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Nick Abel
CSIRO Wildlife and Ecology, Canberra, ACT, Australia

Mark Howden
CSIRO Wildlife and Ecology, Canberra, ACT, Australia

John Ive
CSIRO Wildlife and Ecology, Canberra, ACT, Australia

Art Langston
CSIRO Wildlife and Ecology, Canberra, ACT, Australia

Bill Tatnell
New South Wales Department of Land and Water Conservation, Dubbo, New South Wales, Australia

A complex adaptive system approach to regional sustainability

Globalisation, world population growth, new technologies, and atmospheric and other changes are likely to impact in major ways on rural regions. Many are ill prepared. Reasons include the structure of their economies, demographic trends, social conflicts, non-sustainable resource use, and inflexible institutions. This paper describes a 'complex adaptive systems' approach for increasing the adaptive capacity of a rangeland region. Methods and principles are underpinned by social psychology, political economy, economics and ecology. The approach is intended to be applicable to other regions. The approach is participative. Policy makers and researchers together analyse the institutional arrangements that formed and maintain the current pattern of land use. Stakeholder groups and researchers develop scenarios of future land use that express current stakeholder values, and their expectations for the next 50 years. The process and supporting software enable stakeholders to explore trade-offs among land uses, and the potential for multiple use. Both can reduce social conflict. Researchers evaluate the sustainability of these scenarios, using a range of assumptions about economic, social and atmospheric change. Sustainability criteria include social conflict, gross regional product, economic dependency, employment, carbon emissions, and loss of soils and biodiversity. In the light of the results, policy makers, stakeholders and researchers design changes in policies and institutions that promote sustainable patterns of land use, and adaptive capacity in the economy and society. The close involvement of stakeholders and policy makers in analysis and design are intended to increase the likelihood that the changes will be implemented.


Mahfuzuddin Ahmed
International Centre for Living Aquatic Resources Management, Penang, Malaysia

Gloria M. Umali
International Centre for Living Aquatic Resources Management, Penang, Malaysia

Mary France Rull
International Centre for Living Aquatic Resources Management, Los Baños, Philippines

Economic valuation of coral reefs in the Philippines

Coral reefs are one of the most under valued and least protected coastal ecosystems in the Philippines. Application of standard cost benefit techniques to value the coral reefs has overlooked many of the indirect uses and non-market goods and services provided by coral reefs, and hence revealed only partial values of the country's reef resources. Total economic valuation (TEV) is the most appropriate approach to have a full accounting of the costs and benefits associated with existence and utilisation of the coral reef systems. The TEV framework can be used to describe the different use and non-use values of coral reefs. However, each of the different uses may require multiple methods, for which only a few applications are known to date. The aggregated sum of all the economic benefits derived from coral reefs will provide a measure of the total economic contribution of a particular reef ecosystem. Therefore, it is essential to include in the valuation as much as possible of the net production from fisheries, shells and corals, and environmental benefits such as tourism, biodiversity and shoreline protection. In this paper, a critical review of the techniques used for valuation of coral reefs have been made. A combination of contingent valuation and the travel cost method were used to capture both use and non-use values in an application to a coral reef site in Bolinao, Pangasinan, Philippines. The benefit transfer approach has been reccommended to extrapolate the values of reef resources of the Philippines under alternative use and non-use options.


Oriana Almeida
Imperial College, University of London, United Kingdom

Kai Lorenzen
Imperial College, University of London, United Kingdom

David McGrath
Federal University of Para, Belem, Para, Brazil

Fishing in the Amazon Basin

Research on the social and economic aspects of commercial fishing in the Amazon basin has been neglected. As a result, these factors have not been considered in resource management policies in the region. Research into the economic and social aspects of commercial fishing provides an opportunity to examine the different types of commercial fishing operations in the region. In this research, interviews were conducted with 2000 fishermen to draw a social and economic profile of fishing fleet operators in the four main ports of the Amazon Basin (Manaus, Belem, Santarem and Tefe). Multivariate factor analysis was used to examine the social and economic aspects of the fleet. Cluster analysis was used to classify these factors and to separate the boats constituting the commercial fishing fleet into groups. Factors underlying the social and economic variables were the scale of operation (i.e., size of the boat and ice storage capacity), gear scale and quality (e.g., gear material, number, size and price), and management skills (i.e., job history, years of school, diversity of fishing place). Using cluster analysis, boats were classified based on the scale of the boat (large/small), the person operating the boat (owner/not owner) and the management skills of the operator (good/bad). The geographical distribution of these groups was analysed in relation to the species targeted and the implications of socio-economic heterogeneity for resource management were outlined.


Savas Alpay
Department of Economics, Bilkent University, Turkey

Mehemt Caner
Department of Economics, Bilkent University, Turkey

Environmental Kuznets curve once again

A great deal of attention has been paid to the relationship between growth and environmental quality. A recent comprehensive survey of this relationship, known as the environmental Kuznets curve, has been completed by Rothman (1998) in the journal Ecological Economics. In this paper, we apply a new econometric technique developed by Cane (1997) to finding the threshold if it actually exists. We take some of the previous studies in this literature, and apply this new technique to their data sets (updated)and see whether we can identify any bell-curved relationship between growth and environmental degradation. We also try to identify if there are similar thresholds between environmental degradation and other important variables such as the degree of openness of countries, and the capital labor ratio.


Marty Anderies
CSIRO Wildlife and Ecology, Canberra, ACT, Australia

Demographics, economic growth, and sustainable ecological economic structures

An economic growth model including the interaction of economic structure, human demographics, and a renewable resource base is developed and analysed. The analysis suggests a definition of sustainability that incorporates these three components. Somewhat analogous to the results of Solow (1974) concerning minimum investment levels required to guarantee constant consumption in the face of dwindling resources, the model here suggests that demographic considerations place an upper bound on investment levels that will render an ecological economic system sustainable. Thus there is a 'sustainable investment window'. The relationship of the size of this window to key model parameters is studied.


Marty Anderies
CSIRO Wildlife and Ecology, Canberra, ACT, Australia

Complex adaptive systems as an integrative framework for studying ecological economic systems

The complex adaptive systems (CAS) metaphor has been applied to several areas in the physical and social sciences including characterising economic systems, ant colonies and environmental law. As a metaphor, it may have become a bit overused, perhaps because actually applying it as a guiding principle to build models of particular systems is extremely difficult. Having said this, the CAS metaphor is still appealing as a model building framework for ecological economic systems because it recognises key concepts that apply to them, namely that they are composed of diverse biological and human agents interacting locally and an autonomous process that selects among these components. The CAS metaphor can be applied to environmental policy by associating the institutional, policy, and biophysical attributes of a system with the autonomous selective process. In this paper, applying this idea to studying policy instruments related to soil salinity in the Murray Darling Basin is explored.


Paola Antonello
Department of Economic Systems and Institutions, University of L'Aquila, Italy

Sabrina Santucci
University of L'Aquila, Italy

Uncertainty and the conservation of wilderness: a model of sustainable development applied to Abruzzo National Park

In this paper, we use a stochastic dynamic optimisation model to analyse the impact of strict environmental protection on the economy of five villages located inside Abruzzo National Park. During the past thirty years, the villages' economy experienced a most remarkable growth, largely due to the expansion of ecotourism and related activities. We analyse this reality by means of a two-sector, three-factor model, in which industries are classified either as environment-destructive or sustainable, and wilderness is added to labour and intermediate inputs as a primary input. Of all the economic activities in the Park, only the building industry represents a serious threat to the environment. Under sensible assumptions, the intertemporal maximisation of utility under uncertainty implies 'strong' sustainability, i.e. a zero growth rate of the environment-destructive industry and a constant stock of natural resources. Univariate and econometric analysis of the villages' employment and output time series, in the years from 1951 to 1991, confirm our main theoretical result, since the progressive expansion of sustainable industries and the relative decline of the environment-destructive ones accompany economic growth. However, the dynamics of the construction sector seems to be governed, to a large extent, by internal propagation mechanisms that, in the absence of any control, would have determined its unlimited expansion. Therefore, the cause of its relative decline is to be sought in the setting up of effective regulation rather than in the efficient resource allocation performed by the market.


Paula Antunes
Faculty of Sciences and Technology, New University of Lisbon, Portugal

Rui Santos
Faculty of Sciences and Technology, New University of Lisbon, Portugal

Guidelines for incentive based programs for biodiversity conservation in Portugal

The conservation of biological diversity, the sustainable use of its components and the fair and equitable sharing of the benefits arising out of the utilisation of genetic resources are the main objectives of the 'Convention on Biological Diversity' (CBD), which was signed in Rio de Janeiro in 1992 by 157 countries. Article 11 (Incentive Measures) of the CBD specifies that the Parties shall "adopt economically and socially sound measures that act as incentives for the conservation and sustainable use of components of biological diversity". The development and implementation of incentives for the conservation of biological diversity is therefore nowadays emphasised as a priority in conservation policy. The research presented in this paper aims to contribute to the design and implementation of effective incentive based programs to protect biodiversity acting at a national and local level. It has been recently acknowledged that the process of conducting such an exercise should follow accepted guidelines, which need to be developed by the parties, based on lessons learned from case studies and on the analysis of the particular institutional framework in each situation. These guidelines must therefore be tailored to the specific characteristics of each country. The main objective of the research presented in this paper is to contribute to the application of incentive measures for biodiversity protection in Portugal. This is accomplished through the identification of major issues at the national level for the implementation of incentives for biodiversity conservation, based on the analysis of the existing institutional framework and its implications for biodiversity management. A particular emphasis is given to the identification of existing perverse incentives with negative effects in biodiversity conservation. A set of guidelines to support the design of incentive-based programs at the local level are proposed, favouring the adoption of a mixed approach, where different incentives (including the removal of perverse incentives) are included in a program.


Dhananjaya (Jay) Arekere
Race & Ethnic Studies Institute, Texas A&M University, College Station, Texas, USA

Sustainable development and environmental equity: economics, sociology and the environment

Economic inquiry into the theory behind environmental justice has been almost absent. There is, however, theory explaining the issue of environmental quality and the poor. The economists constructa post-materialistic argumentsuggests that the poor have a lower income, thus, a depressed demand for environmental quality, consequently receiving less of it. However, since the advent of the environmental justice movement, minoritiesboth racial and genderand the poor have mobilized to demand better environmental conditions and protection. This is in contrast to economic theory. An alternative political economy framework is developed to explain this apparent contradiction in real world outcomes and theory. Examining environmental quality as a basic civil and human right, as asserted by sustainability literature, provides environmental equity new meaning and place in economic theory. It is argued that neither local nor global sustainability can be achieved without environmental and economic equity, the latter is a subset of the former.


Dhananjaya (Jay) Arekere
Race & Ethnic Studies Institute, Texas A&M University, College Station, Texas, USA

David Miller
Nuffield College, University of Oxford, United Kingdom

Environmental justice and sustainability: science and societies

The sustainable development and environmental justice movements formally took root in early 1980s. In general, both the movements are concerned about equity issues regarding resource allocation and use. However, they have developed rather distinctly and around particular issues that have not intersected. While sustainable development has received its support and strength from academics and intellectuals [the science], environmental justice has been a grassroots movement of community members [societies]. While a few researchers and scholars worked on environmental justice issues, until recently, a disproportionate number of researchers, from varied disciplines, examined the myriad dimensions of sustainable development. The premise of this paper is that environmental justice is an integral part of both local and global sustainability. The commonalities between the two areas of study are identified and a comparative analysis of the evolution of two movements is undertaken. The comparative analysis is undertaken from the standpoint of both a social organization and institutional perspective.


Dhananjaya (Jay) Arekere
Race & Ethnic Studies Institute, Texas A&M University, College Station, Texas, USA

Mitchell F. Rice.
Race & Ethnic Studies Institute, Texas A&M University, College Station, Texas, USA

Resources, endowments and entitlements: implications for people, property and progress

Resource allocation and use policies are fundamental to sustainability. Examining and (re)designing appropriation regimes and use rights are daunting, even in the abstract (theoretically). There are large array of issues that need to be taken into consideration when both efficiency and equity goals are required to be reconciled. A cursory attempt is made to bring together several complementing and conflicting concepts from different disciplines. Such an exercise, we hope, will help facilitate further conceptualization of the various dimensions of sustainability. This is the first attempt of its kind that adopts a multidisciplinary approach to examine how resource ownership, or lack thereof, leads to disproportionate rights to own or use resources. The disparate endowment structure leads to society bestowing power in different proportions. More resource endowments leads to more individual power that can be used to obtain property. This in turn leads to institutional biases that respect owners with greater resource ownership and material property. This then leads to disproportionate spread of progress among individuals, groups or geo-political powers.


Bustanul Arifin
University of Lampung, Indonesia

Farm-level economics of land degradation

This research examines economic incentives for upland farmers to allow intensive land-use practices that could lead to land degradation and to invest in land conservation measures as a means to control land degradation and improve agricultural productivity in Lampung Province, Indonesia. The study synthesises Neo-Malthusian and Neo-Boserupian models of land degradation where the role of population pressure on land degradation can be direct; but it can also be indirect, manifested through the effects of intensive land-use practices. Two periods of field survey and grounded interview with farmers have been conducted in August- September of 1997 and in February-March of 1999. A total of 74 sample respondents were included in the survey, of which 28 were from the village of Pekurun and 46 were from Subik in Lampung, Indonesia. The results suggest that land-use patterns based on intensive practices of modern inputs and labour allocation are prone to mismanagement that leads to land degradation. However, where governments have neglected to intensify agricultural production through the use of modern technology, the continuing pressures of population growth have worsened poverty and unemployment, which might be accelerated during the current crisis. This has driven rural people to expand cultivation into less favoured, often environmentally fragile areas, conservation forests and steeply sloping uplands, where land productivity is declining. The policy strategies should be directed towards reducing poverty and promoting economic diversification in rural areas. Hence, targeting conservation programs to areas that are highly eroded and/or have high potential of degradation would be an effective strategy.


Murat Arsel
Department of Geography, University of Cambridge, United Kingdom

Mining for change: the triple transformation of business, state and civil society in Turkey

Developing states and multinational corporations alike have successfully adapted to the discourse of sustainable development and speak of the necessity of concomitant economic development and ecological protection. However, devising and implementing meaningful strategies that respect the natural environment within which economic processes take place still remains a great challenge. While the need for institutional change at all levels is evident, the processes through which institutions in the developing world respond to environmental problems await clear elucidation. This paper provides recent empirical evidence from Turkey highlighting the social and economic forces underwriting institutional change. The necessary data comes from a case study of the decade-old struggle in the town of Bergama between the residents and a multinational mining company. Although initially centred on the question of cyanide-intensive gold extraction, for which the company had received the necessary permits, the case evolved into one that directly dealt with the potential contradictions between a Western-style socio-economic development and the preservation of environmental integrity. At the end, the civil society triumphed as the company, despite its promises to install state-of-the-art technology to minimise ecological risk, had its operational permits overturned and the state instituted more stringent environmental legislation.


Hossein Bahrainy
University of Tehran, Iran

Manoochehr Tabibian
University of Tehran, Iran

A model for evaluation of urban environmental quality

The principal objective of any strategy to the improve urban environment is the enhancement of the quality of life for its citizens. In order to determine the quality of an urban environment, it is necessary to use appropriate techniques that would enable us to monitor and measure those variables that, over a certain period of time, will have significant impact on the quality of the environment. In the past and up until recently, evaluation techniques have been generally based on the application of descriptive-qualitative methods and ideal criteria. These techniques were largely devoid of scientific basis, and therefore, lacking in adequate reliability. Experience in recent decades has shown that the design, compilation, and application of the so-called environmental quality indicators is a very valuable tool for evaluating the quality of the urban environment. This tool has great potentials for the evaluation of policies, plans, ideas, and innovations that have been applied in the urban environment. This article intends to, following a brief review of a number of descriptive and traditional evaluation techniques, and presenting a few analytical methods, introduce a model developed by the authors and is currently tested in the City of Tehran, Iran.


David Barkin
Universidad Autonoma Metropolitana, Mexico City, Mexico

Wealth, poverty, and sustainable development

This paper examines alternative strategies in the face of social immiseration and environment degradation. The very accumulation of wealth creates poverty and together they accelerate the process of environmental degradation. It is becoming increasingly clear that the protection and enhancement of biodiversity requires the protection of diversity in all dimensions of human and natural existence. This recognition is essential for designing strategies that privilege proposals for enhancing local capabilities to implement autonomous programs of governance. These programs increase the social capacity to ensure self-sufficiency while diversifying the productive base to allow for raising productivity and assuring satisfactory living standards without compromising local traditions of organisation and cultural diversity. Examples from a number of natural resource management programs in Latin America will be used to demonstrate its feasibility.


Amitrajeet A. Batabyal
Department of Economics, Utah State University, Logan, Utah, USA

Qing Xu
Department of Economics, Utah State University, USA, Logan, Utah, USA

A Bertrand model of trade and environmental policy in an open economy

Specifically, the question of interest is this: What is the appropriate way to conduct national environmental policy in the presence of international trade? In this paper, we conduct a game-theoretic analysis of environmental policy in a two-country world. We examine two questions. First, given that the incidence of pollution is domestic, will one-sided environmental policy, pursued by one country in a Bertrand game, make that country worse off? Second, suppose that both national governments are affected by international pollution, but polluting firms within the two nations are not. In this situation, what are the pros and cons of controlling pollution by means of alternate price control instruments? With regard to the first question, we show that when governments interact strategically, there are theoretical circumstances in which the conduct of one-sided environmental policy can immiserise a nation. This finding is a likely explanation as to why national governments are unwilling to conduct one-sided environmental policy even when the incidence of pollution is domestic. With regard to the second question, we derive inequalities that tell us whether consumers and producers gain or lose from the pursuit of a particular environmental policy. This paper's analysis shows that there are a number of circumstances in which consumer and producer welfare are highest when polluting firms choose quantities rather than prices. From a regulatory standpoint, this suggests that it would be worthwhile for governments to prevent polluting firms with market power from engaging in price competition.


Amitrajeet A. Batabyal
Department of Economics, Utah State University, Logan, Utah, USA

Hamid Beladi
Department of Economics and Finance, University of Dayton, Dayton, Ohio, USA

Time restrictions in natural resource management: A dynamic and stochastic analysis

The use of time restrictions for regulatory purposes is widespread in natural resource management. Weninger and Strand (1998) observe that recreational and commercial hunters for most game are subject to seasonal restrictions. In addition to this, in virtually every state in the USA, sport-fishing seasons exist for a whole host of fish species. Commercial fisheries in Canada, the USA, and in Western Europe are subject to time restrictions. Although time restrictions are frequently used in natural resource management, economists have clearly documented the distortionary effects of such restrictions. At least in the context of fisheries, economists agree that time restrictions convey distributional advantages to politically dominant fishermen at the expense of their more efficient competitors. Although the inefficiencies associated with time restrictions have been recognised by economists, the same cannot be said about a negative effect that time restrictions are likely to have on the stock of a resource that is sought to be managed with such restrictions. Consequently, this paper has two objectives. First, we show that when there is uncertainty about the evolution of the stock of a resource, time restrictions can lead to the collapse of this resource. Mathematically, this means the probability that the resource stock will end up in a particularly undesirable state is positive. Given this finding we next analyse an approach to resource management under uncertainty in which time restrictions are used to maximise the likelihood that the resource stock will always be above a minimum acceptable level.


Alpina Begossi
State University of Campinas, Campinas, Sao Paulo, Brazil

Livelihood and sustainability in tropical environments: Atlantic and Amazonian cases

The concept of livelihood, together with other ecological concepts, such as those of sustainability and of resilience, is useful to understand the relationships among rural inhabitants of tropical forests and their environment. How the inhabitants of the Atlantic Forest coast, the caiáaras, and of Amazonian rivers, the caboclos, deal with the high biodiversity areas they inhabit, their communication channels, and how they deal with other external influences (such as tourism and governmental environmental agencies) are factors that may reveal different outcomes. These may be directed, or not, to a sustainable use of natural resources. Local activities, the network of interactions and options in dealing with external influences, may influence future directions for sustainability and for the living standard of local populations. Illustrative examples will include the tourist coastal areas of southeastern Brazil, where caiáaras live, and riverine areas, including tourist sites and extractive reserves, such as from the Araguaia, Tocantins and Juru rivers.


Kuatbay Bektemirov
Uzbekistan Academy of Sciences, Uzbekistan

A concept for sustainable development of the Aral Sea region

This paper provides lessons from the Aral Sea region, which is the most staggering ecological disaster of the 20th century. This is a vivid example of the complex linkages between environment and development, and the consequences which unsustainable economic development policies have on health and the environment. The problem of the Aral Sea, unlike anything which has come before, has laid bare all the shortcomings of a planet-wide approach to nature as a storehouse of free riches. It is necessary to define the main causes of such crises as they occur not only in the Aral Sea basin, but also in the whole world. The aim of this research is to find principles for harmonious relations between nature and society with the solution to the problem of the Aral Sea serving as a model. A solution to the problem cannot be found within the old concept of nature-society relations or in the framework of the current understanding of property and sovereignty. It demands a restructuring of public consciousness toward a new system of values, which would incorporate the principles of sustainable development, provide ecological security, and limited consumption. In order to achieve this development status an approach to applying the laws of the market economy as they relate to nature would have to be considered. It includes recognition of the rights of the rivers and sea to their shares in the profit generated as a result of their usage. That means recognition of the rivers and sea as equal economic partners in society. Water can no longer be considered a public and free commodity, and its allocation cannot be made by administrative and judicial decisions using a supply-oriented approach. It is necessary to look at water from an economic perspective as a multi-product commodity, with its price representing not only the cost of the water supply, but also its value to the user.


Jeff Bennett
National Centre for Development Studies, The Australian National University, Canberra, ACT, Australia

Mark Morrison
Charles Sturt University, Bathurst, NSW, Australia

Rich Harvey
New South Wales Environment Protection Authority, NSW, Australia

A river somewhere - valuing the environmental attributes of rivers

The benefits of enhanced river flows and water quality to river health underlie a suite of water reforms being progressed by the Council of Australian Governments. In New South Wales (NSW), improving the way water is shared between the environment and consumptive uses is a central tenet of the NSW Water Reforms Package. Water Management Committees have been established to advise Government of feasible options to achieve local communities' desired environmental objectives. Determining the community's preference for healthy rivers requires the explicit analysis of trade-offs between consumptive and environmental uses affecting flows and water quality. Such analyses can be undertaken if the effects of alternative management plans can be effectively described and the associated benefits and costs estimated accurately. Estimating the value of environmental benefits, such as ecological function and non-use value, requires the use of non-market valuation techniques. Choice modelling is one technique that can be used to estimate people's environmental preferences. Value estimates can be derived by presenting survey respondents with a range of hypothetical environmental outcomes associated with the water reforms and asking them to select the outcomes they prefer. Choice modelling is well suited to identifying preferred environmental outcomes from water reforms as choices can be presented in terms of specific environmental attributes (such as flow, fish and vegetation), unlike contingent valuation, which only allows one environmental attribute to be tested. In this paper, choice modelling is presented as a way of estimating the values of the key environmental attributes of rivers. The implications of transferring value estimates to alternative water policy settings are also explored.


Geetesh Bhardwaj
Jawaharlal Nehru University, New Delhi, India

Ramprasad Sengupta
Indian Institute of Management, Calcutta, West Bengal, India

Consumption pattern, trade and green house gas leakage: a case study of India

All the policy discussions in the international fora on the sharing of global responsibility for abatement of Greenhouse Gas (GHG) emissions by individual countries centre on their current flow of total emissions. The basis for determining responsibility takes account neither of the pattern of their final consumption, which is the ultimate determinant of global warming, nor of the role of globalisation through trade in the leakage of GHGs across national boundaries. This paper examines the effect of trade on the net leakage of carbon dioxide and methane from India. It estimates the gross output and domestic absorption level of GHG intensive products for the historically observed consumption pattern in the nineties if such consumption was to be met out of supplies entirely from domestic production in a hypothetical autarchic situation where all the capacities are also to be created from domestic resources. Using the Leontief input-output model framework of analysis, with appropriate endogenisation of investments, the paper shows that foreign trade: reduced the requirement of production of carbon intensive products in India and caused very marginal changes for the production levels of methane intensive primary products, contributing to net leakage of CO2 out of India and not the other way round. In spite of the possible contribution of abatement of GHG emissions through trade because of the likely relative technical inefficiency of production in India, the results point to the necessity of using policy instruments like the imposition of a countervailing carbon duty on imported products in a carbon tax regime in order to enforce globally ecofriendly consumption pattern and a higher environmental efficiency of production.


Mahadev Bhat
Environmental Studies Department, Florida International University, Miami, Florida, USA

Protecting indigenous knowledge under the new international intellectual property rights regime

There is a growing resentment that the intellectual property rights (IPR) of traditional communities in developing countries are being subordinated to modern industrial societies by implementing two international agreements, the Trade-Related Intellectual Property Right (TRIPS) agreement and the Convention on Biological Diversity (CBD). These agreements called for two worldwide institutional changes, namely, the exclusive protection of intellectual products derived from indigenous knowledge and biota, and reasonably unrestricted access by the world community to the biota itself. Promoters of the treaties believe that the IPR protection would promote transfer of biotechnology from developed to developing countries and, in turn, biodiversity conservation. Even though many developing countries think they have lost their case, this paper recognises the 'second-best' option that is still available to them through various provisions of the treaties. We analyse the specific provisions of the two agreements (for instance, creation of different forms of IPR, biotechnology transfers, and compensation for using indigenous knowledge) as to how best they can be used to protect a variety of traditional knowledge and culture. Further, developing nations might implement a series of 'companion' policies and legal reforms to make these provisions work and avoid compromising their economic and environmental interests.


Mahadev Bhat
Environmental Studies Department, Florida International University, Miami, Florida, USA

Ramachandra Bhatta
College of Fisheries, Mangalore, India

Aquaculture and sustainable coastal land management: an ecological economic model of resource interactions

While commercial aquaculture has grown rapidly in many coastal countries and proved to be a significant contributor to their national economies, this industry has come under attack for causing a negative impact on coastal environments. This paper formulates an interactive model of nonrenewable and renewable resources to estimate the optimal allocation of coastal lands between aquaculture and agriculture in an ecologically sustainable fashion. Based on an empirical application to Indian commercial aquaculture, various economic, regulatory and technology circumstances under which the optimal land allocation mix may change are evaluated. For aquaculture to gain recognition as both a valuable economic and environmentally sustainable industry, public and private sector actors must address two externalities: off-site effects on renewable food and other coastal resources, and the on-site, self-pollution of shrimp ponds, which reduces the aquaculture's profitability. Traditional pollution-control policies are inadequate to address these externalities.


Gangaiah Bollempalli
Institute of Public Enterprise, Osmania University, Hyderabad, India

Livelihood sustainability of coastal communities and fisheries production onshore and in exclusive economic zone of India

India has a long coastline of 7516 km with fish production of 5.35 million tonnes. Large numbers of fishing communities and coastal populations depend on offshore and onshore fish production for their livelihood and nutritional needs. With the integration of international markets, the intensive commercial exploitation of offshore fisheries by large companies using mechanised boats has adversely affected the sustainability and regeneration of fishing resources in the Exclusive Economic Zone (EEZ) of India as well as the livelihood of a large number of coastal fishing communities. With the dwindling catch in the EEZ in the face of rising international demand there is a shift towards onshore aquaculture production of mainly prawn for export purposes. A stakeholder analysis based on a survey revealed that this shift is ecologically as well as economically unsustainable and is reversing the process of development. Salinisation and chemical contamination of ground and surface waters as well as of agricultural lands, and destruction of mangroves, cyclone shelter, biomass and pollution of seawater are some of the permanent adverse ecological consequences. On the socio-economic plane, land alienation, uneconomic yield of fish, unequal distribution of income, displacement of coastal communities due to reduced economic activity, conversion of fertile paddy lands to aquaculture resulting in loss of employment and local level food security problems are some of the adverse consequences of this shift. Government and international development institutions have unintentionally supported this model of development. Proper integration of ecological and socio-economic models could avoid such policies with unsustainable and uneconomic benefits in future.


Ralf Buckley
CRC for Tourism and Chair in Ecotourism, Griffith University, Gold Coast, Queensland, Australia

The messy monster model of the human economy.

Neoclassical economics portrays the human economy as a closed loop, with externalities. Herman Daly suggests a more accurate model: a gut which consumes raw materials and excretes waste products. But many of the most severe impacts of the human economy on the natural environment are accidental. More species, surely, have become extinct as an incidental consequence of habitat destruction than through deliberate consumption. So a better model still might be a creature which feeds messily, excretes heedlessly, and blunders around both carelessly and clumsily: a messy monster. This model was first suggested in relation to wilderness protection (Buckley R. C., 2000, in McCool, S. et al, eds, USDAFS Tech Rep RMRS-P-0-Vol-2, Ogden UT). Perhaps it may be equally useful in other sectors.


Erwin Bulte
Department of Economics, Tilburg University, Tilburg, The Netherlands

Daan van Soest
Department of Economics, Tilburg University, Tilburg, The Netherlands

G. C. van Kooten
University of British Columbia, Vancouver, British Columbia, Canada

Rob Schipper
Wageningen Agricultural University, The Netherlands

Trading off forests and agriculture in humid Costa Rica: investing in forest conservation under uncertainty

Uncertainty plays an important role in the investment decision to conserve natural forests. This paper quantifies the impact of uncertainty about environmental services on the trade-off between forest conservation and agricultural expansion in humid Costa Rica. Forest conservation is an investment in natural capital, yielding benefits in the form of biodiversity, carbon sequestration, tourism, and sustainable harvesting of wood and non-timber forest products. Little is known about the environmental benefits of forest conservation. Major potential benefits of sustainable forestry are carbon uptake and biodiversity preservation, but future shadow prices of carbon and species are subject to substantial uncertainty. As tropical deforestation constitutes an irreversible act and new information about shadow prices becomes available over time, we incorporate quasi-option value as a component of the total economic value of forest conservation. Foregone net agricultural revenues are the most important opportunity cost of sustainable forest exploitation. Expanding agriculture implies encroachment on increasingly inferior lands and cultivation of crops with low (financial) returns. To model the decreasing marginal benefits of deforestation we employ a detailed linear programming (LP) model developed over a decade of multi-disciplinary field work in the region (the REPOSA project, 1986-1998). The model takes into account biophysical and economic constraints, and computes shadow prices for agricultural land at the margin. The analytical model is solved numerically for the Atlantic Zone of Costa Rica, and we compute optimal forest stocks for various assumptions with respect to key variables. It turns out that quasi option value is an important determinant of optimal forest stocks.


Ekaterina Busireva
Perm State University, Perm, Russia

Ecological issues as business activities

In future ecological problems will be defined by harmony between nature humans and technology. Unfortunately, there are no such linkages at the end of the twentieth century, and that is why ecological problems have become global. In Russia under the conditions of rapid transition towards new economic relations and development of entreprenuership, there is the a dangerous further worsening of environmental quality and non-rational use of natural resources. As a result, it is necessary to build foundations for an ecological services market. Many business structures, especially private firms, advertise their products using attractive ecological labels in order to receive tax preferences, but their activities are not directly connected with ecology. Some of them cannot provide citizens and other organisations with ecological services because of the absence of well-qualified staff in this field and a lack of financial and other resources. They are becoming ordinary commercial structures with only one aim - receiving profits. Therefore, it is evident that in order to achieve balance between entrepreneur's interests and providing the citizens with ecological products and services it is necessary to strengthen regional local authority activities in the field of ecological labels and the control of products and services. I will present the results I have obtained together with Zhanna Mingalyova and Svetlana Tkachyova during innovation surveys of more then 100 Perm Region enterprises and firms. In researching the innovative activities of Perm Region industries, we have found, among other results, that improving the ecological situation is included in the first ten priorities of firms.


Colin Butler
National Centre for Epidemiology and Population Health, The Australian National University, Canberra, ACT, Australia

Towards a theory for a global environmental Kuznets curve

Per capita income provides a partial quantitative explanation for why populations live in environmentally degraded areas, are at risk of doing so, or no longer do so. That is, the environmental Kuznets' curve (EKC) helps explains local environmental quality. However, the EKC appears less useful for predicting global environmental sustainability. In contrast to EKC theory, global environmental degradation continues to worsen as global per capita income rises. If the U curve predicted by the EKC applies globally, when will its nadir be reached? If the EKC does apply, will there be time for the global environment to sufficiently recover, or might lag effects, operant even if the nadir is passed, still lead to 'civilisation failure'? This paper also argues that the extreme inequality of global exchange-adjusted income partially explains the steepness in the fall of the global EKC. Firstly, relatively wealthy populations, including those making policy decisions on their behalf, generally dismiss the possibility that future civilisation failure, partly caused by environmental factors, can occur. Secondly, this group believes that, even if civilisation failures were to occur, they can be confined to unentitled populations. The ascendancy of comparatively unrestrained marketism has increased many global environmental externalities and also increased global income inequality. Increasing income inequality increases the risk of civilisation failure, because even if the poor experience an increased absolute income, their relative decline is likely to be mirrored by a decline in their ability to influence global policy, including with regard to environmental sustainability.


Alejandro Caparros-Gass
Spanish Council for Scientific Research, Madrid, Spain

Pablo Campos-Palacin
Spanish Council for Scientific Research, Madrid, Spain

David Martin-Barroso
Spanish Council for Scientific Research, Madrid, Spain

Carlos Abad Balboa
Universidad Complutense, Madrid, Spain

Influence of recreational services and carbon dioxide abatement on optimal bio-economic determination of forest rotation

This paper presents and applies a theoretical framework to integrate the influence of recreational services as well as carbon dioxide abatement on optimal bio-economic determination of forest rotation. Recreational services are treated in the classical way proposed by Hartmann (1976) but carbon fixation benefits are introduced in a different manner to previous studies, concentrating on total permanent carbon fixation attained by the forest. Theoretical as well as practical implications of this approach are analysed and compared with previous studies. Data are obtained for the Sierra de Guadarrama (a major mountain forest area close to Madrid (Spain)) and the Scottish Pine (SP) (Pinus silvestrys L.). The yield function is from Rojo y Monter (1996), specifically developed for the SP and the Sierra de Guadarrama. Carbon fixation (directly related to carbon dioxide abatement) is then estimated for the whole biomass produced (timber, roots, branches and leaves), taking into account decay rates for different wood products and other organic residuals. The recreational values associated with different stand ages are determined by means of contingent valuation and travel cost method surveys carried out in different age stands. Visitors rated photographs representing different age stands as well. The optimisation problem of forest rotation determination is then solved. Practical implementation problems of the results in the Spanish legal context are analysed.


James Casey
Washington and Lee University, Lexington, Virginia, USA

Jill Caviglia
Economics and Finance Department, Salisbury State University, Salisbury, Maryland, USA

James Randall Kahn
University of Tennessee, Knoxville, Tennessee, USA

Alexandre Rivas
Universidade do Amazonas, Manaus, Amazonas, Brazil

Information and the subsistence farmer's decision to deforest

Our paper looks at deforestation caused by small-scale farmers, and examines the question of whether the definition of property rights is a sufficient solution, or if other market failures must be addressed. In particular, we examine the role of information in the decision to deforest land by estimating the relation between agricultural knowledge and the quantity of forest cleared. Sustainable agro-forestry techniques exist which can produce a higher sustained level of income, but many farmers continue the impoverishing (and environmentally devastating) cycle of slash-and-burn. While many economists believe that the security of property rights can address this situation, we feel that the deforestation caused by small-scale farmers may result from imperfect information about agro-forestry, and therefore other policy alternatives, in addition to the establishment of property rights, may need to be imposed. There are two ways to test the hypothesis that information matters in the farmer's choice of agricultural technique and the decision of how much forest to clear. First, one can look at intra-community variation in the level of information and its impact on choice of technique and level of clearing. Second, one can look at inter-community variation in the level of information and how these choices vary across communities. We use data community-level and cross-municipality level data from Brazil and Mexico to test these hypotheses.


Clovis Cavalcanti
Fundacao Joaquim Nabuco, Recife, Pernambuco, Brazil

Ecological prudence and the fight against poverty

Recent research reveals that poverty in Brazil has followed an upward trend in the last two decades, and that the absolute number of poor people in the country in 1999 is greater than its total population in 1940. Between 1940 and 1999 conditions (in terms of availability of resources per unit of human capital) were favourable to growth (which occurred at a relatively healthy level). But this did not bring about a reduction in poverty. One may ask then how will it be possible to fight poverty in a more crowded world with more people to feed, house, and educate. In Latin America and the Caribbean, approximately one out of every three individuals is currently living below the 2-dollar a day poverty line. In the world as a whole in 1999 there are 1.6 billion persons in extreme-poverty, compared to a total world population of 1.5 billion in 1900. It is very difficult to agree with the conclusion that economic growth is a convincing argument for reducing poverty. Nevertheless, for conventional wisdom economic growth remains 'essential for poverty reduction', as well as a dream that only markets can effectively deliver. The idea of sustainable development requires going beyond a rhetorical statement, to a thorough understanding that traditional development is unsustainable and is not the proper way to win the fight against poverty.


Paulo Fernando de Moura Cavalcanti
Institution of Economics, Federal University of Rio de Janeiro, Brazil

Carlos Young
Federal University of Rio de Janeiro, Brazil

Maria Lustosa
Federal University of Rio de Janeiro, Brazil

An evolutionary model of innovation and the environment

The objective of the paper is to show the applicability of evolutionary economic models in the analysis of cleaner technologies diffusion. The basic assumption is that the evolutionary approach is a useful tool to integrate economic and environmental analysis, which can be an alternative to standard neoclassical economics and closer to the objectives of ecological economics. Using analogies with biological evolution and interaction, it is possible to establish patterns of causality among competition, cooperation and variety generation inside markets, considering the principle of irreversibility (i.e, once decisions are taken, it is not possible to return to the same previous status). Technical progress is considered as endogenous, therefore technological changes towards cleaner practices are possible, but it is also possible that 'clean' and 'dirty' technologies coexist in the same market, so the final result in terms of technological patterns cannot be defined ex-ante. The model developed in this paper results from the interaction of previous models by Nelson and Winter (1982) and Silverberg (1988). Firms have the same starting point (size and market share) but are able to adopt different technologies: one is labour saving and the other is energy saving. The main conclusions are: standard general equilibrium analysis does not allow the proper evaluation of the dynamic gains of cleaner technologies at firm level (through cost reduction) and system level (spillover effects); and technological diversity is possible - 'clean' technology trajectories may cohabit with 'dirty' trajectories. A clean technology trajectory with higher costs in the short run may become more efficient than other paths in the long run, because of dynamic gains in cost reduction resulting from research and development efforts in environmental friendly technologies.


Yara Maria Chagas de Carvalho
Instituto de Economia Agricola-SAA, Sao Paulo, Brazil

A technical attempt to introduce bottom up policy instruments in a changing centralised institutional environment

The Sao Paulo's State Department of Agriculture is a traditional institution, organised at farmer's demands, when commercial agriculture was first introduced in the state, during the last quarter of the nineteenth century. It is strongly hierarchically oriented and includes six research institutions and the extension agriculture service. The changing institutional environment results from several forces: public financial crisis; guidelines and policies from national institutions, technical efforts to respond to outside changing environment and finally, the World Bank's assistance to design a microcatchment loan agreement. This paper analyses two experiences of a technical attempt to introduce System Analyses, local development and a participatory approach in an inter-institutional project arrangement. It is based on Thiollen's 'Research-Action' methodology. The main objective is to get subsidies to improve group efforts. One is a region where agriculture is the main economic activities and the technical institutional leadership was not initially sensitive to the new methodology. A second experience is related to a partially protected area, where tourism has potential. There was a change in the technical institutional environment from the start, due to a change in federal policy orientation. It did also bring new partners, more experienced in participatory works. Some indicators such as: achievement of specific project goals, community's actions, evaluation by community groups and local technical partners are used to compare the experiences.


Pinaki Chakraborti
Dept. of Economics, The University of Burdwan, West Bengal, India

Optimal Environmental Expenditure

Renewable resources comprise an indispensable part of our environment. The interesting feature of this category is that it includes quite a few types of resources that include both a domestictaed component such as cattle and a natural environment containing biodiversity. The entire environment can be viewed as a renewable resource base. Careless and indiscriminate use of such resources fast aggravates our economic resource base and degrades our environment. The ways out include spending some of our resources on maintaining and improving the quality of such resources. Then it depends on the institutional structure whether adequate expenditure will be incurred by the decision-makers on improving the quality of the environment. The present paper tries to explore the level of such expenditure in oligopolistic exploitation and social planning. The paper seeks answers for the following: If benefit is derived from a renewable natural asset and incurring some environment-improving cost increases productivity, do private motives ensure optimal exploitation for society? Social planner's and oligopolist's intertemporal optimisations are compared with two constraining equations of motion coming respectively from the natural resource growth function and productivity effect (measured in terms of reduction in cost of harvesting) over time. It is shown that whether private oligopoly overexploits depends upon a number of parameters of their market. On the other hand it is shown to be likely that under a set of not-too-restrictive conditions, social planning may lead to a steady sustainable state of the resource. Two aspects of the paper are innovative: (a) environmental decisions are treated as productivity- rather than directly welfare-affecting actions; (b) multiple environmental state variables are reduced successfully to an essentially single state variable problem. The paper also tries to highlight that instead of pressurising the oligopolistic profiteers of ecology, it is possible to monitor the exploitation of such a resource through demand management policies and creating adequate incentive structures for better management through cooperative corporate behaviour.


Snigdha Chakrabarti
Indian Statistical Institute, Calcutta, West Bengal, India

Subhendu Chakrabarti
Indian Statistical Institute, Calcutta, West Bengal, India

Cost-benefit analysis of rural electrification program with solar energy

Almost all the islands in the Sundarbans in West Bengal are without power. One of the major problems of supplying power to these islands is the impossibility of setting up distribution lines over the water. Not only are current attempts to supply grid power through diesel generation inadequate, but further attempts to increase the supply in future, seem both impractical and uneconomic due to high costs of operation and maintenance, dependence on imports of oil and, more importantly, adverse effects on the environment. Some efforts have been made in recent times to supply power through solar energy as an alternative to diesel power. This has led to various kinds of activities using power, which were not possible earlier. However, the operating cost of solar power is much higher compared to that of diesel power and hence may appear to be not viable at the present stage. An attempt is made in this paper to evaluate the overall cost of power generation from solar energy plants taking into account all the different dimensions, in particular, the environmental impact of both the alternatives.


Rabindra Nath Chakraborty
Development Institute, University of St. Gallen, Switzerland

Establishment, stability and outcome of common property institutions in forestry: evidence from the Terai region of Nepal

The purpose of this paper is to analyse factors that affect the establishment, stability and outcomes of common property resource management institutions in forestry. Theoretical work (e.g. by Ostrom, 1990) has identified the existence of well-defined rules, credible commitment, and monitoring and enforcement mechanisms as factors which facilitate the functioning of common property institutions. The paper extends this framework by distinguishing between the stability and outcomes of institutions. An institution is stable if most actors comply with the rules. Important outcomes are the allocation and distribution of economic resources brought about by an institution. The empirical part of the paper is based on a field study in the districts of Banke and Dhanusha in the Terai (lowlands) region of Nepal. Forests have been managed for up to 17 years under informal local common property institutions in parts of these districts. A set of operational and constitutional rules defines access to forests. Strong 'systems of authority' (Bromley, 1992) enhance the credibility of the village residents' commitment to the rules. Compliance is monitored and rules are enforced by the resource users and by watchmen who are paid by the community. While outcomes are favourable in terms of forest preservation, they are ambiguous in terms of the distribution of forest products across social actors. Furthermore, the results of the field study point to the importance of learning and demonstration effects to the establishment of common property institutions.


Larissa Chermont
Federal University of Pará , Belem, Para, Brazil and Imperial College of Science, Technology and Medicine, University of London, United Kingdom

Waste management in an Amazonian city - Belem do Para lessons and experiences

There is clear evidence of the necessity in third world cities of integrating public policies in all contexts for improving the quality of life. Integrated Waste Management Systems are one example where the changes required for implementation imply a strong relationship between environmental, social and economic aspects. This paper centres on the characterisation of waste management services in the Amazonian city of Belem (Para) in Brazil. Its main objective is to identify the 'status quo' of this activity, under the responsibility of the municipality government. The first section covers the social, economic and environmental context of the municipality and its role as a metropolitan region, located at the mouth of the Amazon River. The second section of this paper compares Belem with similar medium sized cities in Brazil (Belo Horizonte, Curitiba and Porto Alegre) which have successfully implemented integrated waste management systems, in order to point out the main directions for public policy. Primary and secondary data were collected from existing literature, official documents and interviews with civil servants, the waste services firms and the informal sector. The final section discusses the role of Brazilian local governments, focusing on the Belem case study, and their capacity to implement policies in the sector that would cope with environmental impacts of waste generation and management, as well as population participation, income generation and citizenship.


Larissa Chermont
Federal University of Pará, Belem, Para, Brazil and Imperial College of Science, Technology and Medicine, University of London, United Kingdom

The determinants of fire and prevention efforts in the Brazilian Amazon

Forest ground fires affect the carbon stocks, wildlife and economic value of Amazonian forests, and may alter forest susceptibility to future burning. Investigation of forest fire will contribute to knowledge of land-use, carbon stocks and surface water chemistry. The probability that agricultural fires will ignite fire-susceptible forests is the focus of the analysis. The aim of this paper is to discuss the design of a conceptual framework, which allows the identification of specific socio-economic characteristics of land use in the Amazon Region, as an input to the development of a predictive model of ground forest fires. The first section is a brief review of the relevant literature on the econometric analysis of the determinants of land user behaviour with respect to fire use and prevention. The second section of this paper consists of the presentation of a theoretical model, describing the key dependent variables, the hypothesised determinants, and the relationship between them. The final, third section, is an assessment of data needs and potential sources, including the extent to which existing data sets on the socio-economic characteristics of land users in the Amazon could provide the data required to estimate the model. This last section contains two annexes: one containing a survey design and draft questionnaire, tested during July 1999 through interviews with landholders in three locations (Uruar, Santarem and Paragominas); and another with tables of data obtained from these interviews, required to estimate the model in the light of existing data.


Gianni Cicia
Dipartimento di Economia e Politica Agraria, Universita' degli Studi di Napoli 'Federico II', Portici ,Italy

Elisabetta D'Ercole
Dipartimento di Economia e Politica Agraria, Universita' degli Studi di Napoli "Federico II", Portici, Italy

Luigi Cembalo
Dipartimento di Economia e Politica Agraria, Universita' degli Studi di Napoli 'Federico II', Portici, Italy

The EU policy for agrochemical inputs use reduction: a comparison of current and potential policies in a rural area of Southern Italy
In the last two decades, the EU has paid increasing attention to agro-environmental issues. In the 1990s, the EU Reg 2078/92 has become one of the main pillars of the Common Agricultural Policy. Reg. 2078/92 contains 11 measures covering a wide range of applications. They span inputs reduction, landscape and biodiversity conservation, and incentives for recreational use of rural areas. This case study focuses on the policy measures concerned with agrochemical inputs reduction. The regulation bases this policy on monetary incentives for those farmers who voluntarily decide to: 1) reduce nitrogen use; 2) adopt Integrated Pest Management; and 3) convert to organic farming. Technical and economic data were collected by directly interviewing a sample of 45 representative farms located in a typical rural area of Southern Italy. Information collected was used for simulating alternative policy scenarios by means of a mixed integer programming model. Conventional farming was compared with low nitrogen techniques, IPM and organic farming in an optimisation framework. Alternative farming techniques were chosen using the Delphi procedure. Many scenarios were considered in order to evaluate current EU policy tools. Different scenarios were evaluated according to three criteria: reduction of the environmental impact of inputs' use; public expenditure; farm revenue change. Simulations also allowed the evaluation of a trade-off between environmental impact reduction and farm gross revenue. With respect to the three criteria, the best policy strategy was the one promoting organic farming, but only if it goes together with vertical integration policies aimed at improving market organisation for organic products.


Mario Cogoy
Department of Economics and Statistics, Universita di Trieste, Italy

Two routes to absolute dematerialisation

Sustainable policies of economic development can rely upon a vast literature on dematerialisation, showing that a considerable body of knowledge is actually available, which could contribute to a radical reduction of material and energy costs per unit of consumption service without impairing present levels of welfare. A reduction of environmental costs per unit of consumption service (relative dematerialisation) will not lead however to an absolute dematerialisation of the economy if efficiency gains are neutralised by the overall effects of economic growth. For this reason, it is necessary to study conditions for absolute dematerialisation in global models of economic dynamics. The paper develops a dynamic model of absolute endogenous dematerialisation based on a time-allocation approach and on a view of technical progress as deriving from the accumulation of human capital. The model assumes that the accumulation of human capital can enable consumers to substitute time for commodities in the process of economic development. In this way, both the allocation of time and the material intensity of the life-process are endogenously determined in a dynamic model of economic development. The features of the model are in sharp contrast with the familiar results of growth orthodoxy: absolute dematerialisation of the life-process instead of an increasing per-capita consumption of material products as a result of the social accumulation of knowledge and technology. Although the paper is mainly theoretically oriented, it provides a suitable framework for discussing several results of the empirically oriented dematerialisation research.


Michael Common
Graduate School of Environmental Studies, Strathclyde University, Glasgow, United Kingdom

Uwe Neumann
Central European University, Budapest, Hungary

Agent based simulation modelling for sustainability analysis

The purpose of the paper is to demonstrate, by presenting results from work in progress, the potential for agent based simulation modelling as a means for gaining insights into the nature of the sustainability problem and policies to address it. This kind of modelling develops a simulated history of a society from the interactions of individual agents with one another and with their environment. Inputs are specifications of individual agent behaviour - in relation to their goals, other agents, and perception of and reaction to environmental states - and specifications of environmental dynamics - which are affected by agent behaviour. Agents and the environment co-evolve. In a simple environment, with irreversibility attaching to local resource exhaustion, the co-evolution sometimes entails the extinction of the agent population. In such cases introducing a social norm for precautionary behaviour averts extinction. Where the norm is not necessary for sustainability, where local resource exhaustion is reversible, imposing it does not materially affect the simulated history of the size of the agent population, though there are implications for the distributions of agent characteristics. The impact of pollution generation in resource consumption is considered.


Steven Cork
CSIRO Wildlife and Ecology, Canberra, ACT, Australia

Brian Walker
CSIRO Wildlife and Ecology, Canberra, ACT, Australia

Nick Abel
CSIRO Wildlife and Ecology, Canberra, ACT, Australia

Carl Binning
CSIRO Wildlife and Ecology, Canberra, ACT, Australia

The nature and value of Australia's ecosystem services: integrating biophysical and economic assessments of ecosystem function under a range of future scenarios

In 1999, a multi-disciplinary, multi-organisational project 'The Nature and Value of Australia's Ecosystem Services' was launched with funding support from the Myer Foundation. The project aims to produce the first detailed assessments of the nature, value and consumption of ecosystem services in a set of representative Australian ecosystems. We develop conceptual and quantitative models of the biophysical processes responsible for providing ecosystem services like clean air and water, nutrient capture and cycling in soil, natural pest control, pollination and seed dispersal, mitigation of extreme weather, regulation of hydrology, maintenance of genetic resources, and provision of aesthetic, cultural and spiritual values. These biophysical models will be linked with economic models and assessments to estimate economic value of ecosystem services and marginal changes to values under a range of future scenarios developed with stakeholders. An integral part of the project is the development and testing of a framework for economic valuation that integrates recent advances in theory and practice in ecological economics. Policy recommendations are a major output of the project. The paper consists of progress report on the first case study as well as an analysis of lessons learned about integrating biophysical, economic and policy models.


Sasha Courville
Department of Geography and Human Ecology, The Australian National University, Canberra, ACT, Australia

Expanding the concept of flows and social and environmental accounting: two approaches for integration

This paper will address a critical question in ecological economics of how to bring human and ecological systems together. Integrative frameworks and methods that connect disciplines to solve the complex social and ecological issues that face our societies today are desperately needed. Two such approaches for ecological economics research are explored in this paper: social and environmental accounting tools and an expanded concept of flows. These approaches will be explored in the context of their application to research in the arena of international trade, environment and development. The research project from which these approaches were developed examines how to incorporate social and ecological costs into international trade through an examination of case studies of coffee production to consumption systems. Social and environmental accounting tools were used in the construction of a report card designed to evaluate the social, environmental, economic and institutional performance of the case study systems. This paper examines the benefits and limitations of such an approach. The second framework used involves an expanded concept of flows. Three types of flows are identified in coffee production to consumption systems including materials and energy flows, financial flows and information/knowledge flows. By examining the relationships between these flows in a production to consumption system, much can be learned about how to move towards sustainable trade.


Jerry Courvisanos
School of Economics, University of Tasmania, Launceston, Tasmania, Australia

Optimise vs satisfice: the uncontested battle of investment planning for sustainable development

The two environment-based approaches to the private-public mix of investment strategies towards sustainable development are critiqued. 'Environmental economics' reduces environmental conflicts to optimal cost-benefit algorithms. 'Ecological economics' ensures optimal ecological scale of resource use given that the economy is a subset of the global ecosystem. Optimality is the 'only game in town'. Both optimal approaches to investment strategy fail to address fundamental uncertainty in historical time, which reduce private and public investment to sub-optimal solutions. The paper goes on to develop a behavioural framework for investment planning that aims at satisficing towards a 'sustainable society'. This framework is based on the work of two economists, Michal Kalecki and Adolph Lowe. Kalecki argues for social control of investment (due to market instability failure) and that this involves a democratic investment planning approach to ensuring stability in investment cycles. This approach is extended to apply to market ecosystem failure with the type of technological innovation that ensures sustainability of the ecosystem. Lowe argues for an 'instrumental analysis' to public policy, linking human agency to investment behaviour for setting long-term goals. This analysis is extended to develop subtle public policy tools that will allow for economic and technology imperatives to flourish within the constraint of a sustainable society. Environmental policies that provide concrete examples of this framework and practical applications of the economic planning approach are outlined.


Graham Cox
Department of Economics, Rensselaer Polytechnic Institute, Troy, New York, USA
National Audubon Society of New York State, Troy, New York, USA

Open-format session. Panel-members: Graham L. Cox, John Gowdy; Sabine OHara

People and nature: the Adirondack Park experience

The Adirondack Park, covering six million acres or about one fifth of the total area of New York State, is the biggest park in the lower 48 United States. It is bigger than several neighbouring states and larger than any U.S. National Parks. Yet, unlike the national parks, which are totally in the public domain, the Adirondack Park is a shared natural resource. Less than half the total area of forests, mountains, lakes and streams is publicly owned and accessible to hikers, bikers, boaters, hunters, fishermen and other recreational pursuits. The remainder is largely in private hands, with much of this in active commercial timber. Since the Parks creation by the State 100 years ago, the dominant land use has been commercial forest management, and much of the employment within the park has been in extractive industries and in a declining general agriculture. Indeed, until about 20 years ago mining for iron ore and a variety of rare metals was the mainstay of several community economies. Though the Park was created 100 years ago and the public lands were declared 'forever wild' in the State Constitution, it was not until the late 1960s and early 1970s that major changes became apparent. These changes were seen in the communities, the Park economy and in the concerns for the full protection of the designated wilderness and wild forest regions of the Park, which together cover some 2.8 million acres of the whole. In 1971 the State created a new agency, the Adirondack Park Agency, to oversee the classification and regulation of land uses. The State also designated the State Department of Environmental Conservation to manage the public lands within the Park. However, there has been strong and persistent opposition from many of the Parks 130,000 year round residents to what they consider oppressive zoning restrictions. Countering this has been pressure from many of the 110,000 seasonal residents and many of the nine million visitors (an annual estimate) to increase the public land holdings in the Park and enact more restrictive zoning. It is against this background that economists in the Department of Economics at RPI with the assistance of the National Audubon Society of New York State have conducted their research and community outreach efforts. This session will feature four presentations and an open discussion on lessons from the Adirondack Park experience for sustainable development.


Philippe Crabbe
Institute for Research on Environment and Economy, University of Ottawa, Ontario, Canada

Sustainable development, productivity, natural capital, convergence with neo-classical economics

Sustainable Development (SD) and Neo-Classical Economics (NCE) provide different but overlapping perspectives on how society may address economic, environmental and social challenges. While NCE is at a relatively mature state of conceptual development, SD is still at the early formative stages. A key focus of SD is equity while that of NCE is efficiency. Empirical evidence shows a decoupling between real income per capita, a means which is the main NCE concern, and well-being, an end which is the main SD concern. NCE aims at maximising GDP per capita, a flow, while SD focuses on the value of capital including amenities and opportunities, a more long-term goal. However, both NCE and SD are interested in increasing total factor productivity. SD acknowledges natural capital as the scarce factor of production and emphasises eco-efficiency and a shift from non-renewable resources to renewables, while knowledge is the scarce factor for NCE. The new industrial changes needed to advance SD will require increasing the rate of natural-capital savin (mission-oriented) innovations and services. While efficiency is often not an explicit part of the SD agenda, increasing the scarcity of natural capital, the assumed widespread availability of no-regrets solutions, and capital-saving innovations improve overall economic efficiency. SD emphasises the systemic complementarity among the four forms of capital while NCE is moving in that direction except in the case of natural capital. NCE is market-based while SD calls for both top-down public sector involvement and bottom-up approaches. NCE favours regulatory, competition, and intellectual property rights reforms. While NCE keeps equity and efficiency issues separate, SD strives to integrate them in a hierarchy; in practice, there is likely to be pragmatic convergence.


Jeremy Cross
CSIRO Wildlife and Ecology, Centre for Arid Zone Research, Alice Springs, Northern Territory, Australia

Mark Stafford-Smith
CSIRO Wildlife and Ecology and Centre for Arid Zone Research, Alice Springs, Northern Territory, Australia

Nick Milham
New South Wales Department of Agriculture, Orange, NSW, Australia

Do tax instruments support sustainable grazing?

The sustainability of the pastoral industry in Australia is dependent upon the conservative management of rangeland resources. Yet many pastoralists in Australia hold the view that taxation policy measures, designed to assist producers in mitigating the economic risks associated with characteristically variable climate and market environments, in fact counter efforts for sustainable resource management within the industry. For example, various income smoothing and tax averaging arrangements may ease the financial burden during poorer seasons, yet encourage higher overall stocking rates; historically unrealistic livestock valuation methods have also acted to discourage timely destocking during critical times. In particular, the study investigates the effects of variability in rainfall, landscape resources and market access on the failure of policy measures to achieve desired behavioural outcomes. As these characteristics vary across different regions in Australia, can policy instruments be designed to allow for these differences? Expert knowledge of pastoralists and policy-makers is combined in an integrated bio-economic model of grazing enterprises ('RISKHerd'). The model has been adapted for specific regions and accounts for independent and correlated variation in environmental, market and policy driven sources of risk. A comprehensive treatment of taxation instruments currently available or raised for consideration in present policy debate has been incorporated in a consultative process that is intended to maximise the likelihood of subsequent acceptance and implementation of the results by stakeholders.


Jim Crosthwaite
Institute of Land and Food Resources, University of Melbourne, Melbourne, Victoria, Australia

The farm business and strategies for sustainable agriculture and biodiversity conservation

In most regions of the world there are questions hanging over the long-term sustainability of agricultural production and the protection of important biodiversity values on private land. An over-riding theme of strategies being developed to tackle these problems, whether at catchment, state, national or international level, is the encouragement of stewardship by landholders. Stewardship runs up against economic pressures on farm operators. Unless directly regulated, farmers will generally only operate in accordance with conservation strategies if it is feasible within the constraints of the farm business. It is in this context that the role of economic incentives is promoted, but they are blunt instruments unless targeted to the needs of individual farms. One starting point for developing a strategy is to consider the adjustments required to the farm business if the owners are to feasibly manage their land in accordance with public policy goals. Such adjustments, and the implications for public policy, are illustrated using case studies of Australian farms where native grasslands are managed as part of the farming system. The approach taken adds a new dimension to ecological economics, as well as a bridge to other sub-disciplines of economics that penetrate the 'black box' of the firm in neo-classical economics. The implications for policy are quite distinct from those derived through alternative economic analyses of the problem of sustainable development on private land.


Brian Czech
United States Fish and Wildlife Service, Arlington, Virginia, USA

Economic growth as the limiting factor for wildlife in the aggregate

The ecological concept of a limiting factor includes the lack of welfare factors and the presence of decimating factors. Originally applied to populations and species, the concept may also be applied to wildlife in the aggregate. Because the decimating factor of economic growth eliminates welfare factors for virtually all imperilled species via the principle of competitive exclusion, economic growth may be classified as the limiting factor for wildlife in the aggregate. The wildlife profession is suited to address the conflict between economic growth and wildlife conservation to an extent, because it is well versed in the principles of the economy of nature. However, wildlife professionals tend to avoid the topic of economic growth because of a lack of familiarity with the history of economic growth theory, neoclassical economic growth theory, and the alternative growth paradigm provided by ecological economics. The International Society for Ecological Economics could assist the wildlife profession in attaining expertise in these topics, and should expect the wildlife profession's support for the Society's endeavours.



Author: David Stern
Date Last Modified: 29 June 2000
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