In Mali's current context, where the crops sector is particularly exposed and vulnerable to agricultural drought, this study assesses the economy-wide impacts of such events and the potential effectiveness of some adaptation strategies. Using a dynamic computable general equilibrium model, we conduct counterfactual simulations of various scenarios accounting for different levels of intensity and frequency of droughts over a 15-year period. We first show how mild, moderate and intense droughts currently experienced by the country affect its economic performance and considerably degrade the welfare of its households. We also show how these negative impacts could be aggravated in the future by the likely increased number of intense droughts threatened by global climate change. However, we finally show that there appears to be some room for Mali to maneuver in terms of drought-risk management policies, such as fostering the use of drought-tolerant crop varieties, improving drought early warning systems or extending irrigation capacities.

Small Island Developing States (SIDS) are characterized by high levels of biodiversity that are under threat. Simultaneously, the tourism sector plays a key role in many of these economies. In this paper, the Hausman-Taylor estimator is used to investigate a tourism demand function in SIDS in which marine and terrestrial biodiversity play a key role, in addition to the traditional economic and price variables. This estimator allows for both the presence of time-invariant variables, a standard feature of environmental data, and the existence of endogenous covariates. Levels of biodiversity are found to have a significant influence on tourism in SIDS and, in particular, a test for redundant variables shows that the biodiversity variables are jointly significant. This justifies their inclusion in a tourism demand function, over and above the conventional economic factors, and points to the importance of national and international policy in protecting the biodiversity of SIDS.

This paper studies the role of middlemen in open-access fisheries and how the organization of the supply chains affects resource exploitation and the level and distribution of economic rent. Imperfect competition among middlemen can help ensure that fish stocks are not depleted, which is typically the case in open-access fisheries with competitive markets. Middlemen with market power can also induce higher economic rent for the supply chain in total, but these rents mainly benefit the middlemen. The supply chains of inshore anchovy and offshore skipjack tuna fisheries in Vietnam are used as empirical examples. The analysis shows that in the anchovy supply chain, the middlemen have insignificant market power and the stock is being overexploited. In the skipjack tuna supply chain, the middlemen have oligopsony power and the stock is higher than the level that produces maximum sustainable yield.

Game theory has been useful as an analytical framework for assessing environmental and resource regulations and policies. The papers in this volume provide the latest methodological and applied works in game theory to a wide range of natural and environmental resource problems such as fishing, grazing, pollution, climate change, water allocation, and stochastic production processes. The findings in the papers suggest that game theory is an effective tool for the analysis of the efficient use of shared natural resources; it can be used to identify stable agreements between parties to a resource conflict, and show how non-cooperation over global public goods/bads has a high social cost tag.

This study examines the relationship between groundwater irrigation and off-farm employment with a set of household level data collected in North China. The results provide evidence that off-farm employment reduces both time spent on irrigation in terms of total hours of irrigation and the amount of groundwater pumped. However, these effects have not resulted in losses of crop production. In fact, water productivity measured as output value produced per m3 of groundwater pumped is higher among households with off-farm employment. These seemingly contradictory findings are explained by the increased use of water-saving technologies such as furrow irrigation, underground pipes and/or lined canals. These technologies reduce seepage losses during the conveyance of groundwater as well as during irrigation of the fields. As a result, less groundwater needs to be pumped to achieve the same level of groundwater irrigation application rate in the field.

This paper analyzes the behavior of cross-country growth rates with respect to resource abundance and dependence. We reject the linear model that is commonly used in growth regressions in favor of a multiple-regime alternative. Using a formal sample-splitting method, we find that countries exhibit different behaviors with respect to natural resources depending on their initial level of development. In high-income countries, natural resources play only a minor role in explaining the differences in national growth rates. On the contrary, in low-income countries, abundance seems to be a blessing but dependence restricts growth.

This paper examines the impact of cross-ownership on the strategic incentive of environmental corporate social responsibility (ECSR) within a green managerial delegation contract in a triopoly market engaged in price competition. It demonstrates that bilateral cross-ownership between insiders provides weak incentives to undertake ECSR, which has a non-monotone relationship with cross-ownership shares, while it provides strong incentives for outsiders, which increases the ECSR level as cross-ownership increases. It also compares unilateral cross-ownership and finds that a firm that owns shares in its rival has a greater incentive to undertake ECSR than its partially-owned rival, while an outsider has more incentive than firms in bilateral scenarios. These findings reveal that a firm's incentive to increase a market price through ECSR critically depends on its cross-ownership share, while it decreases environmental damage and increases social welfare when the environmental damage is serious.

In a widely cited paper, Andreoni and Levinson (2001) argue that, under very mild restrictions on preferences, increasing returns to scale in pollution abatement are a sufficient condition for pollution to ultimately fall to zero with income growth. We show that the existence of an Environmental Kuznets Curve depends on the relative magnitudes of the returns to scale in abatement and in gross pollution, rather than on their absolute values. Increasing returns to scale in abatement by themselves are not sufficient for pollution to fall with income unless the returns to scale of abatement exceed the returns to the production of gross pollution.

In this paper, we conduct an investigation to assess the economic potential of payments for ecosystem services to conserve water through the conversion of land under irrigation into rain-fed land in the upper reaches of the Shiyang River basin, located in northwest China. We use an approach developed by Antle and Valdivia (2006, Australian Journal of Agricultural and Resource Economics, 50: 1–15) to estimate the supply of water. The analysis shows that it is theoretically possible to reduce agricultural water consumption and subsequently increase the water supply, which would aid the prevention of environmental degradation in the middle and lower reaches of the Shiyang River basin. In addition to the conservation of water, considerable income would be generated by local farmers, which would help to alleviate poverty. Furthermore, the analysis also suggests that more complete data on ecosystem services rates, transaction costs and other related factors would be of value for achieving a more comprehensive assessment.

Rivers can be both givers of life and takers of life. Investments that provide protection against flooding are often beneficial during normal or low flows. Investments such as storage reservoirs are long lived, separating construction and management operations. With international rivers, the absence of enforcement mechanisms may preclude infrastructure collaboration. Where physical infrastructure is in an upstream nation, downstream impacts may be ignored after the structure has been completed. Using a game theoretic model, it is shown that downstream cooperation may only be rational when flooding is the primary downstream impact. A stylized arid developing region and humid developed region are compared. Potential gains from collaboration are greatest in arid regions, but may be difficult to achieve. There may be little scope for capturing the gains from basin level management if economic integration does not extend beyond water issues.

We investigate the role that economic instruments can play in promoting economic sustainability and the preservation of biodiversity in agroforestry management in coffee production. Most of the world's coffee producers live in poverty and manage agro-ecosystems in regions that are culturally and biologically among the most diverse on the globe. Despite the relatively recent finding that bees may augment pollination and boost coffee crop yields, the short-term revenues from intense monoculture drive land-use decisions that destroy the forest strips serving as habitats for pollinating insects. Our study investigates whether farmers specialize in environmentally detrimental (sun-grown) or sustainable (shade-grown) farming, or both practices coexist. We calibrate an empirical model to characterize the equilibria and investigate the ecological and economic impacts of three alternative policy instruments: conservation fees, price premiums, and minimum wages.

The costs of living with wildlife are assessed using Namibian subsistence farmers' willingness to pay (WTP) for deterrents to attacks on crops and livestock. A utility-theoretic approach jointly estimates household WTP for deterrent programs in two ‘currencies’: maize and cash. This has a double payoff. Use of a non-cash staple increases respondent comprehension and provides more information about preferences, improving the accuracy of results. The household shadow value of maize is also identified. Significant costs from living with elephants and other types of wildlife are demonstrated. Compensation for farmers may be warranted on equity and efficiency grounds. Uncontrolled domestic cattle generate even higher costs to farmers than wildlife, highlighting the need to clarify property rights among these farmers.

How do people learn from disasters? Do they constantly develop and accumulate new knowledge that enables them to address recurrent disaster risks? This paper investigates whether social learning and, in particular, the development of earthquake-mitigating technologies reduces earthquake-induced fatalities. Combining patent data with a global cross-section of 894 earthquakes that occurred between 1980 and 2010, we find that countries with more disaster-mitigating innovations and more earthquake exposure in the past suffer fewer fatalities. This study is the first to empirically examine the role of technological change and social learning in disaster mitigation. It sheds light on knowledge as a key element of adaptive capacity, and suggests the importance of incorporating technology development into a long-term hazard mitigation and adaptation policy. The paper also contributes to the empirical disaster literature as the first to address the problem of missing data on disaster losses.

This paper examines whether and how experiencing climate-related disasters can improve the rural poor's adaptation to climate change through community-based resource management. Original household survey data in Fiji capture the establishment of community-based marine protected areas following a tropical cyclone. Controlling for the endogeneity of household-level cyclone damage reveals that a household's exposure to the disaster increases its support for establishing marine protected areas, presumably for future safety nets. Evidence suggests that community members' social learning from disaster experience might facilitate their consensual decision making.

Drought events have critical impacts on agricultural production yet there is little consensus on how these should be measured and defined, with implications for drought research and policy. We develop a flexible rainfall-temperature drought index that captures all dry events and we classify these as Type 1 (above-average cooling degree days) and Type 2 droughts (below-average cooling degree days). Applied to a panel dataset of Indian districts over 1966–2009, Type 2 droughts are found to have negative marginal impacts comparable to those of Type 1 droughts. Irrigation more effectively reduces Type 2 drought-induced yield losses than Type 1 yield losses. Over time, Type 1 drought losses have declined while Type 2 losses have risen. Estimates of average yield losses due to Type 1 droughts are reduced by up to 27 per cent when Type 2 droughts are omitted. The associated ex-post economic costs in terms of rice production are underestimated by up to 124 per cent.

This paper contributes to the literature on the determinants of environmental standards by studying the role of income inequality and freedom of the press. Given that evidence of the environmental Kuznets curve has only been found for some countries, it is thus crucial to investigate whether other factors besides income per capita levels may be affecting countries' decisions to pass environmentally-friendly legislation. We investigate the effects that inequality and freedom of the press have on environmental stringency for a sample of OECD and BRIICS countries and a global sample of 82 countries using data over the period 1994–2015. We hypothesize that the more unequal a society is, and the greater the oppression of the press is, the less stringent environmental policies are. The results partially confirm our hypothesis. In particular, lack of press freedom is negatively correlated with environmental stringency, whereas inequality shows a non-linear effect only for non-high-income countries.

Traditional pastoralist land management institutions in sub-Saharan Africa have been stressed by an increasing human population and related forces, including private enclosure of grazing land; government-sponsored privatization; and the increasing prevalence of violent conflicts and livestock theft. We model the incompleteness and flexibility of traditional grazing rights using fuzzy set theory. We compare individual and social welfare under the traditional system to individual and social welfare under a private property system and a common property system. Whether the traditional system is preferred to private property depends on whether the value of mobility, as defined by the traditional system, is more valuable than the right of exclusion inherent in private property. We find that under some conditions the imprecision which characterizes traditional rights can result in higher social returns than a common property regime characterized by complete symmetric rights across all members of the user group and complete exclusion of non-members.

The paper presents an analysis of the role of two forms of social capital – linking and bonding – on two key farm outcomes: on-farm crop diversity and household wellbeing. Where market transactions are limited, social capital is an important household asset for accessing seed and channelling information. The study is set in a drought-prone region of Ethiopia, with high rates of food insecurity and dependency on agriculture for livelihoods. The region is very rich in crop genetic diversity, particularly for sorghum. The data were collected for a production year that experienced a major drought shock. Results of the analysis indicate that social capital is an important determinant of farm level diversity and wellbeing, with opposing effects related to the two different forms of social capital. This suggests possible trade-offs between the two forms of social capital in terms of food security, production and diversity, which need to be considered in planning interventions.

Equity and efficiency are crucial issues behind any tax reform, but they are particularly relevant in countries with high inequality and large shares of poverty. This paper provides a comprehensive socio-economic empirical assessment of Mexico's proposed (and partially implemented) tax reforms in the energy domain, and of a hypothetical partial removal of existing electricity subsidies. Using a rich household income and expenditure survey within the context of a demand system adjustment of non-durable goods, the article provides the public-revenue, environmental and distributional impacts from the simulation of different combinations of energy taxation, subsidy-removal and distributive offsets. The paper also provides detailed ex-ante evidence on the effects of compensatory devices that may contribute to the successful implementation of energy reform packages and significant poverty alleviation in Mexico.

This paper examines the dynamic effects of forest conservation measures. Both short-term and long-term impacts on timber markets are studied using a Finnish example. Forest conservation is interpreted as an exogenous negative shock in the standing timber growth owned by private forest owners, and its effects are retrieved through an impulse response analysis based on a dynamic demand–supply and timber stock model. The results show that timber markets are influenced by forest conservation. The conservation of forest assets reduces traded quantities and increases timber prices. These effects are of the same relative magnitude, thus leaving the annual timber-selling income of private forest owners unchanged. The results suggest that some of the negative short-run impacts of conservation on commercial timber stock will be compensated in the long run by intensified use of the remaining stock. This may to some extent reduce the ecological usefulness of the conservation policies. While the timber markets converge in the long run towards a new post-conservation state the short-term interruptions suggest that caution should be used in establishing set-asides in privately owned forestland.