Vincent Linderhof

Household Welfare, Investment in Soil and Water Conservation and Tenure Security: Evidence from Kenya

In Kenya, conservation and sustainable utilization of the environment and natural resources form an integral part of national planning and poverty reduction efforts. However, weak environmental management practices are a major impediment to agricultural productivity growth. This study was motivated by the paucity of literature on the poverty-environment nexus in Kenya, since poverty, agricultural stagnation and environmental degradation are issues of policy interest in the country’s development strategy. The paper builds on the few existing studies from Kenya and explores the impact of household, farm and village characteristics as well as the development domain dimensions on household welfare and investment in soil and water conservation. The results show that strengthening the tenure security improves household welfare. Further, soil quality, topography and investments in soil and water conservation affect household welfare. Agroecological potential, which is related to environmental conservation, is also a key correlate of poverty. Results for investment in water and soil conservation confirm the importance of tenure security in determining adoption and also the intensity of SWC investments. We also find that household assets, farm characteristics, presence of village institutions and development domain dimensions are important determinants of adoption and intensity of soil and water conservation investments. The results for both poverty and investment in soil and water conservation suggest the existence of a strong poverty-environment link in our sample. The results also suggest that rural poverty can be alleviated by policies that improve environmental conservation and strengthen land tenure security. The study also underscores the importance of village institutions in both investment adoption of soil and water conservation and in improving household welfare.

Welfare and environment in rural Uganda: Results from a small-area estimation approach

This study combines census, survey and bio-physical data to generate spatially disaggregated poverty/biomass information for rural Uganda. It makes a methodological contribution to small area welfare estimation by exploring how the inclusion of bio-physical information improves small area welfare estimates. By combining the generated poverty estimates with national bio-physical data, this study explores the contemporaneous correlation between poverty (welfare) and natural resource degradation at a level of geographic detail that has not been feasible previously. The resulting estimates of poverty measures were improved by the inclusion of bio-physical information and the poverty estimates appear to be more robust, as the standard errors show a decline of up to 40 percent in some cases. The coefficients of variation (i.e., the ratio of the standard error and the point estimate) decline in general as well. Overall, we conclude that the estimates of the poverty measures are more robust when bio-physical information is taken into account. One of the outputs of this study is a series of maps showing poverty and biomass overlays for Uganda. These maps can be used as a planning tool and for targeting purposes.

Adapting to climate variability : learning from past experience and the role of institutions

Adaptation to human-induced climate change is currently receiving a lot of attention in international development circles. But throughout human existence, natural resource-dependent people have exploited and coped with the effects of climate variability on the ecosystems from which they derive a living. Learning from this experience can help inform the design of appropriate policies for responding to human-induced climate change. This paper presents the results of a World Bank study which sought to better understand the role of local institutions in supporting adaptation to climate variability and change in Ethiopia, Mali and Yemen. The study raised three questions. First, what strategies have been adopted by rural households in the past to adapt to climate variability? Second, to what extent do institutions of various sorts assist households in adopting adaptation strategies? And third, what are the factors that prevent households from adopting appropriate adaptation strategies? For the purposes of this paper, institutions are defined as structured, formal or informal organizations. The study followed a three-step approach. First, drawing on original data from field surveys, focus group discussions and institutional stakeholder interviews, household vulnerability to climate variability was characterized in terms of its three constituent elements: exposure to climate-related shocks and stresses, and sensitivity and adaptive capacity in the face of such stressors. Sensitivity refers to the degree to which people are affected by climate variability and change. High levels of exposure and sensitivity and low levels of adaptive capacity generally result in high levels of vulnerability. But a high level of exposure need not necessarily result in a high level of vulnerability if the households adaptive capacity is also high.

Micro Water Harvesting for Climate Change Mitigation: Trade-Offs between Health and Poverty Reduction in Northern Ethiopia

Water harvesting is an important tool for mitigating the adverse effects of climate change. This report investigates the trade-offs between health and poverty reduction by considering the impacts of water harvesting on health in Tigray region, northern Ethiopia. In particular, we assess the prevalence of malaria in association with ponds and wells. The determinants of malaria incidence are explored with multivariate analysis. We investigate people’s willingness to pay (WTP) for improved malaria control using a contingent valuation method (CVM). We applied a double-bounded dichotomous choice CV surveys to elicit households’ WTP for improved health services to control malaria. With interval regression, the WTP was explained as a function of household characteristics, health and health service conditions, and village level factors. The malaria prevalence rate is very high, more than 30 percent in low land communities, although rates are higher after the rainy season. This suggests that ponds and wells are important factors in determining the prevalence of malaria. Better housing conditions, toilet type, and availability of bed nets are all factors which reduce the incidenceof malaria. Pond and well ownership affects the WTP for improved malaria control in a negative and positive way respectively, indicating differences in their economic attractiveness. WTP decreases with altitude and thus malaria incidence. Education and household asset holding generally increases WTP for improved health services. The results suggest that valuation results on household’s WTP in poor economies may be underestimated because of cash constraint. Consequently, alternative payment vehicles in eliciting households’ WTP have to be considered. Similarly, the estimated mean WTP for the external health cost of wells and ponds may be underestimated. In our case, ponds and wells are not fully exploited, as our results suggest that they do not contribute to household income or welfare. Thus the presence of ponds and wells pose high external costs to the economy.

Electricity market liberalisation in Europe Who's got the power?

The European electricity market is in the middle of a transformation from monopolistic state-owned production and distribution to privatized markets, with various competing firms. The speed of privatization differs widely across Europe from full trade of electricity at the wholesale market in Scandinavian countries, to partial trade on the wholesale market in The Netherlands and Germany, and no trade on the wholesale market in France and Belgium. Hence, the market and its rules are no longer fixed, and the electricity market is in the middle of a dynamic and complex process of change. This report discusses whether the liberalization process can result in more efficient electricity production in Europe. In addition, the environmental impacts of the liberalization process are studied. Efficiency of electricity production is analyzed with a static computational game theoretic model, which compares strategic options of and interactions among energy suppliers. This model is calibrated to the European electricity market in eight countries, namely Belgium, Denmark, Finland, France, Germany, The Netherlands, Norway, and Sweden. In a liberalized market, large firms are most likely to behave strategically and exercise market power in order to maximize profits. As a result, wholesale prices might increase, partially or fully off-setting the purpose of liberalization, namely to decrease wholesale prices. Also, a potential market leader may emerge, who by anticipating on the reaction of followers, could acquire higher profits by increasing production and market share. Finally, firms can also acquire passive ownership in other firms. Passive cross-border ownership can increase a firms market power and profits, resulting in even higher wholesale prices. The environmental impacts of different scenarios of producer behavior are ambiguous. Under full competition, greenhouse gas emissions decline compared to the initial situation, while acidification and smog formation increase. In the case where large firms act strategically, the levels of emission decrease due to higher electricity prices and lower levels of electricity demand. In the case with a potential first-moving market leader, the levels of emission increase substantially. This result, however, depends on the technology mix of the electricity capacity of the market leader.