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Showing papers in "Ecological Economics in 2008"


Journal ArticleDOI
Abstract: Payments for environmental services (PES) have attracted increasing interest as a mechanism to translate external, non-market values of the environment into real financial incentives for local actors to provide environmental services (ES). In this introductory paper, we set the stage for the rest of this Special Issue of Ecological Economics by reviewing the main issues arising in PES design and implementation and discussing these in the light of environmental economics. We start with a discussion of PES definition and scope. We proceed to review some of the principal dimensions and design characteristics of PES programs and then analyze how PES compares to alternative policy instruments. Finally, we examine in detail two important aspects of PES programs: their effectiveness and their distributional implications. PES is not a silver bullet that can be used to address any environmental problem, but a tool tailored to address a specific set of problems: those in which ecosystems are mismanaged because many of their benefits are externalities from the perspective of ecosystem managers. PES is based on the beneficiary-pays rather than the polluter-pays principle, and as such is attractive in settings where ES providers are poor, marginalized landholders or powerful groups of actors. An important distinction within PES is between user-financed PES in which the buyers are the users of the ES, and government-financed PES in which the buyers are others (typically the government) acting on behalf of ES users. In practice, PES programs differ in the type and scale of ES demand, the payment source, the type of activity paid for, the performance measure used, as well as the payment mode and amount. The effectiveness and efficiency of PES depends crucially on program design.

1,945 citations


Journal ArticleDOI
Abstract: Payments for environmental services (PES) are an innovative approach to conservation that has been applied increasingly often in both developed and developing countries. To date, however, few efforts have been made to systematically compare PES experiences. Drawing on the wealth of case studies in this Special Issue, we synthesize the information presented, according to case characteristics with respect to design, costs, environmental effectiveness, and other outcomes. PES programs often differ substantially one from the other. Some of the differences reflect adaptation of the basic concept to very different ecological, socioeconomic, or institutional conditions; others reflect poor design, due either to mistakes or to the need to accommodate political pressures. We find significant differences between user-financed PES programs, in which funding comes from the users of the ES being provided, and government-financed programs, in which funding comes from a third party. The user-financed programs in our sample were better targeted, more closely tailored to local conditions and needs, had better monitoring and a greater willingness to enforce conditionality, and had far fewer confounding side objectives than government-financed programs. We finish by outlining some perspectives on how both user- and government-financed PES programs could be made more effective and cost-efficient.

1,083 citations


Journal ArticleDOI
Abstract: Under the United National Framework Convention of Climate Change (UNFCCC) countries are required to submit National Emission Inventories (NEI) to benchmark reductions in greenhouse gas (GHG) emissions. Depending on the definition and system boundary of the NEI, the mitigation options and priorities may vary. The territorial system boundary used by the UNFCCC has been critiqued for not including international transportation and potentially causing carbon leakage. To address these issues, past literature has argued in favour of using consumption-based NEI in climate policy. This article discusses several issues in moving from the standard production-based NEI to consumption-based NEI. First, two distinct accounting approaches for constructing consumption-based NEI are presented. The approaches differ in the allocation of intermediate consumption of imported products. Second, a consistent method of weighting production-based and consumption-based NEI is discussed. This is an extension of the previous literature on shared responsibility to NEI. Third, due to increased uncertainty and a wide system boundary it may be difficult to implement consumption-based NEI directly into climate policy. Several alternative options for incorporating consumption-based inventories into climate policy are discussed.

886 citations


Journal ArticleDOI
Stefano Pagiola1
Abstract: Costa Rica pioneered the use of the payments for environmental services (PES) approach in developing countries by establishing a formal, country-wide program of payments, the PSA program. The PSA program has worked hard to develop mechanisms to charge the users of environmental services for the services they receive. It has made substantial progress in charging water users, and more limited progress in charging biodiversity and carbon sequestration users. Because of the way it makes payments to service providers (using approaches largely inherited from earlier programs), however, the PSA program has considerable room for improvement in the efficiency with which it generates environmental services. With experience, many of these weaknesses are being gradually corrected as the PSA program evolves towards a much more targeted and differentiated program. An important lesson is the need to be flexible and to adapt to lessons learned and to changing circumstances.

821 citations


Journal ArticleDOI
Abstract: This study investigates determinants of sustainable food consumer behaviour in Belgium. To gain a better insight in sustainable consumption, a study was conducted in which attitudes and behaviour as well as the role of individual characteristics like confidence and values related to sustainable products are analyzed. The focus of the analysis is on exploring the influence of determinants as hypothesised by the theory of planned behaviour (TPB) – attitudes, perceived behavioural control, social norms – on sustainable consumption intention in general, and specifically depending on consumer's perceived confidence and personal values. The empirical research builds on a survey with a sample of 456 young adults using a questionnaire and showing an advertisement for hypothetical sustainable dairy products. Stepwise multiple regression models showed that 50% of the variance in intention to consume sustainable dairy was explained by the combination of personal attitudes, perceived social influences, perceived consumer effectiveness and perceived availability. In addition, different levels of confidence and value orientation yield different strengths of the determinants. The findings yield public policy and marketing recommendations for stimulating sustainable food consumption among young adults.

760 citations


Journal ArticleDOI
Abstract: The rebound effect results in part from an increased consumption of energy services following an improvement in the technical efficiency of delivering those services. This increased consumption offsets the energy savings that may otherwise be achieved. If the rebound effect is sufficiently large it may undermine the rationale for policy measures to encourage energy efficiency. The nature and magnitude of the rebound effect is the focus of long-running dispute with energy economics. This paper brings together previous theoretical work to provide a rigorous definition of the rebound effect, to clarify key conceptual issues and to highlight the potential consequences of various assumptions for empirical estimates of the effect. The focus is on the direct rebound effect for a single energy service — indirect and economy-wide rebound effects are not discussed. Beginning with Khazzoom's original definition of the rebound effect, we expose the limitations of three simplifying assumptions on which this definition is based. First, we argue that capital costs form an important part of the total cost of providing energy services and that empirical studies that estimate rebound effects from variations in energy prices are prone to bias. Second, we argue that energy efficiency should be treated as an endogenous variable and that empirical estimates of the rebound effect may need to apply a simultaneous equation model to capture the joint determination of key variables. Third, we explore the implications of the opportunity costs of time in the production of energy services and highlight the consequences for energy use of improved ‘time efficiency’, the influence of time costs on the rebound effect and the existence of a parallel rebound effect with respect to time. Each of these considerations serves to highlight the difficulties in obtaining reliable estimates of the rebound effect and the different factors that need to be controlled for. We discuss the implications of these findings for econometric studies and argue that several existing studies may overestimate the magnitude of the effect.

671 citations


Journal ArticleDOI
Abstract: In contractual relationships involving payments for environmental services, conservation buyers know less than landowners know about the costs of contractual compliance. Landowners in such circumstances use their private information as a source of market power to extract informational rents from conservation agents. Reducing informational rents is an important task for buyers of environmental services who wish to maximize the services obtained from their limited budgets. Reducing informational rents also mitigates concerns about the “additionality” of PES contracts because low-cost landowners are least likely to provide different levels of services in the absence of a contract. Paying low-cost landowners less thus makes resources available for contracts with higher opportunity cost landowners, who are more likely to provide substantially different levels of services in the absence of a contract. To reduce informational rents to landowners, conservation agents can take three approaches: (1) acquire information on observable landowner attributes that are correlated with compliance costs; (2) offer landowners a menu of screening contracts; and (3) allocate contracts through procurement auctions. Each approach differs in terms of its institutional, informational and technical complexity, as well as in its ability to reduce informational rents without distorting the level of environmental services provided. No single approach dominates in all environments. Current theory and empirical work provides practitioners with insights into the relative merits of each approach. However, more theoretical work and experimentation in the laboratory and the field are necessary before definitive conclusions about the superiority of one or more of these approaches can be drawn.

541 citations


Journal ArticleDOI
Abstract: Mexico faces both high deforestation and severe water scarcity. The Payment for Hydrological Environmental Services (PSAH) Program was designed to complement other policy responses to the crisis at the interface of these problems. Through the PSAH, the Mexican federal government pays participating forest owners for the benefits of watershed protection and aquifer recharge in areas where commercial forestry is not currently competitive. Funding comes from fees charged to water users, from which nearly US$18 million are earmarked for payments of environmental services. Applicants are selected according to several criteria that include indicators of the value of water scarcity in the region. This paper describes the process of policy design of the PSAH, the main actors involved in the program, its operating rules, and provides a preliminary evaluation. One of the main findings is that many of the program's payments have been in areas with low deforestation risk. Selection criteria need to be modified to better target the areas where benefits to water users are highest and behavior modification has the least cost, otherwise the program main gains will be distributive, but without bringing a Pareto improvement in overall welfare.

538 citations


Journal ArticleDOI
Abstract: Analysis of household consumption and its environmental impact remains one of the most important topics in sustainability research. Nevertheless, much past and recent work has focused on domestic national averages, neglecting both the growing importance of international trade on household carbon footprint and the variation between households of different income levels and demographics. Using consumer expenditure surveys and multi-country life cycle assessment techniques, this paper analyzes the global and distributional aspects of American household carbon footprint. We find that due to recently increased international trade, 30% of total US household CO 2 impact in 2004 occurred outside the US. Further, households vary considerably in their CO 2 responsibilities: at least a factor of ten difference exists between low and high-impact households, with total household income and expenditure being the best predictors of both domestic and international portions of the total CO 2 impact. The global location of emissions, which cannot be calculated using standard input–output analysis, and the variation of household impacts with income, have important ramifications for polices designed to lower consumer impacts on climate change, such as carbon taxes. The effectiveness and fairness of such policies hinges on a proper understanding of how income distributions, rebound effects, and international trade affect them.

454 citations


Journal ArticleDOI
Abstract: This paper uses the panel data of energy consumption and GDP for 82 countries from 1972 to 2002. Based on the income levels defined by the World Bank, the data are divided into four categories: low income group, lower middle income group, upper middle income group, and high income group. We employ the GMM-SYS approach for the estimation of the panel VAR model in each of the four groups. Afterwards, the causal relationship between energy consumption and economic growth is tested and ascertained. We discover: (a) in the low income group, there exists no causal relationship between energy consumption and economic growth; (b) in the middle income groups (lower and upper middle income groups), economic growth leads energy consumption positively; (c) in the high income group countries, economic growth leads energy consumption negatively. After further in-depth analysis of energy related data, the results indicate that, in the high income group, there is a great environmental improvement as a result of more efficient energy use and reduction in the release of CO2. However, in the upper middle income group countries, after the energy crisis, the energy efficiency declines and the release of CO2 rises. Since there is no evidence indicating that energy consumption leads economic growth in any of the four income groups, a stronger energy conservation policy should be pursued in all countries.

451 citations


Journal ArticleDOI
Abstract: China's Sloping Land Conversion Program (SLCP) is the largest land retirement/reforestation program in the developing world, having the goal of converting 14.67 million hectares of cropland to forests by 2010 (4.4 million of which is on land with slopes greater than 25°) and an additional “soft” goal of afforesting a roughly equal area of wasteland by 2010. Pending successful completion it could represent a 10–20% increase in China's national forest area and a 10% decrease in current cultivated area. In contrast to China's other forest-sector policies, SLCP uses a public payment scheme that directly engages millions of rural households as core agents of project implementation, and has the stated principals of volunteerism. Thus, insofar as current or future de facto program implementation involves decentralized, voluntary grassroots participation, SLCP represents an important departure from “business as usual” in how China manages its forest resources. This work draws upon current available research of the program and uses a 2003 household and village-level survey conducted by the Center for Chinese Agricultural Policy, CAS, to examine program design, implementation and outcomes to date. Results indicate that significant problems in design and implementation exist, with these including shortfalls in subsidies delivered, lack of respect of the principals of volunteerism, and insufficient technical support and budgeting for local implementation costs. More fundamentally, some program goals appear to be based on common misperceptions regarding the linkages between forests and watershed services. Overall, SLCP contains both innovative elements (volunteerism and the direct engagement of farmers) as well as components that hark back to policies and mindsets of decades past (the program's top-down, simplified contract structure, lack of sufficient consultation with local communities and rural households, and campaign-style mobilization). The paper concludes by providing four main suggestions to improve the program: 1) Increase local community input in design and implementation, and ensure that households have full autonomy in participation choice; 2) improve technical support and budgeting for local administrative costs and capacity building; 3) clarify the environmental services targeted and verify the measures needed to acquire these services; and 4) integrate SLCP into an overall package of complementary policies aimed at the rural sector.

Journal ArticleDOI
Abstract: Payments for environmental services (PES) have become an increasingly popular market-based instrument to translate external, non-market environmental services into financial incentives for landowners to preserve the ecosystems that provide the services. However, lack of spatial differentiation in the targeting mechanism may lead to efficiency losses. Addressing this challenge, we construct an applied site selection tool, which takes into account three variables that vary in space: environmental services provided, risks of losing those services, and participation costs. Using data from Costa Rica's Nicoya Peninsula, we empirically test the tool's potential to increase the financial efficiency of the forest-focused PES program in place. Results show that, given a fixed budget, efficiency increases radically if per hectare payments are aligned to landowners' heterogeneity in participation costs, involving opportunity, transaction and direct costs of protection, respectively. Selecting sites based on environmental service potential also moderately increases efficiency. Overall additionality could in the best case be doubled, but remains generally limited due to current low deforestation risks prevailing in Costa Rica. To take advantage of the high efficiency potentials of flexible payments, we propose inverse auction systems as a cost-effective approach for the determination of micro-level participation costs.

Journal ArticleDOI
Abstract: Eco-efficiency is an instrument for sustainability analysis, indicating how efficient the economic activity is with regard to nature's goods and services. This paper conducts an eco-efficiency analysis for regional industrial systems in China by developing data envelopment analysis (DEA) based models. Using real data of 30 provinces in China, an empirical study is employed to illustrate the pattern of regional industrial systems' eco-efficiency. The results indicate that Tianjing, Shanghai, Guangdong, Beijing, Hainan and Qinghai are relatively eco-efficient. The results also show that, provinces with higher level GDP per capita will have higher eco-efficiency relatively with an exception of Hainan and Qinghai. The study provides deeper insights into the causes of eco-inefficiency, and gives further implications on environmental protection strategies in China. In the article, we also discuss the advantages and disadvantages of using DEA in eco-efficiency analysis and areas that require further work are presented.

Journal ArticleDOI
Abstract: In recent years, economists have been using socio-economic and socio-demographic characteristics to explain self-reported individual happiness or satisfaction with life. Using Geographical Information Systems (GIS), we employ data disaggregated at the individual and local level to show that while these variables are important, consideration of amenities such as climate, environmental and urban conditions is critical when analyzing subjective well-being. Location-specific factors are shown to have a direct impact on life satisfaction. Most importantly, however, the explanatory power of our happiness function substantially increases when the spatial variables are included, highlighting the importance of the role of the spatial dimension in determining well-being.

Journal ArticleDOI
Abstract: Valuation of ecosystems services has been a challenging issue for economists There is a growing concern to capture the total and incremental changes in services of different types of ecosystems, mainly, due to perturbations arising from anthropogenic activities Market-based valuation techniques have long been declared inadequate and a constructed market method such as the contingent valuation method albeit a robust tool does not seem to capture the expanse, nuances, and intricacies of many of the ecosystem services The paper attempts to address the lacunae in valuation of ecosystem services from a psychological perspective by arguing that the common person's perception of the ecosystem is quite different from what is conceptualized by conventional economists The paper shows how the ecological identity of individuals is revealed at various levels of the decision-making hierarchy that is, from local to regional and further onto a global level The paper builds upon insights from psychoanalytic psychology and environmental-psychology Further, it outlines recent research findings from experimental psychology to redefine concepts such as ecological identity, self-other dichotomy, and the fostering of identification with nature, as issues that must be embraced in the valuation of ecosystem services Extending the idea of relational goods and reciprocity, the paper offers a deconstructed view of market forces and furthers the idea of interdisciplinary collaboration and cooperation in the valuation of ecosystem services In this perspective the dichotomy and schism between markets, missing markets and non-markets, gets renovated and reconstructed beyond a utilitarian discourse

Journal ArticleDOI
Abstract: Key features of U.S. agri-environmental programs are reviewed and analyzed using literature review and program data. We focus, in particular, on several key questions: Has benefit–cost targeting increased the environmental benefit obtained from program budgets? Has competitive bidding reduced program costs? To what extent have these program designs resulted in additional gain (that would not have otherwise been obtained)? Previous research illustrates how benefit–cost targeting using environmental indices (such as the Environmental Benefits Index in the Conservation Reserve Program) can increase environmental cost-effectiveness. Previous research and data from two U.S. programs suggests that bidding has reduced costs, but that the full potential of bidding may not have been realized. Finally, most U.S. programs are intended to yield environmental gains that would not have otherwise been obtained, but sometimes fall short of this goal.

Journal ArticleDOI
Abstract: Sustainable development represents a commitment to advancing human well-being, with the added constraint that this development needs to take place within the ecological limits of the biosphere. Progress in both these dimensions of sustainable development can be assessed: we use the UN Human Development Index (HDI) as an indicator of development and the Ecological Footprint as an indicator of human demand on the biosphere. We argue that an HDI of no less than 0.8 and a per capita Ecological Footprint less than the globally available biocapacity per person represent minimum requirements for sustainable development that is globally replicable. Despite growing global adoption of sustainable development as an explicit policy goal, we find that in the year 2003 only one of the 93 countries surveyed met both of these minimum requirements. We also find an overall trend in high-income countries over the past twenty five years that improvements to HDI come with disproportionately larger increases in Ecological Footprint, showing a movement away from sustainability. Some lower-income countries, however, have achieved higher levels of development without a corresponding increase in per capita demand on ecosystem resources.

Journal ArticleDOI
Abstract: A payments for ecosystem services (PES) system came about in South Africa with the establishment of the government-funded Working for Water (WfW) programme that clears mountain catchments and riparian zones of invasive alien plants to restore natural fire regimes, the productive potential of land, biodiversity, and hydrological functioning. The success of the programme is largely attributed to it being mainly funded as a poverty-relief initiative, although water users also contribute through their water fees. Nevertheless, as the hydrological benefits have become apparent, water utilities and municipalities have begun to contract WfW to restore catchments that affect their water supplies. This emerging PES system differs from others in that the service providers are previously unemployed individuals that tender for contracts to restore public or private lands, rather than the landowners themselves. The model has since expanded into other types of ecosystem restoration and these have the potential to merge into a general programme of ecosystem service provision within a broader public works programme. There is a strong case for concentrating on the most valuable services provided by ecosystems, such as water supply, carbon sequestration, and fire protection, and using these as ‘umbrella services’ to achieve a range of conservation goals. The future prospects for expansion of PES for hydrological services are further strengthened by the legal requirement that Catchment Management Agencies be established. These authorities will have an incentive to purchase hydrological services through organisations such as WfW so as to be able to supply more water to their users.

Journal ArticleDOI
Abstract: Few payment for environmental services (PES) schemes in developing countries operate outside of the central state's umbrella, and are at the same time old enough to allow for a meaningful evaluation. Ecuador has two such decentralised, consolidated experiences: the five-year old Pimampiro municipal watershed-protection scheme and the twelve-year old PROFAFOR carbon-sequestration programme. We describe and compare the two cases, using a common PES definition and methodology, drawing on both primary interview-based information and secondary data. We find that both schemes have been relatively effective in reaching their environmental objectives, in terms of having probably high additionality levels and low leakage effects. A strong focus on the targeted environmental service and a strong degree of conditionality seem to be two key factors explaining these achievements. Although neither scheme has targeted poverty alleviation or other side objectives, both are likely to have improved PES recipients' welfare, mostly through higher incomes. We highlight several observations with more generalised relevance and lessons for the design of PES schemes.

Journal ArticleDOI
Abstract: Human use of biomass has become a major component of the global biogeochemical cycles of carbon and nitrogen The use of land for biomass production (eg cropland) is among the most important pressures on biodiversity At the same time, biomass is indispensable for humans as food, animal feed, raw material and energy source In order to support research into these complex issues, we here present a comprehensive assessment of global socioeconomic biomass harvest, use and trade for the year 2000 We developed country-level livestock balances and a consistent set of factors to estimate flows of used biomass not covered by international statistics (eg grazed biomass, crop residues) and indirect flows (ie biomass destroyed during harvest but not used) We found that current global terrestrial biomass appropriation amounted to 187 billion tonnes dry matter per year (Pg/yr) or 16% of global terrestrial NPP of which 66 Pg/yr were indirect flows Only 12% of the economically used plant biomass (121 Pg/yr) directly served as human food, while 58% were used as feed for livestock, 20% as raw material and 10% as fuelwood There are considerable regional variations in biomass supply and use Distinguishing 11 world regions, we found that extraction of used biomass ranged from 03 to 28 t/ha/yr, per-capita values varied between 12 and 117 t/cap/yr (dry matter) Aggregate global biomass trade amounted to 75% of all extracted biomass An analysis of these regional patterns revealed that the level of biomass use per capita is determined by historically evolved patterns of land use and population density rather than by affluence or economic development status Regions with low population density have the highest level of per-capita biomass use, high-density regions the lowest Livestock, consuming 30–75% of all harvested biomass, is another important factor explaining regional variations in biomass use Global biomass demand is expected to grow during the next decades; the article discusses some options and possible limitations related to such a scenario

Journal ArticleDOI
Abstract: This paper presents a model developed in the Netherlands for the estimation of damage caused by floods. The model attempts to fill the gap in the international literature about integrated flood damage modelling and develop an integrated framework for the assessment of both direct hazard-induced damages and indirect economic damages such as the interruption of production flows outside the flood affected area, as well as loss of life due to flooding. The scale of damage assessment varies from a specified flood-prone area in a river basin or a coastal region to the country's entire economy. The integrative character of the presented model is featured by the combination of information on land use and economic data, and data on flood characteristics and stage-damage functions, where the geographical dimension is supported by modern GIS to obtain a damage estimate for various damage categories. The usefulness of the model is demonstrated in a case study estimating expected flood damage in the largest flood-prone area in the Netherlands.

Journal ArticleDOI
Abstract: This paper explores how South American farmers adapt to climate by changing crops. We develop a multinomial logit model of farmer's choice of crops. Estimating the model across 949 farmers in seven countries, we find that both temperature and precipitation affect the crops that South American farmers choose. Farmers choose fruits and vegetables in warmer locations and wheat and potatoes in cooler locations. Farms in wetter locations are more likely to grow rice, fruits, potatoes, and squash and in dryer locations maize and wheat. Global warming will cause South American farmers to switch away from maize, wheat, and potatoes towards squash, fruits and vegetables. Predictions of the impact of climate change on net revenue must reflect not only changes in yields per crop but also crop switching.

Journal ArticleDOI
Abstract: Marketing several environmental services from a single area can help access diverse sources of funding and make conservation a more competitive land use. In Bolivia's Los Negros valley (Department of Santa Cruz), bordering the Amboro National Park, 46 farmers are currently paid to protect 2774 ha of a watershed containing the threatened cloud-forest habitat of 11 species of migratory birds. In this payment for environmental services (PES) scheme, annual contracts prohibit tree cutting, hunting and forest clearing on enrolled lands. Farmer–landowners as service providers submit to independent yearly monitoring, and are sanctioned for non-compliance. Facilitated by a local NGO, Fundacion Natura Bolivia, one service buyer is an international conservation donor (the US Fish and Wildlife Service) interested in biodiversity conservation. The second service users are downstream irrigators who likely benefit from stabilized dry-season water flows if upstream cloud forests are successfully protected. Individual irrigators have been reluctant to pay, but the Los Negros municipal government has on their behalf contributed ~ US$4500 to the scheme. The negotiated payment mode is annual quid pro quo in-kind compensations in return for forest protection. Predominantly, payments are made as “contingent project implementation”, transferring beehives supplemented by apicultural training. With regard to service provision, environment committees and education programs have increased awareness in downstream communities of the probable water-supply reduction effect of continued upstream deforestation. External donors have funded subsequent studies providing basic economic, hydrological and biodiversity data, and covered PES start-up (~ US$40,000) and running transaction costs (~ US$3000 per year over the last three years). The greatest challenges in the development of the PES mechanism have been the slow process of building trust between service buyers and providers, and in achieving clear service-provision additionality.

Journal ArticleDOI
Abstract: The ecological footprint is a measure of the resources necessary to produce the goods that an individual or population consumes It is also used as a measure of sustainability, though evidence suggests that it falls short The assumptions behind footprint calculations have been extensively criticized; I present here further evidence that it fails to satisfy simple economic principles because the basic assumptions are contradicted by both theory and historical data Specifically, I argue that the footprint arbitrarily assumes both zero greenhouse gas emissions, which may not be ex ante optimal, and national boundaries, which makes extrapolating from the average ecological footprint problematic The footprint also cannot take into account intensive production, and so comparisons to biocapacity are erroneous Using only the assumptions of the footprint then, one could argue that the Earth can sustain greatly increased production, though there are important limitations that the footprint cannot address, such as land degradation Finally, the lack of correlation between land degradation and the ecological footprint obscures the effects of a larger sustainability problem Better measures of sustainability would address these issues directly

Journal ArticleDOI
Abstract: In this study, we analyze the information dynamics between corporate environmental disclosure, financial markets (as proxied by financial analysts' earnings forecasts) and public pressures (as proxied by a firm's media exposure). We adopt a comprehensive view of disclosure that encompasses environmental information that is both print-based as well as web-based. The sample comprises firms from both continental Europe (Belgium, France, Germany, and Netherlands) as well as North America (Canada and the United States). Relying on a system of equations that controls for endogeneity between environmental disclosure determination and financial analysts' work, we show that enhanced environmental disclosure translates into more precise earnings forecasts by analysts. Such effect is reduced for firms with extensive analyst following and in environmentally sensitive industries. However, these relationships are shown to be starker in Europe than in North America, i.e., environmental disclosure has a greater impact on analysts' forecasts but is also more greatly attenuated by analyst following and membership in an environmentally sensitive industry. Most observed relationships hold for either print- or web-based disclosure, except for North America in which web-based disclosure seems to have no impact on analysts' forecasting work.

Journal ArticleDOI
Abstract: Currently water resources management is undergoing a major paradigm shift. Water resources management has a strong engineering tradition based on controlling environmental problems with technical solutions. The management of risks relied on the ability to predict extremes and limit their impact with technical means such as dikes, dams and reservoirs. In this paradigm, belief systems, human attitudes and collective behaviours are perceived as external boundary conditions and not as integral part of management. However, the situation has started to change dramatically. Over the past years, integrated water resources management has become the reigning paradigm. The importance of governance and cultural adaptation has become a major issue of concern. At the same time, there is a paucity of adequate scientific concepts that would allow addressing these issues. This paper introduces a concept for social learning developed in the European project HarmoniCOP and discusses its implications for the cultural and institutional context of water resources management. It aims to contribute to the new paradigm of integrated resource management by discussing the importance of processes of culture and social learning for environmental resources management, in general, and water resources management, in particular.

Journal ArticleDOI
Abstract: This paper analyses the hypothesis that environmental management systems (EMS) and managerial activities to reduce negative environmental impacts which are not part of EMS have a positive influence on the probability of firms to carry out environmental innovations. Based on binary and multinomial discrete choice models, the relationship of a number of determinants on the occurrence of environmental innovations is studied using data collected during the “European Business Environment Barometer 2001/2002” survey in 9 European states. The study finds that environmental management systems are associated with process innovations. However, the study does not find that environmental management systems are associated with product innovations. For product innovations, mainly information of consumers and eco-labelling activities show a positive association. Market research on the potential of environmental innovations positively relates to both process and product innovations. Importantly, firm size is not found to have any effect on the probability of a firm carrying out environmental product or process innovations.

Journal ArticleDOI
Abstract: Agri-environmental policies (AEPs) in the United States and the European Union are examples of payments for environmental services that pay farmers to reduce the negative externalities of agricultural production, while serving as a means to transfer public funds to farmers. We show that despite similar origins, AEPs in the two regions differ both in their specific objectives and in their implementation. For example, AEPs in most member states of the EU-15 have the additional objective of using agriculture as a driver for rural development. This objective is achieved by compensating farmers for the private delivery of positive public goods, such as attractive landscapes, produced by agriculture. The rationale is market failure, and there is empirical evidence that Europeans are willing to pay for such positive externalities. No comparable provision exists in U.S. policy. By contrast, U.S. AEPs focus almost entirely on reducing agriculture's negative externalities, such as soil erosion. Second, we find that U.S. programs are more targeted than their EU counterparts, and take opportunity cost into account. The EU programs, on the other hand, address a wider range of externalities, and are focused more on the paying for a particular farming process than reducing specific negative externalities. The EU takes a broader view of AEPs than does the United States, both in terms of type of activity that can be funded, and by using less targeting by land characteristics, and so the European program could be more easily used as a mechanism for transferring income to producers. Despite this, we find evidence that many of the amenities targeted by the programs are demanded by the population.

Journal ArticleDOI
Abstract: This paper studies the interaction between financial and social performance. The research is about the overall social strengths and concerns of firms as well as strengths and concerns with respect to firms' community involvement, employee relations, diversity, environment and product. Using a sample of 289 firms from the US covering the period 1991–2004 and employing two different test methods, namely lagged OLS and Granger causation, there appears to be preliminary evidence that the direction of the ‘causation’ predominantly runs from financial to social performance. However, the specific interaction patterns tend to vary along the different dimensions.

Journal ArticleDOI
Abstract: Hitherto the task of valuing differences in environmental quality arising from air pollution and noise nuisance has been carried out mainly by using the hedonic price technique. This paper proposes a different approach to derive information on individual preferences for local environmental quality. It analyses data drawn from the German socio-economic panel in an attempt to explain differences in self-reported levels of well-being in terms of environmental quality. Mindful of existing research a large number of other explanatory variables are included to control for socio-demographic differences, economic circumstances as well as neighbourhood characteristics. Differences in local air quality and noise levels are measured by how much an individual feels affected by air pollution or noise exposure in their residential area. The evidence suggests that even when controlling for a range of other factors higher local air pollution and noise levels significantly diminish subjective well-being. But interestingly differences in perceived air and noise pollution are not capitalised into differences in house prices.