This paper examines whether the stochastic convergence hypothesis of per capita carbon dioxide (CO2) emissions is supported in countries with the same level of development – that is, are shocks to relative per capita CO2 emissions temporary in industrialized countries? We respond to this question by utilizing the recently developed Lagrange Multiplier (LM) unit root test that endogenously determines structural breaks in level and trend as proposed by Lee and Strazicich (2003, 2004). Our empirical findings provide significant evidence that relative per capita CO2 emissions for 21 OECD countries stochastically converge when we control for breaks in the period 1960–2000. Structural breaks are identified in each country, and overall we find that most breakpoints occur around the two energy crises and in the 1990s. The robust test clearly also indicates that most original per capita CO2 emissions and average series are stationary.

Tourists, protected area managers, gateway communities, and national or international interested parties may have different objectives for protected areas management in developing countries. When values and incentives are at cross-purposes, difficulties in management may persist, but policy alternatives may be available. This research hopes to better understand the incentives facing different groups of stakeholders in the ecological-economic management of the Monarch Butterfly Biosphere Reserve in Michoacan, Mexico. The quasi-private management of this protected area by ‘ejidatarios’ provides an additional feature of interest. Travel cost, contingent behavior and export base analyses are used to establish alternative optimal entrance price strategies at the Reserve. Potential policy alternatives from the perspective of each stakeholder group are explored. Significant changes in management strategy, optimal entry fee and economic benefit appear to be possible by recognizing different scales and orientations of relevant stakeholders.

This paper uses data from a Payments for Environmental Services (PES) project being implemented in Nicaragua to examine the extent to which poorer households that are eligible to participate are in fact able to do so, an issue over which there has been considerable concern. The study site provides a strong test of the ability of poorer households to participate, as it requires participants to make substantial and complex land use changes. The results show that poorer households are in fact able to participate – indeed, by some measures they participated to a greater extent than better-off households. Moreover, their participation was not limited to the simpler, least expensive options. Extremely poor households had a somewhat greater difficulty in participating, but even in their case the difference is solely a relative one. Transaction costs may be greater obstacles to the participation of poorer households than household-specific constraints.

Studies of compliance with fishing regulations have been based on fishery crimes where the offender faces a one-period decision problem of maximizing an expected utility. Moreover, the returns from the crimes are uncertain because the offender may lose them if caught. This paper extends these models by considering a fishery crime that generates a flow of returns until the offender is caught and then punished. Consequently, it incorporates into the existing model the influence of dynamic deterrence in which the discount rate affects violation levels. The predictions of the model are tested on data from an artisanal fishery in Ghana.

This paper explores the potential impacts of payments for agricultural soil carbon sequestration on poverty of farm households and on the sustainability of agricultural systems, using economic theory combined with evidence from three case studies in Kenya, Peru, and Senegal. The case studies indicate that the likely impact of carbon contracts will be to raise rural incomes and reduce the rate of soil carbon loss. In some cases, carbon contracts may be able to stabilize soil carbon stocks at a higher level than would otherwise be economically feasible. These findings suggest that carbon payments could have a positive impact on the sustainability of production systems while also reducing poverty. The analysis indicates that payments for environmental services are most likely to have a positive impact when they are implemented in an enabling economic and institutional environment.

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.

This paper attempts to explore how the Taiwan government can effectively use subsidies to retire aquacultural farms based on the externality ground subsidence from pumping groundwater, using the town of Budai in Chia-Yi county as an example. The research first constructs the relationship between ground subsidence and groundwater consumption after taking the externality into consideration. An economic model that minimizes the total subsidy expenditure is then used for targeting the fish farms that need to be retired first in order to meet environmental goals. The results show that when the interaction caused by pumping groundwater among neighborhood farmers is considered, the responsibility for achieving the targets of environmental control is not evenly shared by aquacultural farmers. The location, and not the farm size, plays a more important role in determining whether environmental goals can be met.

Cash-constrained wildlife departments must increasingly look towards revenue-generating activities such as sales of permits for hunting common species combined with fines for those caught with rare species. Pertinent to west Africa, an optimal enforcement model demonstrates the conditions under which a department with neither external budget nor tourism revenue can fully protect a rare species, and the impact on other species and local hunters' livelihoods. The department's effectiveness is shown to depend critically on the extent to which hunters can discriminate among different species. Improvements in hunting technology selectivity are therefore a substitute for increased enforcement spending.

This paper analyzes overlapping-generations models where natural capital is owned by selfish agents. Transfers in favor of young agents reduce the rate of depletion and increase output growth. It is shown that intergenerational transfers may be preferred to laissez-faire by an indefinite sequence of generations: if the resource share in production is sufficiently high, the welfare gain induced by preservation compensates for the loss due to taxation. This conclusion is reinforced when other assets are available, e.g. man-made capital, claims on monopoly rents, and R&D investment. Transfers raise the welfare of all generations, except that of the first resource owner: if resource endowments are taxed at time zero, all successive generations support resource-saving policies for purely selfish reasons.

Conservationists promote non-timber forest products (NTFP) to simultaneously alleviate poverty and conserve ecosystems. Unfortunately, little is known about how such products actually contribute to poverty alleviation, or how various complementary policies such as green marketing campaigns or cooperative management might impact resource health and users' welfare. This paper develops a simple NTFP extraction model that focuses on spatial and labor market dimensions of use in both managed and unmanaged settings. The model contrasts patterns of spatial use, resource health, and income generation under open access and community-managed institutions. We then test the conceptual model by investigating the case of xate production in the rainforest of Chiapas, Mexico, using survey work conducted over two separate periods. The empirical investigation reveals spatial patterns and labor market outcomes predicted by the model. We find NTFP use is mainly conducted by households with low opportunity costs of time and fewer income generation opportunities.

At the community level, bylaws and other regulations are commonly used to manage natural resources. However, there is limited research on how communities enact these regulations and what determines awareness and compliance with these regulations. A survey of 273 communities was conducted in Uganda with an objective of analyzing the determinants of enactment, awareness and compliance with community Natural Resource Management (NRM) regulations. Presence in the community of programs and organizations with focus on agriculture and the environment increases the probability to enact and to be aware of NRM regulations. The probability to comply with regulations enacted by village councils was greater than the case with such regulations passed by higher legislative bodies, suggesting the important role played by decentralization in NRM. Poverty is associated with lower compliance with NRM regulations. This supports the poverty-natural resource degradation trap hypothesis, and suggests that measures to reduce poverty can also improve NRM.

We explore poor farmers' incentives to adopt production systems that increase soil carbon sequestration, focusing on the impact of risk. A dynamic optimization model of conservation agriculture adoption is presented, where farmers optimize over expected utility of profits from agriculture and carbon sequestration. Adoption impacts on agricultural productivity are modeled as a combination of the technological effects of the new system, and productivity effects of changes in soil carbon on agricultural output. Comparative static results indicate increases in soil carbon sequestration price and the discount rate have unambiguous impacts on equilibrium soil carbon levels; the former leading to higher, and the latter to lower, carbon levels. Increases in the price of agricultural output and risk aversion have ambiguous impacts, depending on the relative strength of the productivity and technology effects. The paper concludes with a discussion of designing soil carbon payment mechanisms to benefit low income farmers.

The exact specification and motivation for an environmental Kuznets curve (EKC)is the subject of a vast literature in environmental economics. A remarkablydiverse set of econometric approaches and candidate regressors have beenproposed, which highlights the degree of model uncertainty surrounding therelationship between environmental quality and pollution. We introduce Bayesianmodel averaging (BMA) to the EKC analysis to examine: (a) whether a sulphurdioxide EKC exists, and if so (b) which income/pollution specification issupported by the data. BMA addresses model uncertainty as part of the empiricalstrategy by incorporating the uncertainty about the validity of competingtheories into the posterior distribution. We find only weak support for an EKC,which disappears altogether when we address issues relating to the extremeoversampling of two industrialized countries in the sample. In contrast, ourresults highlight the relative importance of political economy and site-specificvariables (specifically executive constraints and precipitation variation) inexplaining pollution outcomes. Trade is shown to play an important indirectrole, as it moderates the influence of the composition effect on pollution.

Sustainable use of humid forest resources as a source of fertile land for cultivation requires long periods of fallow and the ability to move the zone of active cultivation from one location to another over time. At the individual field level, shifting cultivation is essentially a resource extraction problem akin to a pulse fishery – a short period of intensive use of the stock of soil fertility followed by a long idle period permitting regeneration. This paper describes a spatiotemporal model of resource extraction adapted to the use of forest resources by shifting cultivators. Theoretically grounded in the spatial and household modelling literature, it is a structural simulation model of household decision-making, and includes a demonstration of the concept with a limited data set from southern Cameroon. Use of a stated preference approach to modelling decision-making identifies individual preferences and spatial path-dependency as important sources of shortened fallows and resource degradation.

This paper discusses the gain in efficiency from including deforestation risk as a targeting criterion in payments for environmental services (PES) programs. We contrast two payment schemes that we simulate using data from Mexican common property forests: a flat payment scheme with a cap on allowable hectares per enrollee, similar to the program implemented in many countries, and a payment that takes deforestation risk and heterogeneity in land productivity into account. We simulate the latter strategy both with and without a budget constraint. Using observed past deforestation, we find that while risk-targeted payments are far more efficient, capped flat payments are more egalitarian. We also consider the characteristics of communities receiving payments from both programs. We find that the risk-weighted scheme results in more payments to poor communities, and that these payments are more efficient than those made to non-poor ejidos. Finally, we show that the risk of deforestation can be predicted quite precisely with indicators that are easily observable and that cannot be manipulated by the community.

This paper reviews the state of economic understanding about fuelwood in developing countries. It synthesizes the main results from numerous empirical studies with the intent of identifying implications for policy and pointing out where important questions remain unanswered. Overall, the empirical results reviewed reinforce the contention that households alter their behavior in the presence of sufficient scarcity in ways that are least costly to them. Still, the cost can be substantial and many cases remain where policy intervention is justified to address concerns of both equity and efficiency. Addressing the coping capabilities of the very poor and the open access conditions of woodlands appear to be two ways of dealing with fuelwood scarcity that are likely to yield high social rates of return. Community forestry has the potential to address these two important areas, but there is little evidence to date that this is being done with fuelwood in mind.

Traditional grazing grounds near Amboseli National Park (Kenya) are being rapidly converted to cropland – a process that closes important wildlife corridors. We use a spatially explicit simulation model that integrates ecosystem dynamics and pastoral decision-making to explore the scope for introducing a ‘payments for ecosystem services’ scheme to compensate pastoralists for spillover benefits associated with forms of land use that are compatible with wildlife conservation. Our break-even cost analysis suggests that the benefits of such a scheme likely exceed its costs for a large part of the study area, but that ‘leakage effects’ through excessive stocking rates warrant close scrutiny.

We develop a bioeconomic model to gain insight into the challenges of Payments for Environmental Services (PES) as applied to protect endangered species given wildlife-livestock disease risks and habitat fragmentation. We show how greater connectivity of habitat creates an endogenous trade-off. More connectedness both (i) ups the chance that populations of endangered species will grow more rapidly, while (ii) simultaneously increasing the likelihood diseases will spread more quickly. We examine subsidies for habitat connectedness, livestock vaccination, and reduced movement of infected livestock. We find the cost-effective policy is to first subsidize habitat connectivity rather than vaccinations – this serves to increase habitat contiguousness. Once habitat is sufficiently connected, disease risks increase to a level to make disease-related subsidies worthwhile. Highly connected habitat requires nearly all the government budget be devoted to disease prevention and control. The result of the conservation payments is significantly increased wildlife abundance, increased livestock health and abundance, and increased development opportunities.