The collective action problem around water use and management involves solving both the problems of provision and appropriation. Cooperation in the provision can be affected by the rival nature of appropriation and the asymmetries in access. We report the results of two field experiments conducted in Colombia and Kenya. The irrigation game was used to explore the provision and appropriation decisions under asymmetric or sequential appropriation, complemented by a voluntary contribution mechanism experiment which looks at provision decisions under symmetric appropriation. The overall results were consistent with the patterns of previous studies: the zero contribution hypotheses is rejected whereas the most effective institution to increase cooperation was face-to-face communication, although we find that communication works much more effectively in Colombia than in Kenya. We also find that the asymmetric appropriation did reduce cooperation, though the magnitude of the social loss and the effectiveness of alternative institutional options varied across sites.

This study revisits and updates a 1999 economy-wide analysis predicting that increases in tourism would result in rapid economic as well as demographic growth on the Galapagos Islands. The following six years witnessed sharp growth in tourism; a restructuring of tourism around larger cruise ships and new, larger hotels; and rapid population growth. Our findings indicate that total income (that is, the gross domestic product) of the Galapagos increased by an estimated 78 per cent between 1999 and 2005, making the Galapagos economy among the fastest growing in the world. Tourism continued to be far and away the major driver of economic growth. Nevertheless, population growth via new migration to the islands nearly erased the effect of economic growth on per-capita household income. These findings raise questions about the compatibility of ecotourism and conservation in this unique ecological setting.

This paper attempts to estimate the maintenance cost of water pollution abatement measures to the Indian industry using the methodology of distance function in the theory of production. The distance function is estimated using both programming and stochastic frontier models for a sample of water polluting industries in India. The firm-specific shadow prices for pollutants, measures of efficiency, and scale economies are estimated. Estimates show that on average the cost to the Indian industry for reducing one ton of BOD and COD are respectively, Rs 0.246 and 0.077 million. Large differences in the estimates of firm-specific shadow prices of pollutants reflect the use of inefficient water pollution abatement technologies. The relationships between firm-specific shadow prices or marginal costs of abatement of BOD and COD and the index of compliance (ratio of effluent load to sale value) and the pollution load reductions obtained confirm the earlier empirical results of studies on water pollution abatement in Indian industries. The earlier studies have found increasing marginal costs with respect to reductions in pollution concentrations and decreasing marginal cost with respect to the pollution loads reduced by the firms.

Community forestry projects in Ethiopia have been implemented using the top–down approach, which may have contributed to the failure of most of these projects. The so-called community plantations practically belonged to the government and the labour contribution of the local communities in the establishment of the plantations was mainly in exchange for wages. In this paper, we use the contingent valuation method to examine the determinants of the value of community forestry in rural Ethiopia and its feasibility, when the plantations are established, managed, and used by the communities themselves. The value elicitation format used is discrete question with open-ended follow-up which is closer to the market scenario our respondents are familiar with compared, for example, with the single discrete choice format. Unlike most other studies, we use a tobit model with sample selection in the empirical analysis of the bid function to correct for the effect of excluding invalid responses (protest zeros, outliers and missing bids) from the analysis. The analysis of the bid function shows that household size, household income, distance of homestead to proposed place of plantation, number of trees owned and sex of household head are significant variables that explain willingness to pay. We also find that there are significant differences in willingness-to-pay across sites. It is hoped that this study contributes to the limited empirical literature on community forestry in developing countries by indicating some of the conditions under which community plantations will be acceptable and feasible.

Climate change is increasing the intensity of extreme weather events. Mexico is particularly prone to suffer at least two different types of these events: droughts and hurricanes. This paper focuses on the effects of an extended drought on the Mexican economy. Through a computable general equilibrium model, we simulate the impact of a drought that affects primarily agriculture, livestock, forestry, and hydropower generation. We look at the effects on the overall economy. We then simulate the effects of several adaptation strategies in (chiefly) the agricultural, forestry, and power sectors, and we arrive at some tentative yet significant conclusions. We find that the effects of such an event vary substantially by sector with moderate to severe overall impacts. Furthermore, we find that adaptation policies can only effect modest changes to the economic losses to be suffered.

In developing countries, informal waste-pickers (known as scavengers) play an important role in solid waste management systems, acting in a parallel way to formal waste collection and disposal agents. Scavengers collect, from the streets, dumpsites, or landfills, re-usable and recyclable material that can be reincorporated into the economy's production process. Despite the benefits that they generate to society, waste-pickers are ignored when waste management policies are formulated. The purpose of this paper is to integrate the role of scavengers in a dynamic model of production, consumption, and recovery, and to show that, in an economy producing solid waste, efficiency can be reached using a set of specific and complementary policies: a tax on virgin materials use, a tax on consumption and disposal, and a subsidy to the recovery of material. A numerical simulation is performed to evaluate the impact of these policies on landfill lifetime and natural resource stocks. A discussion on the implementation of these instruments is also included.

This paper presents the analysis of a choice experiment designed to estimate willingness-to-pay (WTP) to mitigate damages caused by invasive plant species in a rural community of Nepal. In order to address the cash constraints problem in a subsistence economy, two payment attributes, labour contribution and membership fee, were included in the choice sets. The results reveal that rural farmers have significant WTP for forest management activities, in terms of both cash and labour contributions. The results also suggest that rural farmers value their time in this context at a different rate from the current wage rate.

Projects in the forestry sector, and land-use change and forestry projects more generally, have the potential to help mitigate global warming by acting as sinks for greenhouse gasses, particularly CO2. However, concerns have been expressed that participation in carbon-sink projects may be constrained by high costs. This problem may be particularly severe for projects involving smallholders in developing countries. Of particular concern are the transaction costs incurred in developing projects, measuring, certifying, and selling the carbon-sequestration services generated by such projects. This paper addresses these issues by reviewing the implications of transaction and abatement costs in carbon-sequestration projects. An approach to estimating abatement costs is demonstrated through four case studies of agroforestry systems located in Sumatra, Indonesia. A typology of transaction costs is presented and related to existing pilot projects. The paper concludes with recommendations to reduce the disadvantages that smallholders may face in capturing the opportunities offered by carbon markets.

We analyze links between exposure to climate extremes and shocks, vulnerability and coping strategies, environmental reliance and poverty among 7,300 households in forest adjacent communities in 24 developing countries. We combine observed income with predicted income to create four categories of households: income & asset poor (structurally poor), income rich & asset poor (stochastically non-poor), income poor & asset rich (stochastically poor) and income & asset rich (structurally non-poor), and assess exposure and vulnerability across these groups. The income poor are more exposed to extreme climate conditions. They tend to live in dryer (and hotter) villages in the dry forest zones, in wetter villages in the wet zones, and experience larger rainfall fluctuations. Among the income-generating coping strategies, extracting more environmental resources ranks second to seeking wage labor. The poorest in dry regions also experience the highest forest loss, undermining the opportunities to cope with future climate shocks.

The overall goal of our paper is to better understand water management reform in China's rural communities, especially focusing on the effect that improving incentives to water managers will have on the nation's water resources and the welfare of the rural population. To pursue this goal, the paper has three objectives. First, we track the evolution of water management reform and seek to identify the incentive mechanisms that encourage water managers to more efficiently use water. Second, we identify the impact on crop water use of the incentives provided to water managers during reform. Since we are also interested in the possible negative consequences of an incentive-led water management reform strategy, the paper also explores how changes in incentives also affect agricultural production, farmer income, and poverty. Based on a random sample of 51 villages, 189 farmers, and 378 plots in four large irrigation districts in Ningxia and Henan provinces, both provinces in China's Yellow River Basin, our results show that in our sample areas the two main forms of water management reform, Water User Associations and contracting, have begun to systematically replace traditional forms of collective management. Our analysis demonstrates, however, that it is not the nominal implementation of the reform that matters, but rather it is the creation of new management institutions that offer water managers monetary incentives that lead to water savings. Importantly, given China's concerns about national food production and poverty alleviation, the reductions in water, at least in our sample sites, do not lead to reductions in either production or income, and do not increase the incidence of poverty.

This paper aims to test the relation among militarization, CO2 emissions, economic growth and energy consumption in G7 countries from 1985 to 2015 via panel methods. Long- and short-run coefficients and the causal relationship between the variables are important for G7 countries' energy policies and strategy. Cointegration among CO2 emissions, militarization, energy consumption and economic growth was determined by using panel Johansen and panel autoregressive distributed lag (PARDL) methods. Further, the panel trivariate causality test was applied and unidirectional causalities from militarization to CO2 emissions and from energy consumption to CO2 emissions were found. The evidence of bidirectional causality between per capita GDP and militarization, between per capita GDP and energy consumption, and between energy consumption and militarization was determined. The paper recommends that environmental and energy policies must recognize the differences in the relation between militarization, energy consumption and economic growth in order to maintain sustainable economic growth in the G7 countries.

In recent years, the surge in China's CO2 emissions has caused increasing international concern. In this paper, we investigate whether and when the turning point in China's CO2 emissions would occur. A simple yet powerful neoclassical Green Solow model (GSM) is utilized herein as the main forecasting tool. To verify the capability of this framework to address China's economy, a key prediction of the GSM – the convergence in per capita CO2 emissions across Chinese provinces – is empirically verified. By assigning reasonable values to the GSM's key parameters, the trajectories of total CO2 emissions are projected for the three regions of China and the whole country. The forecast results show that, under the benchmark scenario, China's total CO2 emissions would peak around the year 2047. According to the sensitivity analysis, carbon efficiency is the most important determining factor for whether a turning point in total CO2 emissions may occur.

The June 2012 issue of Environment and Development Economics published a symposium with considerable focus on our paper, ‘Sustainability and the measurement of wealth’. The Symposium also contained five articles in which other researchers offered valuable comments on our paper. The present note replies to those comments. It clarifies important issues and reveals how important questions relating to sustainability analysis can be fruitfully addressed within our framework. These include questions about the treatment of time, the use of shadow prices and the treatment of transnational externalities. This note also offers new theoretical results that help substantiate our earlier empirical finding that the value of human health is something very different from the value of the consumption permitted by health and survival.

This paper develops a methodology for including ecosystem services in a wealth accounting framework. Accounting for ecosystems and their services leads to adjusting net domestic product (NDP) for the direct benefits provided by the current stock of ecosystems but not for their indirect contributions in terms of protecting or supporting economic activity, property and human lives. When ecosystems are irreversibly converted for economic development, NDP must be further modified to reflect any capital revaluation that occurs with the current conversion of ecological capital to other land uses. The risk of collapse also requires adjustments to NDP, as any capital revaluation associated with ecosystem conversion must be adjusted for this risk, and the discounted minimum value of ecosystems associated with collapse must be subtracted from NDP. These various contributions of ecological capital to wealth accounts are illustrated with the example of mangroves in Thailand over the period 1970–2009.

Recent research documents the adverse causal impacts on health and productivity of extreme heat, which will worsen with climate change. In this paper, we assess the current distribution of heat exposure within countries, to explore possible distributional consequences of climate change through temperature. Combining survey data from 690,745 households across 52 countries with spatial data on climate, this paper suggests that the welfare impacts of added heat stress may be regressive within countries. We find: (1) a strong negative correlation between household wealth and warmer temperature in many hot countries; (2) a strong positive correlation between household wealth and warmer temperatures in many cold countries; and (3) that poorer individuals are more likely to work in occupations with greater exposure. While our analysis is descriptive rather than causal, our results suggest a larger vulnerability of poor people to heat extremes, and potentially significant distributional and poverty implications of climate change.

Much of the population in developing countries uses firewood for cooking. The resulting indoor air pollution has severe health consequences for children who are close to the fire while their mothers cook. We use survey data from Guatemala to examine the effects of firewood consumption on the health of children up to five years of age. We also investigate the impact of cooking inside the home, the importance of a mother cooking while caring for her children and the role played by the smoke permeability of housing construction materials. We find that children living in households that use more wood, and where exposure to indoor air pollution is higher because the mother cooks while caring for children or because cooking takes place inside, are more likely to have symptoms of respiratory infection. Simulations indicate that policies that target cooking habits in order to directly reduce exposure, particularly by reducing the number of women who simultaneously cook and care for children, may be more effective for improving young children's health than policies to accelerate the adoption of gas stoves.

This paper analyzes the causes for regulatory compliance, using traditional deterrence variables and potential moral and social variables. We use self-reported data from 459 Tanzanian artisanal fishers in Lake Victoria. The results indicate that the decision to be either a non-violator or a violator, as well as the violation rate – if the latter – are influenced by changes in deterrence variables like the probability of detection and punishment and also by legitimacy and social variables. We also identify a small group of fishers who react neither to normative aspects nor to traditional deterrence variables but persistently violate the regulation.

Food-for-work (FFW) programs are commonly used both for short-term relief and long-term development purposes. This paper assesses the potential of FFW programs to reduce poverty and promote sustainable land use in the longer run. There is a danger that such programs distort labor allocation or crowd out private investments and therefore have unintended negative effects. We explore this issue using survey evidence from northern Ethiopia that we use to motivate a simple theoretical model, a more detailed version of which we then implement through an applied bio-economic model calibrated to northern Ethiopia. The analysis explores how FFW project outcomes may depend on FFW project design, market conditions, and technology characteristics. We show that FFW programs may either crowd out or crowd in private investments and highlight factors that condition whether FFW promotes or undercuts sustainable land use.

This article formulates an empirical model that measures the short- and long-run effects of political stability, corruption control and economic growth on CO2 emissions from deforestation. Political stability and corruption have significant effects on forest cover in the short run and have lingering long-run effects. We derive a U-shaped forest–income curve where forest cover initially declines as per capita income increases, but starts to rise after an income turning point. Political stability and corruption control do not significantly affect the income turning point but both variables shift the forest–income curve up or down. The resulting CO2 emission–income curve is downward sloping and is based on changes in the levels of variables affecting forest cover. Increased political stability flattens the CO2 emissions–income curve, leading to smaller changes of CO2 emissions per unit change in income.

The paper analyzes the conflict between illegal and legal exploitation of wildlife species in an East African context. In the model there are two agents, an agency managing a national park of fixed area and a group of local people living in the vicinity of the park. The park agency has the legal right to exploit the wildlife, while the local people hunt illegally. Because of the property rights, the park agency has incentives to invest in the stock of wildlife, while the behaviour of the local people is steered by short-term considerations. The model is analyzed in two steps. Firstly, the market solution is studied. Next, the model is examined when user and property rights are given to the local people.