Fishers in developing countries do not have the resources to acquire advanced technologies to exploit offshore fish stocks. As a result, the United Nations Convention on the Law of the Sea requires countries to sign partnership agreements with distant water fishing nations to exploit offshore stocks. However, for migratory stocks, the offshore may serve as a natural marine reserve (i.e., a source) to the inshore (i.e., sink); hence these partnership agreements generate a spatial externality. In this paper, we present a bioeconomic model in which a social planner uses a landing tax (ad valorem tax) to internalize this spatial externality. We found that the tax must reflect the biological connectivity between the two patches, intrinsic growth rate, the price of fish and cost per unit effort. The results are empirically illustrated using data on Ghana.

Much of the debate between the European and US positions about the labeling of genetically modified (GM) foods has been whether consumers perceive labels as a source of information or as a signal to change behavior. In this paper we provide an experimental framework for examining these roles of information and signaling. While previous studies have focused on the impact of labels on consumer behavior, our interest is also in what happens prior to the expression of aversion to GM-labeled foods. In particular, the experiment design allows the researcher to estimate a lower bound of the informational impact of labels on GM food aversion. The other novel feature of this paper is that, unlike earlier studies, it uses subjects from a developing country.

This paper investigates the impact of structural adjustment policies on deforestation taking place when the agricultural frontier advances into forest reserves in Nicaragua. A computable general equilibrium model incorporating deforestation by squatters is used for policy simulations. The opportunity cost of migrating to the frontier does not simply depend on wage income opportunity, but also on market prices of basic grain which determine the capacity to consume beyond subsistence food-level given a certain real wage. Reducing public expenditures both conserves forests and enhances economic growth, while showing positive distributional effects. On the other hand, a strong conservation trend following a sales tax increase is driven by increasing poverty in rural areas. Noticeably, there are policies which initially intensify deforestation, but turn out to ease the pressure on forests over time. Rapid economic growth does not ensure less pressure on forest reserves.

It has been recognized that extra incentives for firms' compliance with pollution regulations would be created under state-dependent enforcement as Harrington (1988) has shown theoretically. However, the extent of the overall improvement in compliance is expected to be different according to the pollution control costs and industrial structures of any given country. This paper empirically examines, for the first time, the effectiveness of an imposition of higher fines for repeated violations and state-dependent enforcement in terms of the reduction of violation days, by simulating emitting behavior for 65 sub-industries in the Korean manufacturing industry over the period 1987–1989. State-dependent enforcement was found to be more effective than an imposition of higher non-compliance fines for repeated violations in regard to the number of sub-industries exhibiting persistent non-compliance. However, the number of fully complying sub-industries was found to be slightly higher under an imposition of higher non-compliance fines for repeated violations. In Korea, it would therefore be desirable to discriminate against certain industries with enforcement systems of different intensity based on their abatement cost structures rather than uniformly introducing a state-dependent approach.

This essay offers a limited study of income sustainability for one oil-exporting country: Iraq. The nature of the study motivates a discussion of some theoretical issues concerning levels of non-renewable resource depletion and re-investment as well as related questions about the substitutability of man-made and natural capital and critical natural capital. The results of the study, which decomposes oil revenues into consumption and capital portions, suggest that the re-investment in physical capital offset the depletion of natural assets arising from oil extraction in the period under consideration. Because of the lack of data, a complete study of the capital balance is not feasible. Consequently the findings are tentative.

This paper studies the impact of a World Trade Organization withdrawal of trade concessions against countries that fail to respect globally recognized environmental standards. We show that a punishing tariff can be effective when environmental and trade policies are endogenous. When required standards are not too stringent with respect to the marginal damage of pollution, compliance along with free trade as a reward is the unique equilibrium outcome. A positive optimal tariff in the case of non-compliance prevents complete relocation to pollution havens, but only works as a successful credible threat and does not emerge in equilibrium.

We examine the environmental impacts of a cash transfer program in rural Zambia and investigate whether variation in market access is associated with heterogeneous impacts on natural resource use. We consider households’ use of firewood, charcoal, bushmeat and land for farming, as well as their ownership of non-farm businesses. We find that cash transfers increase the likelihood of charcoal consumption as well as the amount consumed for those living close to paved roads. The transfers also enable households to increase the size of their farms and establish non-farm businesses. These impacts are most pronounced for those living far from paved roads. While remoteness is associated with farm expansion in response to the cash transfer, more education causes those receiving the transfer to decrease the size of their farms. This impact heterogeneity has important implications for sustainable development.

In an overlapping generations model with multiple steady states, we analyse the impact of endogenous environmental policies on the relevance of history and expectations for the equilibrium selection. In a polluting regime, environmental preferences cause an increasing energy tax which raises the risk that the economy transitions to the inferior equilibrium under pessimistic expectations. However, higher environmental preferences imply an earlier switch to the clean energy regime. Then, the conflict between production and environmental preferences is resolved and the prospects of selecting the superior equilibrium improve, since positive expectations become more relevant. In an empirical analysis we find that people with environmental preferences tend to have more optimistic expectations about economic development. Using these findings to analyse the steady-state dynamics implies that agents with environmental preferences support higher energy taxes and switch to clean production more quickly. Due to their optimism, the likelihood of reaching the superior stable steady state increases.

We present evidence that international trade may exacerbate the initial unequal distribution of hydric resources. This result is driven by the fact that countries exporting agricultural goods are relatively abundant (with respect to capital) in the combined availability of water and arable land but, in absolute terms, scarce in capital and not richer in water in comparison to more developed ones. Due to both the scarcity of capital and the lower relative price of natural resources with respect to capital, the total value of production in these developing countries is modest, implying that international trade can lead to a less even distribution of the water content of consumption. Policies sustaining water prices and, more generally, those of natural resources (or lower capital costs) may contribute to offsetting this effect and allow for trade to play a positive role in reducing the uneven distribution of water endowments.

This paper empirically examines the factors that determine the incidence and extent of the Clean Development Mechanism (CDM) in developing countries. Estimation results show that the incidence and extent of the CDM is greater for the developing countries with larger mitigation potential and greater capacity to manage the projects. Developing countries with faster economic growth and past experience with activities implemented jointly (AIJ) projects are more likely to host renewable energy projects, although this is not the case for other project types. The incidence and extent of foreign investment projects in energy efficiency, CO2 reduction and non-CO2 gas reduction projects are higher for the countries with lower per capita GDP, most likely due to capital constraints. There is no evidence that the number of sub-regional projects impinged on investment flows. Countries in Sub-Saharan Africa appear to face special obstacles under the CDM even after the strength of institutions and energy-related mitigation opportunities are accounted for.

Stated preference approaches, such as contingent valuation, focus mainly on the estimation of the mean or median willingness to pay (WTP) for an environmental good. Nevertheless, these two welfare measures may not be appropriate when there are social and political concerns associated with implementing a payment for environmental services (PES) scheme. In this paper the authors used a Bayesian estimation approach to estimate a quantile binary regression and the WTP distribution in the context of a contingent valuation PES application. Our results show that the use of other quantiles framed in the supermajority concept provides a reasonable interpretation of the technical nonmarket valuation studies in the PES area. We found that the values of the mean WTP are 10–37 times higher than the value that would support a supermajority of 70 per cent of the population.

Schistosomiasis is caused by a vector-borne parasite, commonly found in low- and middle-income countries. People become infected by direct contact with contaminated water through activities such as collecting water, bathing and fishing. Water becomes contaminated when human waste is not adequately contained. We administered a discrete choice experiment to understand community preferences for interventions that would reduce individuals' risk of contracting, or transmitting, Schistosoma mansoni. These focused on water access, sanitation and hygiene (WASH) interventions. We compared interventions that target behaviours that mainly put oneself at higher risk versus behaviours that mainly put others at risk. We used two payment vehicles to quantify what individuals are willing to give up in time and/or labour for interventions to be implemented. Key findings indicate that new sources of potable water and fines on open defecation are the highest valued interventions.

A dynamic model of selective harvesting in multi-species, multi-age tropical forests is developed. Forests are predicted to exhibit different optimal harvesting profiles depending on the nature of their joint cost functions and own or cross-species stock effects. The model is applied to the controversy about incentives produced by various taxes. The impacts of specific taxes are shown to depend on the composition of the forest stocks, growth rates, and joint cost effects. Therefore, specific taxes may create different incentives and impacts in Indonesia than in Brazil or Malaysia, for example, suggesting that no single uniform forest tax policy will be appropriate for all countries or all forests.

The effect of preference uncertainty on estimated willingness to pay (WTP) is examined using identical payment cards and alternative uncertainty elicitation procedures in three split samples, focusing on air quality improvement in Nairobi. The effect of the stochastic payment card (SPC) and polychotomous payment card (PPC) are compared with a conventional payment card (PC). Substantial financial support is found for improved air quality in Nairobi, with approximately 85 per cent of the whole sample stating a positive WTP. The way WTP values are elicited, with and without ability to express preference uncertainty, has significant effect on WTP welfare estimate. Allowing respondents to express experienced uncertainty when stating WTP value yields more conservative but less accurate WTP values for inclusion in policy analysis. The PPC seems to hold more promise since it is easier to understand and imposes less cognitive burden on survey participants than the SPC in a developing country context.

This paper examines how natural resource revenues interact with growth and welfare in an overlapping generations model with altruism. The revenues are allocated between public productive services and direct transfers to members of society by spending policies. We analyze how these policies influence the dynamics, and how the dynamics are influenced by the revenue. Abundant revenues may harm growth, but growth and welfare can be oppositely affected. We also provide the social planner solution under which revenues enhance growth. Overall, the analysis suggests that variation in the strength of altruism and in spending policies may be part of the reason why natural resources seem to affect economic performance across nations differently.

Deforestation results from the trade-off between benefits from forest conservation and economic profits associated with land development. However, as net gains are often uncertain, irreversible land development may later be regretted. To better inform conservation policies, we use a real options framework to model irreversible forest conversion under uncertain conservation benefits and determine the associated optimal long-run average rate of deforestation. We then analyze the impact of the demand for agricultural products on the rate of deforestation in the Brazilian Amazon. In a scenario analysis for the nine states of the Brazilian Amazon, we calculate: (i) the expected time for exhaustion of the current forest stock; and (ii) the potential forest coverage for the next 20, 100 and 200 years. Our results suggest that if forest benefits grow over time at a sufficiently high speed, they may significantly slow down deforestation. In contrast, the higher their volatility, the faster deforestation proceeds.

In this paper I analyze the forest and debt dynamics in a less developed country (LDC), where the former is a renewable resource and the latter's increase results from the interests to be paid on the current debt minus the balance of trade surplus. Agricultural and industrial goods are produced, and whereas the former requires the converted forest as an input, the latter does not. It transpires that the stock of debt is likely to increase infinitely without repudiation, whereas the stock of forest is likely to oscillate around an equilibrium level. Within this framework, I compare the effectiveness and enforceability of the debt-for-nature and the debt-for-development swaps with respect to tropical deforestation and debt burden issues. Some empirical evidence confirming the theoretical results is provided.