Martine Visser

Risk Aversion: Experimental Evidence from South African Fishing Communities

We estimate the risk attitudes of a large sample of small-scale fishers from various fishing communities along the west coast of South Africa, using subjects’ choices over lotteries with real monetary prizes. We find that participants are moderately risk averse and that risk attitudes vary with certain socio-demographic variables. In particular, females are found to be more risk averse than their male counterparts, while quota holders are more risk loving. Logistic regression analysis indicates that risk attitudes have implications for non-compliance with fisheries regulation. Specifically, greater risk aversion translates into a reduction in the odds of catching illegally. Furthermore, in the case of gender, female fishers and female fishers with fishing rights are more likely to comply with fisheries regulation. These findings have important implications for the characterisation of risk attitudes in fisheries policy applications and for the management of marine resources.

Elasticity of demand, price and time: lessons from South Africa's plastic-bag levy

Policy makers in many countries have perceived plastic-bag litter as a problem, and have used a variety of regulatory tools to address it. South Africas current legislation on plastic-bags came into effect on 7 May 2003. It increased the thickness of the plastic used, charged a small levy and required that bags be sold rather than distributed gratis. These regulations sharply reduced consumption of plastic bags in the short term, but unlike the Irish and Danish levies have failed to curb their use meaningfully in the long run. It is suggested that the initial sharp fall in use of bags was a result of loss aversion rooted in an endowment effect (the bags having long been a free good). Once consumers became accustomed to paying for bags, demand slowly rose to its historic levels.

The impact of climate change on net revenue and food adequacy of subsistence farming households in South Africa

This paper examines the impact of climate change on poor households across South Africa who practise subsistence farming to supplement their household income and dietary requirements. We consider three production systems: specialized crops, livestock and mixed crop-livestock farming. In general, we find specialized crop farmers to be the most vulnerable, while mixed crop-livestock farmers appear to be least vulnerable, suggesting that crop-livestock diversification is a potential coping strategy among poor subsistence farming households. We observe qualitatively similar results when we use self-reported food adequacy as the outcome. Furthermore, predicted impact shows that the climatic changes will be mildly harmful at first but will grow over time and lead to a 151 per cent loss in net revenue by the year 2080. Interestingly, we observe that crop farmers receive higher revenue when land is owned by the household, while on the other hand, livestock farmers earn more revenue when the land is communal.

Abalone conservation in the presence of drug use and corruption: implications for its management in South Africa

The illegal exploitation of wild abalone in South Africa has been escalating since 1994, despite increased enforcement, leading to collapse in some sections of its range. South Africa banned all wild abalone fishing in 2008 but controversially reopened the fishery in 2010. This paper formulates a poachers model, taking into account the realities of the abalone terrain in South Africa - the high-value of abalone, use of recreational drugs, the prevalence of bribery, and corruption - to explore why poaching has not subsided. The paper suggests two additional measures that might help ameliorate the situation: eliminating the demand side through targeted enforcement on organised crime, and ceding the resource to the local coastal communities. However, local communities need to be empowered to deal with organised crime groups. Complementary measures to bring back community patriotism will also be needed given the tattered social fabric of the local coastal communities.

Responsible Investment: A Vehicle for Environmentally Sustainable Economic Growth in South Africa

This paper explores whether any investment products or strategies in South Africa take environmental sustainability into account. By looking at how environmental, social, and governance (ESG) criteria are used in investment decision making, we found that most socially-responsible investment products and responsible investment strategies largely focus on infrastructure, development, and black economic empowerment. Environmental criteria do not yet receive comparable attention from South African asset managers and owners. Mainstreaming responsible investment principles will need to come from either an increase in demand for such practices by asset owners or from company positions on ESG issues.

Meeting a national emission reduction target in an experimental setting

Climate change mitigation presents us with a social dilemma: while mitigation benefits everyone, individuals lack the incentive to alter their behaviour, since they can reap its benefits while failing to reduce their own emissions. Using a ‘public good’ experiment with a climate change framing, the scope for cooperation in meeting a national mitigation goal is examined: in particular, how different sectors with differing marginal abatement costs distribute the responsibility of reducing emissions between themselves. The experiment consists of four scenarios: (1) a counterfactual baseline scenario in which cooperation is voluntary although communication is prohibited, (2) a communication scenario in which communication is permitted, and finally, (3) and (4) two scenarios in which there is a carbon tax, where the tax reflects an electricity levy. The results suggest that relying on the voluntary cooperation of individuals will not be sufficient to meet the mitigation target; while communication significantly increases average contribution levels, it also polarizes the strategies of individual players between full cooperation and free-riding. While introducing a carbon tax crowds out contributions, in excess of a specified mitigation target, cooperation becomes near-universal, thus emphasizing the importance of choosing the correct tax level.

Climate change and South Africa’s commercial farms: an assessment of impacts on specialised horticulture, crop, livestock and mixed farming systems

South Africa, a main food exporter in SADC, is characterised by a dual agricultural economy consisting of a well-developed commercial sector and smallholder, often subsistence, farming. Using the Ricardian cross-sectional framework, we examine the impact of climate change on a nationwide sample of crop, horticulture, livestock and mixed commercial farming systems. We find that a simultaneous decrease in precipitation and an increase in temperature will reduce productivity; and that an increase in temperature alone negatively affects farm output more than a decrease in precipitation. One of the most robust findings is the difference in the extent to which different commercial production systems will be impacted. That is, the results indicate that the strongest impact will be amongst specialised commercial crop farming system. In contrast, mixed farming systems appear to be the least vulnerable. This finding is consistent with studies on small-holder farms in sub-Saharan Africa. Hence, it appears that despite the likely benefits derived from economies of scale, commercial farms are, somewhat, equally vulnerable to climate change. Further, a province-wise assessment revealed that areas that already face disadvantageous climatic conditions will become even less productive. Overall, the findings suggest that practicing mixed farming methods will strengthen the resilience of commercial farms to climate change and that access to extensions—insurance and irrigation—is likely to reduce the risks.

Capacity Building to Deal With Climate Challenges Today and in the Future

Climate change represents a serious threat to the economic growth potential in low income countries. Instead of investing in growth, they may be drawn into strife and conflict. Climate change and the global politics to deal with it, could however also present a number of interesting opportunities for developing countries. Such opportunities may arise in sustainable forestry, new forms of solar, wind or bioenergy and related industries, agriculture or in the programs for abatement and mitigation that are likely to be created. It is an important priority for low-income countries to develop local knowledge and understanding concerning climate change in order to better prepare for both the costs and challenges posed by climate change, as well as to defend their national interests and participate in international negotiations. Creating academic capacity is however a long and painstaking process. We discuss a number of existing initiatives but conclude that more is needed, particularly at the higher level of PhD studies.