In order to explore the conditions for successful communal irrigation management, this study investigates the determinants of household contributions to the cleaning of irrigation channels and the availability of water. By using household-level data collected in a large-scale gravity irrigation scheme in Uganda, whose management was transferred from the government to the community, we find that household contributions to the cleaning of irrigation channels are determined by the scarcity of irrigation water, the opportunity cost of labor and the private benefit associated with plot size. We also find that the availability of irrigation water increases in the tertiary irrigation canal where the coefficient of variation of plot size is large, which may indicate that farmers of larger plots are particularly active in water management. These findings suggest that farmers are responsive to private benefits and, hence, the support of the government for communities to implement punishment may be effective for successful irrigation management.

This paper analyzes the effect of different types of cookstoves on firewood demand at the household level. Using nationally representative household survey data from Nepal, we find that stove type significantly affects the firewood demand for household uses. Traditional mud-stove user households seem to use less firewood than the open-fire stove users. Surprisingly, households with the so-called ‘improved’ stoves seem to use more firewood than the households with mud stoves. Thus, converting traditional open-fire stoves to mud stoves may be a better conservation strategy in the short term rather than installing improved stoves, unless the technology improves. However, in the long run, making cleaner fuel more accessible to rural households is desirable to reduce indoor air pollution.

For the most part, economic research in Latin America has had a ‘macro’ orientation (e.g., economic growth, monetary and fiscal policy, hyperinflation crisis). This is perfectly understandable because of the macro instability that has affected the entire region for decades and that still remains in many places. However, the composition of research is gradually changing as more attention is paid to a wider set of problems. Nowadays we see an increasing number of researchers in the region focusing on a variety of economic problems dealing with health, education, poverty alleviation, competition policy and the protection of natural resources and pollution control, among many others. This special issue of Environment and Development Economics presents a small sample of four research papers on these latter topics by researchers in established academic institutions in the region.

A recently developed small area estimation technique is used to geographically derive detailed estimates of consumption-based poverty and inequality in rural Shaanxi, China. These estimates may be helpful for targeting since there is wide variability in poverty rates within Shaanxi but low levels of inequality within most counties and townships. We also investigate whether including environmental variables in the equation used to predict consumption and poverty improves upon typical approaches that only use household survey and census data. Ignoring environmental variables appears likely to produce targeting errors.

Adaptation has the attributes of a private good that aims to protect a country from climate change, while mitigation, which contributes to the reduction of worldwide greenhouse gas emissions, has the properties of a public good. This paper attempts to investigate how the innovation of adaptation technology by a developed country (the North) may affect a developing country (the South) as well as the North through changes of mitigation in both countries. We show that the efficacy of adaptation determines the level of both countries' mitigation, and thereby causes them to be better or worse off. For both countries to be better off, it is required that the innovation be neither very effective nor very ineffective. Furthermore, we demonstrate that by introducing an international transfer system in which the North is taxed according to the level of adaptation, both countries can be better off even if the innovation is highly effective.

There is a new international policy focus on reducing emissions from deforestation and forest degradation (REDD), as well as promoting forest conservation, the sustainable management of forests and the enhancement of forest carbon stocks (REDD-plus). The recent Conference of Parties meeting of 196 countries of the United Nations Framework Convention on Climate Change (UNFCCC) in Cancun, Mexico (December 2010) was able to advance initiatives on REDD-plus even while there was limited progress on fossil fuel related aspects of an international climate change agreement. The Cancun meeting recognised that there was strong and broad support for REDD-plus and was able to agree to the development of a formal Mechanism under the UNFCCC for incentivizing REDD-plus activities. Implementing the Mechanism is another matter, and will require the development and coordination of country REDD-plus readiness and financing, including detailed consideration of country reference levels, measurement, reporting and verification methodologies, and sub-national and national program coordination.

We develop a forward-looking version of the recursive dynamic MIT Emissions Prediction and Policy Analysis (EPPA) model, and apply it to examine the economic implications of proposals in the US Congress to limit greenhouse gas (GHG) emissions. We find that shocks in the consumption path are smoothed out in the forward-looking model and that the lifetime welfare cost of GHG policy is lower than in the recursive model, since the forward-looking model can fully optimize over time. The forward-looking model allows us to explore issues for which it is uniquely well suited, including revenue-recycling and early action crediting. We find capital tax recycling to be more welfare-cost reducing than labor tax recycling because of its long-term effect on economic growth. Also, there are substantial incentives for early action credits; however, when spread over the full horizon of the policy they do not have a substantial effect on lifetime welfare costs.

In this paper, we estimate the individual effects of natural openness and trade policy on air pollution. Natural openness is the component of the trade share (imports and exports as a percentage of GDP) attributable to population, geography and factor endowment differences. We find that natural openness reduces air pollution, while trade policy has a limited impact. The implication is that ‘natural’ geographic and endowment differences play a more important role than deliberate trade policy decisions in explaining the trade and environment link.

Greenhouse gas emissions from the forestry sector are estimated to be 8.4 GtCO2-eq./year or about 17% of the global emissions. We estimate that the cost for reducing deforestation is low in Africa and several times higher in Latin America and Southeast Asia. These cost estimates are sensitive to the uncertainties of how much unsustainable high-revenue logging occurs, little understood transaction and program implementation costs, and barriers to implementation including governance issues. Due to lack of capacity in the affected countries, achieving reduction or avoidance of carbon emissions will require extensive REDD-plus programs. Preliminary REDD-plus Readiness cost estimates and program descriptions for Indonesia, Democratic Republic of the Congo, Ghana, Guyana and Mexico show that roughly one-third of potential REDD-plus mitigation benefits might come from avoided deforestation and the rest from avoided forest degradation and other REDD-plus activities.

Using stream water polluted with untreated wastewater in agriculture is controversial due to its combination of benefits and negative health impacts. Using data from a household survey, ‘wastewater’ and ‘freshwater’ farmers were analysed comparatively to examine the perceived impacts of irrigation water quality on farmers' health and to evaluate the extent of health damage. Probability of illness was estimated using the theory of utility-maximising behaviour of households subject to the conventional farm household production model, augmented by adding a health production function. Reduced model and instrumental variable probit specifications both show that perceived illness prevalence is significantly higher for household members working on wastewater irrigation farms than for those working with freshwater. Our data entails econometric complications (e.g., endogeneity of farmers' behaviour, unobserved location-specific characteristics). Ignoring these will result in underestimation of the value of policy interventions designed to reduce potential health damage of wastewater use in irrigation.

I review the few programs implemented in Latin America to control pollution with direct economic instruments and draw general lessons for the future implementation of these instruments in the region. The available evidence suggests that a combination of low capacities and political economy issues negatively affected the implementation of these programs. As a result, the capacity of the economic instruments to induce emission reductions cost effectively and their future political viability in these countries in the short- or medium-run may have been compromised. This present state of affairs provides more evidence in favor of the policy recommendation that Latin American countries should build local capacities before implementing direct economic instruments, than in favor of the alternative that these countries should adapt direct economic instruments to their institutional and political characteristics.

We present the ecological functions of cormorants and estimate the economic value of these functions to artisanal fishermen, as a valuation exercise for Neotropic Cormorants at Los Olivitos Estuary, Lake Maracaibo, Venezuela. Ecological functions were based on estimating the abundance, distribution and diet of cormorants; economic values were attached to a selection of goods, services and attributes. Based on available information, we selected four ecological–economic functions of cormorants: harvesting for food; contributors to fish diversity; indicators of fish schools; and contributors to fish biomass, due to guano production. Cormorants consumed nine commercial fish species. Mean consumption was 225 g/ind/day. All ecological–economic functions were positive except for the role as contributors to fish biomass. Total value of the cormorant population to fishermen was $5,429,703/year. Unlike many studies, our results show that Neotropic Cormorants have a negligible impact on artisanal fisheries. We emphasize the importance of these results for management policies.

This paper argues that the use of coal can be reconciled with the environment. In the empirical work, three environmental pollutants are considered, using two alternative methods with two sets of Chinese data. CO2 emissions could not be studied because of data limitations. The hypothesis that the use of coal can be reconciled with the environment through declined emission intensity is confirmed by the empirical tests. The decreases in emission intensity are driven by the application of clean coal technologies, which can be encouraged by appropriate regulations and incentives and have both environmental and economic benefits. Therefore it is critical that appropriate legal and fiscal regimes be formulated and that the development and utilization of high-efficiency and clean coal technologies be promoted. The paper also suggests that the use of coal could continue to be reconciled with concern for the environment, even while considering CO2 emissions.

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.

Extreme weather events such as droughts and floods have potentially damaging implications for developing countries. Previous studies have estimated economic losses during hypothetical or single historical events, and have relied on historical production data rather than explicitly modeling climate. However, effective mitigation strategies require knowledge of the full distribution of weather events and their isolated effects on economic outcomes. We combine stochastic hydrometeorological crop-loss models with a regionalized computable general equilibrium model to estimate losses for the full distribution of possible weather events in Malawi. Results indicate that, based on repeated sampling from historical events, at least 1.7 per cent of Malawi's gross domestic product (GDP) is lost each year due to the combined effects of droughts and floods. Smaller-scale farmers in the southern region of the country are worst affected. However, poverty among urban and nonfarm households also increases due to national food shortages and higher domestic prices.

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.

Deforestation and forest degradation represent an important part of global CO2 emissions. The identification of the multiple drivers of land-use change, past and present forest cover change and associated carbon budget, and the presence of locally adapted systems to allow for proper monitoring are particularly lacking in sub-Saharan Africa (SSA). Any incentive system to reduce emissions from deforestation and forest degradation (REDD+) will have to overcome those limits. This paper reviews the main challenges to implementing effective REDD+ mitigation activities in SSA. We estimate that SSA is currently a net carbon sink of approximately 319 TgCO2 yr−1. Forest degradation and deforestation put the forest carbon stock at risk (mean forest carbon stock is 57,679 TgC). Our results highlight the importance of looking beyond the forest sector to ensure that REDD+ efforts are aligned with agricultural and land-use policies.

Dual discounting is a new approach under consideration for use in environmental cost–benefit analysis. This paper updates the literature on this subject and subjects it to the assessment of an international panel of experts on environmental discounting by means of a Delphi study. Subsequently, a case study provides some findings deriving from the practical application of this strategy as the choice of discounting scenario in the economic evaluation of a plant for the desalination of irrigation return water, aimed at halting the degradation of a wetland. There are theoretical and practical reasons to support the use of this discounting approach in relation to projects with intergenerational impact, where the environmental effects are considerable in relation to market effects. Although still under investigation, the dual discounting approach appears to provide an appropriate methodological platform enabling the quantification of the degree of intergenerational equity implicit in the project.

Environmental regulation in the developing countries is undermined by weak enforcement. Lack of information and public awareness are fundamental factors that render informal regulation by civil society ineffective. In India, a number of environmental problems have been addressed using the institution of public interest litigation (PIL) by ‘public-spirited’ citizens. This paper examines the economic advantage of PIL over other conventional legal forms. An important outcome of judicial interventions of this kind in environmental cases in India is a spillover effect, which generates public information via media coverage. Using a case study, we test whether the judicial directives that followed a PIL filed and the subsequent spillover effect of media publicity were effective in getting the state to enforce the standards. This is done using autoregressive distributed lag models and univariate structural break analysis. The results show that judicial intervention and public information were effective in controlling pollution.

This paper undertakes a quantitative analysis of the socioeconomic and environmental impacts of different trade agreements for Chile. A dynamic general equilibrium model is used to compare the consequences of unilateral liberalization and trade agreements with the European Union (EU) and the United States (USA). The results show that economic gains under the trade agreements are only significant if foreign investment increases or value added taxes are modified. Winners and losers depend on the agreement; however, unskilled labor-intensive sectors always progress. Consequently, these agreements seem to be good for the poorest groups. Some natural resource intensive sectors significantly increase their production with the EU and the US agreements, also increasing the environmental pressures. CO2 and PM-10 emissions are not very different under these agreements as compared to business as usual – under which environmental pressures increase significantly. The results show the importance of economy-wide analysis of trade agreements in developing contexts.