Farmers’ Perceptions of Land Degradation and Their Investments in Land Management: A Case Study in the Central Rift Valley of Ethiopia

To combat land degradation in the Central Rift Valley (CRV) of Ethiopia, farmers are of crucial importance. If farmers perceive land degradation as a problem, the chance that they invest in land management measures will be enhanced. This study presents farmers’ perceptions of land degradation and their investments in land management, and to what extent the latter are influenced by these perceptions. Water erosion and fertility depletion are taken as main indicators of land degradation, and the results show that farmers perceive an increase in both indicators over the last decade. They are aware of it and consider it as a problem. Nevertheless, farmers’ investments to control water erosion and soil fertility depletion are very limited in the CRV. Results also show that farmers’ awareness of both water erosion and soil fertility decline as a problem is not significantly associated with their investments in land management. Hence, even farmers who perceive land degradation on their fields and are concerned about its increase over the last decade do not significantly invest more in water erosion and soil fertility control measures than farmers who do not perceive these phenomena. Further research is needed to assess which other factors might influence farmers’ investments in land management, especially factors related to socioeconomic characteristics of farm households and plot characteristics which were not addressed by this study.     

Adding public value: The limits of corporate responsibility

It is suggested that natural resource companies undertaking large-scale projects may be expanding the scope of corporate social responsibility by working to enhance the capabilities of the public sector. Naturally companies are concerned to protect their investments, and to ensure their viability. They will therefore invest in necessary infrastructure and facilities of all types, where those are lacking. Such investment often provides benefits to the wider community, but with a few exceptions these are normally incidental byproducts rather than inherent objectives. The motivation for companies to provide resources of all types in order to enhance the capabilities of the public sector to provide public services is usually an expectation is that the tangible benefits will exceed the costs, rather than altruism. One driving force is to secure and maintain a company's social licence to operate. More recently competition from Chinese firms is prompting private sector companies to offer comparable investments in infrastructure. It is unclear whether investment in public sector capabilities is cyclical and liable to cutbacks when market conditions deteriorate. Changing market conditions affect not just corporate willingness to spend but also host countries’ bargaining strengths. In boom periods host countries will be more able to secure straightforward financial benefits through higher tax receipts than when markets are weak. Beyond the specific needs of individual projects corporate policies are strongly influenced by the beliefs of senior managers. External pressures both from international institutions and from NGOs also drive corporate behaviour. The success of investment in public sector capabilities relies in the end on the responses of host countries, and on how closely the objectives and interests of the government are aligned with maximising the nation's long term wealth and welfare. Where they are not corporate resources may be frittered away. There are also questions over the legitimacy of corporate investments, especially by foreign-owned companies. They have a right to offer advice and protect their legitimate interests, but these may not always coincide with those of their host countries. There is a range of questions about the appropriate role of companies, which lead on to feasible and effective ways of improving weak governance.     

Fostering sustainable small-scale investments: lessons from experience and ideas for intervention and innovation

This article presents lessons from experience pertinent to implementing small-scale natural resource and related investment projects in developing countries. It outlines ideas for intervention and innovation to foster such investments. Particular emphasis is placed on private-sector participation in these investments. Following a brief presentation of the economic development and other arguments that support intervention and innovation in support of such small-scale natural resource investments, the article discusses many of the lessons learned from experience. These lessons reinforce those touched upon in the investment-specific discussions in the previous articles. The experience and associated lessons that are examined include experiences in both developing and developed countries and encompass not just lessons from natural resource investments, but also small-scale investments in other sectors. Financing and other innovations which facilitate meeting the challenges are drawn from relevant experience where barriers to investment have been surmounted. Options for programme and project interventions to increase market penetration of small-scale investments and achieve the associated development linkages and synergies are suggested. These suggestions are aimed especially at governments and bilateral and multilateral development finance and development assistance entities. It is those players who might support such interventions in collaboration with local financial institutions and other market players.     

Making a stronger case for industrial energy efficiency by quantifying non-energy benefits

This paper describes a more compelling case for industry to promote the non-energy benefits of energy efficiency investments. We do this in two ways to actively appeal to chief executive officers (CEOs) and chief financial officers (CFOs) primary responsibility: to enhance shareholder value. First, we describe the use of a project-by-project corporate financial analysis approach to quantify a broader range of productivity benefits that stem from investments in energy-efficient technologies, including waste reduction and pollution prevention. Second, and perhaps just as important, we present such information in corporate financial terms. These standard, widely-accepted analysis procedures are more credible to industry than the economic modeling done in the past because they are structured in the same way corporate financial analysts perform discounted cashflow investment analyses on individual projects. Case studies including such financial analyses, which quantify both energy and non-energy benefits from investments in energy-efficient technologies, are presented. Experience shows that energy efficiency projects’ non-energy benefits often exceed the value of energy savings, so energy savings should be viewed more correctly as part of the total benefits, rather than the focus of the results. Quantifying the total benefits of energy efficiency projects helps companies understand the financial opportunities of investments in energy-efficient technologies. Making a case for investing in energy-efficient technologies based on energy savings alone has not always proven successful. Evidence suggests, however, that industrial decision makers will understand energy efficiency investments as part of a broader set of parameters that affect company productivity and profitability.     

Investment in water infrastructure: Findings from an economic analysis of a national programme

Mixed findings emerge from this ex post Cost-Benefit Analysis of a major water investment programme in Ireland. Water supply and conservation investments, where most benefits were internal, generally proved worthwhile. Wastewater investments could not be analysed fully due to lack of environmental data. Here the authors estimated the level of ‘willingness-to-pay’ that would have been required to ‘justify’ the investments. In some cases the required level seemed implausibly high, raising questions as to prioritisation of projects. The authors recommend a more systematic approach to recording environmental benefits in future investment programmes, the next likely wave being in new EU member states seeking to meet environmental standards. The EU, as likely co-funder of these investments, should require systematic recording of environmental benefits.     

Innovative Approach to Financing Energy Conservation Investments in Developing Countries

A common barrier to undertaking conservation measures in developing countries is the limited ability or the reluctance of energy users to acquire and deploy the capital needed to develop these opportunities. Industrial firms, for example, have had frequent opportunities in recent years to benefit from the use of new, more energy-efficient production technologies, but insufficient internal cash, combined with an ability to raise debt or equity capital under favourable terms, have often prevented firms from funding these investments.
Confronted with such impediments to mobilizing capital for conservation investments, some financiers and entrepreneurs in industrialized countries have recently implemented five innovative arrangements for financing conservation and other energy-related investments. These five financing arrangements are discussed. For each arrangement, the structure and operation, the distribution of risk between the energy user and the creditors/external investors, and the financial benefits that accrue to the energy user are described.     

MEASURING CONSUMER SURPLUS BENEFITS OF WATER SUPPLY EXTENSIONS IN DEVELOPING COUNTRIES1

ABSTRACT: For investments in water mains serving new households, consumer surplus benefits may far outweigh those measured by revenues recoupled from user fees. While consumer surplus might be capitalized in the value of sites with access to mains, empirical attempts to measure such capitalization have not proved inveriably successful. In this note an alternative technique based upon the direct estimation of the demand curve is applied. An analysis of Penang Island, Malaysia indicates that the consumer surplus benefits are one and one-half times greater than the revenues recoupled through user fees. The applicability of this technique to cost-benefit analysis of water supply investments is discussed.     

INCOME DISTRIBUTION IMPACTS OF A WATER DEVELOPMENT PROJECT - BOISE PROJECT,IDAHO, 1950–19701

ABSTRACT: Public investments in water resource development projects are continually under scrutiny in terms of economic, environmental, and social impacts. Results of an analysis of a water development project that supplies irrigation water in Idaho are discussed in terms of the impact on income distribution and income growth 44 to 64 years after the project was initiated. Gini ratios for the rural farm population of these counties were consistently lower than they were for the United States as a whole and for the state of Idaho. In addition, income distributions tended to become more equitable over time in the water project counties. Rural farm population income growth rates were found to be similar to those for the nation as a whole. Some of the reasons for these results may be related to the tendency for income distribution to become more equitable as income increases, and the fact that average farm size is relatively small.     

Open data and stormwater systems in Los Angeles: applications for equitable green infrastructure

Urban stormwater systems traditionally used “grey” infrastructure to manage runoff. Contemporary designs now incorporate “green” infrastructure, which offers additional potential benefits such as urban amenities and health. Understanding how green and grey infrastructure investments are distributed across urban areas is important for new goals of promoting environmental justice in planning. In California, for instance, public investments increasingly require a percentage of funds to be spent in disadvantaged communities. Recent advancements in the availability of high-detail geographic data in cities can support prioritising investments to fulfil these multiple benefits. This paper analyses the distribution of stormwater infrastructure in Los Angeles (LA) County in relation to design criteria, urban structure and sociodemographic information. It demonstrates an approach for identifying projects that simultaneously address engineering needs and promote equity. Statistical analysis of high-detail sewer locations reveals geographic correlations with key local design parameters, urban characteristics and sociodemographic indicators. Watershed areas in LA County were identified that support multi-benefit projects, meeting dual criteria for infrastructure improvements and disadvantaged community status. As stormwater systems are increasingly designed for multi-benefit outcomes, new design frameworks can emphasise both performance and social equity.     

Building a model of commitment to the natural environment to predict ecological behavior and willingness to sacrifice

We examined the connection between individuals’ relationships with the natural environment and their environmental behaviors with a focus on commitment to the environment, defined as psychological attachment and long-term orientation to the natural world. Commitment is theorized to emerge from structural interdependence with the environment and to lead to pro-environmental behaviors. Close relationships research has identified three key antecedents to commitment (satisfaction, alternatives, and investments). We developed environment-specific measures of these constructs, and factor analysis verified three distinct factors. A path analysis revealed that satisfaction with the environment and investments in the environment, but not alternatives to the environment, predicted commitment to the environment. Moreover, commitment mediated the effects of satisfaction and investments on general ecological behavior and willingness to sacrifice for the environment. In regression analyses, commitment predicted general ecological behavior and willingness to sacrifice for the environment, even when controlling for ecological worldview, inclusion of nature in the self, connectedness to nature, and environmental identity. Individuals who are satisfied with and invested in the natural world are likely to be committed to the environment and act with the well-being of the environment in mind.     

VALUING IRRIGATION WATER IN PUNJAB PROVINCE,PAKISTAN: A LINEAR PROGRAMMING APPROACH1

ABSTRACT: Linear programming models of a representative farm in a district of Pakistan's Punjab Province are formulated for the purpose of estimating the value of irrigation water. The models provide for choices among several irrigation levels for each potential crop. Solutions of the model for several water supply situations provide the basis for approximating the total, average, and marginal values of irrigation water. Prices for important crops in Pakistan are controlled at levels below their levels elsewhere in the world, so models are specified for both financial (domestic price) and economic (world price) scenarios. The value of water to society (its economic value) is high relative to the costs of some generally available water-augmenting investments, while financial values, which measure water management and allocation incentives faced by farmers, are less than the corresponding economic values. At current water supply levels, incremental returns to added water estimated from the economic model would justify investments in water-saving or water-augmenting technologies, while such a decision would be barely attractive assuming financial prices. While present government commodity price policies may serve to protect low-income and non-farm members of the population, they also inhibit farmer investments to increase the productivity of scarce irrigation water.     

Quantifying the human health benefits of curbing air pollution in Shanghai

Urban development in the mega-cities of Asia has caused detrimental effects on the human health of its inhabitants through air pollution. However, averting these health damages by investing in clean energy and industrial technologies and measures can be expensive. Many cities do not have the capital to make such investments or may prefer to invest that capital elsewhere. In this article, we examine the city of Shanghai, China, and perform an illustrative cost/benefit analysis of air pollution control. Between 1995 and 2020 we expect that Shanghai will continue to grow rapidly. Increased demands for energy will cause increased use of fossil fuels and increased emissions of air pollutants. In this work, we examine emissions of particles smaller than 10 microm in diameter (PM10), which have been associated with inhalation health effects. We hypothesize the establishment of a new technology strategy for coal-fired power generation after 2010 and a new industrial coal-use policy. The health benefits of pollution reduction are compared with the investment costs for the new strategies. The study shows that the benefit-to-cost ratio is in the range of 1-5 for the power-sector initiative and 2-15 for the industrial-sector initiative. Thus, there appear to be considerable net benefits for these strategies, which could be very large depending on the valuation of health effects in China today and in the future. This study therefore provides economic grounds for supporting investments in air pollution control in developing cities like Shanghai.     

Modeling the impact of revegetation on regional water quality: A collective approach to manage the cumulative impacts of mining in the Bowen Basin,Australia

In this paper we quantify the additional water quality benefits that can be achieved through coordinated cumulative impact management. To do this we simulate coordinated and un-coordinated revegetation investments and compare their impact on achieving regional water quality goals. Our results show that coordination between multiple mining companies achieves additional benefits since prioritization is enabled across a broader range of investment opportunities. Additionally, when coordinated investment is permitted beyond the boundaries of coal mining leases, results show that additional benefits are greatly enhanced since these regions provide more rewarding investment opportunities. Results illustrate (a) how regional coordination may influence reputational benefits of investments, and (b) that coordination is beneficial when investment opportunities are unevenly distributed across the landscape. When additional benefits are achievable, we suggest that mining companies should develop collective investment projects with an understanding of how coordination influences project costs. Similarly, investment projects should be developed with an understanding of investment tradeoffs and how these may adversely impact on regional stakeholders and hence industry reputation. The mining industry has significant potential to contribute to regional wellbeing; however, land management policies must be flexible and promote incentives to enable companies to invest beyond compliance.     

Measuring participation by socially vulnerable groups in hazard mitigation planning,Bertie County,North Carolina

In accordance with the Disaster Mitigation Act, most US counties have a hazard mitigation plan (HMP) to reduce future disaster losses. HMPs are important as they can be used to proactively assess risk, direct future development, raise awareness and build consensus. Using a population-based sample, we interviewed residents of Bertie County, NC, about their awareness of and participation in the HMP process to determine if demographics, social vulnerability or hazard vulnerability were associated with increased awareness or participation. We also assessed whether these factors were associated with knowledge of policy changes and investments that were adopted in the HMP. Overall, the unemployed were the only group less likely to report awareness of or participation in HMP development. African-Americans, mobile home residents, the poor, short-term residents and those with less disaster experience were less likely to be aware of policies and investments prioritised in the HMP. Targeted efforts to increase awareness could potentially improve disaster outcomes among vulnerable populations.     

FINANCING PRIVATE WATER RESOURCE DEVELOPMENT: ANALYSIS OF A STATE LOAN PROGRAM1

ABSTRACT. A State loan program was analyzed for its effects on groundwater development in Wyoming. The analysis focused on the effects of low-interest State financing on the economic feasibility of investments in center-pivot sprinkler irrigation systems. The feasibility analysis indicated that investments in sprinkler systems for production of cash crops are highly profitable, and would frequently be carried out whether or not the State loan program were available. Investments in sprinklers for production of forage crops are perhaps frequently made attractive by the loan program. Thus, while the program appears to have accelerated the pace of private water resource development in Wyoming, it has also subsidized some investments that would have been carried out regardless of the program's existence. Further analysis indicated that sprinkler investments carried out with State financing contribute substantially to firm growth when cast crops are grown, but have less marked, and sometimes negative, effects on growth when forage crops are produced. Some positive effects of the loan program on southeast Wyoming's regional economy were noted, though a complete empirical analysis of regional impacts was beyond the scope of the study.     

Long-term iron ore price modeling: Marginal costs vs. incentive price

The paper studies and applies the approaches to forecast long-term (LT) real prices of iron ore. This price is crucial for valuation of investments in Greenfield iron ore projects on the horizon of more than 5 years. The forecast is obtained by three different approaches which are usually used by investment bank analysts: marginal costs approach and 2 approaches based on calculation of incentive price. The paper concludes that there has been a structural shift on the iron ore market and LT iron ore prices will be higher by 20–30% than the average of industry forecasters suggest. This is related to the 2 key factors which were taken into account in this study—depletion of existing iron ore deposits and targeted return on investments for new projects. In addition, escalated industry costs inflation is claimed to be the factor which will bolster nominal iron ore prices at high levels in the long-term. Using a Monte-Carlo simulation approach, confidence interval for future iron ore price was estimated.     

Economic Analysis of Selected Offshore Petroleum Arrangements

As a result of the current decline of oil prices, exploration decisions are more carefully analysed than ever before. At the same time various governments have introduced incentives to reinvest in exploration and development in order to maintain or increase activity. As a result, most exploration decisions are now being analysed as "incremental investments". This has the effect of "trapping" investments in areas where profits are currently being made. This in turn creates serious problems for those developing countries which would like to attract exploration. The paper analyses issues related to sliding scale formulae based on the ROR, and the economic impact of the size of the area to which fiscal terms apply.     

Equitable distribution of green stormwater infrastructure: a capacity-based framework for implementation in disadvantaged communities

This study seeks to understand the factors that influence the variability in distribution of public and private sector investments in green stormwater infrastructure (GSI) projects across the diversity of neighbourhoods in the City of Philadelphia, PA, U.S.A. using indicators of community context and capacity. For this study, context is defined as characteristics of disadvantaged communities and capacity as factors that facilitate individual and collective action. Community context and capacity are deemed integral to the success of the Philadelphia GSI programme as the Philadelphia Water Department is relying upon collaborative approaches to facilitate public investments in neighbourhoods and voluntary implementation of GSI practices on publically and privately owned lands. Private sector investments in GSI mandated by stormwater regulations for new construction and major rehabilitation also are assessed in relation to these two sets of indicators. The geographic information systems and statistical analyses reveal an inequitable distribution of GSI projects, which largely is driven by market forces. The paper concludes with a community capacity-based framework to prioritise public sector investment in disadvantaged communities to achieve more equitable distribution of GSI projects and associated benefits.     

ECONOMIC EVALUATION OF ON-FARM WATER MANAGEMENT PROJECTS1

ABSTRACT: During the last three decades, developing countries have invested enormous amounts of resources (running into billions of dollars) in the development of large surface irrigation systems. Investment funds were largely spent on the development of the main systems such as dams, canals and distributaries. Very little attention and resources have been spent on the development of below-the-outlet subsystems, in spite of very low levels of water use efficiency due to lack of proper land leveling, high water losses in field channels, and skewed distribution of available water among farmers served by individual water courses. This state of affairs has resulted in a lack of confidence on the part of most farmers in the reliability of surface irrigation systems to deliver water on time and in adequate quantities which, in turn, has resulted in farmers using below optimum levels of all other complementary inputs except labor. Realizing the importance of improving water use efficiency, both the domestic governments and donor agencies are increasingly paying serious attention to these problems. On-Farm Water Management (OFWM) as a strategy to improve water use efficiency and consequently agricultural production in many developing countries has been currently receiving very wide and vigorous consideration among economists, water management experts, policymakers, and donor agencies. A judicious use of the newly allocated funds of OFWM projects obviously needs proper evaluation procedures so that money could be allocated for the most deserving purposes and projects. In particular, recently, private profitability calculations due to public investments in OFWM activities have received attention from economists and decision makers in developing countries’governments and in donor agencies are very much interested in knowing the impacts of their investments in OFWM activities on farmers’income and welfare. However, the evaluation procedures commonly used in empirical studies, using a production function approach, seem to be at variance and sometimes inconsistent with proper comparative-static procedures. Thus, the primary objective of this paper is to develop consistent procedures for evaluating the impacts created by OFWM investments on farmers’income and resource use. In this context, the paper examines the critical relationship between the market price of the agricultural output and production function parameters which are affected by the OFWM investments.     

Forest environmental investments and implications for climate change mitigation

Forest environmental conditions are affected by climate change, but investments in forest environmental quality can be used as part of the climate change mitigation strategy. A key question involving the potential use of forests to store more carbon as part of climate change mitigation is the impact of forest investments on the timing and quantity of forest volumes that affect carbon storage. Using an economic optimization model, we project levels of U.S. forest volumes as indicators of carbon storage for a wide range of private forest investment scenarios. Results show that economic opportunities exist to further intensify timber management on some hectares and reduce the average timber rotation length such that the national volume of standing timber stocks could be reduced relative to projections reflecting historical trends. The national amount of timber volume is projected to increase over the next 50 yr, but then is projected to decline if private owners follow an economic optimization path, such as with more forest type conversions and shorter timber rotations. With perfect foresight, future forest investments can affect current timber harvest levels, with intertemporal linkages based on adjustments through markets. Forest investments that boost regenerated timber yields per hectare would act to enhance ecosystem services (e.g., forest carbon storage) if they are related to the rate of growth and extent of growing stock inventory.