This paper aims to address the impact on deforestation of the use of forest products as safety nets by poor agricultural households. Two safety-net uses may be implemented: the diversification strategy and the coping strategy. With both strategies, crop risk reduction, lower risk aversion and larger population increase tropical deforestation. Forest profitability always tends to increase the forest cover in the diversification case. Conversely, considering the coping strategy, two opposite effects determine the impact of forest profitability on the forest cover: a portfolio effect and an insurance effect. Finally, the household is better off and deforests less when using the diversification strategy instead of the coping strategy.

Gold is frequently mined in rainforests that can provide either gold or forest benefits, but not both. This conflict in resource use occurs in Ghana, a developing country in the tropics where the capital needed for mining is obtained from foreign direct investment (FDI). We use a dynamic model to show that an ad valorem severance tax on gross revenue can be used to internalize environmental opportunity costs. The optimal tax must equal the ratio of marginal benefits from forest use to marginal benefits from gold extraction. Furthermore, the tax should increase (decrease) when adjusted net return on all other assets in the economy is higher (lower) than the growth in the price of gold. Empirical results suggest that the 3 per cent tax rate currently used in Ghana is too low to fully represent the external cost of extraction (i.e., lost forest benefits).

This study examines farmers’ preferences for seed of new rice varieties (improved and NERICA) and their willingness to pay (WTP) for information embodied in the seed, in villages of Nigeria and Benin. Information might not generate rivalry among its users but excludability is certainly a characteristic of information and its delivery can generate incentives for private participation. Conjoint utility analysis is used to estimate the structure of farmers’ preferences for rice seed. Farmers prefer one variety based on the utility they obtain from its attributes, which depends on their own social and economic characteristics. Contingent methods are used to elicit preferences and rice seed price. The marginal values of attributes are estimated with an ordered probit regression. The WTP for seed-related information is derived from the utility model. The results have implications for the best way to finance extension services in the areas of intervention, particularly for new rice varieties.

In the epidemiological literature, the eradication of a wildlife disease through culling is usually described in terms of a constant hunting rate to simulate the selective removal of animals from the population. By using simple SI (susceptible–infected) models, it is easy to prove that, if the hunting rate is high enough, the population eventually drops below a critical threshold level under which the pathogen is deemed to be extinct. However, hunting costs as well as the monetary benefits of disease control are almost systematically neglected. Moreover, the hunting rate is usually assumed to be constant over time, while in reality health authorities can implement more flexible culling policies. In this work we examine a class of more realistic time-variant culling strategies in a cost–benefit framework. Culling strategies differ in the way decisions are made about when and how much to cull; that is, whether hunting occurs when disease prevalence, host population density, or the number of carcasses exceeds (or is below) a given threshold. For each culling strategy, the optimal value of the control parameters and the hunting rate are those that minimize the sum of the culling costs and the sanitary costs associated with infection over a specific period of time. Classical swine fever (CSF) in wild boar populations has been taken as a reference example because of its potential economic impact on industrialized and developing countries.

We show that the optimal time-flexible culling strategy is invariably more efficient than the best traditional strategy in which the hunting rate is held constant through time. We also show that the type of hunting strategy that is selected as optimal depends on the shape of the cost functions.

This study aims to find the optimal switching point for the Indian coal-based power plants to switch to a cost-effective technology and reduce particulate emissions. Regulation in the form of an emission standard, an emissions tax, an ash tax, or a coal tax provides an incentive for the power plants to abate. We have taken a period of 40 years to show the pattern of abatement in a sample of 40 power plants. Linear programming using GAMS has been used for the analysis to determine when the plants will shift to cost-efficient technology. We have first done the analysis on a firm-to-firm basis and then we have aggregated to show the variability of our results.

The potential importance of natural resources for the livelihood of poor rural households has long been recognized but seldom quantified and analyzed. In this paper, we apply poverty and inequality measures to national and community level data sets to explore the impacts of resource extraction on rural welfare. Our findings suggest that natural resource extraction reduces both income inequality and poverty. Results from a simulation analysis at the community level indicate that poverty may be reduced, in the short-run, by increases in the price of a non-timber forest product.

Plant pathogens are quite destructive to cash crops throughout the world, resulting in potentially devastating financial losses. This work expands recently developed optimal control theory for an integrodifference model to a mathematical system which includes an integrodifference component. This system models a highly simplified plant pathogen system for which the optimal harvesting scheme is derived. An adjoint system is introduced to characterize the optimal harvesting pattern. This analysis shows that, while it may not be possible to prevent losses upon discovery of the pathogen in an area, it is theoretically possible to significantly cut those losses by culling an area around the initial infection.

In the framework of the Harris–Todaro model we introduce a production–production externality and assume that the activity in the urban sector negatively affects (pollutes) the rural sector. As a means of reducing pollution a tax is imposed on the production of the polluting sector and the distributional and employment effects, as well as the national income aspects of such a tax, are explored. We take two versions of the Harris–Todaro model, the short run, where only labour is mobile between the rural and the urban sector, and the longer run, where all factors of production are intersectorally mobile. Our findings indicate that taxation will reduce pollution, may favour employment in the rural sector, and under certain conditions will also reduce unemployment, particularly in the longer run. National income will be generally enhanced if the share of the agricultural output in national income is higher than the share of manufactures.

A bioeconomic model is used to study the effect of Prosopis juliflora, an exotic tree, on diverse agents in Ranthambhore National Park. Tigers prey on wild herbivores, cattle, and goats that compete with each other to feed on green biomass, i.e. leaves and grass. There are four agents: goat owner, cattle owner, wood gatherer, and park manager. It is shown that there is an inherent trade-off between the number of tigers and village livestock that are grazing. Prosopis juliflora makes management of this trade-off more difficult. The four agents have different interests in the park, and a different ranking of the four scenarios that are simulated.

This paper develops four agricultural household models of forest clearing – as both an input for current production and an investment in future production – over two periods under distinct land and labor market institutions. Five different effects of policies on farmers' forest clearing decisions are identified. Careful comparison of their relative magnitudes reveals (potential) pro-forest policies under distinct market conditions. In Latin American countries, poor early settlers are often bid off their cleared land after or without cultivation by wealthy large holders. With this ‘sell-out effect,’ price transfer and technological transfer for soil management targeting poor colonists and policy reforms eliminating land price distortions are recommended to arrest deforestation. On the other hand, especially in places where land transaction opportunities are nil like Sub-Saharan African countries, policies promoting non-agricultural activities among poor farmers are needed.

We study the effects of development and climate change on infectious diseases in Sub-Saharan Africa. Infant mortality and infectious disease are closely related, but there are better data for the former. In an international cross-section, per capita income, literacy, and absolute poverty significantly affect infant mortality. We use scenarios of these three determinants and of climate change to project the future incidence of malaria, assuming it to change proportionally to infant mortality. Malaria deaths will first increase, because of population growth and climate change, but then fall, because of development. This pattern is robust to the choice of scenario, parameters, and starting conditions; and it holds for diarrhoea, schistosomiasis, and dengue fever as well. However, the timing and level of the mortality peak is very sensitive to assumptions. Climate change is important in the medium term, but dominated in the long term by development. As climate can only be changed with a substantial delay, development is the preferred strategy to reduce infectious diseases even if they are exacerbated by climate change. Development can, in particular, support the needed strengthening of disease control programs in the short run and thereby increase the capacity to cope with projected increases in infectious diseases over the medium to long term. This conclusion must, however, be viewed with caution, because development, even of the sort envisioned in the underlying socio-economic scenarios, is by no means certain.

Environmental conservation requires society to consider the trade-off between allocating resources to productive activities and pollution control activities. Therefore, it is informative to measure the effect of environmental regulations on firms' productivity. This paper attempts to estimate the impact of environmental regulations on Korean manufacturing industries. Despite being key inputs in the manufacturing process, raw materials have often been excluded from the cost function due to the lack of price data. A restricted cost function is used to improve the reliability of parameter estimates. Empirical results indicate that environmental regulations caused a 12 percent decline in the average annual rate of productivity growth over the period 1982–93.

This study is the first systematic attempt to test statistically the contrasting hypotheses on the emission of SO2 and CO2, and energy consumption in Japan and China for the last few decades. We postulate the hypotheses that local governments have incentives to internalize the local external diseconomies caused by SO2 emissions, but not the global external diseconomies caused by CO2 emissions. To substantiate our hypotheses, we decompose emissions of SO2 and CO2 into two factors: the emission factor (i.e. emission per energy use) and energy consumption. The results show that the prefectures where past energy consumption was high tend to reduce the emission factor of SO2 significantly in Japan, while we do not find such a tendency in China. There is also evidence that neither per capita income nor past energy consumption affects the CO2 emission factor and energy consumption significantly in both Japan and China, implying that an individual country has few incentives to reduce CO2 emissions.

Negative externalities in groundwater irrigation arise due to overdraft of groundwater leading to premature well failure, and reduced yield and age/life of wells. A watershed development program aiming at recharging aquifers, facilitating sustainable groundwater use, is the focus of this study. Primary survey data from farmers using groundwater for irrigation in a dry land watershed in peninsular India are analysed. Results indicate that, even after considering (i) amortized cost of watershed, (ii) amortized cost per acre-inch of groundwater, and (iii) electricity cost of groundwater extraction, the net returns in watershed are economically viable. This can aid policy-makers, addressing groundwater overdraft leading to negative externalities, reach solutions with the assistance of a watershed development program enhancing groundwater recharge in dryland areas in developing countries.

Rivers can be both givers of life and takers of life. Investments that provide protection against flooding are often beneficial during normal or low flows. Investments such as storage reservoirs are long lived, separating construction and management operations. With international rivers, the absence of enforcement mechanisms may preclude infrastructure collaboration. Where physical infrastructure is in an upstream nation, downstream impacts may be ignored after the structure has been completed. Using a game theoretic model, it is shown that downstream cooperation may only be rational when flooding is the primary downstream impact. A stylized arid developing region and humid developed region are compared. Potential gains from collaboration are greatest in arid regions, but may be difficult to achieve. There may be little scope for capturing the gains from basin level management if economic integration does not extend beyond water issues.

The fields of epidemiological disease modeling and economics have tended to work independently of each other despite their common reliance on the language of mathematics and exploration of similar questions related to human behavior and infectious disease. This paper explores the benefits of incorporating simple economic principles of individual behavior and resource optimization into epidemiological models, reviews related research, and indicates how future cross-discipline collaborations can generate more accurate models of disease and its control to guide policy makers.

The pollution haven hypothesis maintains that the industries that are highly pollution intensive, i.e. dirty industries, have been migrating from developed economies to the developing world. It is argued that the environmental concerns of the developed economies caused them to enact strict environmental regulations, which have increased the cost of production of the dirty industries at home. On the other hand, the developing countries with their low wages and lax environmental regulations have been attractive alternative producers in these sectors. Thus, developing countries provide pollution havens for dirty industries. In this study, the pollution haven argument for Turkey, for the 1994–1997 period, is examined. The study focuses on the pollution haven hypothesis from the trade perspective by looking at the manufacturing industry data at four-digit ISIC detail by using the panel data approach. It is found that exports increase as the dirtiness of the industries increases, providing some evidence for the pollution haven hypothesis.

Mumbai, the largest metropolitan city in India, generated 6,256 tons of waste per day in 2001. It is the responsibility of the Municipal Corporation of Greater Mumbai (MCGM) to provide Municipal Solid Waste (MSW) management services; however, the MCGM is not able to handle the increasing quantity of waste. As a result, waste litters all over the place giving rise to health and environmental problems. Hence, there is a need to involve private sector and community participation in waste management. In this paper, a linear programming model is developed to integrate different options and stakeholders involved in MSW management in Mumbai. Various economic and environmental costs associated with MSW management are taken into consideration while developing the model.

This paper studies the impact of the largest conservation set-aside program in the developing world: China's Grain for Green program, on poverty alleviation in rural areas. Based on a large-scale survey, we find that the program was implemented mostly in the areas of China that are fairly poor. In addition, we show that income from livestock activities and some types of asset holdings of participants have increased significantly more than those of non-participants (due to program effects). Only weak evidence is provided demonstrating that participating households have begun to shift their labor into the off-farm sectors. Overall, the results suggest that the program has been moderately successful in achieving its poverty alleviation objectives.

In future agreements to cut greenhouse gases, a Chinese commitment will probably be essential. Committing for China is easier if the cost is low and the benefit to China is high. Using a new CGE-model of the Chinese economy we discuss the cost and benefit to China of taking on a climate commitment. We argue that a climate commitment gives significant ancillary benefits to China since associated particle and NOx-reductions improve public health and increase agricultural yields. The model of impact on agricultural yields is a novel feature of CGE-models. Comparing benefits to economic costs produces striking results. We find that China may reduce its CO2-emissions by 17.5 per cent without suffering a welfare loss. Half of the benefit originates in the novel agricultural model. We also discuss the distributional impact of a climate commitment. In general the distributional impact is not averse.