The journal Environment and Development Economics began operating in 1995; in a few months, it will complete 20 years of operation. It seemed appropriate to mark this occasion with a special issue of the journal that would provide some perspective on the field, looking both backward at what has been achieved and forward to what lies ahead.

The Nobel Prize Committee for Economics has been pretty good about drawing attention to innovative developments in economics since 1969, but in the past 20 years only one prize has been awarded for work that had a strong natural resources dimension, namely that on ad hoc cooperative solutions to the management of common property resources (Elinor Ostrom, University of Indiana). At least three Peace Prizes have been awarded for contributions to issues in conservation and the environment (Al Gore, the IPCC, and Wangari Maathai in Kenya for a tree-planting campaign). Toronto's Globe and Mail newspaper speculated in October 2012 that William Nordhaus would win the prize in economics, probably for his simulation model of economic growth and global warming (an Integrated Assessment Model). But to date only Ms Ostrom has been awarded the Economics Prize for essentially environmental economics. Thomas Schelling has circled back to environmental issues in his research over the years and was awarded the prize in economics, but it was for his contributions to game theory that he was singled out. Ronald Coase (Economics Nobel winner) focused the attention of economists on possible ‘markets’ for externalities, among other things, but few would refer to him as an environmental economist. Robert Solow set out the basic model of economic sustainability but again his prize was for other contributions. Observers in Stockholm and Oslo have thus made known their concern for environmental issues but have remained fairly agnostic about the significance of work by resource and environmental economists on such issues.

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:

Addressing the challenge of ecological limits to economic growth and protection of the commons has been the central focus of scholarly research and policy debate in the world of EDE over the past two decades. Notable progress has been realized on a number of fronts but big challenges remain. Advances in the theory and practice of sustainable development, moving away from income measures such as GDP and promoting inclusive wealth as the right indicator of change in wellbeing and sustainability for the evaluation of economic performance and associated progress with the development and use of natural resources and environmental accounts represent one major example. Another important example is the ecosystem services (ES) approach of the millennium ecosystem assessment that has now become the main framework widely adopted as the basis for the characterization, valuation and evaluation of tradeoffs among the multiple services of ecosystems impacted by the pursuit of economic growth. Together with progress in the science and economics of addressing climate change, these advances moved the EDE focus from micro- to macro-environmental economics management issues. Major manifestations of progress on these fronts include: the emphasis on the green economy for ‘the future we want’ at Rio+20 and the intended move beyond the millennium development goals (MDGs) to redirect future efforts of the international community towards new sustainable development goals (SDGs) and targets; global consensus and support for establishing an Intergovernmental Platform on Biodiversity and Ecosystem Services (IPBES); and efforts to better define planetary boundaries.

The economic analysis of the natural environment and of economic development encompasses most complex topics and issues. Accordingly, many contributions in the field are either cross-disciplinary or very detailed and broad in perspective. The core methodology of economics is different, however. Economic models are generally used to drastically reduce complexity and to look at a low number of analytical relationships. This allows for analysis of the basic mechanics of the problems in a concise manner and for the derivation of closed-form model solutions. There are of course seminal contributions using the procedure, e.g., Hotelling (1931) and Dasgupta and Heal (1974). But for the crucial issue of climate change the profession appears to be somewhat reluctant to push strongly for constructing a stringent analytical framework; the field is still dominated by relatively complex integrated assessment models. These yield many important insights but, in certain cases, provide contradicting results and sometimes lack intuition. Hence, climate economic models providing closed-form solutions on future growth and optimum climate policy appear to be warranted.

We live at a unique moment in history when rapid economic growth has finally lifted hundreds of millions out of deep poverty, not only in Asia and Latin America but increasingly in Africa (Sala-i-Martin and Pinkovskiy, 2010). Yet the impending damage of climate change could reverse this. The world is failing miserably at implementing rational and collectively beneficial treaties and policies to tackle climate change. In spite of the many declarations concerning the need not to exceed two degrees of warming, current lack of action will make it difficult to avoid three degrees. The effects of climate change will be very unequal, particularly because there is a negative relationship between temperature and income (Dell et al., 2009). The poor will have particular difficulty in making the necessary investments to protect themselves and to adapt in response to climate change pressures, rendering them most vulnerable. New evidence shows that even the vital ability to grow economically will be severely set back. Several articles have shown how heat – particularly in poor countries – may increase conflicts and decrease growth rates. Climate change is far from the only global environmental problem we face; we find in one area after another that world production and consumption exceeds the Earth's capacity to provide a satisfying quality of life, which raises a number of sustainability issues (see, for instance, Arrow et al., 2012).

Development and environmental policies have accompanied China's economic growth progress, and played significant roles in the process. The economic field in China has experienced its own growth and transition process. Over more than three decades of economic reform and transition, Chinese economists have learnt from the West, from similar countries undergoing economic reform and transition and, more importantly, from the lessons and experiences in China's unique reform process, and have grown to be an increasingly strong force behind policy change and national development. The following are two examples of policy interactions between economists and policy makers that made an identifiable difference.

Conserving wildlife has been much in the news in early 2014, owing to the rapid growth of wildlife crime since 2000. This is now a problem measured in tens of billions of dollars, with large, organized and violent criminal activity pushing rhinos towards extinction, and losses of African elephants measured in the thousands per year. Tigers, lions and other top predators are under severe pressure as well.

My first advice to graduate students is always that they should follow their own motivation. That is, in my view, the key to success for the students and the main driver for scientific progress: only motivated researchers will make a difference, in academia and in society. But of course environment and development economics is a good choice: it is very relevant and intellectually challenging. Alleviating poverty and preserving a balance between the human sphere and the natural environment are the major issues of our world. The parts of the world that are still developing are also the parts of the world where important choices will be made on preserving this balance. This makes the field very relevant.

Climate and global economic integration have contributed to a refocusing of research in EDE in the two last decades. The disclosure of new scientific evidence, namely after the publication of the Stern Review and the following debates, has definitely granted economists a central role in defining the key elements of the debate on climate change.

A problem in urgent need of attention in modern industrial societies is to discover ways to de-link aggregate output from recorded employment. If the loss were shared in a manner deemed fair by the general public, there would be nothing catastrophic for people in a country where the average income is 35,000 international dollars a year to suffer an income loss of even 25 per cent, let alone 5 per cent. Average income in the UK in 1990 was about 25 per cent less than in 2005. It's hard to maintain that UK citizens experienced significantly lower levels of personal wellbeing in 1990 than they did in 2005. Revival of research on competitive consumption (e.g., Veblen's ‘conspicuous consumption’) and reports on ‘life satisfaction’ suggest that a general rise in private consumption among a population enjoying a high standard of living adds little to happiness, or indeed to objectively measured indices of wellbeing.

It was a visionary initiative, 20 years ago, to start a journal devoted to the intersection between environmental, resource and development economics. At the time, the ‘Brundtland Report’ was old enough to be recognized in policy discussions at many possible levels, IPCC had already published its first and second assessment reports, and the Kyoto Protocol was just shaping up. Over the first 20 years of EDE's life, interest in environment and development grew quickly if not explosively, both in research and in the (policy) field, as was witnessed by the Millennium Development Goals in 2000, ‘Green Growth’ initiatives (from 2008 onwards at UNEP, OECD and World Bank), and at Rio +20 in 2012; IPCC's fifth assessment report is expected this year.

Population growth and growing incomes in developing and developed countries are leading to increased demand for energy and food, placing significant stress on the environment. At the same time, the increased scarcity of natural resources, and especially concerns about climate change and other environmental side effects, are constraining the traditional supplies of food and fuel. Failure to provide both energy and food in an affordable as well as in an environmentally sustainable manner, as well as climate change, will negatively affect our society, especially the global poor. Finding solutions to food energy problems is both a policy and technological challenge.

The most challenging topic in the area of EDE is, to my point of view, the understanding of the various issues related to biodiversity and their modeling. We do not know much about the reasons why we would want to prevent ecosystem and species losses, but we suspect that preventing large-scale loss is indeed a tremendously important task we should undertake rapidly. We need tools to help us evaluate the costs of these losses and the benefits of preventing them, and to provide guiding principles for environmental policy.

I wandered into environment and development economics through an initially disconnected series of interests in the environment, development and, finally, economics. Family camping trips instilled in me a love of nature from an early age, but growing up in the US industrial heartland in the 1960s also exposed me (literally) to serious pollution problems. My home state of Ohio is famous for having a river that caught on fire. It is also on the shores of Lake Erie, which was the source of my family's Friday fish dinners untilmercury contamination closed the fishery. About the only business in my rural hometown was a waste dump, which contaminated all the wells in the town and forced the town to develop a more costly water source.

I was 23 when I first ventured into rural India as a research assistant to examine how women harvested, traded and earned income from a fruit from the Uppage (Garcinia Cambogia) tree. The seeds were collected for their oil by local women, until markets opened up for the fruit, which had value as a condiment in a neighboring region. This led to changes in demand, and harvest rights began to be auctioned by the government. The Uppage case presents a classic story of access to new markets leading to partial privatization of common property, with consequences for both conservation and income distribution. Of course, I knew little about environmental economics then. But this foray into rural India exposed me to many elements of environment and development problems – the challenges of managing the commons, the possibility of markets leading to overexploitation of resources and growth in employment, the idea of institutional change contributing to multiple winners and losers with poor women being left behind on the bottom rung, and so on. This had a life-changing influence, leading me eventually to branch out and specialize in this area.

At the end of my undergraduate studies in economics I was ready to go into graduate studies in finance, monetary policy or macroeconomics. At that time in my country, the choices were not much broader than that. In order to complete my studies I needed 30 days of community work, so I went to Ostional National Wildlife Refuge (ONWR), one of a few places in the world where sea turtles come to nest in massive numbers. My task was to craft a set of rules and incentives for the local community to organize better around the unique resources of this protected area.

Early this year, Thomas Friedman (2014) reported on a (Wikileaks) cable sent in 2008 from the US Embassy in Damascus concerning the drought Syria had been suffering from since 2006 (and which was going to last for another couple of years). The Syrian UN food and agriculture representative was seeking assistance for among others 15,000 small-holding farmers, who might otherwise seek jobs in Syrian cities (leaving many women and children behind in poverty) and who could arguably add to already existing social and economic tensions in those cities.

The journal Environment and Development Economics has made a major contribution over the last 20 years to our understanding of the ways in which the environment interacts with the process of development. The risks of ignoring environmental considerations was raised at the outset when the journal was launched and the discussion has gone on to become more informed and sophisticated as time has passed. We know more about where development may bring about an improvement in environmental quality and where it may not, unless the right policies are followed. We also better appreciate what those policies are and what challenges governments face in implementing them.

How can the malign and growing influence of lobbying on global climate policies be checked? In this short piece I link some wide-ranging suggestions for academic research by environment and development economists that is needed to further this aim, with the key idea in Acemoglu and Robinson's (2012) Why Nations Fail. Their book argues strongly that sustained, very long-term economic growth through national industrial revolutions requires ‘inclusive institutions’ that distribute political power broadly over a nation's economic, class and geographical sectors. This is because long-term growth needs technical innovations, which cause creative destruction (structural adjustment) of existing technologies, which in turn harms the interests of existing elites. If elites are too powerful, they will block new technologies, so as to keep their powers to extract rents from the rest of society, and the nation will then fail (to grow sustainably).