countries is through bilateral transboundary pollution, i.e., countries are closed or small open economies. Under simultaneous moves, there is no carbon leakage. However, in the sequential-move game, carbon leakage occurs; the leader sets its pollution tax lower than that in the simultaneous-move game and lower than the marginal damage from own pollution, while the follower sets its tax higher than that in the simultaneous-move game. The only motive behind the leader's underregulation of own pollution is to reduce the incidence of transboundary pollution from the follower. If pollution is a pure global public bad, aggregate pollution is higher in the sequential-move game than in the simultaneous-move game. The leader (follower) obtains higher (lower) welfare than that under simultaneous moves. Hence, if countries can choose to be leaders or followers, they choose to move first to set environmental taxes.

Low and highly variable prices plague the coffee market, generating concerns that coffee farmers producing in shade systems under natural forests, as in biodiversity hotspot Oaxaca, Mexico, will abandon production and contribute to deforestation and reduced ecosystem services. Using stakeholder information, we build a setting-informed model to analyze farmers' decisions to abandon shade-grown coffee production and their reactions to policy to reduce abandonment. Exploring price premiums for bird-friendly certified coffee, payments for ecosystem services, and price floors as policies, we find that once a farmer is on the path toward abandonment, it is difficult to reverse. However, implementing policies early that are low cost to farmers – price floors and no-cost certification programs – can stem abandonment. Considering the abandonment that policy avoids per dollar spent, price floors are the most cost-effective policy, yet governments prefer certification programs that push costs onto international coffee consumers who pay the price premium.