2. Nature always presented risks to
mankind and to all life
Living beings have adapted to those by
developing survival strategies
These are not conscious but have been acquired
in an evolutionary way
Human beings have done the same over the ages
except that conscious strategies have replaced
unconscious ones
What is new is that humans can modify
significantly and quickly their environment
This is not new
3. Focus on Society-Environment
Interactions
What behavioral and institutional factors
mediate relations with natural system?
What features create vulnerability or
resistance to certain natural events or
processes?
What mechanisms are available to different
types of society to adapt or mitigate
change.
4. Environment-Society Issues
Level of resource use
Population size
Even with constant level of use, attain limits
as population increases
Could these be related?
5. Environment-society issues
What behavioral and institutional factors
mediate relations with natural system?
What features create vulnerability or
resistance to certain natural events or
processes?
What mechanisms are available to different
types of society to adapt or mitigate
change?
6. Environment and Society. A
Critical Issue for our Future?
At issue is relation between natural
processes and human populations
To what extent does human agency matter?
If human choices affect natural processes,
can we identify some problems crucial
enough to address now?
How can cooperation about environmental
issues be organized?
7. General Issue: Environmental
Influences and Human Control
Immediate environmental influences high in past:
very high risks for humans, examples of collapse
Less important with technological progress:
cushioning and spreading of risks
Some troubling aspects remain: mastering
Climate change
8. The Assessment of
Environmental Risks
The studies of society collapse show the importance
of knowing the environment in order to assess the
risks it presents: knowledge of two aspects are
important: 1) The evolutionary dynamics of the
crucial resource 2) The initial resource stock (ex.
climate change)
It also shows the importance of social responses to
the problems involved in terms of a) control of
access b) charging for use in proportion
3 Types of risk management have therefore to be
considered:
9. Risk management types
1. Risks due to nature
2. Risks due to the consequences of
uncoordinated and non-cooperative human
activities, present and future
3. Risks due to problems of coordination
and cooperation of social institutions
present and future
10. Risks due to nature can be assessed
in terms of expected utility
2 elements: uncertainty measure p (probability) of
an outcome and its subjective value or utility U:
P(o)U(o)
This formulation suggests a cost benefit analysis.
Suppose there are only 2 outcomes, o1 and o2:
Total value is:
P(o1) U(o1) + (1 –P) U(o2)
Present value: [P(o1) U(o1) + (1 –P) U(o2)]/r
where r is a discount rate (interest rate)
11. Risk analysis
Suppose we have several other outcomes
resulting from different plans of action
Possibil
ities
Actions Do Nothing Build small
levee
Build big
dike
Minor flooding:
P
U1 U3 U5
High flooding: 1-
P
U2 U4 U6
12. Risk analysis
States of Nature a1 a2 a3
r1
Extreme bad weather
7000 4000 2000
r2
Nice weather
1000 4000 5000
14. Solution of the minimization of
expected losses: Min L(a) =
Min (aij p + aij (1 –p))
Expected losses of a1 are inferior to all
others: 3400 instead of 4000 and 3800
This conclusion holds only if one cannot
update informations
15. Cost Benefit Analysis
Previously take the ΣPiUj which is largest
(or smallest if the U’s represent costs)
Climate change: Choose where Marginal
Damage of CC = Marginal Cost of
Abatement
16. Risks from Nature, Risks from
Society
As seen from the Stephens text in Cashdan,
risk analysis can help us understand animal
behavior and thus raise our knowledge about
nature
This is necessary for estimating stocks of
natural resources and their evolution
Risks from Society involve the positive or
negative influences (externalities) people can
exert on each other
17. Complexity of Human Behavior
Human behavior is obviously complex.
One can analyze it with the help of general
concept such as the one of collective good.
A collective good characterized by two
aspects: Non excludability and some times
non-rivalry. Collective goods that are rival,
so called commons, thus 2 types of
collective goods: welfare generating and
welfare preserving
18. Welfare preserving collective
goods
In welfare preserving (rival) collective goods,
users represent a negative externality with respect
to each other. The risk comes from others! The
purpose of institutions is to limit use. This is
difficult to achieve because there is a first mover
advantage of non cooperation with the institution
which then often leads to conflict and coercion
This model cannot easily be followed at the inter-
institutional level
19.
20. Welfare Preserving Collective Goods:
Dasgupta and Heal Economic Theory and Exhaustible
Resources (1979)
Graciela Chichilnisky’s Trade Theory between Regions
with Different Property rights Regimes (1994)
The choice is not really only between different types of
rights but between different types of hierarchies of
collective goods: Even private property rights have to be
protected!
21. Problem: 2 strategies
•Adhere or not to a strategy depending on what others are
doing.
•This problem can have a stable (Nash ) equilibrium
•The equilibrium is only efficient if a sufficient number
participate.
•Non- Efficient Accord Efficient Accord
Coop. Strat
a(t)
Non Coop.
Strat b(t)
Stable
Nash Equ.
Min fraction of total to
sustain accord
0 t 1
Stable
Nash Equ.
Min fraction of total to
sustain accord
Non Coop.
Strat b(t)
Coop. Strat
a(t)
0 t 1
U(t)
U(t)
22. Theory of Collective Goods and
Theory of the Open Access
The importance of jointness: Behavior
driven by average product: F(Nx)/N(x)
Open access as opposed to private
marginal product dF(Nx)/dN(x)
As emphasized by Dasgupta and Heal open
access problems are not PD problems
23. Open access resource use
Open access situations are characterized by
an overuse of Resources at any price. This
is due to the fact that one can show that the
open access marginal product is always
superior to the “restricted access” marginal
product
26. Role of a Market for Externalities
Mechanisms developed by society
To set limits on resource use before
diminishing returns set in
To meet needs across space and
through time with greatest efficiency
28. Conclusion
There are several ways of solving the open
access question
Markets for externalities, the most efficient
solution might not always be possible
The structuring of authority associated with
the open access problem is quite important
30. Role of Property Rights
Mechanisms developed by society
To set limits on resource use before
diminishing returns set in
To meet needs across space and
through time with greatest efficiency
32. Standard economic view of
property rights
Well-defined property rights
Market mechanisms and a pricing system
No transaction costs
No income effects
Assumes collective action problems solved
33. Private property solves production
(and environmental) problems
Can anticipate diminishing returns:
incorporate foregone benefits into present
production decisions (Hotelling)
Private property rules provide means to
maintain efficiency even when
environmental externalities exist (Coase)
35. Common Property:
Tragedy of the Commons
Resource that is:
Depletable
Non-exclusive
Rival
Joint, fugitive
36. Common Property
Resource unit defined
Well-delineated user group
Multiple users
Explicit rules of extraction
37. Why Common Property?
Nature of resource
Economies of scale
Maintenance or capital demands
Enforcement
38. The Example of water
Common good aspects
Competitive use
Particular spatial distribution creates
asymmetries
Upstream-downstream
Common pool: technology differences lead
to differential access
Unequal political power
International aspects compound problems
39. Debates about water
Debate over nature of resource
Symbolic aspects: natural right
Water as economic good
Debate about most effective management
strategies
40. Symbolic aspects: natural right
Open access?
BUT
Demographic growth
Urbanization: concentration of demand
Agricultural intensification
70% of water used for irrigation
Changing demands: economic development
Quality/quantity
Health issues: water borne diseases
Pollution: overuse and salinization
Nature of resource debate
41. Nature of resource debate
Water as commodity: evaluate costs
Supply costs: exploitation, maintenance,
investments
Opportunity costs
Externalities
Goal: promote efficiency and avoid "tragedy
of commons" type outcome
42. Management problems
How to balance equity issues raised by
"right to water" approach with efficiency
aspects raised by "water as commodity"
view?
44. Causes of shrinking Aral Sea
Since 19e
century, Russia, and later Soviet Union
emphasized cash crops: cotton and rice
Reduce dependence on imports
Acquire hard currency
After 1960, consequence of policy was reduction
in volume of water flowing to Aral Sea
45. Soviet system
Quotas specifying quantities of water
available for each region
Exchange fossil fuels and energy for water
Coordination by central government
46. Present context
Water allocation is no longer an domestic
issue within a centralized state but has
become an international problem
New source of conflict
47. Current management structure
Almaty Agreement 1992
Based on former Soviet allocation system
Creation of interstate commission where
decisions taken by consensus
Establish quotas
Assure their implementation
48. Management problems
Maintenance of old Soviet system
Not all states accept previous allocation
criteria
Favors richer downstream countries
Enforcement problems: quotas not
respected
Exchanges between energy and water have
been maintained but also not always
respected
49. Persisting common good problems
Lack of information on quantities really
available
Thus cannot determine sustainable rate of use
Costs of water use not distributed fairly
Downstream users of Toktogul dam do not
contribute to maintenance costs
50. Reaction
After independence , Uzbekistan and
Kazakstan introduced market prices for gas
and coal.
Kyrgyzstan couldn't pay: increased
electricity production to increase revenues
but then the amount of water available for
downstream irrigation in Uzbekistan and
Kazakstan was also reduced
51. Response
2001: Kyrgyzstan passed law to regulate
transborder water use:
Water belongs to state
Has economic value
Kyrgyzstan owns water "created" within it
borders
Users must pay
52. Water: International efforts
Dublin Conference and Rio Summit, 1992
Broad often contradictory principles
Slow definition of international water law:
UN Convention 1997 on non-navigational
uses
53. Relevance of different property
regimes to other current
environmental issues
Confrontation of regimes is occurring
South/North
Common property characteristics of
environmental resources
Institutional solutions are adopting
common property arrangements
54. Problems of environmental
regulation; solution through
definition of property rights
Atmosphere rival at global level
Consumption interdependent
Command and control difficult to achieve
because deal with countries
Introduce market solution to create incentives
Raises problems of initial allocation
55. Efficiency, the Environment and
Property Rights
What is efficiency in economic, social,
environmental, and technical terms?
Are they equivalent?
What is the relation with property rights?
Is the problem simple to solve?
56. Efficiency
Economic and social efficiency: use
resources in such a way that they minimize
costs and maximize profits
Technical efficiency: minimizing inputs
with respect to outputs minimizing
energy use
There should not be any contradiction
between the 2 above
If contradiction: not internalized
externality, ill defined property rights
57. The Coasian analysis
Problem of property rights, efficiency and
externalities raised by Coase
Argument: What matters is the overall cost and
benefit
Compensation schemes can be built around this
principle
It depends who has the biggest loss
The issue can be resolved by negotiation
All allocations based on Coasian principle
optimal
58. What do property rights provide?
Demsetz claims that they are an
internalization of externalities
Adjustment of property rights are an
adjustment to externalities
Example: forced labor
Property rights originate under scarcities in
particular environmental scarcities
59. Problems raised by Dasgupta and
Heal
Property rights are not created in a vacuum
Problem often comes from partially
defined property rights
Coase and Demsetz assume symmetry
which might not exist
They implicitly assume unique equilibrium
Problem: Multiple equilibria
61. Solutions
In these cases, solutions have to be
revealed to producers
Sometimes solutions have to be imposed
62. Sustainability and exhaustible
resources
In some basic sense nothing is truly sustainable
since finite resources are continuously exhausted
by man but also by nature
Sustainability has thus evolved to mean a
“correct” relationship between generations
Dasgupta has suggested that net wealth rather
than income should be considered in this relation
Net wealth is accumulated social, economic and
institutional capital minus depreciation for natural
resources exhausted
63. Sustainability continued
Sustainability means that resources should be as
much as possible preserved for future generation’s
use
The net wealth criteria tells us that some countries
like India have GDP growth but decreasing net
wealth while Western countries have increasing net
wealth and income Africa, decreasing net wealth and
income
Clearly this means that slowly renewable and
exhaustible resources should be depleted at an
optimal rate.
64. Theory of slowly renewable
resources
Slowly renewable resources have to be
evaluated as an evolving stock such as a
population minus withdrawals
( ) ( ) ( , )1
d z
d t
H z F z N x= −
Evolution of z = Natural Dynamics of z minus catches
65. Slowly renewable resources:
Production
Producers will be drawn into using the
stock by profits:
( )
( , )
2
d x
d t
q F z N x p N x
N
=
−
µ
Evolution of inputs x, if average profits are positive,
if F is production, q unit price, p unit costs
66. Equilibrium conditions
In equilibrium there should be an optimal
level of the resource z if:
( )( )
( , )
e x p3
0
q F z N x p N x
N
r t d t
−
−
∞
∫
Is maximized subject to the relation before and where
r is a discount rate: The discounted sum of all future
profits is maximized with a discount rate r, the spot
price of the resource is thus dependent on
availability of z in nature and the discount rate
67. Exhaustible Resources
Hotelling Principle:
An exhaustible resource is an asset and its net
price (market price - extraction costs) should
increase exponentially with the interest (or
discount rate, to some extent a socio-political
construct), i.e.:
P(t) = P(0)eit
or (dP/dt)/P = I
Indeed if for the resource Z, the price is P.Total
value of resource:PZ. Compare to other assets, P
has to grow as P(0)eit
to stay competitive.
68. Hotelling’s Principle:
Competitive resource owners will
deplete at a socially optimal rate
Take r the rate if return to the owner
of natural resources. In
equilibrium : r = i
Whenever, r … i, we have a
conservationists dilemma.
69. Conditions for Hotelling
principle
1. No externalities
2. No uncertainty about future sales,
exploration prospects, etc.
3. No extraction with environmental
externalities (ex. Gold Rush).
4. Not too big differences between
private and market (social) discount rate
(for instance due to dangers of transfer
within society)
70. Example:Deforestation processes
According to Hotelling principles a forested area
is a particular type of asset whose capitalized
value should grow with the interest rate. If this
growth is not achieved other assets including
agricultural ones will be closer and the forested
land will either sold for development or
transformed into another agricultural asset.
In particular:If the income flow stemming from
the forest is lower than the income flow from
other activities then deforestation will occur!
71. This can be due to:
subsidies for agricultural production
income subsidies or welfare
cost of property rights enforcement
prohibition of trade
unclearly defined property rights
73. Population Dynamics
Fundamental problem of global
environmental change:
Balance supply of resources from physical
system with demand for these resources
from human populations over time
75. Measuring Population
Static: characteristics
Total
Age distribution
Genders
Urban/rural
Geographic distributions
Dynamic: use various extrapolation
techniques to predict future trends
76. Measuring Population
Challenges in achieving accurate
assessment
Completeness and accuracy
Census comparability
Different interpretations of categories
Different areas/levels of aggregation
Different time periods
Size of area
Units
77. Projections
Dependent on accuracy of initial conditions
(i.e. count)
Need techniques of projection
Postulate relationships among the different
aspects of population so you can have
internally driven system.
But projections assume smooth path. Also
need to introduce mechanisms to account
for changes in rates
78. Malthusian theories of population
Assumptions
Constant "passion between the sexes"
Finite earth
Argument:
Left unchecked, population grows and, by
definition, grows exponentially (passion)
After an initial period of strong growth,
output as a function of population (labor)
exhibits diminishing returns
79.
80. Preventive checks
Late marriage
Celibacy
Low marital fertility (spacing)
Contraception
Migration
Positive check: Mortality
81. Alternatives to Malthus:
Boserup/Simon
Relate technological progress to population
growth
Population concentration leads to higher
likelihood of technological advance.
Population growth longer hours,
More labor-intensive techniques eventually
leads to more sophisticated technology.
82. Multiple influences on population
dynamics
Demographic influences on fertility
Institutional controls
Property rights
Production systems and technologies
84. Limits to Malthusian Approach
Explaining emergence of new demographic
regimes
How technology might explain shifts
These considerations important, because new
regimes have emerged
Synthesis argument: Lee, Ronald, Malthus and Boserup: A Dynamic
Synthesis, In David Coleman and Roger Schofield, The State of
Population Theory, Oxford: Basil Blackwell, 1986.
85. Demographic Transition
Characterized by a drop in marital fertility
Achieved through "stopping" behavior, i.e.
controlling births after having the desired
number of children
86.
87. Demographic transition
Puzzle
Not linked to decreased mortality
No obvious link to Industrialization
No Malthusian population response to
income growth
88.
89. Fertility Declines, Real and Projected
1
2
3
4
5
6
7
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
ChildrenperWoman
(2.1=nopopulationgrowth)
Developing
Developed
Africa
Asia
South and Central
America
90. Stabilization Remains a Challenge
0
1
2
3
4
1950 2000 2050
StabilizationRatio(births/deaths)
(1=nopopulationgrowth)
Developing Developed Africa Asia South and Central America
91. Sub-Saharan African Fertility Regime
Low age at marriage
Polygyny: men have many wives, leaving few
women celibate
Acceptance of pre-marital and extra-marital
sexual relations
Remarriage after widowhood or divorce is the
norm
These are all factors that make women
susceptible to childbearing throughout their
reproductive period of 15-49.
93. Characteristics of Sub-Saharan
African Social System
Poorly defined or poorly enforced common
property systems
Children reared communally (polygyny)
Share “costs” in time or responsibility
Weak conjugal bonds
Lineage holds land
Large families have access to larger share
References: Dasgupta; Partha, The Population Problem: Theory and
Evidence Journal of Economic Literature, 33, 4, 1995: 1879-1902;
Chichilnisky, Graciela, North-South Trade and the Global Environment, The
American Economic Review 84 (4): 851-874.
94. Changes in life expectancy in selected African countries
with high and low HIV prevalence: 1950 - 2005
with high HIV prevalence:
Zimbabwe
South Africa
Botswana
with low HIV prevalence:
Madagascar
Senegal
Mali
Source: UN Department of Economic and Social Affairs (2001) World Population Prospects, the
2000 Revision.
30
35
40
45
50
55
60
65
Lifeexpectancy(years)
1950–
1955
1955-
1960
1960-
1965
1965-
1970
1970-
1975
1975-
1980
1980-
1985
1985-
1990
1990-
1995
1995-
2000
2000-
2005
95. 0 10 20 30 40 50 60 70
Cambodia
Haiti
Mozambique
Rwanda
Côte d'Ivoire
Zambia
Kenya
South Africa
Zimbabwe
Botswana
Life expectancy at birth (years)
Predicted life expectancy Loss in life expectancy due to HIV/AIDS
Source: U.S. Census Bureau, 2000
Predicted loss in life expectancy due to
HIV/AIDS in children born in 2000
96. Population and environment: Key
points
Population dynamics in part create
“demand” for environmental resources by
determining population sizes and
distributions
Other factors: tastes/lifestyles; technology
Importance of understanding mechanisms
linking fertility—mortality—migration and
relation between these demographic
processes and other socio-economic
variables
97. Two views of population—resource
interaction
Population grows until limited by resource
availability (at all levels of technological
development). Ultimately checked by
mortality: Malthus
Population growth stimulates technological
development which permits higher levels
of population: Boserup/Simon
98. Problem: How to account for new
regimes?
Malthus perspective could not account for
shift from high fertility—high mortality to
low fertility—low mortality first in Europe
then, progressively, globally
99. Demographic transition: the
definition
“Pre-transition” Western Europe
characterized by high fertility and high
mortality
“Transition” defined as a drop in marital
fertility that in Western Europe was
achieved by “stopping” behavior
Conscious limitation of family size once a
desired number of children born
100. Demographic transition: the
evidence
Shift from high to low fertility was a result
of deliberate family limitation
Transition occurred rapidly once it began
To date, process has been irreversible
101. Causes: Early theories
Link to modernization: Frank Notestein
(1944)
“New ideal of the small family arose in the
urban industrial society.
It is impossible to be precise about the
various causal factors, but apparently many
were important”
Individuality
Mobility
Education
Declining mortality
Costs of children
103. Transition: the European-US data
Great variation in socio-economic and
demographic conditions
Timing and extent of decline in mortality
France and USA
Infant mortality varied
Extent of urbanization differed at transition
France 1800: 70% male labor force in agriculture
England 1892: 15% male labor force in
agriculture
104. Transition: Developing countries
Link to mortality seems more direct
Knowledge and treatments not available at
time of initial transition in Europe and often
precedes fertility decline
Role AIDS epidemic as Malthusian control in high
fertility regions
Sub-Saharan Africa either slow to adopt
transition or exhibits special characteristics
105. Questions for future
Evolution of African population patterns
Response of regions where population
below replacement rate
Lower population levels
Pro-natalist policies
Role of migration in redistributing population
Prediction difficult since mechanisms of
previous transitions are still under debate
106. Environment and Migration
Migration constitutes, as mentioned before,
a significant factor in population dynamics
Migration and the environment are linked
in 2 important ways:
Some migrations are environmentally
induced: ex. The dust bowls in the US, the
Sahel
Migrations create environmental problems:
crowding effects
107. There are two basic theoretical considerations
about migration which emphasize either push or
pull factors
Voluntary migration: migrants decide to move from
one place to the other on the basis of some
incentives, wages, quality of life
Involuntary migrations: migrants are excluded from a
given society and are forced to leave
This 2 causes can combine themselves
Before we look at these links let’s
consider theoretical approaches to
migration
108. Involuntary migration
A description of the multiple aspects of
involuntary migration is included in the Zollberg
article: political, racial or religious reasons
The collective good literature helps to understand
exclusion processes
Other countries often are reluctant to accept these
populations which are then concentrated in
relatively small areas and cause environmental
problems
109. Voluntary Migrations
Since voluntary migrations are based on
incentives to move, these incentives have to be
made explicit in the form of wage differentials for
instance
Migration due to wage differential constitutes the
main explanation for migrations in economics
A standing puzzle lies in the explanation of
overcrowding of big developing country cities
110. Harris Todaro Model
These 2 authors postulate a 2 sector rural
(agricultural) and industrial economy
Wages in agriculture are: WA=P.q’
Wages in industry are dependent upon a minimal
wage Wmin They are:
1,
min
≤=
U
M
U
M
U
N
N
N
NW
W
111. Equilibrium conditions
As long as the following is >0, migration will
occur
0','
min
>
−= ψψ Pq
N
NW
N
U
M
U
N Is a time evolution (derivative)
112. Other Factors Could Be Important
As well
The pull aspect of cities exists before
Minimal wage policies are applied
The pull aspect is enhanced by existing
social networks that support newcomers
Increasing returns to scale in cities
High paying but difficult to enter jobs
Segmented labor market
114. Other incentive models: The
Owen land use model
The land use model developed by Owen assumes
only two types of land use, agriculture and
dwelling and examines the special case of areas
around urban centers
Whether land will be transformed into dwelling
will depend on income streams generated by both
Arrival of newcomers increases income streams
from dwellings especially if migrants get
subsidies
115. Conclusions of Owen model and
further development
Even under normal conditions, as long as there is
an attraction to moving into an urban area such as
a subsidy or the hope of a job, farm land will be
urbanized down to a critical value which can be
very close to zero.
Higher interest rate for agricultural investments
as opposed to investments for urban dwellings
will accelerate the process.
116. Further conclusions
Mass migration which can result from climate
change will accelerate this process.
Foreign aid and relief can accelerate the process
An Ill-defined property right regime will initially
slow but then accelerate the process.
Climate change might reduce net profits made
from agricultural production and accelerate the
process.
117. Trade and Environment
From a general point of view, trade and the
environment should be neutral with respect
to each other
Problems come from the different political
social and legal structures between
countries
These lead to either advantageous or
problematic relationships between the two
118. Positive and negative effects
Environmental conditions can be positively
affected by trade liberalization
Positive effects can result from the suppression of
distortions which have all kinds of costs
including environmental ones
Other legislation than trade legislation might
create distortions: environmental standards
A market economy and this is due for trade as
well can work optimally only if some structural
conditions are similar such as property rights
To make all this explicit lets look at trade theories
119. Property Rights, the
Environment and Trade
Changes in the Economic Theory of Trade
Traditional Theory Based on the Notion of
Comparative Advantage: Heckscher Olin
2 New Notions:
Importance of Increasing Returns to Scale
and Intra-Industry Trade (Helpman,
Krugman, Ethier, etc.)
Importance of availability of a factor and
factor prices (Chichilnisky)
120. Characteristics of Trade
Importance of increasing returns in
External aspects
Monopolistic competition
Some property rights regime lower the price of
factor inputs
Countries with ill-defined property rights extract too
many natural resources
They have thus an "artificial" comparative advantage
in environmental goods
121. The Chichilnisky Perspective
Chichilnisky (1994) has analyzed trade links
between regions with different property rights
Basic conclusions are drawn from her
investigation:
The region with undefined property rights
will supply more of a resource at any price
This applies to any good that is "fugitive" :
rights of ownership established only when
captured or freely extractable
123. Chichilnisky Perspective
This situation creates an "abundance" of the resource
in the region without or with ill-defined property
rights
The region will "appear" to have a comparative
advantage in the given resource.
Abundance is not due to any intrinsic natural
availability of the resource but only to the absence of
rights.
The region without property rights will get poorer
because it will get rid of its resources at too low a
price.
124. Chichilnisky: Analysis
Assumptions about the region without well
defined property rights:
elasticity of substitution between leisure and
consumption for harvesters or extractors of the
resource good that is lower than 1
extractors consume mostly other goods than the
natural resource that are purchased with their harvest
or catch
An increase of the relative price of other goods
with respect to the resource will result in more
extraction
125. Consequences
Regions with ill-defined property rights are "exploited"
those with well defined rights.
Resultant lower prices lead to increasingly unfavorable terms
of trade followed by more extraction of the resource
Thus regions with poorly defined property rights grow
poorer as a result of trade with regions with better defined
property rights
More important, corrective taxes are counterproductive:
lower demand and lower prices lead to more extraction
126. Analysis of Countries with Ill-
Defined Property Rights
These countries are sensitive to price fluctuations
due to substitution effects or taxation policies
Lower prices lead to more extraction of natural
resources due to a lowering of the opportunity
cost of labor
This lowers their bargaining power at the
international level
Their bargaining power is lowered further by the
cost of the artificial "comparative advantage" in
terms of natural resources on the society as a
whole which might lead to social upheavals.
127. Environment and trade policies
One has to distinguish here between
production and consumption
The prevalent norm and WTO rule is that
consumption can be regulated with respect
to environmental standards (up to a point)
by national legislation
No such leeway exists for production
methods (ppm problem)
128. Conflict, cooperation, and the
environment
The relations between conflict, cooperation
and the environment are numerous but
cannot always be clearly established
Quite clearly early cooperative structures
such as early agricultural states were
driven by the necessity to better control the
human environment
Resource driven conflicts are probable in
this context
129. Relationships between the
environment and human
production
As technology evolves, the relations between the
environment and human activities become more
distant
2 types of relations can be emphasized: 1.
Cataclysmic Events such as volcano eruptions
Long term changes such as deforestation trends
and climate changes: the 2 may be linked
130. Conflicts over environmental
resources may exist but they are
difficult to show
Difficulty to disentangle environmental
form other conflicts, ex. Rwanda
Here again importance of property and
property rights
Similar for conflict over resources: Central
Asia and Water in the Jordan river water
basin, conflict between Turkey, Syria and
Iraq over the Euphrates and Tigris waters
133. 2 Middle Eastern Conflicts: The Jordan
and Euphrates River Basins
Jordan River: Israel plus Palestinians use about
2300 million cubic meters per annum, only
1950 is considered sustainable
Jordan uses 740 to 750 million cubic meters per
annum. Only 730 is considered sustainable
Euphrates: Turkey reduces Euphrates flow to
500 to 300 cubic meters per second, 700 are
demanded by Syria
134. Some Theoretical Notions
Goal: tackle problems analytically and suggest responses that
tend to promote strategies to minimize conflicts and promote
cooperation
All social interactions and conflicts are not the same. They have
to be analyzed according to their incentive structures
Water problems are also common problems
Commons lead to asymmetries: Lack of dominant strategies lead
to first mover advantage
First, (or second) move advantage can be enhanced by
geographic or technological circumstances
135. Fundamental Questions to Address
What are the nature of the
conflicts
How can one find optimal
solutions to solve them?
136.
137.
138. Water competition has technological
and economic limits
Price of Water from Sea: fundamental
Given by the cost of a m3
of water from sea water
or possibly from pipe lines:
Around 65¢ per m3
70% of all consumed water is for agriculture
(irrigation)
In the Middle East this proportion can reach 80 to
90 %
Is it worth it?
139. Symbolic aspects
The sharper the conflict and the demands
around it, the more is at stake
Giving in on little things is perceived as
signal to give in on big ones
140. How to get out of the conflict
spiral?
Emphasize limited worth of conflict
Franklin Fisher approach using pricing
Problem: Symbolic aspect
Policy of mutual voluntary restraint in use
Reduce conflict extensions to other areas
through compensations
146. Environmental Negotiations
The Common problem makes it difficult to
carry out international environmental
negotiations
Often countries try to free ride on each
other
It is difficult to exclude from environmental
benefits
147. Unit veto and leader problem
Unit Veto makes agreements even more
difficult
Particular importance of players
One has to find ways to exclude
Side payments have to be provided
Importance of a leader, US for Montreal,
EU for Kyoto
Notes de l'éditeur
Progress Toward Population Stabilization by Region, 1950-2050
Some regions are closer to the point at which death rates and birth rates are approximately equal and population growth levels off. For more information see http://www.wri.org/wri/trends/popgrow.html.
Source: United Nations (U.N.) Population Division, World Population Prospects, 1950-2050 (The 1996 Revision), on diskette (U.N., New York, 1996).
Notes: Progress toward stabilization is measured by dividing a region’s crude birth rate by its death rate. A ratio of 1 indicates a stable population. Values are based on 5-year rates.