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Environment for Development Initiative Adapting Environmental Policy for the Developing World
RFF Feature
November 10, 2009

Environmental policymakers in developing countries face enormous challenges including weak regulatory institutions and urgent competing demands on scarce political and fiscal resources. Several new Environment for Development discussion papers delve into these challenges and explore potential solutions.

Cultural Norms

Cultural norms can determine the success or failure of an environmental policy. Two papers examine this issue.

In "Enforcement of Exogenous Environmental Regulations, Social Disapproval, and Bribery," authors Wisdom Akpalu, Håkan Eggert, and Godwin K. Vondolia find that social disapproval and exclusion can hamper enforcement of environmental regulations, noting that if the behavior of enforcement officials is driven mainly by the desire for social acceptance, economic incentives will have weaker effects than traditional models suggest. Increasing the pay of government-appointed enforcement officials may increase enforcement efforts, however.

Using a public goods experiment described in "Social Background, Cooperative Behavior, and Norm Enforcement,” authors Martin Kocher, Peter Martinsson, and Martine Visser find that the level of enforcement of social norms varies widely, even within communities. This research suggests that decisionmakers should be careful when making broad assumptions about how social norms will impact policy.

Policy Choices

All policy decisions involve direct and indirect costs. Two recent papers focus on measuring them.  

Fuel taxes have the potential to mitigate increasingly severe air pollution, traffic congestion, and traffic accidents in developing countries. However, they are often opposed on the grounds that they are regressive (that is, that the poor shoulder too much of the tax burden). In "Fuel Tax Incidence in Developing Countries: The Case of Costa Rica," authors Allen Blackman, Rebecca Osakwe, and Francisco Alpizar examine that argument and find that in Costa Rica, a tax on gasoline primarily affects households in the highest socioeconomic brackets where car ownership is concentrated. A tax on diesel, by contrast, would be regressive, in part because poorer households rely heavily on bus transportation.

In "Climate Change in a Public Goods Game: Investment Decision in Mitigation versus Adaptation," Reviva Hasson, Åsa Löfgren, and Martine Visser find that the level of mitigation investment varies little between low- and high-vulnerability settings and that trust factors significantly in facilitating cooperation with mitigation strategies.

Technology

Addressing environmental challenges in developing countries will require polluters to adopt clean technologies. These two papers illustrate the range of problems that technology can address, as well as the obstacles to adoption.

Authors Clara Villegas and Jessica Coria analyze how price- versus quantity-based emissions regulations affect compliance incentives and social welfare in the presence of incomplete enforcement and technology adoption in "Taxes, Permits, and the Adoption of Abatement Technology under Imperfect Compliance." They find that taxes may induce lower emissions damages, whereas tradable emissions permits induce lower abatement, investment, and expected enforcement costs. Therefore, the overall ranking in terms of social welfare depends on the extent to which these effects offset each other.

Maurice Juma, Wilfred Nyangena, and Mahmud Yesuf find that yield variability and the risk of crop failure may play a large role in whether farmers in developing countries adopt agriculture technologies. In their paper, "Production Risk and Farm Technology Adoption in Rain-Fed, Semi-Arid Lands of Kenya," the authors recommend that decisionmakers consider risk implications when implementing policies to encourage adoption of land management technologies.

These six discussion papers highlight the depth and breadth of challenges facing developing nations as they work to grow economically in a sustainable manner. Research into the diverse social, policy, and technological complexities unique to these regions demonstrates both the need for and benefits of this work.

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These publications continue the efforts of the Environment for Development Initiative to improve environmental policymaking in developing countries. RFF collaborates with the Environmental Economics Unit at the University of Gothenburg in Sweden in international research and the creation of centers around the world.

The papers discussed here, along with all Environment for Development publications are available on RFF’s EfD publications page.

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