Analysis of a new Mexican database reveals that air-borne, suspended particulate emissions per employee by plants with 20 or less employees are significantly greater than by larger plants within the same manufacturing sector. From a second, new data set on manufacturing plants in Brazil, it is shown that industry in lower-income areas displays a higher concentration of the dirtiest industrial sectors and of smaller plants (which are dirtier). However, harm to humans from industrial air pollution in Brazil is found to be greater in higher-income areas and most of this harm derives from larger plants. This is not simply a reflection of the greater prevalence of manufacturing in urban areas, for the rising projections of human mortality among higher wage municipalities hold, even controlling for population density. Resolution of this apparent paradox hinges on the distinction between emission intensities and total emissions, the latter determining the level of harm, a distinction that has not always been made clear in the course of debate.

Well-functioning factor markets play an important role in improving the performance of the agricultural sector. Our paper examines both technical and allocative efficiencies at the household level, with an application to a cross-section sample of rural households in three provinces of China in 2009. In a first step, we use nonparametric methods to estimate household efficiency. In a second step, we examine econometrically the role of land rental market and its linkages with household-level efficiencies. We find that participation in the land rental market does not affect technical efficiency but has large positive effects on allocative efficiency. This stresses the need to distinguish between technical efficiency and allocative efficiency in the analysis of land tenure issues. The improvements in allocative efficiency from land-leasing contribute to significant increases in household income in rural China.

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.

Climate change is increasing the frequency of extreme weather events, such as drought and heat waves. In this paper, we assess the impact of drought and high temperatures on the employment outcomes of working-age individuals in South Africa between 2008 and 2017. We merge high-resolution weather data with detailed individual-level survey data on labor market outcomes, and estimate causal impacts using a fixed effects framework. We find that increases in the occurrence of drought reduce overall employment. These effects are concentrated in the tertiary sector, amongst informal workers, and in provinces with a higher reliance on tourism. Taken together, our results suggest that the impacts of climate change will be felt unequally by South Africa's workers.

This paper studies the effects of global warming in a descriptive model of endogenous growth. It is assumed that deviations from the pre-industrial global surface temperature negatively affect aggregate output. The paper studies the effects of varying the tax rate and of different abatement activities on the emission of greenhouse gases and on the growth rate. We study both effects for the long-run balanced growth rate and for the growth rate of GDP on the transition path. Using simulations, it is demonstrated that higher abatement activities may both reduce greenhouse gas emissions and lead to higher growth. Further, the second-best abatement share is computed and the corresponding growth rate as well as the social optimum.

The local effects of mining might simply come and go with mine production. In this paper we revisit Aragón and Rud's (2013) study of the Yanacocha mine, frequently cited to account for local economic effects and backward linkages, but we offer a more nuanced interpretation: first, effects fade with the mine exhaustion; and second, impacts are the result of consumption boom-and-bust dynamics. While we find it more conceptually accurate to reserve the concept of backward linkages for effects of a productive nature, our evidence reveals that unskilled services is the one sector that benefits, in contrast to manufactures and skilled services. We stress that impact evaluations of mines are contingent to time and place, and contend that exploring the extent to which multipliers generate spillovers is central. The short-run effects of a mine might in fact give little indication of how to tell or make a blessing from a curse.

Economic instruments offer the potential to reach pre-determined environmental goals at a lower aggregate cost than less incentive-based measures, but administrative underpinnings crucial to the effective functioning of economic instruments may be lacking in developing countries. For this reason, pragmatic analysts and policymakers often advocate the use of so-called ‘mixed’ instruments that combine incentive mechanisms with improved administrative arrangements. This paper explores such possibilities with reference to intensive shrimp aquaculture, which dominates shrimp farming and is an important economic sector in Thailand. This activity has been cited as a major contributor to environmental degradation in Thailand and several other countries through destruction of mangrove forests, salinization of land, sludge disposal, and, in particular, water pollution. An analytical model is presented that highlights some of the key opportunities and limitations of mixed instruments applied to shrimp aquaculture. Mixed instruments are then proposed and evaluated.

The Fifth IPCC Assessment Report estimates the world's ‘carbon budget’, which is the cumulative amount of anthropogenic CO2 emissions limiting global warming below 2°C. We model this carbon budget as a resource asset depleted by annual GHG emissions, and estimate the user cost associated with depletion. For constant emissions, social welfare increases US$3.3 trillion (6 per cent of global GDP) over the business as usual scenario of growing emissions, and the carbon budget's lifetime increases from 18 to 21 years. For declining emissions, the gain is US$10.4 trillion (19 per cent of global GDP), and the budget's lifetime is 30 years. Extending indefinitely the lifetime of the carbon budget would require emissions to fall exponentially by 4.8 per cent or more. Although the Paris Agreement abatement pledges will generate social gains of US$2–2.5 trillion (4–5 per cent of world GDP), they are insufficient to prevent depletion of the 2°C global carbon budget by 2030.

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.

The article describes and quantifies the financial benefits of small-scale community forestry, conducted on an ecologically sustainable basis—‘eco-forestry’, by customary landowners in Papua New Guinea. Through economic modelling the article also attempts to quantify the global benefits generated. Eco-forestry is subsidized by donors directly and through NGOs in its setting up and certification. Financial modelling suggests that, with a subsidy, eco-forestry is capable of generating a return to landowners that is comparable to industrial logging. While the return to logging followed by conversion to agriculture is much more attractive than eco-forestry, agriculture is an option available only in some locations. Economic modelling finds that the external economic benefits emanating from tropical forest conservation that replaces logging in Papua New Guinea are far greater in scale than the financial benefits to landowners. However, the lack of reliable data on the environmental benefits of forest conservation means that economic analysis is somewhat inconclusive. The need for further research to quantify environmental benefits is thus highlighted. The subsidization of forest conservation directly, instead of indirectly through small-scale forestry, is investigated and found to generate a similar level of economic benefits to eco-forestry. However, the cost of direct subsidization is greater. Moreover, mechanisms for direct subsidy are undeveloped in Papua New Guinea. Donors may prefer to continue to subsidize small-scale forestry where it replaces logging because of its apparent conservation and side benefits and because it is operational, while at the same time exploring and extending cost-effective models of direct conservation that have the advantage over eco-forestry of being applicable in more remote areas. Compared with industrial logging, eco-forestry contributes little to consolidated revenue. Therefore it is to be expected that eco-forestry will meet government resistance if it makes significant inroads into the allocation of logging concessions.

Previous research has found that presenting consumers with information regarding multi-attributes of a product tends to reduce the product's overall evaluation relative to a situation wherein only one attribute is presented. We find that the same phenomenon also holds for consumers' perceptions regarding attributes associated with genetically modified (GM) products. When given information on health (nutrients) and water use of certain crops, consumers reduce their quality perceptions compared to the situation wherein they are given only health or only water use information. In addition to replicating the findings on this phenomenon in another product category – that of GM products – we extend the theory by showing that multi-attribute information results in lower perceptions of attributes in addition to deflated total evaluation. This finding provides another explanation of consumers' resistance to GM products beyond risk and negative predisposition. Our findings can be used to guide policy makers in designing educational campaigns.

Well-defined and enforceable property rights are usually seen as a prerequisite for optimal resource management. However, the interaction effects between different renewable resource pools with different ownership structures are often not well recognized. In this paper we introduce these interaction effects in optimal fishery management theory. Various property rights regimes and market structures for fisheries are analyzed. Furthermore, we perform a sensitivity analysis with respect to the carrying capacity of a fish lake for the different agents. We describe various approach paths towards the new equilibrium after opening up to a common market. We show that a decline in market power leads to a lower stock and a higher supply. Furthermore we identify conditions under which market power might reduce profits.

Building on the extensive theoretical and empirical work regarding the cost-minimizing properties of economic instruments, this article describes and analyses the Mexican legislation relevant to the treatment/disposal of pig slurry in the state of Yucatán. Using a linear programming model to determine the optimal level of pig production and abatement processes simultaneously, different policy instruments and scenarios are compared. Serious shortcomings associated with the recently introduced command-and-control (CAC) legislation, which establishes concentration-based standards for discharges, are identified. It is shown that it will be extremely difficult and expensive to comply with (cost: US$41.8 million per annum). An alternative mass-based CAC approach, which instead regulates nitrogen applications to land, has compliance costs of US$3.5–US$9.4 million per annum, depending on the strictness of the standard. By contrast, an environmentally equivalent economic instrument approach results in additional cost savings of 22–25 per cent. The results are of relevance to Mexican policy makers, extensionists, researchers, and farmers.

Small landholders’ contribution to Amazon deforestation in Brazil has been persistent even after government actions have allowed a steep reduction in the overall annual deforestation area since 2004. We investigate land clearing and the incentives to comply versus not to comply with environmental legislation, allowing for selection into compliance or noncompliance due to unobserved perceptions of Forest Code enforcement. Our dynamic land clearing model is empirically tested through an endogenous switching regression method applied to data collected from households in the Transamazon-BR163 region between 2003 and 2014, when Forest Code enforcement supposedly increased. We show that smallholder compliance and noncompliance preferences lead to a selection problem that must be addressed in any land clearing behavior examination. We find that greater marginalization, longer land tenure and transitions to cattle grazing, but not agricultural rents, are major contributors to forest clearance and incentives not to comply with the Forest Code.

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).

Enhancing carbon sequestration is crucial to mitigate rising global levels of greenhouse gases, and for developing countries, carbon sequestration may also provide economic benefits via international carbon trading schemes. This study aimed to determine the optimal management strategy for tropical planted forests when timber and carbon sequestration are valued. The survey data were collected from 291 household foresters, who were growing Eucalyptus urophylla and Acacia mangium in Yen Bai Province, Vietnam. The regression exercise suggests that financial status was negatively correlated with forest management practices, and ethnicity and financial status were correlated with carbon sequestration management. The survey results suggest that the mean rotation age employed by household foresters is five years. However, the optimization modelling suggests that the optimal rotation age for maximizing net present value is greater than nine years. The differences between current practices and optimal practices therefore favour a role for government policy interventions.

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.

This study investigates the optimal use of ‘dirty’ technologies for economic development and when to stop polluting (either temporarily or forever). This question is addressed within a real option framework where three different kinds of options arise: for stopping pollution temporarily or forever and for re-starting. The possibility to shelve a polluting technology temporarily allows for a more conservationist policy. Costs associated with the option of a re-start lead to hystereses effects that complicate empirical cross-country comparisons of environmental policies.

Hurricanes act as large external shocks potentially causing considerable damage to agriculture in the Caribbean. While a number of studies have estimated their historic economic impact, arguably the wider community and policy makers are more concerned about their future risk and potential losses, since this type of information is useful for disaster preparedness and mitigation strategy and policy. This paper implements a new approach to undertaking a quantitative wind risk and loss assessment of agriculture in Caribbean island economies. The authors construct an expected loss function that uses synthetically generated, and historical, hurricane tracks within a wind field model that takes cropland exposure derived from satellite data into consideration. The results indicate that expected wind losses are potentially large but vary considerably across the region, where the smaller islands are considerably more likely to be negatively impacted. Moreover, we find that the structure of the agricultural sector can be important in terms of vulnerability.