This paper investigates the factors that drive farmers’ simultaneous adoption of six water conservation practices (WCPs) and the intensity of their adoption. We estimate farmers’ adoption of these WCPs with a multivariate probit model, and for the intensity of their adoption, an ordered probit model is estimated. Our results show that gender, age, education, and farm size (among other factors) influence the probability and extent of adoption of WCPs. Furthermore, combinations like drip and/or sprinkler irrigations and cover cropping, drip and/or sprinkler irrigations and intercropping (among others) are complements, suggesting the bundling of these WCPs.

As its practitioners know well, benefit-cost analysis (BCA) walks a fine line between the positive and normative, between the science of economics and the art of political economy. Missteps threaten to undermine its credibility as a value-free science, while overcaution risks irrelevance to the pressing questions of the day. As BCA adapts to give more weight to distributional concerns, while operating in a more highly charged political environment than ever before, these tensions will only grow. For perspective, I reexamine three prominent episodes in the history of economics where these issues were vigorously debated: (i) The founding of the NBER by Wesley Clair Mitchell, who insisted that the organization eschew all policy recommendations; (ii) the introduction of the modern definition of economics as the study of tradeoffs by Lionel Robbins, who insisted welfare effects could never be aggregated; and (iii) the origins of BCA as a measure of income, which to first-generation practitioners seemed to foreclose the possibility of measuring “intangible” benefits like recreation opportunities, mortality risks, and equity. These episodes, together with critiques of economics from philosophers of science, suggest we are best served by being as transparent as possible about the ways values influence BCA reasoning, without arrogating political decisions into it.

Green rooftops, also known as vegetated roofs, will play a critical role in enhancing the resilience of urban areas in the face of climate change and other contemporary environmental and social challenges. To ensure the optimal design and implementation of these green technologies, it is vital to understand the public’s preferences, values, and attitudes toward the government support for green rooftops. This study employs contingent valuation methods, specifically utilizing a payment card and a choice experiment, to investigate these topics that have received inadequate exploration within the current body of literature. Our findings indicate that 45% of the public is aware of green rooftops, and the most desired features on an extensive green rooftop, ranked by importance, are: flowers, grass, trees, and walking paths. The majority (79%) of the public supports a federally proposed legislation currently under review (the Public School Green Rooftop Program) and has a mean willingness to pay of approximately $176 per household as a one-time payment. Additionally, the results show that individuals place a higher value on green rooftops that incorporate solar energy technology compared to those without. Furthermore, there is a perceived, loss of value when access to a green rooftop is limited, as opposed to having open access.

The plan to introduce a carbon pricing scheme in Australia has focused attention on the future relevance and necessity of using other policy instruments to reduce carbon emissions. Significant reports, including the Wilkins Review and reports by the Productivity Commission, have argued using the standard neoclassical economics framework that once a carbon price is established, it should be (almost) the only instrument needed to tackle climate change mitigation in Australia. With a small number of exceptions for complementary instruments to address some market failures, the use of other climate policy instruments, it is argued, will result only in unnecessary duplication and potential distortions. The aim of this article is to show that there are, in fact, a significant number of rationales for implementing several climate policy instruments in combination with a carbon price, and we should not be too quick to dismiss certain climate policy instrument combinations.

We make four main contributions in this paper related to the theory and practice of benefit–cost analysis (BCA). First, we show that most BCAs of policy interventions do not consider the welfare consequences in secondary markets, where goods or services can be complements or substitutes to those in the directly regulated markets. Second, we provide a general theoretical analysis for examining the sign of welfare effects in secondary markets, showing how the results depend on the welfare measure of interest and on whether the goods are complements or substitutes. We conclude that the welfare effects in secondary markets will typically be negative in cases most relevant for policy analysis. Third, we develop a straightforward tool that BCA analysts can use to evaluate the potential magnitude of secondary-market effects in particular applications. The tool itself highlights how secondary markets are likely to be relatively small in most circumstances. Finally, we illustrate use of the tool in different applications that provide further evidence that secondary-market effects are likely to be small.

Nigeria is endowed with abundant sunshine year-round; thus, solar PV would solve the environmental problems associated with petrol-powered generators. However, it is unclear whether households are willing to transition. Thus, we analyze households’ willingness to pay (WTP) for solar PV under four scenarios: (i) WTP when a solar PV is complemented with a generator, (ii) WTP when a solar PV completely displaces a generator, (iii) WTP when a solar PV is complemented with a generator, plus a subsidy, and (iv) WTP when a solar PV completely displaces a generator, given a subsidy. We find that WTP for solar PV is higher when it can displace generators completely. Subsidy plus monthly rather than upfront payment would scale up the adoption of solar PV by about 6 per cent. Furthermore, the cost benefit analysis results show that solar PV investment is profitable. Thus, there is a need to implement policies aimed at scaling up the energy transition.

The value of statistical life (VSL) is arguably the most important number in benefit–cost analyses of environmental, health, and transportation policies. However, agencies have used a wide range of VSL values. One reason may be the embarrassment of riches when it comes to VSL studies. While meta-analysis is a standard way to synthesize information across studies, we now have multiple competing meta-analyses and reviews. Thus, to analysts, picking one such meta-analysis may feel as hard as picking a single “best study.” This article responds by taking the meta-analysis another step, estimating a meta-analysis (or mixture distribution) of seven meta-analyses. The baseline model yields a central VSL of $8.0 m, with a 90 % confidence interval of $2.4–$14.0 m. The provided code allows users to easily change subjective weights on the studies, add new studies, or change adjustments for income, inflation, and latency.

Housing price comovements are an important issue in economics. This study focuses on monthly housing prices of 99 major cities in China for the years 2010–2019 by using correlation-based hierarchical analysis and synchronisation analysis, through which one could determine interactions and interdependence among the prices, heterogeneous patterns in price synchronisations and their changing paths over time. Empirical results show that the degree of comovements is slightly lower after March 2017 but no persistent drop is found. Several groups of cities are identified, each of which has its members showing relatively strong but volatile price synchronisations. Certain cities show potential of serving as price leaders within a group. Results here could be useful to policy analysis regarding housing price comovements.

The effects of transgenic corn use and federal biofuel policies on state-level cropping patterns in the US Corn Belt region are investigated using state-level data from 2000 to 2019. During this time, producers moved away from diverse cropping patterns and toward simpler rotational practices. Empirical evidence indicates that the intensification of corn acres planted was positively impacted by the spread of genetically modified (GM) soybeans—used as a proxy for GM corn for biofuel usage—but the effects of biotech advancements on producer planting decisions vary across states. This suggests that future policy changes affecting corn production decisions at the farm level will also be heterogeneous across states.

Political economists assume that global externalities, such as pandemics and climate change, require global or multi-national solutions. Yet, many aspects of these externalities can be addressed at the micro-level. As Elinor Ostrom pointed out, what scholars perceive as global externalities are in fact nested externalities that are organized in multiple, overlapping scales. By drawing on Ostrom's oeuvre, we explore the notions of nested externalities, polycentricity, and co-production in the context of pandemic governance. We highlight two crucial features of pandemics: first, preventative measures such as social distancing are co-production processes that cannot be provided by governments alone. Second, pandemics, much like climate change, pose nested externalities problems at different levels. Thus, pandemic externalities are better viewed as collective action problems arranged at multiple, nested, and/or overlapping scales. Finally, we propose an alternative institutional take that considers the nestedness of pandemic externalities and the diversity in institutional conditions across jurisdictions.

The outcome of environmental actions from participation in the export market are examined by unpacking some mechanisms that explain the estimated relationship. The empirical strategy utilizes the variation in the distance between the location of the sampled enterprises and the top 25 destinations of Vietnamese exports across sectors, and the weight of each sampled export to total exports in each period, to obtain exogenous variation in the enterprise's export market participation. The result shows a positive relationship between the enterprise's export participation and its overall engagement in environmental actions (such as the sum of its environmental actions, the sum of actions in the investments in equipment towards environmental issues, and total expenditure for the purchase of equipment for environmental actions). Possible mechanisms are international standardization, national certification, and strong enforcement of environmental regulations from export market engagement.

This paper shows that strengthening land rights via a land certification program may reduce the negative economic impact of climatic anomalies in the highlands of Ethiopia. The results support the hypothesis that certification enhances the likelihood of adapting some of the land-related investments, thus supporting adaptation enhancing mechanisms and the resilience of the farming sector. Institutional factors may play a key role in supporting farmers’ adaptive capacity to climatic challenges.

The presence of nonzero conjectural variations in pollution abatement and output make emission taxes less effective with respect to reducing emissions. This has implications for the characterization of the optimal emission tax, particularly in an international context where there are large asymmetries in pollution intensities. A higher degree of collusion in output between polluting firms results in higher emissions taxes in the non-cooperative equilibrium. In contrast, a higher degree of collusion in abatement between polluting firms results in lower emissions taxes in the non-cooperative equilibrium. These results rely on the presence of nonzero conjectural variations and large asymmetries in pollution intensities across countries. The analysis is relevant to the design of international environmental policy, including cases where countries face increasing global competition and damages from rising global emissions.

The value of a statistical life (VSL) establishes the money-risk tradeoff that U.S. government agencies have used for four decades to monetize the mortality reduction benefits of proposed regulations. This article advocates the adoption of the VSL more generally both for policy evaluation purposes and for setting the magnitude of regulatory sanctions involving fatalities. Agencies currently employ the inconsistent practice of using the VSL to set the stringency of regulations, while at the same time, reverting to very low monetary values of sanctions for violations that result in fatalities. Reform of penalty levels to reflect the VSL will require increasing the current statutory limits on regulatory penalties. Revamping the penalty structure also will incentivize private companies to incorporate the VSL in their corporate risk analyses. Government agencies, including those concerned with national defense, similarly could profit from greater expansion of the use of the VSL in policy decisions.

To guide investments in ecosystem-based adaptation (EbA) in developing countries, numerous stated preference valuation studies have been implemented to assess the value of ecosystem services. These studies increasingly use time payments as an alternative to money. There is limited knowledge, however, about how to convert time to money and how the type of payment affects willingness to pay (WTP). In this study, the results of choice experiments using time and money payments are compared in the context of EbA measures in Vietnam. Six, of which five individual-specific, conversion rates are applied. WTP estimates are found to be higher for time payments. Moreover, the type of payment vehicle as well as the conversion rate has substantial effect on mean WTP and WTP distributions. We discuss implications of these results for the conversion of time to money and the use of resulting WTP estimates in cost benefit analyses in developing countries.

China and the United States are the two largest emitters of greenhouse gases, making them pivotal players in global climate negotiations. Within the coming decade, however, India is set to become the most important counterpart to the United States, as it overtakes China as the country with the most at stake depending on the type of global burden-sharing agreements reached, thus becoming a member of the ‘Climate G2’. We create a hypothetical global carbon market based on modelling emissions reduction commitments across countries and regions relative to their marginal abatement costs. We then analyse net financial flows across a wide range of burden-sharing agreements, from pure ‘grandfathering’ based on current emissions to equal-per-capita allocation. Among the four largest players – the United States, the EU-27, China, and India – it is China that would currently be the largest net seller of emissions allowances in all but the grandfathered scenario. The United States would be the largest net buyer. However, India is poised to take China’s position by around 2030. That leaves the United States and India as the two major countries with most to gain and lose, depending on the type of climate deal reached.

In 1992, Congress passed The Elwha River Ecosystem and Fisheries Restoration Act with the goal of “full restoration of The Elwha River Ecosystem and native anadromous fisheries.” As part of that act, the federal government was required to produce a benefit-cost analysis on dam removal of the Elwha and Glines Canyon dams, which was published in 1994. This article revisits that initial 1994 benefit-cost analysis; background on its methods and assumptions is given, comparisons are made to current state-of-the-art techniques in benefit-cost analysis, and an ex post benefit-cost analysis of the project is conducted for comparison purposes. We find that the cost and scope of the project exceeded original expectations, the cost of the foregone electricity generation was less than expected, and that anticipated recreational and fisheries benefits were both delayed, and lower, than expected. Furthermore, issues such as the value of hatchery-spawned versus wild anadromous fish seem not to have been anticipated in the original analysis, highlighting the fact that in doing an ex ante analysis, researchers must expect that unexpected factors may influence the ex post results of any project.

We demonstrate an application evaluating carbon sequestration benefits from federal policy alternatives. Using detailed forest inventory data, we projected carbon sequestration outcomes in the coterminous 48 states for a baseline scenario and three policy scenarios through 2050. Alternatives included (1) reducing deforestation from development, (2) afforestation in the eastern United States and reforestation in the western United States, and (3) reducing stand-replacing wildfires. We used social cost of carbon estimates to evaluate the present value of carbon sequestration benefits gained with each policy. Results suggest that afforestation and reforestation would provide the greatest marginal increase in carbon benefit, far exceeding policy cost.

In benefit-cost analysis, fatality risk reductions are usually valued based on estimates of adults’ willingness to pay for changes in their own risks, regardless of whether the risk reduction accrues to adults or children. This approach reflects the relatively large number of valuation studies that address adults; however, the literature on children is growing. We review these studies, focusing on those that estimate values for both adults and children using a consistent approach to limit the effects of between-study variability. We rely on explicit selection criteria to identify studies that measure reasonably comparable outcomes and are candidates for application to analyses of U.S. policies. The ratio of values for children to values for adults ranges from 0.6 to 2.9; however, most estimates are greater than 1.5. Although some studies suggest that the divergence between child and adult values decreases as the child ages, this finding is not universal. We conclude that analysts should test the sensitivity of their results to the use of higher values for children than adults. Additional empirical research is needed to support more precise estimates of the variation in values by age that can be featured in the primary analysis.

Investing in global health and development requires making difficult choices about what policies to pursue and what level of resources to devote to different initiatives. Methods of economic evaluation are well established and widely used to quantify and compare the impacts of alternative investments. However, if not well conducted and clearly reported, these evaluations can lead to erroneous conclusions. Differences in analytic methods and assumptions can obscure important differences in impacts. To increase the comparability of these evaluations, improve their quality, and expand their use, this special issue includes a series of papers developed to support reference case guidance for benefit-cost analysis. In this introductory article, we discuss the background and context for this work, summarize the process we are following, describe the overall framework, and introduce the articles that follow.