E. Somanathan

Decentralization for cost-effective conservation

Since 1930, areas of state-managed forest in the central Himalayas of India have increasingly been devolved to management by local communities. This article studies the long-run effects of the devolution on the cost of forest management and on forest conservation. Village council-management costs an order of magnitude less per unit area and does no worse, and possibly better, at conservation than state management. Geographic proximity and historical and ecological information are used to separate the effects of management from those of possible confounding factors.

Awareness and the demand for environmental quality: survey evidence on drinking water in urban India

The demand for environmental quality is often presumed to be low in developing countries due to poverty. Less attention has been paid to the possibility that lack of awareness about the adverse health effects of environmental pollution could also keep the demand low. We use a household survey from urban India to estimate the effects of awareness proxies such as schooling and exposure to mass media controlling for wealth on home water purification. Average costs of different home purification methods are used to get estimates on willingness to pay for better drinking water quality. We find that our awareness proxy measures have statistically significant effects on adoption of different home purification methods and therefore, on willingness to pay. These effects are similar in magnitude to the wealth effects.

Effects of Information on Environmental Quality in Developing Countries

How does information on environmental risks obtained by individuals in developing countries affect environmental quality? The literature reveals that for issues like water quality and pesticides, information affects individual behavior and risks are reduced through individual action. However, even if information were to become widely available in developing countries, unless regulation is also strengthened, environmental risks will remain at high levels relative to developed countries. While education appears to raise the demand for environmental quality, there is no systematic developing-country evidence that this demand translates into increased supply through the political process and government regulation.

A Simple Model of Collective Action

Successful collective action is usually accompanied by explicit systems for punishing noncooperators. A simple model of collective action is presented in which such punishment opportunities are available, and some individuals have a taste for exercising them. The model suggests that many of the correlates of successful collective action in the commons management literature are endogenous, and it clarifies the channels through which others operate. It points to the importance of communication costs and asymmetries in power rather than wealth in explaining when collective action fails. Heterogeneity in the ability to inflict punishment or be hurt by it may result in collective action becoming infeasible, especially when there are increasing returns in the production of the public good, but there is a range of parameters in which heterogeneity is favorable to cooperation.

Global warming and local air pollution have reduced wheat yields in India

We use regression analysis on data from 208 districts over the period 1981–2009 to examine the impact of temperature and solar radiation (affected by pollution from aerosols) on wheat yields in India. We find that a 1 °C increase in average daily maximum and minimum temperatures tends to lower yields by 2–4% each. A 1% increase in solar radiation increases yields by nearly 1%. Yields are estimated to be about 5.2% lower than they would have been if temperatures had not increased during the study period. We combine the estimated impacts of weather on yield with the estimated impacts of aerosol pollution (measured by moderate resolution imaging spectroradiometer sensor in terms of aerosol optical depth, aerosol optical depth (AOD) in 2001–2013) on weather to compute the net impact of reducing aerosol pollution on wheat yields. A one-standard-deviation decrease in AOD is estimated to increase yields by about 4.8%. Our results imply reducing regional pollution and curbing global warming in the coming decades can counter wheat yield losses.

Does collective action sequester carbon ? the case of the Nepal community forestry program

This paper estimate the effects of collective action in Nepal’s community forests on four ecological measures of forest quality. Forest user group collective action is identified through membership in the Nepal Community Forestry Programme, pending membership in the program, and existence of a forest user group whose leaders can identify the year the group was formed. This last, broad category is important, because many community forest user groups outside the program show significant evidence of important collective action. The study finds that presumed open access forests have only 21 to 57 percent of the carbon of forests governed under collective action. In several models, program forests sequester more carbon than communities outside the program. This implies that paying new program groups for carbon sequestration credits under the United Nations Collaborative Programme on Reducing Emissions from Deforestation and Degradation in Developing may be especially appropriate. However, marginal carbon sequestration effects of program participation are smaller and less consistent than those from two broader measures of collective action. The main finding is that within the existing institutional environment, collective action broadly defined has very important, positive, and large effects on carbon stocks and, in some models, on other aspects of forest quality.

New and Enduring Themes in Development Economics

This book is a compilation of selected papers presented at the ISI (Indian Statistical Institute) Platinum Jubilee Conference on Comparative Development held at the ISI, Delhi, India. The papers cover new and well-established topics in development economics. Some of these include political economy, role of public outrage in delivering justice and the political economy of general strikes, economics of happiness, economics of labour, agricultural economics, macroeconomics and public finance. These topics are analyzed from the perspective of developing countries. The book will be of interest to both researchers and graduate students in development economics.

Ensuring Water Availability to Water Users through Incentive Payment for Ecosystem Services Scheme: A Case Study in a Small Hilly Town of Nepal

This study was carried out to design an incentive payment for an ecosystem services (IPES) scheme in the Baitadi Town Water Supply and Sanitation Project of Nepal. The main intention behind the designing of the scheme was to develop strategy for equitable use of water resources and involve communities, watershed and water user, in the sustainable management of water resources. We administered household survey in both the watershed community and water users to elicit their preferences regarding water source management and drinking water supply. A discrete choice experiment was employed in the case of water users which showed that, for them, water quality and quantity are the most important attributes. The estimated annual willingness-to-pay of water users for doubling water availability is NPR 482,076 (USD 4,505) and for doubling the water quantity and the supply of clean water that can be drunk directly from the tap is NPR 1.18 million (USD 10,988). The results of consultations with stakeholders indicate ...

Climate Policy and Innovation in the Absence of Commitment

We compare the effects of price and quantity instruments (an emissions tax and a quota with tradable permits) on the incentive to innovate to reduce the cost of an emission-free technology. We assume that the government cannot commit to the level of a policy instrument before R&D occurs but sets the level to be socially optimal after the results of R&D are realized. The equivalence of price and quantity instruments in inducing innovation that is seen in end-of-pipe abatement models does not hold. When the marginal cost of the dirty technology is constant, then a quota can induce R&D, but a tax is completely ineffective. However, if the marginal cost function of the dirty technology is steep enough, then both a tax and a quota with tradable permits can induce R&D, and the tax will do so in a wider range of circumstances. Furthermore, in this case, an R&D subsidy may induce R&D and raise welfare whether a tax or a quota regime is in place.