Many developing economies are faced with growing populations and deteriorating natural resources. It is often argued that economic growth will arrest these trends via cleaner technology and social change accompanied by reduced birth rates. Two questions arise: (1) What general economic, demographic, and ecological conditions favor this scenario? and (2) What adjustments, technological, demographic, or ecological, are more important in realizing this scenario? I address these questions using a two-sector growth model which includes human demographics and a renewable resource base. Using powerful numerical bifurcation techniques and rescaling arguments, I obtain the following general results. If the regeneration rate of the renewable resource base is slow relative to the rate of economic growth, population overshoot and resource collapse is more likely. Demographic adjustments are more important than technological adjustments in avoiding renewable resource degradation. Several related results are presented that support these general findings.

We consider the international treaties on climate change as self-enforcing agreements. Applying non-cooperative game theory, we interpret the UN framework Convention on Climate Change as a Nash equilibrium outcome of an international abatement game where only domestic abatement is allowed. The Kyoto Protocol is a Nash equilibrium outcome of the game where flexibility mechanisms are introduced. We also show that credit discounting on foreign abatement can Pareto improve the welfare of all countries.

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.

Successful economic growth in Chile based on open market and export strategy, is characterized by a high dependence on natural resources, and by polluting production and consumption patterns. There is an increasing concern about the need to make potentially significant trade-offs between economic growth and environmental improvements. Additionally, policy makers have been reluctant to impose standards that could have regressive consequences, making the poor poorer. Using the CGE model ECOGEM-Chile we study the direct and indirect effects of imposing environmental taxes in Chile for PM-10 as well as taxes on fuels. We analyze the effects over macroeconomic variables as well as sectoral, distributive, and environmental variables. The results show that the most significant impacts are on emissions and sectoral outputs. There are winners and losers. Macroeconomic and distributional impacts are low when low emission reductions are required, however they can be significant if a 50% reduction in emissions are imposed.

This paper presents the operational procedures involved in incorporating the environmental costs in the cost–benefit analysis of a hydro-electric project. The proposed project, if implemented, would result in the loss of 2,800 hectares of tropical forests and dislocation of two settlements of about 200 families who are currently dependent on the forests for their livelihood. The forests are mainly used for extracting reed – a material used both by traditional artisans and the paper-pulp industry. The potential environmental costs and benefits of the project are identified and approximate estimates of some of these costs are made for items such as carbon sequestration, bio-diversity, and so on, based on similar estimates made elsewhere. These estimated environmental costs are incorporated into the analysis, and the hypothetical estimate of the non-use value, which would make the project's net benefit zero, is estimated under different discount rates. The analysis brings into sharp focus some crucial factors that have a direct bearing on the social trade-off involved in the project choice.

Farm households in developing countries are generally credit constrained. This forces them to simultaneously take production and consumption decisions. In this paper, a two-period lifecycle model of the farm household is constructed and the household's investment response to changes in land and agricultural output prices are derived theoretically. It is shown that in the absence of credit markets household responses to exogenous price changes may differ from the predictions of cost–benefit analysis. Farm household responses are also derived for the case where price increases for land and agricultural output are accompanied by the introduction of a credit market. For this case the results show that farm household reactions are in accordance with predictions made by cost–benefit analysis. An empirical case study from Bénin underscores the relevance of considering access to credit in establishing whether investments in soil conservation are beneficial to farm households.

Two very similar contingent valuation surveys eliciting willingness-to-pay (WTP) to avoid eye irritation, gastroenteritis, and coughing episodes due to seawater pollution were conducted on visitors to beaches in Portugal and Costa Rica. Various forms of the hypothesis regarding the transfer of mean WTP between the two countries were rejected, as was the hypothesis that model parameters were drawn from the same pooled sample across countries for three different illness episodes. When compared to on-site studies in Costa Rica, benefit transfer from Portugal leads to errors typically of the order of 100 per cent. Adjusting WTP for declared income or other easily accessible socio-demographic variables does not reduce transfer error. This study shows that transfer of health benefit estimates can be potentially quite unhealthy for policy analysis, questioning whether the time and resource savings are justified in this particular transfer context.

A strategic issue facing many developing economies is the maintenance of natural resources, which are important in ecological terms as well as for providing income from tourism. This paper presents an analysis of the economic value of marine protected areas in the Seychelles. The contingent valuation method (CVM) is used to determine tourists willingness to pay (WTP) for visits to Seychelles' marine national parks. In addition, attitudinal and motivational data are related to respondents' stated economic preferences. Three hundred interviews were conducted in the Seychelles during June 1998 and both tourists having visited a park and a more general population of tourists were surveyed. The results demonstrate that different economic values are predicted for respondents from different countries who display a range of both consumer and citizen behaviour in constructing their preferences. In addition, significantly different WTP amounts are predicted depending on which particular marine parks are visited, and the expectations of visitors to Seychelles. The discussion focuses on exploring how this information may be of use to policy makers in setting a realistic pricing policy for visitors to Marine National Parks in the Seychelles.

This study applies the hedonic pricing model to property sales in the township areas in Windhoek, the capital city of Namibia, where municipal authorities have pursued a programme of selling plots of land to settlers in order to encourage them into a formalized economic situation. We find that, apart from house quality, access to the central business district, access to marketplaces and access to transportation, environmental quality also has a large impact on property prices. Properties located close to a garbage dump sell at considerable discounts, while properties located close to a combined conservation and recreation area sell at premium prices. The results thus suggest that the hedonic pricing method can be useful for studying townships in developing countries, and that this can help to clarify the importance of environmental factors which are otherwise frequently neglected in town planning for township settlements.