The paper compares the total costs of abating CO2 emissions in two different intertemporal trading systems. In addition, the paper gives an analysis of how abatement costs are distributed among different countries/regions. It is shown that the total cost of implementing a climate treaty is considerably reduced in a system where both banking and borrowing of quotas are allowed compared to a system where quotas only can be banked. The analysis also shows that the total cost of implementing a climate treaty can be reduced in a banking system by compensating the developing country parties for participating in the CO2 emission reductions such that their net costs of making emissions reductions after sale/purchase of quotas equal zero.

This paper studies soil depletion incentives in a dynamic economic model under two different sources of revenue uncertainty (output and price risk). The focus is on the long-term effects of risk-averse preferences when farming decisions have implications for both expected short-run production and natural topsoil fertility. The analysis shows that the risk properties of the stock variable are crucial for the results arrived. The presence of risk preferences is found to improve soil conservation incentives in a low-input farming system, independent of the source of revenue risk considered. The only case for which soil conservation incentives are weakened is for high-input farming systems under price uncertainty.

JEL classification: Q12, Q20, D81

This paper uses a model of an inland fishery in Bangladesh to investigate the relationship between poverty and resource sustainability in a specific case. It makes use of detailed fieldwork to build a numerical model of fishery decision making, which incorporates extensions to standard fisheries models. In particular, it includes fish migration between lease units and models the choice of fishing gear, as well as fishing effort, over the year. The modelling of fishing gear choice allows an analysis of the effect of management policies on employment in the fishery, a major factor that influences poverty in the locality. The numerical results show that while some simple policies to improve sustainability are likely to increase poverty, it is possible to design policies which affect gear choice and lead to reduced poverty without harming the sustainability of the resource.

This article develops a framework for environmental–economic decision-making in a single project case that includes the ecological sustainability criteria, environmental costs, natural resource scarcity prices and local peoples’ preferences and presents a case study of the lowland irrigated agriculture system. The geographic information system (GIS) technique has been used for evaluating ecological criteria and integrating information for use in the cost–benefit analysis at different levels of computation process. The environmental costs and economic value of water associated with the lowland irrigated agriculture are estimated using both the direct and indirect economic valuation approaches. Various sets of alternatives were designed for promoting sustainable use of resources, and the net present value is estimated in each of these cases by incorporating environmental costs and economic values of water obtained from different methods. The cost–benefit analysis (CBA) carried out in these different cases indicated that diversification of crops, rather than the conventional monocropping system, would promote sustainable resource use and generate higher benefits to the farmers and society, if external costs, such as environmental costs and scarcity value of irrigation water, and ecological sustainability criteria are also considered in the economic decision-making process. The results of the case study also indicated that sustainability criteria could well be incorporated into the CBA in a single project case by addressing local people's concerns, resource scarcity values and ecological sustainability criteria with the use of spatial analysis techniques such as GIS.

Community forestry projects in Ethiopia have been implemented using the top–down approach, which may have contributed to the failure of most of these projects. The so-called community plantations practically belonged to the government and the labour contribution of the local communities in the establishment of the plantations was mainly in exchange for wages. In this paper, we use the contingent valuation method to examine the determinants of the value of community forestry in rural Ethiopia and its feasibility, when the plantations are established, managed, and used by the communities themselves. The value elicitation format used is discrete question with open-ended follow-up which is closer to the market scenario our respondents are familiar with compared, for example, with the single discrete choice format. Unlike most other studies, we use a tobit model with sample selection in the empirical analysis of the bid function to correct for the effect of excluding invalid responses (protest zeros, outliers and missing bids) from the analysis. The analysis of the bid function shows that household size, household income, distance of homestead to proposed place of plantation, number of trees owned and sex of household head are significant variables that explain willingness to pay. We also find that there are significant differences in willingness-to-pay across sites. It is hoped that this study contributes to the limited empirical literature on community forestry in developing countries by indicating some of the conditions under which community plantations will be acceptable and feasible.

Previous studies of deforestation have focused on agriculture, population and migration, timber exploitation, macroeconomic policies and geographic factors to explain the variability of deforestation rates among countries. This study tests the hypothesis that countries with a high proportion of petroleum or non-petroleum mineral exports in total exports experience a relatively low deforestation rate because of macroeconomic ‘Dutch disease’ effects. Bivariate and multivariate analyses provide preliminary support for the hypothesis, although they give little insight on how precisely mineral exports might exert their influence on forest cover. One reason for the limited utility of these methodologies is that they do not adequately explain the various effects of mineral windfalls that go beyond the Dutch disease's ‘core model’. Future research must attempt to understand these effects, which include: levels of funding for agriculture, roads, and directed settlement; agricultural protectionism; levels of rural poverty, urbanization, and consumer demand; the site-level effects of mineral extraction; and the variability of state autonomy.