We present the results of a framed field experiment with Ethiopian farmers that use the mountain rain forest as a common pool resource. Harvesting honey causes damage to the forest, and open access leads to over-harvesting. We test different mechanisms for mitigating excessive harvesting: a collective tax with low and high tax rates, and a tax/subsidy system. We find that the high-tax scheme works best in inducing the desired level of harvesting, while the tax-subsidy scheme may trigger tacit collusion. Via a panel data analysis we further investigate which variables influence the subjects' decisions during the treatments.

The small-scale fisheries sector in many Pacific islands is facing increasing challenges in relation to resource availability, economic opportunity, and demographic and social pressure. In particular, intensifying cash-oriented livelihood strategies can exacerbate existing vulnerabilities and threaten food security and resource conservation. In this paper the authors develop a bio-economic model and a quantitative measure of resilience in order to explore the interaction between socio-economic and ecological dynamics, and to analyze the potential role that cooperation and collective arrangements can play in this interaction to maintain the viability of the system. Based on the case of the system known as wantok typically found in the Solomon Islands, numerical examples are used to explore the potential gain that cooperation between fishers can bring in terms of subsistence, profitability and ecological performances, as well as the resilience of the whole system to shocks.

This paper examines the impact of climate shocks, measured as temperature and precipitation variability, on real monthly per capita consumption expenditure of Indian households over the 1988–2012 period, utilising data from the National Sample Survey Organisation's Consumer Expenditure Surveys. The regression results show an increase in consumption by 1.2 per cent on average, in response to a one standard deviation rise in temperature, with heterogeneous impacts across economic sectors. While agricultural and industrial households experience consumption declines of 1.7 per cent and 8.3 per cent on average, service sector households exhibit consumption increases by 2.4–9.6 per cent on average across rural and urban regions, in response to a one standard deviation rise in temperature. The analysis suggests an increase in inequality of consumption across sectors due to climatic shocks, with implications for climate policy and sustainable development in India.

To protect the elephant, trade in ivory has been banned since 1990. In this paper, we demonstrate that this ban's effect on elephant populations is ambiguous. Depending on the discount rate, among other things, the trade ban can either increase or decrease optimal population size. If the decision-maker's discount rate exceeds a certain threshold, the optimum stock of elephants is greater with a trade ban. Since the threshold is in the range of possible social discount rates, the success of the trade ban in promoting elephant conservation will vary spatially and temporally, depending on the characteristics and level of development of countries with significant elephant populations.

This paper aims at assessing the determinants of Amazon deforestation, emphasizing the role played by off-farm income. Initially an economic model is provided which relates off-farm income to deforestation patterns. Subsequently, empirical implications are tested using data from the 2006 Brazilian Agricultural Census. Estimation results suggest that higher off-farm incomes are associated with reduced deforestation rates. In fact, higher off-farm incomes might increase the opportunity cost associated with agricultural activities. The latter option becomes less attractive and farmers dedicate less time to farm activities, thereby reducing deforestation pressure. Results also show that smallholders respond less to the increase in the returns from off-farm activities when compared to largeholders, which matches our hypothesis of labor market imperfections regarding off-farm activities.

Collective action can play a significant role in sustainable management of common grazing lands through restricting access and regulating use. However, it is not clear why there are often violations of grazing restrictions in equilibrium. This paper first presents a theoretical framework of collective action in community management of grazing lands that explicitly models individual violations behaviour. Then data from the highlands of Amhara region of Ethiopia are used to test the model predictions to examine the impact of policy-relevant factors on collective establishment of grazing restrictions and violations of grazing restrictions. Econometric results show that collective action in community grazing land management is likely to be more beneficial and effective in communities with better market access or higher populations. Collective action, on the other hand, is less likely to be successful in communities with greater social, economic, or cultural heterogeneity or more affluent members. Factors related to greater livestock profitability, such as rainfall, or fixed costs of negotiating agreements, such as total land area of the community, have ambiguous effects, as they are associated with establishment of grazing restrictions as well as violating the restrictions.

Environmental conservation requires society to consider the trade-off between allocating resources to productive activities and pollution control activities. Therefore, it is informative to measure the effect of environmental regulations on firms' productivity. This paper attempts to estimate the impact of environmental regulations on Korean manufacturing industries. Despite being key inputs in the manufacturing process, raw materials have often been excluded from the cost function due to the lack of price data. A restricted cost function is used to improve the reliability of parameter estimates. Empirical results indicate that environmental regulations caused a 12 percent decline in the average annual rate of productivity growth over the period 1982–93.

The expansion of private production erodes the quality of commonly owned assets, thereby forcing individuals to rely increasingly on private goods to satisfy their needs. In the face of this deterioration, households increase their work effort and accumulate more capital in order to buy more consumer goods both in the present and in the future. By so doing, each household contributes to an increase in production and thus has a detrimental—though negligible—impact on commonly owned assets. Hence, the economy converges to a long-run equilibrium level of production that is higher than the level associated with the Pareto-efficient path.

Recently, there has been significant research interest in the empirical formulations of the environment-income relationship using both global and disaggregated data. Advances in methods and availability of better and more extensive data make the old topic of growth and environment a unique field for Environment and Development Economics, among other journals. Conventionally, the environmental Kuznets curve has been important in testing for emissions of many pollutants in many different countries. Now, policy and institutional data including transparency variables are available, making many social and economic factors interesting for policy analysts. In light of these advances, and the existing associated empirical problems in analyzing the income-environment relationship, the key findings of each paper in this special issue are discussed and connected to the related areas of research interest.

This paper explores economic development in the floodplain of large rivers, where both economic and ecological factors need to be considered for effective management. Floodplain management policies in Bangladesh emphasize structural changes to enhance agricultural production. However, these structural changes reduce fisheries production, an important natural resource sector and a source of subsistence for the rural poor. We develop a model where net returns to agriculture and fisheries are jointly maximized, taking into account the effect of flooding depth and timing on production, and value of catch in markets and for subsistence nutrition. Results for a region in Bangladesh show that optimal production in a natural floodplain yields higher net returns compared with a floodplain modified by flood control structures. This finding implies that neglecting the bio-economic relationship between fisheries and land use may significantly affect the long-run economic role of a river floodplain, particularly where subsistence consumption is important to social welfare.

Development projects that are potentially eligible for Clean Development Mechanism (CDM) funding under the Kyoto Protocol, require final approval from the host countries where the projects are to be implemented. The approval requires an evaluation of the positive contribution of the CDM project to sustainable development in the host country. A prototype set of sustainable development criteria is introduced using an evaluation process conducted in South Africa. Weighting values that reflect societal priorities in South Africa are required for these criteria. The paper shows how judgements of industry decision makers and the expenditure trends of the national government (on environmental sub-criteria) can be used to generate a first approximation of such weighting values. The industry judgements are obtained from an Analytical Hierarch Process (AHP) survey. They reflect the perceptions of the automotive supply chain and process industry only, and not other parts of the South African society. A more comprehensive study is required to determine the political and social acceptability of the AHP approach, which should be initiated and managed by the Designated National Authority (DNA) of South Africa.

We propose an ‘allocate-and-trade’ institution to manage the eastern Nile River Basin for Ethiopia, Sudan and Egypt as the basin faces a new reality of the Grand Ethiopian Renaissance Dam (GERD). We find that a social planner could increase the region's economic welfare by assigning water rights to the riparian states. An alternative intrabasin water rights arrangement and trade could achieve more than 95 per cent of the welfare created by the social planner. GERD will change both the economic benefits and hydrological positions of the riparian countries. Economic benefits from alternative water use would be sufficient to make riparian countries better off compared with the status quo. Furthermore, riparian countries could raise more than US$680 m annually for protecting and conserving the natural resources of the region.

Recently, in their 2019 paper, Poyago-Theotoky and Yong consider a managerial Cournot duopoly with pollution externalities and emission taxes and propose an explicit environmental incentive in a managerial compensation contract. The authors compare several exogenous equilibria emerging in the symmetric sub-games in which the owner offers either the environmental delegation contract or the standard sales delegation contract: abatement and social welfare (resp. emission taxes) under environmental delegation are higher (resp. lower) than under sales delegation. The present work extends their model using a game-theoretic approach to analyse the asymmetric sub-games, in which only one firm adopts the environmental contract, and adds the contract decision stage. Results show that the environmental contract never emerges as the unique sub-game perfect Nash equilibrium of this non-cooperative managerial decision game. Indeed, if the green R&D technology is efficient, the sales contract emerges as the unique Pareto-inefficient Nash equilibrium. Otherwise, if the green R&D technology is inefficient, multiple Nash equilibria in pure strategies exist (coordination game). Our findings offer direct policy implications.

Although farmers in the Malian Sahel depend on millet for survival, demand and supply constraints have impeded their use of certified seed. We use data collected from households, vendors and seed samples to test the way market purchases of grain and seed affect household food consumption and millet genetic diversity. Purchase of millet grain in markets contributes to food security, but reduces dietary diversity – suggesting that scarce cash was directed toward meeting staple food needs first. Farmers purchased millet grain for seed only in the site with riskier rainfall and smaller market fairs. Although they were more likely to purchase in markets where the genetic dissimilarity of seed was higher, purchasing seed in markets was negatively associated with on-farm diversity. Seed shortage rather than variety experimentation appears to be the motivation for seed purchase. Introducing certified seed in rural markets through small-scale traders will require the provision of market services and promotional efforts.

This study examines, with a focus on regional environmental states in China, whether regional latecomers suffer the domestically created ‘pollution haven’ effect through the interjurisdictional competition for polluted industries within China, or enjoy the spillover effect of nationwide progress in environmental management and technology, using the analytical framework of the environmental Kuznets curve. The study found that the regional latecomer's advantage was verified in the case of wastewater, while its disadvantage was identified in waste gas and solid waste. We speculate that the contrasting result on regional latecomer's effects between wastewater, waste gas, and solid waste comes from the difference in policy performances: the well-designed water pollution control may have regional latecomer's enjoy the spillover effect of nationwide progress, while the ineffective control of air and solid waste pollution may cause a ‘pollution haven’ effect through the interjurisdictional competition for polluted industries on regional latecomers.

This paper investigates the effects of pollution taxation for a dual developing economy with a separate abatement sector. Due to the real rigidity of the urban wage, pollution taxes raise the cost of the urban good and hence its relative price. This suggests that because of flexible rural wages, the developing economy tends to have a comparative advantage in the rural good which may be less polluting. Moreover, the higher price of the urban good worsens the urban unemployment ratio. The optimal tax on pollution is thus lower than the marginal environmental damage to the economy.

This special issue is concerned with environmental Kuznets curves (EKC) - the hypothesis that there is an ‘inverted-U’ relationship between various indicators of environmental degradation and levels of per capita income. Explanations as to why environmental degradation should first increase then decline with income have focused on a number of underlying relationships, including:

the effects of structural economic change on the use of the environment for resource inputs and to assimilate waste;

the link between the demand for environmental quality and income;

types of environmental degradation and ecological processes.

Self-governance of natural resources has started to gain increasing attention as an alternative to command-and-control and market-based tools. However, a fundamental question remains: is self-governance economically beneficial, allowing it to serve as an alternative management tool? This paper uses a unique set of survey data from a territorial-user-right-based South Korean inshore (maul) fishery and applies an empirical strategy to provide some of the first quantitative evidence that self-governance benefits maul fishermen. We find that members of the self-governance group perceive the management system as having had a positive impact on four out of the eight criteria we tested: stock recovery, curtailed fishing effort, reduced disputes among fishermen and declining incidents of illegal fishing. Considering that these groups have been in existence on average for less than seven years, these results indicate that the management scheme has made good progress overall.

Among the tools of the economic trade, cost-benefit analysis is the most widely used in policy circles. Asking whether there is a role for cost-benefit analysis is like asking whether there is a role for the weatherman. Of course there is.

We analyze the spatio-temporal dynamics of a simple model of macroeconomic geography in which demography and pollution dynamics mutually affect each other. Pollution, by reducing the carrying capacity of the natural environment – which determines the maximum amount of people a given location can effectively bear – crucially affects labor force dynamics which in turn alter the amount of resources available for abatement activities aiming to reduce pollution. Such mutual links determine the eventual sustainability of the development process in different locations and economies, and spatial interactions further complicate the picture. We show that neglecting the existence of mutual feedback between population and pollution leads to misleading conclusions about the eventual sustainability of a specific location. We also show that even neglecting the existence of spatial externalities can lead to misleading conclusions about the sustainability of different regions in the spatial economy. This suggests thus that both the nature of the population and pollution relationship and geographical factors may play a critical role in the process of sustainable development.