ch 20: environmental policy in low-income countries

Question 1

generalized wealth distributions

Answer 1

llarge middle class and smaller number of economic elites and poor people in wealthy countries

Small middle class, smaller number of economic elites, and large number of poor people in low income countries. Wealthy elites in poor countries own greater portion of national gdp

Question 2

factors leading to government failure in sustainability policy

Answer 2

1. imperfect info
2. political influence

compounded by a lack of resources and small political-economic elite

Question 3

factors contributing to increased government failure in poor countries

Answer 3

1. Colonial history
2. Small political-economic elites
3. Undemocratic governmental structures
4. poorly trained and paid bureaucrats

Question 4

what can be done to reduce government failure in poor countries

Answer 4

1. Eliminate damaging subsidies
2. Strengthen property rights
3. Regulate to internalize externalities where feasible
4. Promote clean (sustainable) tech transfer
5. Work for debt relief
6. Insure the gains from trade (resource rents) are reinvested locally

Question 5

what is the environmental impact of damaging subsidies

Answer 5

1. Unsustainable declines in natural capital
2. Environmental damage
3. Loss of biodiversity
4. Lost access to subsistence for indigenous peoples

Question 6

how is tropical deforestation promoted

Answer 6

1. Failure to capture resource rents (“low” timber prices)
2. Infrastructure development
3. Subsidized “downstream” industries
4. . Colonization projects
5. Subsidized cattle ranching

Question 7

how can open access problem be reduced?

Answer 7

through strengthening property rights

Question 8

3 types of property rights

Answer 8

1. communal: community level governance
2. state: state monitored and enforced
3. private: individual ownership rights

Question 9

what are the pros and cons of privatization?

Answer 9

pros
- When ownership rights are strengthened, owners are more likely to engage in profit-based conservation
- directly reduces environmental damage by internalizing externalities
- allows for establishment of payment for ecosystem services systems

cons
- can penalize the poor = those who cant afford to own their own land, are hurt and some may lose access to traditional territories
- difficult for governments to manage

Question 10

considerations for regulatory policy

Answer 10

enforceability and administrative simplicity

Question 11

sustainable tech

Answer 11

clean tech that helps reduce poverty by increasing employment and improving the economic position of the poor majority

Question 12

policies for late stage sustainable tech

Answer 12

1. design standards
2. technical assistance
3. small grants, loans, or tax credits

Question 13

policies for early-stage sustainable tech

Answer 13

1. r and d
2. infrastructure investmnet

Question 14

governments can promote the development and diffusion of sustainable tech using

Answer 14

1. subsidies
2. infrastructure investment

Question 15

poor countries can encourage the transfer of clean tech by

Answer 15

1. instituting environmental regulation
2. obtaining adequate tax concessions from multinationals for reinvestment elsewhere in the economy

Question 16

two obstacles to resource conservation in poor countries + solutions to these problems

Answer 16

1. The intensity of the development-environment conflict
   solution: sustained yield resource development
2. The difficulty of enforcement, leading to free-rider problem
   solution: debt for nature swap

Question 17

sustained yield resource development

Answer 17

Using available renewable natural capital in an ecologically sustainable way

Harvests cannot exceed the regenerative capacity

Question 18

debt for nature swap

Answer 18

Poor country debts to private banks in rich countries poses a major obstacle to sustainable development since it reudces investment in human and manufactured capital that poor countries need

Debt for nature swap involves relieving debt burden and invests in resource conservation
- Rich country organizations pay off a portion of a loan
- Poor countries agree to invest money in a resource conservation program
- Ownership of natural resources does not change hands

Question 19

Environmental argument for free trade

Answer 19

Trade can reduce poverty if increases % f resource rents invested productively in the developing country (through ekc channels), transfers clean tech, and promotes more open flows of ideas

ex nafta could act to strengthen both democratic and environmental political movements within mexico

Question 20

Environmental argument against free trade

Answer 20

Through weak environmental enforcement and a race to the bottom over regulatory standards (in turn arising from increased business mobility and trade-based regulatory challenges), trade agreements may undermine environmental quality in both trading countries

ex nafta - allows us corn to flood the market, deepening rural poverty in Mexico