16. Development and the environment

Question 1

Describe the relationship between the environment and economic development?

Answer 1

Environmental issues affect and are affected by economic development

Question 2

What are some of the consequences of environmental problems for health, security and productivity?

Answer 2

• Loss of agricultural productivity
• Prevalence of unsanitary conditions created by a lack of clean water and sanitation
• Dependence of biomass fuels and pollution
• Airborne pollutants
• Increased risk of conflict linked to environmental resources

Question 3

What may poverty lead to with regard to the environment?

Answer 3

The non-sustainable use of environmental resources

Question 4

What do classic market failures often lead to?

Answer 4

Excessive environmental degradation

Question 5

How may the poorest interact with the environment?

Answer 5

They may find themselves as both agents and victims of environmental degradation

Question 6

Why may the poor be victims of environmental degradation?

Answer 6

• The poorest often live in environmentally degraded lands which are less expensive whereas richer groups avoid them
• Living in less productive areas gives the poor less opportunity to work their way out
• People living in poverty have less political influence to reduce environmental damage where they live

Question 7

How can the poor be agents of environmental degradation?

Answer 7

• The high fertility rate of people living in poverty often adds to pressure on environmental resources
• Those living in poverty may make decisions within a shorter time horizon or by necessity

Question 8

Define sustainable development

Answer 8

Meeting the needs of the present generation without compromising the wellbeing of future generations

Question 9

Why is environmental capital important in developing countries?

Answer 9

Because environmental capital makes up a larger fraction of total capital

Question 10

Why may inefficiencies arise with use of the environment?

Answer 10

Because it is considered a public good, this is known as the tragedy of the commons

Question 11

Why do agents fail to take account of this important externality?

Answer 11

Because it doesn’t impact them, as each uses more of the common resource, the average return is used for all users

Question 12

What is the tragedy of the commons?

Answer 12

The overuse and underinvestment in commonly owned resources

Question 13

What are some possible solutions to the tragedy of the commons?

Answer 13

• Privatisation
• Local social enforcement mechanisms

Question 14

How could the tragedy of the commons benefit from privatisation?

Answer 14

• Small farmers may benefit from extended tenancy or ownership
• Larger firms could generate local employment; but the community may lose the benefits of the common resource

Question 15

What is the limit that the tragedy of the commons can be solved by privatisation?

Answer 15

If common resources are to be privatised - who should buy the common resource

Question 16

How could the tragedy of the commons benefit from local social enforcement mechanisms?

Answer 16

• Traditional societies have sometimes responded effectively with social enforcement mechanisms based on common property design principles

Question 17

What is the limit that the tragedy of the commons can be solved by social enforcement mechanisms?

Answer 17

They are very difficult to maintain

Question 18

What did Elinor Ostrom find to be conditions which helped systems that were more likely to endure?

Answer 18

• Clearly defined boundaries
• Proportional equivalence between benefits and costs - allocated based on inputs
• Collective choice arrangements - rules are modified collectively
• Graduated sanctions - violating the common rules leads to increasingly severe punishment
• Conflict resolution mechanisms

Question 19

Why was it believed that pollution and environmental degradation first rose then fell with increases in income per capita?

Answer 19

• Institutional reform
• Public goods provision
• Improvement in institutional quality

Question 20

What are some of the main effects of climate change in poor countries?

Answer 20

They will be disproportionately effected by:

• Social degradation/ desertification
• Dwindling water resources
• Rising sea levels (Tuvalu)

Question 20

Why will high income countries be less vulnerable to climate change?

Answer 20

• A smaller proportion of their economy is in sectors such as agricultural that are most sensitive to climate change
• They are located in cooler higher latitudes and therefore further from critical temperature threshold for humans and crops

Question 21

Which countries are likely to be those worst effected by climate change?

Answer 21

Those in Africa

Question 22

How much have estimates suggested the annual losses to GDP in Africa be?

Answer 22

It ranges from 0.5% to 23.5%

Question 23

Why may developing countries be worse off?

Answer 23

• Exposure
• Sensitivity
• Adaptive capacity

Question 24

Why may developing countries be more sensitive to climate change?

Answer 24

• Developing economies often focus on agriculture
• Agriculture is already close to environmental tolerance limits in some regions
• Even marginal environmental deterioration has serious immediate effects and long-term effects on output and growth
• Water scarcity may worsen problems with conflict such as in the Nile Basin

Question 25

Give an example of how developing countries have a lower adaptive capacity which makes them more vulnerable to climate change?

Answer 25

A lack of government administrative capacity and capital to react appropriately and quickly to shocks (e.g. earthquakes in Haiti v Japan)

Question 26

Why is autonomous adaption relevant?

Answer 26

We will see more autonomous than policy intervention in low income countries

Question 27

What is autonomous adaption?

Answer 27

• Moving locally such as to higher ground
• Migrating temporarily or permanently within a country or internationally
• Altering crop or livestock varities
• Changing livelihoods

Question 28

Why may autonomous adaption increase conflict risk?

Answer 28

• Out-migration into already settled areas
• Pastoralists may encroach on others territories
• Farmers expanding territory can encroach on traditional pastoralist lands
• Drawing down - contaminating - neighbours resources

Question 29

Why is good government policy important to autonomous adaption?

Answer 29

Because it can complement it as a means to avoid conflict but it is hard to get right

Question 30

How do US historical emmisions compare to other countries?

Answer 30

The US has emitted more CO2 than any other country to date, 25% of historical emissions, almost twice as much as China

Question 31

How do US emissions compare to that of the African continent?

Answer 31

The US has contributed more than 9 times the historical emissions of the whole African continent

Question 32

What climate change policies are feasible in low-income countries?

Answer 32

• Renewable energy sources
• Sustainable land use
• Climate finance such as the Green Climate Fund (GCF)
• Technology transfer and capacity building initiatives that facilitate the transfer of clean and low-carbon technologies

Question 33

Why may carbon pricing policy not work in developing countries?

Answer 33

• They have large informal sectors that are not easily regulated
• Needs to minimise effects on vulnerable populations
• Requirement of good institutions
• Other challenges take precedence
• Level of responsibility given historical contributions to climate change

Question 34

How has carbon pricing changed?

Answer 34

A decade ago, carbon pricing policies covered only 7% of global emissions. Today, nearly a quarter are covered by these instruments.