By Jan Bojö, Karl-Göran Mäler, Lena Unemo

This publication is the second one version of a textual content according to a document commissioned by way of the Swedish overseas improvement Authority (SID A). The monetary provide from SIDA which made the paintings attainable is hereby gratefully said. There are already many books out there approximately environmental economics, a few of them first-class. what's certain approximately this one? we don't declare to have bought new effects, yet we have now our personal means of providing the subject material. particularly, we're of the opinion that coverage disasters are frequently missed as a drawback to effective environmental administration. even though the most emphasis during this publication is on venture point research, it's crucial that such analyses be associated with an figuring out of the (dis)incentives for environmental advancements that basic monetary and specific environmental regulations supply. one other crucial characteristic of the ebook, even supposing this isn't targeted, is the hyperlinks supplied among thought and empirical illustrations. we are hoping that it will indicate to our readers the sensible usefulness, but in addition the problems, of using economics to environmental difficulties. specifically we are hoping that the textual content may be of curiosity to decision-makers, improvement programme team of workers, academics and most of the people attracted to how economics can give a contribution to raised environmental decision-making. In precept, this e-book will be learn through an individual attracted to the subject material, with none formal schooling in economics. even though, a few heritage in microeconomic thought makes the studying easier.

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There is common agreement that low agricultural prices can be a disincentive to production. To what extent supply responds to higher prices is more controversial, and the data base for Africa is so poor that nothing reliable can be said about agricultural production trends (Fones-Sundell, 1987). 5 Tax Policy Another economic policy instrument that influences individuals' behaviour is taxation. There are many examples of how tax policies encourage (or fail to discourage) inefficient use of environmental resources.

There is very little difference between Mrican countries. The trend for the state to lose its role as instrument of development is evident throughout sub-Saharan Africa. " (Hyden, 1983, p. xii). 1 Externalities A useful definition of externality has been suggested by Baumol and Oates (1975, p. " Externalities can be both positive and negative, and originate from and affect both consumers and producers. Some relevant examples of possible cases are: - Spraying with pesticides upstream decreases fish catches and therefore production and consumption of fish downstream; - Increased off-take among my neighbours' cattle in a communal grazing area increases availability of fodder for my cattle, which increases their yield of milk; - The neighbours' trees provide wind shelter and shade for my crops.

This tends to increase demand for land and contribute to a rapid increase in the conversion of forest to agricultural uses. A case study with an illustration from Brazil by Binswanger (1989) is presented in chapter 7. 6 Political Elites and Bureaucratic Sub-optimization The "lack of political will" is often cited as a factor behind failure to stop environmental degradation. The implicit assumption seems to be that government well represents the interest of the masses. Obviously, there are many countries where this is not true and where the following observation would be appropriate: "Desertification is a low priority for politicians because the people who live in arid zones have little political power.

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