A free lunch in the commons

We derive conditions under which raising costs through a regulatory constraint or a fully expropriated tax can increase the profits arising from a common-pool resource. The basic model assumes a fixed number of identical agents with linear costs selling in a single period at an exogenous price. A necessary and sufficient condition for a cost increase to be profitable is that aggregate output from the resource be locally convex in aggregate effort. We also show that cost increases can be profitable even if price is endogenous, agents are heterogeneous, entry is costless, or agents are playing a Markov-perfect equilibrium of a dynamic game. We also discuss more general welfare implications of the result along with its relation to existing results for a Cournot oligopoly.     

Low carbon transition options for Australia

A rapid and sustained transition to new energy systems for Australia was explored using the OzECCO model implemented in a systems dynamics simulation package. OzECCO simulates the close relationship between energy use and economic productivity at a sectoral level to explore scenarios of economic and biophysical function based on a calibration period of 1981-2005 and a scenario period 2006-2051. The core scenarios showed that a fully renewable (the renewables transition) or an advanced fossil and nuclear transition (the conventional wisdom transition), can reduce accumulated CO2 emissions from the Australian economy for the period 2006-2051 by 50%. Adding a low growth economy where GDP averages less than 1% annually extends this to a 60% reduction. Extensive reforestation of more than 50 million hectares extends the total reduction to 70% over the 45 year period and provides at 2051 a per capita emissions level of one to two tonnes which will be necessary if developed and developing countries are to converge on equal atmospheric impacts with reasonable lifestyle opportunities. Central to both the renewables and conventional-wisdom scenarios are substantial reductions in the physical dimensions of personal consumption, and the transfer of these avoided consumption opportunities to an intergenerational sovereign wealth fund. This fund, held outside day-to-day domestic activities, can buffer Australian society and future generations against shocks, financial or physical, that might lie waiting and unanticipated in our future. This study did not explore phasing out Australia's extensive coal and natural gas exports although their impact on global atmospheric concentrations is significant. Domestic combustion and exported fuels will add 82 billion tonnes of CO2 to the atmosphere in the scenario period 2006-2051, equivalent to a 20 ppm rise in atmospheric concentrations. The low-growth renewables transition with unconstrained exports reduces this rise to 15 ppm. The continued expansion of fuel exports thus expands atmospheric risk in physical terms but also entrains policy and strategic risks should carbon-based industries become pariahs in international commerce and political relations.     

Implications of ecological data constraints for integrated policy and livelihoods modelling: An example from East Kalimantan, Indonesia

Policy and human livelihoods modelling increasingly demands integrated research which requires ecological expertise. However, contributions from ecologists are often based on sparse data. Rather than discounting such data, in this paper we demonstrate how ecological modelling can effectively contribute to the development of policy recommendations in spite of data constraints. In a petrol subsidy analysis in East Kalimantan, Indonesia, we accounted for ecological data uncertainty by (a) assuming large parameter value ranges and (b) conducting a robustness test for policy recommendations. In addition to data scarcity, counter-intuitive results emerged emphasising the need for model validation. These counter-intuitive results indicated that decreasing petrol prices led to increased poverty. This informed a policy recommendation to prevent the reduction of petrol prices below IDR 5500 per litre. Using two key livelihood resources (fish and honey), we found that while a traditional sensitivity analysis suggested highly robust results, a robustness test indicated that policy recommendations would change if the incorrectness of parameter values approached 50%. The results show that ecological modelling can contribute effectively in spite of sparse data to guide policy, as well as identifying future research priorities.     

Potential Effects of Direct Transfer Payments on Farmland Habitat Diversity in a Marginal European Landscape

Farmland habitat diversity in marginal European landscapes changed significantly in the past decades. Further changes toward homogenization are expected, particularly in the course of European agricultural policy. Based on three alternative transfer payment schemes, we modeled spatially explicit potential effects on the farmland habitat diversity in a marginal European landscape. We defined (1) a scenario with direct transfer payments coupled to production, (2) a scenario with direct transfer payments decoupled from production, and (3) a scenario phasing out all direct transfer payments. We characterized habitat diversity with three indices: habitat richness, evenness, and rarity. The habitat pattern in 1995 served as reference for comparison. All scenarios predicted a general trend of homogenization of the farmland habitat pattern, yet to a differing extent. Transfer payments coupled to production (Scenario 1) favored the abandonment of agricultural production, particularly in low-productive areas and arable land use in more productive areas. Habitat richness and habitat evenness had intermediate values in this scenario. Decoupling transfer payments from production (Scenario 2) supported grassland as most profitable farming system. This led to a grassland-dominated landscape with low values of all habitat diversity indices. Phasing out transfer payments (Scenario 3) resulted in complete abandonment or afforestation of agricultural land and extremely low values in all habitat diversity indices. Scenario results indicate that transfer payments may prevent cessation of agricultural production, but may not counteract homogenization in marginal landscapes. Conserving high farmland habitat diversity in such landscapes may require support schemes, e.g., Pillar Two of EU Common Agricultural Policy.     

The poverty of forestry policy: double standards on an uneven playing field

Can policies designed to maximize exploitation by elites benefit the people who live in forests? Forestry policy throughout the developing world originates from European “scientific” forestry traditions exported during the colonial period. These policies were implemented by foreign and local elite whose interest was to maximize and extract profit. In spite of reforms since the end of the colonial period, policies on the environment usually remain biased against rural communities. Even when more recent policies are fair, the rural poor face severe biases in implementation. In addition, they must compete on an uneven playing field of ethnic and other social inequities and economic hurdles. This article examines how forestry policy and implementation maintain double standards on this uneven playing field in a manner that permanently excludes the rural poor from the natural wealth around them—producing poverty in the process. Change that would support poverty alleviation for forest-based communities requires a radical rethinking of forest policy so as to counterbalance widespread regressive policies and structural asymmetries.     

Fertilizer market reforms and factors influencing fertilizer use by small-scale farmers in Bénin

Bénin, like other countries in sub-Saharan Africa, has initiated programs to reform agricultural input and output markets. While the impact of the reform programs has been different for each country, it is commonly observed that impact at the farm level has been less than anticipated. A central theme of this paper is to assess the impact of fertilizer market reforms on the fertilizer market structure and fertilizer use for both food and export (cotton) crop production in Bénin. This analysis of farm-level policy impact is based on data from 899 farm households randomly selected and interviewed in all six départements of Bénin in 1998/1999. Results of the study show that there have been only insignificant changes in the fertilizer market structure. Access to fertilizers has not improved; prices for fertilizer have risen in real terms, resulting in application rates lower than that recommended by extension agents. The effects of the reform programs are vital for investment decisions and provide lessons for introducing alternative approaches for improving soil fertility or management. Since 1992, 54% of farmers find maize (Zea mays L.) production more profitable, while 38% reported that cotton (Gossypium hirsutum L.) production has become more profitable. As a result of the mixed effects of the fertilizer market reform program on the level of fertilizer use and profitability, there is need to develop efficient soil fertility management strategies for small-scale farmers. Such strategies should incorporate the use of complementary inputs, such as seeds with a high level of response to the balanced nutrient package.     

Regulating carbon emissions from indirect land use change (ILUC): U.S. and California case studies

As lifecycle emissions accounting becomes more widely used in policy, it is important to understand how it has been applied. This paper analyses policy-making for two U.S. fuel regulations—the federal Renewable Fuel Standard (RFS) and the California Low Carbon Fuel Standard (LCFS)—that were pioneering not only in using life cycle assessment (LCA) in performance-based environmental regulations, but especially for including emissions from indirect land use change (ILUC). The case studies in this paper focus, in particular, on the decision to include ILUC in lifecycle emissions accounting. Tracing the development of these policies shows the key role of environmental policy entrepreneurs in advocating for ILUC emissions accounting during policy formulation. Moreover, it highlights a paradox in the use of science: although ILUC policy proponents were motivated by best available research, they were also politically enabled by scientific uncertainty and lack of understanding. Understanding this political dimension of decision-making is valuable for scholars as well as practitioners facing similar decisions.     

The effects of pricing waste generation: A synthetic control approach

To internalize pollution externalities into household waste generation, Unit Pricing Systems (UPS) have been adopted worldwide. This paper evaluates the causal effects of a UPS on the disposal of municipal solid waste in Trento, Italy. Using a unique panel dataset of monthly waste generation in Italian municipalities, we employ the synthetic control method, which allows us to account for possible time-varying effects of unobservables. Our results show that the policy was effective, with a significant decrease of the priced waste stream, unsorted waste, by 37.5%. This effect seems to be largely driven by behavioral changes towards waste avoidance (−8.6%) and possibly by a smaller increase in recycling (+6.1%). By comparing these results to those obtained by a difference-in-differences approach, we show that failing to account for time-varying effects of unobservables may lead to a mismeasurement of policy effects.     

Moving policy and regulation forward for single-use plastic alternatives

Single-use plastics are often used once or cannot be reused for extended periods. They are widely consumed with the rapid development of social economy. The waste generated by single-use plastics threatens ecosystem health by entering the environment and ultimately restricts sustainable human development. The innovation of sustainable and environmentally friendly single-use plastic alternative materials and the joint participation of governments, enterprises and the public are promising technologies and management approaches that can solve the problem of single-use plastics wastes. The development of single-use plastic alternative products can be promoted fundamentally only by improving relevant legislation and standards, providing differentiated industrial policies, encouraging scientific and technological innovation and expanding public participation.     

The generative power of metaphor: long‐term action research on disaster recovery in a small Japanese village

Disaster recovery is a dynamic process of creating, maintaining, and changing the meaningful context of survivors. It is completed when they redevelop their self‐reliance and resume managing their social relations with a sense of community. This study employed action research to examine how researchers and survivors collaborated to change disaster recovery through the generative power of metaphor in a small village in Japan that experienced the Niigata–Chuetsu earthquake on 23 October 2004. It outlines long‐term collaborative practices as survivors undertook new activities owing to the power of the metaphor of ‘school’. Once ‘school’ was adopted as the metaphor for where survivors learnt new skills and passed on traditional knowledge, they created new metaphors and performed new activities independently, which is critical for recovery as it demonstrates self‐reliance. The paper assesses the reasons why generative metaphors worked effectively in this case and highlights some academic and practical implications for disaster recovery.