2010 Awards


Internalizing Agricultural Externalities: Incentives, Information and Environmental Impacts

Nava Ashraf. Assistant Professor, Harvard Business School

2010-11 Land-Water Initiative award of $40,000

In the Bolivian highlands, as in many parts of the developing world, agricultural decisions on land-use generate negative environmental externalities on sustainable water sources. Extensive cattle grazing degrades water quality and quantity and increases risks associated with landslides and flooding. Our intervention explores alternative mechanisms for behavior change to mitigate these externalities. Providing targeted local information lowers collective action barriers at the community level, and allows for locally imposed incentives through sanctions or positive compensation. Alternatively, these incentives may be provided by the implementing organization through direct payments for improved grazing practices. A rigorous experimental design allows us to identify generalizable relationships between the provision of targeted information and financial incentives and resulting behavioral and biophysical outcome measures. In addition to comparing the effectiveness of financial incentives with local bargaining solutions, we will observe the interaction between these two approaches to better understand whether top-down interventions crowd out local resource management approaches. We will explore a two-way relationship between the interventions and water-related shocks, tracking both the biophysical effects of the treatments and the robustness of behavior change to shocks such as landslides.

Publications:

Jack, B. Kelsey and Maria Recalde. 2014. Local leadership and the voluntary provision of public goods: Field evidence from BoliviaJournal of Public Economics, doi:10.1016/j.jpubeco.2014.10.00.

Updated 2015.01.09


Climate Change Policy as Sustainable Development: Putting the Copenhagen Accord into Action by Giving Developing Countries Emission Targets that Won’t Derail Growth

Jeffrey Frankel, James W. Harpel Professor of Capital Formation and Growth, Kennedy School of Government, Senior Researcher, Fondazione Eni Enrico Mattei, University of Milano

Valentina Bosetti, Senior Researcher, Fondazione Eni Enrico Mattei, University of Milano

2010-11 award: $40,000

The grant continues research on global climate change policy as it relates to developing countries. Sustainable development in this context means achieving the simultaneous twin goals of protecting the global environment and allowing poor countries to achieve economic development. Previous research formalized a proposal for a successor-treaty to the Kyoto Protocol, using formulas to set quantitative emission targets in such a way as to bring developing countries inside the system. It showed how such an approach could achieve environmental goals (concentration levels) while yet satisfying political constraints. The political constraints are that no country will agree ex ante to numerical targets that represent an unfair burden compared to other countries, nor will abide ex post by targets that would cost it more than, say, 10 per cent of GDP in any given period.

The new project extends this work in two directions. First, the parameters, emission targets, and simulated implications for environmental and economic goals will be updated to take into account recent developments associated with the UNFCCC Conference of Parties in Copenhagen in December 2009, specifically the national targets submitted by many countries January 31, 2010, under the Copenhagen Accord. Second, the analysis will allow for century-long uncertainty in countries’ rates of economic growth, in their rates of carbon-saving technological progress, and in the global environment.

The goal is to generalize the formula approach so as to make it more robust with respect to these sources of uncertainty. This is to be done in two ways: first, indexing decade targets to income; and, second, periodic renegotiation of parameters – such as the extent of progressivity in emission cuts, the speed with which latecomers are required to return to historical benchmarks, and the rate at which targets move in the long term toward per capita equalization. A negotiating framework that allows for target indexation and renegotiation of parameters is more likely to stay within the political constraints.

Publications:

Bosetti, Valentina and Jeffrey Frankel. 2011. How to agree emissions targets at DurbanVoxEU, November 28.

Bosetti, Valentina and Jeffrey Frankel. 2011. Politically Feasible Emission Target Formulas to Attain 460 ppm CO2 Concentrations, Review of Environmental Economics and Policy (Oxford University Press) Winter 2011-12, doi: 10.1093/reep/rer022; Harvard Kennedy School Faculty Working Paper Research Working Paper11-016, Feb. 2011. Revised from Global Climate Policy Architecture and Political Feasibility: Specific Formulas and Emission Targets to Attain 460PPM CO2 Concentrations, National Bureau of Economic Research Working Paper 15516, Nov. 2009 and Harvard Project on International Climate Agreements Working Paper 09-30, Sept. 2009.

Bosetti, Valentina and Jeffrey Frankel. 2011. Sustainable Cooperation in Global Climate Policy: Specific Formulas and Emission Targets to Build on Copenhagen and Cancun, National Bureau of Economic Research Working Paper 17669, Dec. 2011, Cambridge, MA; Harvard Program on Climate Agreements Discussion Paper No. 46, Sept. 2011; and Fondazione Eni Enrico Mattei Working Paper 66, Sept. 2011.

Updated 2012.02.09


The Effect of Air Pollution on Labor Supply

Rema Hanna, Assistant Professor of Public Policy

Paulina Oliva, Assistant Professor, Department of Economics, University of California at Santa Barbara

2010-11 award: $40,000

In this study, we will study the impact of changes in air quality on worker absences in Mexico City. To estimate this relationship, we will exploit exogenous variation in pollution due to the closure of a large oil refinery in the Mexico City Metropolitan Area (MCMA) in March of 1991. Anecdotal evidence and our own preliminary analysis suggest that households located close to the refinery experienced an improvement in pollution concentrations and health after the closure (controlling for location and time trends). Since one of the main and most potent pollutants generated by oil refineries is Sulphur Dioxide (SO2), we will first test whether the closure did in fact reduce daily SO2 concentrations. We will then exploit the variation in pollution induced by the closure to estimate the causal effect of the resulting reductions in SO2 concentrations on labor supply. Finally, we will use these estimates to compute the expected benefits of related environmental regulations, and contrast these against existing measures of their costs.

This study represents an important step in understanding the optimal amount of environmental regulation. If policymakers are to implement regulation at the efficient level, then they must consider not only its costs, but also its benefits. Yet while the costs of regulations are obvious and have so far hindered the creation of a comprehensive global climate change agreement, the short-term benefits of such regulation are murky and ill-understood. If, in studies such as this one, we discover heretofore unknown benefits or learn that known benefits are greater than previously imagined, it could make policymakers more willing to implement environmental regulation. Thus, conducting studies like this is critical for ensuring that policymakers do not exaggerate the net short term costs of environmental regulations by ignoring their economic benefits. This is particularly important in developing countries, where the benefits of such regulation are thought to be the greatest.

Publications:

Hanna, Rema and Paulina Oliva. 2015. The Effect of Pollution on Labor Supply: Evidence from a Natural Experiment in Mexico CityJournal of Public Economics. 112:68-79.

Hanna, Rema and Paulina Oliva. 2011. The Effect of Pollution on Labor Supply: Evidence from a Natural Experiment in Mexico City. CID Working Paper No. 225, August 2011, Center for International Development, Cambridge, MA: Harvard University.

Updated 2015.07.20


Farming the Ogallala Aquifer: Short and Long-run Impacts of Unsustainable Water-use

Richard Hornbeck, Assistant Professor of Economics

Pinar Keskin, Assistant Professor, Economics Department, Wesleyan University; Giorgio Ruffolo Post-doctoral Fellow in Sustainability Science and (2009-10)

2010-11 award: $25,000

In the United States Great Plains, the Ogallala aquifer provides particular counties with valuable groundwater. The 1950's invention of central pivot irrigation made this groundwater available for large-scale agricultural production. Irrigation became critical for Great Plains agriculture, but the aquifer has become depleted over time and some counties have lost access to groundwater. This research aims to quantify the impacts of access to the Ogallala aquifer, comparing counties and time periods with varying access to its groundwater. Research questions focus on the value of water in agricultural production; the magnitude and speed of agricultural adjustment to water availability; the magnitude of "common pool" inefficiencies; how incentive schemes might encourage sustainable use; and how changes in the agricultural sector influence other economic sectors. The Great Plains are not alone in facing severe water shortages, and the Ogallala region's historical and modern experiences may help understand the importance of water and management of externalities.

Publications:

Hornbeck, Richard and Pinar Keskin. 2011. The Evolving Impact of the Ogallala Aquifer: Agricultural Adaptation To Groundwater And ClimateNBER Working Paper 17625, Cambridge, MA: National Bureau of Economic Research.

Hornbeck, Richard and Pinar Keskin. 2012. Does agriculture generate local economic spillovers? Short-run and long-run evidence from Ogallala Aquifer, NBER Working Paper #18416.

Hornbeck, Richard and Pinar Keskin. 2014. The historically evolving impact of the Ogallala Aquifer: Agricultural adaptation to groundwater and droughtAmerican Economic Journal: Applied Economics 6(1): 190–219, http://dx.doi.org/10.1257/app.6.1.190.

Hornbeck, Richard and Pinar Keskin. 2015. Does agriculture generate local economic spillovers? Short-run and long-run evidence from the Ogallala Aquifer. American Economic Journal: Economic Policy. 7(2): 192-213.


Enhancing the Resilience of Subsistence Farming to Drought: Crop Diversification in the former Transkei, Eastern Cape Province, South Africa

Noel Michele Holbrook, Professor of Biology and Charles Bullard Professor of Forestry, Department of Organismic and Evolutionary Biology

2010-11 Land-Water Initiative award of $40,134

The potential for physiological diversification to reduce drought related risks faced by subsistence farmers in the former Transkei, Eastern Cape Province, South Africa will be investigated. An empirically-based modeling analysis will be conducted for a series of hypothetical subsistence farms across a range of realistic rainfall scenarios, and a field validation of the preceding analysis across a similar rainfall gradient. We will assess the potential for diversification of crop physiological types to increase resilience and explore alternative income mechanisms used in this region to augment crop losses during drought. In addition, we will contrast physiological diversification of existing crop combinations relative to co-occurring native communities.

Publications:

Gilbert, Matthew E., Alicia Pou, Maciej A. Zwieniecki, and N. Michele Holbrook. 2012. On measuring the response of mesophyll conductance to carbon dioxide with the variable J methodJournal of Experimental Botany63 (1): 413-425.

Gilbert, Mathew and N. Michelle Holbrook. 2011. Limitations to crop diversification for enhancing the resilience of rain-fed subsistence agriculture to drought. CID Working Paper No. 228, Center for International Development, Cambridge, MA: Harvard University.

Gilbert, Matthew, N. Michele Holbrook, M.A. Zwieniecki, W. Sadok, and T.R. Sinclair, TR. 2011. Field confirmation of genetic variation in soybean transpiration response to vapor pressure deficit and photosynthetic compensation for this effectField Crops Research124(1): 85-92.

Gilbert, Matthew E., Maciej A. Zwieniecki, and N. Michele Holbrook. 2011. Independent variation in photosynthetic capacity and stomatal conductance leads to differences in intrinsic water use efficiency in 11 soybean genotypes before and during mild droughtJournal of Experimental Botany62(8): 2875-2887.

Updated 2012.01.30


Going Green: Low Carbon Growth Strategies for Africa

Calestous Juma, Professor of the Practice of International Development

2010-11 award: $25,000

African countries face a new development dilemma. On the one hand they are starting to register high growth rates and putting in place strategies that seek to address their perennial problems associated with poverty. On the other hand, their growth strategies are likely to be constrained by new concerns over global warming and the pressure on countries to reduce their emissions. Arica's ecosystems are particularly vulnerable to changes in climate and this environmental instability often exacerbates political instability. While the reality of climate change is stark for Africa the potential for continued development is great. This study calls for urgent action to ensure that Africa's prospects are not undermined. The drive to meet the challenges posed by managing both growth and a changing climate has led African countries to start looking into adopting low-carbon growth strategies as a means of fostering development that can be sustained in the twenty-first century. This is reflected in the decision of the African Development Bank (AfDB), the continent's premier source of development financing, to seek to adopt a "green growth" strategy for Africa. The challenge, however, is that there is little policy guidance to African leaders and their development partners on how to pursue low-carbon growth strategies. The aim of this study is to fill this gap. It will analyze Africa's current development challenges, review existing technological opportunities for "green growth" and outline policies for actions. The study will focus on exploring the new growth strategies in the age of ecological awareness.


The impact of Rainfall Shocks on Cooperation and Productivity in Contract Farming: Evidence from Kenya

Michael Kremer, Gates Professor of Developing Countries and Professor of Economics, Department of Economics

Sendhil Mullainathan, Professor of Economics, Department of Economics

2010-11 Land-Water Initiative award of $31,000

The shift toward cash crop and market-oriented agriculture is a key step to foster growth and poverty reduction in Sub-Saharan Africa. Contract farming schemes play a central role in this transition. As agriculture in Africa is primarily rainfed, water-related stresses provide major sources of vulnerability for the human-natural systems that sustain cooperation in these organizational forms. In the proposed research, we use unique micro-data to study the static and dynamic impact of rainfall shocks on productivity and cooperation in a large sugar cane outgrowing scheme in Western Kenya. Using the company administrative records, we will construct and analyze a database containing information on production, inputs, measures of farmers' effort and plot-specific rainfall shocks. This will allow us to study how these shocks affect cooperation between the company and the farmers. First, we will look at the impact on productivity of adverse rainfall conditions during the cane growing cycle. We will particularly focus on how these effects differ across farmers that vary in experience, baseline productivity level and plot size. Second, we will look at the impact on measures of farmer's diligence recorded by the company. Third, we will test whether, through a credit constraint channel, current shocks affect future cooperation and productivity. With its focus on water-related shocks in contract farming, the proposed study will bring high-quality evidence to an understudied research topic. We also plan to make the database available to other researchers after a first round of analysis.

Publications:

2015

Casaburi, Lorenzo, Michael Kremer, and Sendhil Mullainathan. 2015. Contract farming and agricultural productivity in Western Kenya. National Bureau of Economic Research Working Paper. Cambridge, MA: NBER.

2012

Casaburi, Lorenzo, Michael Kremer, and Sendhil Mullainathan. 2012. Contract farming and agricultural productivity in Western Kenya. In African Economic Successes: Sustainable Growth. Sebastian Edwards, Simon Johnson, and David N. Weil (Eds.) Chicago, IL: University of Chicago Press.

Updated 2015.07.31


Sustainability of the Amazonian Hydrologic Cycle with the Expansion of Agriculture and Changing Climate

Paul Moorcroft, Professor of Organismic and Evolutionary Biology

Steve Wofsy, Abbott Lawrence Rotch Professor of Atmospheric and Environmental Science and Associate Dean of Faculty of Arts and Sciences

John Briscoe, Professor of the Practice of Environmental Engineering and Health
Faculty member in Schools of Engineering and Applied Sciences, Public Health, and Kennedy School of Government

2010-11 Land-Water Initiative award of $64,336

Ongoing agricultural expansion in Amazonia and the surrounding areas of Brazil is expected continue over the next several decades as global food demand increases. The transition of natural forest and cerrado ecosystems to pastureland and agricultural crops creates warmer and drier atmospheric conditions than the native vegetation. In addition, human induced climate change arising from increasing levels of carbon dioxide in the atmosphere is also expected to push the Amazon region towards a warmer and drier state. In a number of recent climate modeling studies, the Amazon has been shown to exhibit two contrasting states for the water cycle and ecosystems of the region: a moist forested state, and an alternate drier and warmer state with savanna-like vegetation. This has raised the question of whether deforestation and conversion to agricultural land cause the atmosphere-vegetation-hydrologic system of the Amazon to switch from is current moist state to the warmer and drier one? And if so, will this new state have sufficient precipitation to sustain the native forest and productivity of adjacent agricultural areas? In this study we propose to answer these questions by investigating the stability of the Amazonian hydrologic system to deforestation and climate change scenarios using a coupled vegetation-atmosphere model. Our study will combine the effects of deforestation and associated agricultural expansion with climate change scenarios. We expect to come closer to capturing the true response and thresholds of the Amazonian system than previous studies as the model has a more realistic representation of the dynamic response of the native vegetation. By doing so we will be able to answer the question: how much deforestation is too much?

See Publications


Improving Gujarat's industrial pollution inspection standards

Rohini Pande, Mohammed Kamal Professor of Public Policy

2010-11 award: $40,000

India's rapid industrial growth has improved the living standards of the average Indian but also incurred environmental costs. While India has a stringent regulatory framework that sets acceptable levels of industrial air and water emissions, many believe these standards are weakly enforced. Sustainable development in India will require a way of reliably monitoring and curbing industrial pollution, and finding ways to enforce these standards better is therefore a key policy challenge. This study is a collaborative research project with the pollution control board in one of India's fastest growing states - Gujarat. We evaluate public and private options for improving enforcement of environmental regulation -- the public channel is a targeted increase in pollution inspections by the regulator, and the private channel an improved third-party environmental audit scheme. We are conducting a large-scale field experiment where these interventions are applied to a random sample of Gujarati industries with high pollution potential, and request funds from the Land-Water Sustainability Faculty Grant to pilot the addition of a new intervention on the public release of information. Specifically, we will examine the additional benefits of community participation in the environmental inspection system. The randomized trial design will enable us to estimate the causal effect of these monitoring mechanisms and the informational mechanism on pollution emissions at the factory level, and whether these translate into reductions in water pollution. They will also have immediate relevance for ensuring environmental quality in water-scarce Gujarat, where industrial externalities have fallen on agriculture.