Allen Blackman

Producer-level benefits of sustainability certification.

Initiatives certifying that producers of goods and services adhere to defined environmental and social-welfare production standards are increasingly popular. According to proponents, these initiatives create financial incentives for producers to improve their environmental, social, and economic performance. We reviewed the evidence on whether these initiatives have such benefits. We identified peer-reviewed, ex post, producer-level studies in economic sectors in which certification is particularly prevalent (bananas, coffee, fish products, forest products, and tourism operations), classified these studies on the basis of whether their design and methods likely generated credible results, summarized findings from the studies with credible results, and considered how these findings might guide future research. We found 46 relevant studies, most of which focused on coffee and forest products and examined fair-trade and Forest Stewardship Council certification. The methods used in 11 studies likely generated credible results. Of these 11 studies, nine examined the economic effects and two the environmental effects of certification. The results of four of the 11 studies, all of which examined economic effects, showed that certification has producer-level benefits. Hence, the evidence to support the hypothesis that certification benefits the environment or producers is limited. More evidence could be generated by incorporating rigorous, independent evaluation into the design and implementation of projects promoting certification.

Foreign direct investment in China's power sector: Trends, benefits and barriers

In the early 1990s, hoping to reduce chronic electricity shortages and enhance the efficiency of Chinese power plants, China opened its doors to foreign direct investment (FDI) in electricity generation. Using data from an original survey of US private investors, official Chinese statistics, and other sources, we assess the volume and characteristics of FDI in Chinas power sector, its impact on energy efficiency, and the factors that limit this impact. Our five principal findings are as follows. First, the volume FDI in Chinas power sector will likely fall short of the governments 1995 - 2000 capacity expansion target by a substantial margin, most likely because of persistent institutional barriers to FDI. Second, to avoid the lengthy central government approval process for large plants and to minimize risk, early FDI tended to be in small-scale, gas- and oil-fired plants using imported equipment and located in coastal provinces. However, more recent FDI tends to be in larger coal-fired plants that use more Chinese equipment and tends to be located in the north as well as the east. Third, and perhaps most important, FDI is likely having a significant positive impact on energy efficiency. Almost a third of the 20 FDI plants in our survey sample use advanced efficiency-enhancing generating technologies, and a fifth are cogeneration plants. Fourth, the main factor that has hampered the contribution of FDI to energy efficiency is an institutional bias in favor of small-scale plants which are generally not as energy efficient as the large-scale plants. And finally, the most important barriers to FDI generally are uncertainty associated with the approval process of FDI projects, electricity sector regulation, and the risk of default on power purchase contracts.

The Use of Economic Incentives in Developing Countries: Lessons from International Experience with Industrial Air Pollution:

To what extent should developing countries eschew conventional command and control regulation that is increasingly seen as inefficient and rely instead on economic incentives to control industrial air pollution? The article discusses the advantages and disadvantages of various economic incentive instruments; presents in-depth case studies of their application in Sweden, the United States, China, and Poland; and proposes policy guidelines. The authors argue that both design deficiencies and pervasive constraints on monitoring and enforcement impede the effectiveness of economic instruments in developing countries. The latter are difficult to rectify, at least in the medium term. Therefore, tradable permits are generally not practical. Suitably modified, however, emissions fee policies probably are appropriate. They can provide a foundation for a transition to an effective economic incentive system and can raise revenue for environmental projects and programs. If political opposition can be overcome, taxes on goods associated with pollution constitute a second-best regulatory instrument.

Does eco-certification have environmental benefits? Organic coffee in Costa Rica

Eco-certification of coffee, timber and other high-value agricultural commodities is increasingly widespread. In principle, it can improve commodity producers’ environmental performance, even in countries where state regulation is weak. However, evidence needed to evaluate this hypothesis is virtually nonexistent. To help fill this gap, we use detailed farm-level data to analyze the environmental impacts of organic coffee certification in central Costa Rica. We use propensity score matching to control for self-selection bias. We find that organic certification improves coffee growers’ environmental performance. It significantly reduces chemical input use and increases adoption of some environmentally friendly management practices.

Informal Sector Pollution Control: What Policy Options Do We Have?

In developing countries, urban clusters of informal firms such as brick kilns and leather tanneries can create severe pollution problems. However, these firms are quite difficult to regulate for a variety of technical and political reasons. Drawing on the literature, this paper first develops a list of feasible environmental management policies. It then examines how these policies have fared in four independent efforts to control emissions from informal brick kilns in northern Mexico. The case studies suggest that: (i) conventional command and control process standards are generally only enforceable when buttressed by peer monitoring, (ii) surprisingly, clean technologies can be successfully diffused even when they raise variable costs, in part because early adopters have an economic incentive to promote further adoption, (iii) boycotts of dirty goods sold in informal markets are unenforceable, (iv) well-organized informal firms can block implementation of costly abatement strategies such as relocation, and (v) private-sector-led initiatives may be best suited for informal sector pollution control.

Land Cover in a Managed Forest Ecosystem: Mexican Shade Coffee

Managed forest ecosystems—agroforestry systems in which crops such as coffee and bananas are planted side-by-side with woody perennials—are being touted as a means of safeguarding forests along with the ecological services they provide. Yet we know little about the determinants of land cover in such systems, information needed to design effective forest conservation policies. This paper presents a spatial regression analysis of land cover in a managed forest ecosystem—a shade coffee region of coastal Mexico. Using high-resolution land cover data derived from aerial photographs along with data on the geophysical and institutional characteristics of the study area, we find that plots in close proximity to urban centers are less likely to be cleared, all other things equal. This result contrasts sharply with the literature on natural forests. In addition, we find that membership in coffee-marketing cooperatives, farm size, and certain soil types are associated with forest cover, while proximity to small town centers is associated with forest clearing.

Natural climate solutions

Significance Most nations recently agreed to hold global average temperature rise to well below 2 °C. We examine how much climate mitigation nature can contribute to this goal with a comprehensive analysis of “natural climate solutions” (NCS): 20 conservation, restoration, and/or improved land management actions that increase carbon storage and/or avoid greenhouse gas emissions across global forests, wetlands, grasslands, and agricultural lands. We show that NCS can provide over one-third of the cost-effective climate mitigation needed between now and 2030 to stabilize warming to below 2 °C. Alongside aggressive fossil fuel emissions reductions, NCS offer a powerful set of options for nations to deliver on the Paris Climate Agreement while improving soil productivity, cleaning our air and water, and maintaining biodiversity. Better stewardship of land is needed to achieve the Paris Climate Agreement goal of holding warming to below 2 °C; however, confusion persists about the specific set of land stewardship options available and their mitigation potential. To address this, we identify and quantify “natural climate solutions” (NCS): 20 conservation, restoration, and improved land management actions that increase carbon storage and/or avoid greenhouse gas emissions across global forests, wetlands, grasslands, and agricultural lands. We find that the maximum potential of NCS—when constrained by food security, fiber security, and biodiversity conservation—is 23.8 petagrams of CO2 equivalent (PgCO2e) y−1 (95% CI 20.3–37.4). This is ≥30% higher than prior estimates, which did not include the full range of options and safeguards considered here. About half of this maximum (11.3 PgCO2e y−1) represents cost-effective climate mitigation, assuming the social cost of CO2 pollution is ≥100 USD MgCO2e−1 by 2030. Natural climate solutions can provide 37% of cost-effective CO2 mitigation needed through 2030 for a >66% chance of holding warming to below 2 °C. One-third of this cost-effective NCS mitigation can be delivered at or below 10 USD MgCO2−1. Most NCS actions—if effectively implemented—also offer water filtration, flood buffering, soil health, biodiversity habitat, and enhanced climate resilience. Work remains to better constrain uncertainty of NCS mitigation estimates. Nevertheless, existing knowledge reported here provides a robust basis for immediate global action to improve ecosystem stewardship as a major solution to climate change.

User Financing in a National Payments for Environmental Services Program: Costa Rican Hydropower

National government-funded payments for environmental services (PES) programs often lack sustainable financing and fail to target payments to providers of important environmental services. In principle, these problems can be mitigated by supplementing government financing with contributions from leading environmental service users. We use original survey data and official statistics to analyze user financing in Costa Rica’s renowned national PES program, focusing on the amounts and sources of user financing, the drivers of contributions, and contributors’ perceptions of the PES program. We find that user financing has supported less than three percent of the acres enrolled in the program and that hydroelectric plants are the largest private sector contributors. Large hydroelectric plants tend to contribute while small ones do not. The weight of evidence suggests that in addition to ensuring the provision of forest environmental services, hydroelectric plants’ motives for contributing to the PES program include improving relations with local communities and government regulators—common drivers of participation in all manner of voluntary environmental programs. These findings raise questions about the potential of user financing to improve the efficiency and financial sustainability of national PES programs.

The Evidence Base for Environmental and Socioeconomic Impacts of “Sustainable” Certification

Initiatives certifying that farms and firms adhere to predefined environmental and social welfare production standards are increasingly popular. According to proponents, they create financial incentives for farms and firms to improve their environmental and socioeconomic performance. This paper reviews the evidence on whether sustainable certification of agricultural commodities and tourism operations actually has such benefits. It identifies empirical ex post farm-level studies of certification, classifies them on the basis of whether they use methods likely to generate credible results, summarizes their findings, and considers the implications for future research. We conclude that empirical evidence that sustainable certification has significant benefits is limited. We identify just 37 relevant studies, only 14 of which use methods likely to generate credible results. Of these 14 studies, only 6 find that certification has environmental or socioeconomic benefits. This evidence can be expanded by incorporating rigorous, independent evaluation into the design and implementation of projects promoting sustainable certification.

An agenda for assessing and improving conservation impacts of sustainability standards in tropical agriculture

Sustainability standards and certification serve to differentiate and provide market recognition to goods produced in accordance with social and environmental good practices, typically including practices to protect biodiversity. Such standards have seen rapid growth, including in tropical agricultural commodities such as cocoa, coffee, palm oil, soybeans, and tea. Given the role of sustainability standards in influencing land use in hotspots of biodiversity, deforestation, and agricultural intensification, much could be gained from efforts to evaluate and increase the conservation payoff of these schemes. To this end, we devised a systematic approach for monitoring and evaluating the conservation impacts of agricultural sustainability standards and for using the resulting evidence to improve the effectiveness of such standards over time. The approach is oriented around a set of hypotheses and corresponding research questions about how sustainability standards are predicted to deliver conservation benefits. These questions are addressed through data from multiple sources, including basic common information from certification audits; field monitoring of environmental outcomes at a sample of certified sites; and rigorous impact assessment research based on experimental or quasi-experimental methods. Integration of these sources can generate time-series data that are comparable across sites and regions and provide detailed portraits of the effects of sustainability standards. To implement this approach, we propose new collaborations between the conservation research community and the sustainability standards community to develop common indicators and monitoring protocols, foster data sharing and synthesis, and link research and practice more effectively. As the role of sustainability standards in tropical land-use governance continues to evolve, robust evidence on the factors contributing to effectiveness can help to ensure that such standards are designed and implemented to maximize benefits for biodiversity conservation.