Environment and Development Economics (EDE) was established 15 years ago to provide a publication outlet for theoretical and applied scientific papers dealing with issues at the intersection of environmental, resource and development economics, as well as to actively support capacity building in the developing world. In the years since its inception, EDE has published a large number of articles on topics ranging from sustainable development, the environmental Kuznets curve, and green accounting, to trade and environment, poverty and natural resource use, and the economics of ecosystems.

This paper addresses the potential of in situ crop landrace conservation, employing market-based instruments, which pre-requires that (1) consumers hold positive use-value for the landrace attribute and (2) their willingness to pay covers both the transaction cost of implementing these instruments and the opportunity cost of landrace cultivation. The empirical examination is based on two closely related analyses of eggplant production and consumption sectors of India. At present, the vegetable markets of south India provide the landrace cultivators with a price premium adequate enough to cover the opportunity cost of not opting for high-yielding modern varieties. However, we detect an underutilized consumer demand for landrace products. The wide margin that exists between the price premium farmers currently obtain for the landrace attribute and what consumers are willing to pay for it is indicative of the unexploited potential of labelling and certification schemes as an emerging agrobiodiversity conservation strategy.

This paper examines the role of the financial sector in renewable energy (RE) development. Although RE can bring socio-economic and environmental benefits, its implementation faces a number of obstacles, especially in non-OECD countries. One of these obstacles is financing: underdeveloped financial sectors are unable to efficiently channel loans to RE producers. The influence of financial sector development on the use of renewable energy resources is confirmed in panel data estimations on up to 119 non-OECD countries for 1980–2006. Financial intermediation, in particular commercial banking, has a significant positive effect on the amount of RE produced, and the impact is especially large when we consider non-hydropower RE such as wind, solar, geothermal and biomass. There is also evidence that the development of the RE sector has picked up significantly in the period since the adoption of the Kyoto Protocol.

We analyze the external effects that arise in the decisions of firms on polluting emissions and in the decisions of parents on the number of births in an optimal control model with three stock variables representing population, economic capital, and pollution. We distinguish two different types of households, which represent opposite ends of a spectrum of potential familial structures: ‘dynastic households’, in which the family sticks together forever and ‘micro-households’, in which children leave their parent's household immediately after birth. We show that the decision of parents on the number of births involves an externality that is qualitatively different for both types of familial structure. Hence, population policy should be different, according to the type of household. A first best result may be obtained in the case of dynastic households if an appropriate tax on the household size is applied, or, in the case of micro-households, if an appropriate tax on children is applied.

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.

This work depicts the possibility of setting up an optimal pollution tax under non-competitive markets and international trade in a small country. The model employed describes a situation of partial equilibrium characterized by imperfect competition among domestic producers, where the domestic good is a substitute for an imported polluting commodity. In this framework, we also bring in the possibility that the domestic firms can introduce innovation offsets via their investment in R&D. From the results, the optimal pollution tax under domestic distortions can be expressed as a function of a ‘domestic production effect’ and a ‘pollution effect’. Furthermore, when the firms execute R&D expenditures, the optimal policy adds an ‘innovation effect’, which captures the change in welfare coming from a decrease in total costs and can lead our results to a win–win situation.

This paper examines the complex relationship that exists between poverty and natural resource degradation in developing countries. The rural poor are often concentrated in fragile, or less favorable, environmental areas. Consequently, their livelihoods can be intimately dependent on natural resource use and ecosystem services. The relationship between poverty and natural resource degradation may depend on a complex range of choices and tradeoffs available to the poor, which in the absence of capital, labor, and land markets, is affected by their access to outside employment and any natural resource endowments. The paper develops a poverty–environment model to characterize some of these linkages, and concludes by discussing policy implications and avenues for further research.

This paper measures the impact of climate on Mexican agriculture using a Ricardian analysis. The analysis relies on economic data from 621 individual farms that were collected in 2002. Data on climate, elevation, soils, and distance to nearest city were matched with each farm. The analysis reveals that farmland values in Mexico are sensitive to climate. On average, warmer temperatures reduce land value by 4,000 to 6,000 pesos per degree Celsius. Examining three climate scenarios for 2100, the models predict average losses of between −42% to −54% of land value in Mexico. As a percent of income, rainfed farms will suffer slightly larger damages than irrigated farms but comparisons between small and large farms are mixed.

Presented in this paper are the results of two contingent valuation analyses, one undertaken in Ecuador and the other in Guatemala, of potential payments for environmental services (PES) directed toward rural households. We find that minimum compensation demanded by these households is far from uniform, depending in particular on individual strategies for raising incomes and dealing with risks. Our findings strengthen the case for allowing conservation payments to vary among recipients, which would be a departure from the current norm for PES initiatives in Latin America.

This paper addresses the design of corrective taxation schemes to manage multiple, interacting stocks. In the setting of irrigation-induced salinity, a collective groundwater stock aliments a set of individual rootzone salt stocks. It is shown that the policy maker does not need to base the tax rule on the individual salt stocks. Indeed, taxes based on the level of input and on the collective stock induce the agents to achieve the socially optimal irrigation path. An even simpler instrument is sufficient if the policy-maker's goal is to reach optimality at the steady state only.

Development agencies spend approximately US$ 400 million per year on landmine clearance. Yet many cost–benefit evaluations suggest that landmine clearance is socially wasteful because costs appear to far outweigh social benefits. This paper presents new estimates of the benefits of clearing landmines based on a contingent valuation survey in two provinces in rural Cambodia where we asked respondents questions that elicit their trade-offs between money and the risk of death from landmine accidents. The estimated Value of a Statistical Life (VSL) is US$ 0.4 million. In contrast, most previous studies of landmine clearance use foregone income or average GDP per capita, which has a lifetime value of only US$ 2,000 in Cambodia. Humanitarian landmine clearance emerges as a more attractive rural development policy when appropriate estimates of the VSL are used.

Human-generated greenhouse gases depend on the level and emissions intensity of economic activities. Therefore, most climate-change studies are based on the models and scenarios of economic growth. Economic growth itself, however, is likely to be affected by climate-change impacts. These impacts affect the economy in multiple and complex ways: changes in productivity, resource endowments, production and consumption patterns. We use a new dynamic, multi-regional computable general equilibrium (CGE) model of the world economy to answer the following questions: Will climate-change impacts significantly affect growth and wealth distribution in the world? Should forecasts of human-induced greenhouse gas emissions be revised, once the climate-change impacts are taken into account? We found that, even though economic growth and emission paths do not change significantly at the global level, relevant differences exist at the regional and sectoral level. In particular, developing countries appear to suffer the most from the climate-change impacts.

Concern about global climate change has elicited responses from governments around the world. These responses began with the 1997 Kyoto Protocol and have continued with other negotiations, including the 2009 Copenhagen Summit. These negotiations raised important questions about whether countries will reduce greenhouse gas emissions and, if so, how the burden of emissions reductions will be shared. To investigate these questions, we utilize environmental Kuznets curves for carbon emissions for the G8 plus five main developing countries. Our findings raise doubts about the feasibility of reducing global carbon emissions and shed light on the different positions taken by countries on the distribution of emissions reductions.

This paper applies a household production framework (Becker, 1971) to infer the economic value of a cultural heritage site, namely, the Petroglyph National Monument, situated in Albuquerque, New Mexico, USA. The empirical analysis uses benefit-transfer techniques from three source studies: those of Bergstrom and Cordell (1991) and Boxall et al. (2003), which concern willingness-to-pay to hike and view rock art sites; and those of Rolfe and Windle (2003, 2006), which concern willingness-to-pay by Aboriginal and general populations to preserve a cultural heritage site containing rock art. The benefit-transfer analysis estimates recreational values between 3.75 million and 7 million dollars per year (depending on perceptions of the cultural attribute quality) and a nonuse value of approximately 12.5 million dollars per year. By comparison the annualized costs of developing/operating the study site are 8.5 million dollars per year. Thus a partial cost-benefit analysis suggests the study site yields net economic benefits upwards of 7.8 million dollars per year.

Based on decision theory, this paper suggests a four-hurdle model to deal with zero and missing responses in the contingent valuation method with open-ended bidding, which is used to analyze the willingness to pay for blue skies in Beijing where air pollution is known to be very serious. The mean and the median of the predicted willingness to pay for blue skies per household are, respectively, 120.15 and 128.60 yuan, less than 0.2% of the per capita annual disposal income in Beijing. This is very low compared to results from studies of other countries. The empirical results also indicate that the four-hurdle model is superior to the Tobit model and raw data estimation.

Accelerating economic growth and social development is necessary to reduce the vulnerability and enhance the adaptive capacity of sub-Saharan Africa to cope with the consequences of predicted unfavorable future climate. This requires major investments and policy reforms to induce a needed radical transformation of the way development is currently pursued to a more climate-sensitive path of low carbon growth. Key gaps in the current knowledge base that call for major investments and urgent attention include the ability to forecast more robust local future climate and to account for the uncertainties associated with climate risks for ecosystems' functions and probable nonconvexities in future impacts to project more plausible scenarios for future development in sub-Saharan Africa and provide better information on the costs and benefits of potential actions to avert the negative consequences of climate change.

Migration literature has considered environmental constraints as one of the prime movers of populations, especially from dry regions, where water rather than land is the primary limiting factor. This study examines the impact of degradation of private as well as common pool land resources on migration decisions, based on primary data from over one thousand households in three dry land districts in Gujarat. The study finds that economic assets and natural capital have differential impacts on short-term and long-term migration decisions. Thus, any employment creation in rural dry land regions is likely to help the poorest. Further degradation of common-pool land resources influences short-term but not long-term migration. Therefore, better management of common-pool resources would strengthen the livelihood base of traditional herder communities and limit migration among middle-income households. Overall, in dry areas such as Gujarat, access to irrigation, rather than land ownership per se, is likely to deter migration.

The goal of this paper is to analyze whether reforming groundwater pricing has the potential to encourage water conservation and assess its impacts on crop production and producer income in rural China. Household-level water demands are estimated so that adjustments at both the intensive and extensive margins are captured. The results show that a large gap exists between the cost of water and the value of water to producers. Simulation analysis shows that reforming water pricing can induce water savings. However, the price of water needs to be raised to a relatively high level. We also find that the value-based policy is more effective than the cost-based policy since it generates larger water savings, given the same increase in the average price of water. While raising the price of water negatively affects crop production and crop income, higher water prices do not adversely affect the distribution of household income.

Morocco's argan oil is now the most expensive edible oil in the world. Growing high-value argan markets have sparked a bonanza of argan activity. NGOs, international and domestic development agencies, and argan oil cooperatives have promoted the win–win aim of simultaneously benefiting locals and the argan forest. We test this win–win claim by surveying households before and after rapid appreciation in argan prices. The argan boom has benefited some rural households. Those well positioned to benefit increased their goat herds more than other households, which bodes poorly for forest impacts, and were more likely to send their girls to secondary school. While locals are keeping their goats out of argan trees during the harvest, they may also be resorting to more aggressive harvesting techniques. The boom has made households vigilant guardians of fruit on their own trees, but has not incited investments in longer term tree and forest health.

This study examines the effects of growing manufacturing employment on infant mortality across almost 200 Indonesian districts from 1985 to 1995, a time of rapid industrialization. Overall, we find no relationship between growing manufacturing employment in general and infant mortality. However, when the growth in manufacturing is concentrated in more polluting industries (as measured by the construction of a harm-weighted index of predicted emissions from manufacturing), there were economically and statistically significant increases in infant mortality. Finally, we consider a variety of potential causal channels that may change with industrialization (such as housing quality and access to health care) and whose change may help to explain the observed relationships. Although most of the various factors are correlated with infant mortality and the industrialization measures are correlated with changes in several factors, conditioning on these measures does not change our basic results.