Skip to main content
SpringerLink
Log in

Making the Transition

  • Chapter
Nature and Wealth

  • 164 Accesses

Abstract

As outlined in the previous chapter, in order to end the current structural imbalance in the world economy, all economies need to address simultaneously the two key sources of this imbalance: the underpricing of natural capital that leads to its overexploitation, and the insufficient accumulation of human capital to meet the demand, which contributes to wealth inequality. Also, there must be additional policies aimed at encouraging structural transformation in resource-dependent developing economies and ending the significant pockets of rural poverty found worldwide. Finally, as we have seen throughout this book, the global impacts of environmental degradation are becoming a pressing problem. Thus, overcoming these worldwide market failures and environmental threats, especially climate change, ecological scarcity and declining freshwater availability, requires creating global markets.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
eBook
USD 16.99
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 16.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

Notes

  1. IEA/OPEC/OECD/World Bank (2010) Analysis of the Scope of Energy Subsidies and the Suggestions for the G-20 Initiative. Joint Report Prepared for Submission to the G-20 summit Meeting Toronto (Canada), 26–27 June 2010.

    Google Scholar 

  2. This means that for every dollar earned in revenues by OECD farms, 18 cents came from some kind of agricultural subsidy. Organization for Economic Cooperation and Development (OECD) (2014) Agricultural Policy Monitoring and Evaluation 2014 — OECD Countries. Paris: OECD,. The OECD member countries include: Australia, Austria, Belgium, Canada, Chile, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, South Korea, Luxembourg, Mexico, The Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, United Kingdom and United States. In fact, the agricultural subsidy rate for some individual countries is extremely high. According to OECD (2014), op. cit. in the European Union, producer support is around 20% of gross farm receipts, and the share is even larger for Japan (56%), South Korea (53%), Norway (53%), Switzerland (49%) and Iceland (41%). The European Union (EU) estimate is for the 27 members; i.e., it excludes Croatia, which joined on 1 July 2013. The 27 EU members are: Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and United Kingdom.

    Google Scholar 

  3. Grant Potter (2014) “Agricultural subsidies remain a staple in the industrial world”, Vital Signs. The World Watch Institute. 28 February 2014. Available at: http://vitalsigns.worldwatch.org/vs-trend/agricultural-subsidies-remain-staple-industrial-world

    Google Scholar 

  4. United Nations Environmental Programme (UNEP) (2011) Towards a Green Economy: Pathways to Sustainable Development and Poverty Eradication — A Synthesis for Policymakers. Nairobi: UNEP.

    Google Scholar 

  5. Ussif Rashid Sumaila, et al. (2010) “Subsidies to High Seas Bottom Trawl Fleets and the Sustainability of Deep-Sea Demersal Fish Stocks”, Marine Policy, 34: 495–497. As the authors estimate the profit earned by bottom trawl fleets is normally not more than 10% of landed value, removal of their subsidies will stop the activities of many of these fleets worldwide, thereby reducing the current threat to deep-sea and high seas fish stocks.

    Article  Google Scholar 

  6. Edward B. Barbier and Anil Markandya (2012) A New Blueprint for a Green Economy. Routledge/Taylor & Francis: London, pp. 113–118.

    Google Scholar 

  7. C. Böhringer, et al. (2014) “The Impacts of Feed-in Tariffs on Innovation: Empirical Evidence from Germany”, CESIFO Working Paper No. 4680. Center for Economic Studies and Ifo Institute, Germany, March.

    Google Scholar 

  8. Benedict Clements, et al. (eds) (2013) Energy Subsidy Reform: Lessons and Implications. Washington, DC: International Monetary Fund (IMF).

    Google Scholar 

  9. For a further comprehensive study of the overall economic, environmental and health benefits of ending the underpricing of fossil fuels globally, see Ian Parry, Dirk Heine, Eliza Lis and Shanjun Li (2014) Getting Prices Right: From Principle to Practice. Washington, D C: International Monetary Fund.

    Google Scholar 

  10. Ariel Dinar and R. M. Saleth (2005) “Water Institutional Reforms: Theory and Practice”, Water Policy, 7: 1–19;

    Google Scholar 

  11. C. Dosi and K. W. Easter (2003) “Water Scarcity: Market Failure and the Implications for Water Markets and Privatization”, International Journal of Public Administration, 26(3): 265–290;

    Article  Google Scholar 

  12. K. W. Easter, and S. Archibald (2002) “Water Markets: The Global Perspective”, Water Resources Impact, 4(1): 23–25;

    Google Scholar 

  13. K. Schoengold and D. Zilberman (2007) “The Economics of Water, Irrigation, and Development”, in Robert Evenson and Prabhu Pingali (eds), Handbook of Agricultural Economics, vol. III. Amsterdam: Elsevier, pp. 2933–2977.

    Google Scholar 

  14. Richard D. Horan and James S. Shortle (2011) “Economic and Ecological Rules for Water Quality Trading”, Journal of the American Water Resources Association, 47: 59–69.

    Article  Google Scholar 

  15. Organization for Economic Cooperation and Development (OECD) (2010) Paying for Biodiversity: Enhancing the Cost-Effectiveness of Payments for Ecosystem Services. Paris: OECD.

    Google Scholar 

  16. Lawrence H. Goulder (2004) Induced Technological Change and Climate Policy. Arlington: Pew Center on Global Climate Change.

    Google Scholar 

  17. See also Daron Acemoglu, et al. (2012) “The Environment and Directed Technical Change”, American Economic Review, 102(1): 131–166.

    Article  Google Scholar 

  18. Acemoglu et al. (2012), op. cit.; Goulder (2004), op. cit.; Asian Development Bank (ADB) and Asian Development Bank Institute (ADBI) (2013) Low-Carbon Green Growth in Asia: Policies and Practices. Manila: ADB and ADBI;

    Google Scholar 

  19. W.-S. Hwang, I. Oh and J.-D. Lee (2014) “The Impact of Korea’s Green Growth Policies on the National Economy and Environment”, BEJ. Economic Analysis and Policy, 14(4): 1585–1614;

    Google Scholar 

  20. C. Lu, Q. Ton and X. Liu (2010) “The Impacts of Carbon Tax and Complementary Policies”, Energy Policy, 38: 7278–7285;

    Article  Google Scholar 

  21. M. Blesl, et al. (2010) “Effects of Climate and Energy Policy Related Measures and Targets on the Future Structure of the European Energy System in 2020 and Beyond”, Energy Policy, 38: 6278–6292;

    Article  Google Scholar 

  22. Carolyn Fischer and Richard Newell (2008) “Environmental and Technology Policies for Climate Mitigation”, Journal of Environmental Economics and Management, 55: 142–162;

    Article  Google Scholar 

  23. David Popp (2010) “Innovation and Climate Policy”, NBER Working Paper 15673. Cambridge, MA: National Bureau of Economic Research.

    Book  Google Scholar 

  24. Harry Huizinga, Wolf Wagner and Johannes Voget “Lessons from the taxation of cross-border banking for new financial taxes.” VoxEU.org, 11 July 2011. Available at: http://www.voxeu.org/article/why-banks-are-under-taxed-and-what-do-about-it. See also Harry Huizinga, Johannes Voget, and Wolf Wagner (2014) “International Taxation and Cross-Border Banking”, American Economic Journal: Economic Policy, 6(2): 94–125.

    Google Scholar 

  25. P. B. Spahn (2010) “A Double Dividend”, The Broker, 22(Oct/Nov): 8–14.

    Google Scholar 

  26. Thornton Matheson (2011) “Taxing Financial Transactions: Issues and Evidence”, IMF Working Paper WP/11/54t. Washington, DC: International Monetary Fund, March 2011.

    Google Scholar 

  27. Matheson (2011), op. cit.; John Grahl and Photis Lysandorij (2014) “The European Commission’s Proposal for a Financial Transactions Tax: A Critical Assessment”, Journal of Common Market Studies, 52(2): 234–249;

    Article  Google Scholar 

  28. Thornton Matheson (2012) “Security Transaction Taxes: Issues and Evidence”, International Journal of Tax and Public Finance, 19: 884–912;

    Article  Google Scholar 

  29. Richard T. Page (2010) “Foolish Revenge or Shrewd Regulation? Financial-Industry Tax Law Reforms Proposed in the Wake of the Financial Crisis”, Tulane Law Review, 85: 191–214;

    Google Scholar 

  30. Daniel Shaviro (2012) “The Financial Transactions Tax versus (?) The Financial Activities Tax”, Law & Economics Research Paper Series Working Paper No. 12–04. New York University School of Law, March 2012.

    Google Scholar 

  31. International Monetary Fund (IMF) (2010) A Fair and Substantial Contribution by the Financial Sector. Final Report for the G-20, June, Washington DC: IMF.. Available at: http://www.imf.org/external/np/g20/pdf/062710b.pdf

    Google Scholar 

  32. Claudia Goldin and Lawrence F. Katz (2008) The Race Between Education and Technology. Cambridge: Harvard University Press.

    Google Scholar 

  33. See Edward B. Barbier (2011) Scarcity and Frontiers: How Economies Have Developed Through Natural Resource Exploitation. Cambridge: Cambridge University Press.

    Google Scholar 

  34. Gavin Wright and Jesse Czelusta (2004) “Why Economies Slow: The Myth of the Resource Curse”, Challenge, 47(2): 6–38, pp. 34–36.

    Google Scholar 

  35. Ronald Findlay and Mats Lundahl (1999) “Resource-Led Growth — A Long-Term Perspective: The Relevance of the 1870–1914 Experience for Today’s Developing Economies”, UNU/WIDER Working Paper No. 162. Helsinki: WIDER, pp. 31–32.

    Google Scholar 

  36. Paul A. David and Gavin Wright (1997) “The Genesis of American Resource Abundance”, Industrial and Corporate Change, 6: 203–245.

    Article  Google Scholar 

  37. For further discussion of the long-run natural resource management and development strategies of Botswana, Malaysia and Thailand, see in particular Barbier (2011), op. cit.; Edward B. Barbier (2005) Natural Resources and Economic Development. Cambridge, UK: Cambridge University Press;

    Book  Google Scholar 

  38. Ian Coxhead and Sisira Jayasuriya (2003) The Open Economy and the Environment: Development, Trade and Resources in Asia. Northampton, MA: Edward Elgar;

    Book  Google Scholar 

  39. Atsushi Iimi (2007) “Escaping from the Resource Curse: Evidence from Botswana and the Rest of the World”, IMF Staff Papers, 54: 663–699.

    Article  Google Scholar 

  40. Glenn-Marie Lange and Matthew Wright (2004) “Sustainable Development and Mineral Economies: The Example of Botswana”, Environment and Development Economics, 9(4): 485–505;

    Article  Google Scholar 

  41. Maria Sarraf and Moortaza Jiwanji (2001) “Beating the Resource Curse: The Case of Botswana”, Environmental Economics Series. The World Bank Environment Department. Washington DC: The World Bank;

    Google Scholar 

  42. and Jeffrey R. Vincent, Razali M. Ali and Associates (1997) Environment and Development in a Resource-Rich Economy: Malaysia under the New Economic Policy. Harvard Institute for International Development: Harvard University Press. However, it should also be noted that, in all three economies, important sectors and populations have yet to gain significantly from improving the sustainability of the main primary producing sectors. In Malaysia, there is concern about the continuing destruction of forests, especially in the more remote Sabah and Sarawak Provinces, and the expansion of oil palm plantations. In Thailand, the loss of mangroves, growing pollution problems and the failure to instigate development in upland regions are major issues. Botswana has still to grapple with a stagnant agricultural sector, large numbers of people living in fragile environments and widespread rural poverty. Finding ways to broaden the economy-wide benefits and improve the sustainability of resource-dependent economies is an ongoing challenge for such small open economies.

    Google Scholar 

  43. Barbier (2005) and (2011), op. cit.; Sarraf and Jiwanji (2001), op. cit.; Thorvaldur Gylfason (2001) “Nature, Power, and Growth”, Scottish Journal of Political Economy, 48(5): 558–588;

    Article  Google Scholar 

  44. Frederick van der Ploeg (2011) “Natural Resources: Curse or Blessing?”, Journal of Economic Literature, 49: 366–420.

    Article  Google Scholar 

  45. Edward B. Barbier (2012) “Natural Capital, Ecological Scarcity and Rural Poverty”, Policy Research Working Paper No. 6232. Washington, DC: The World Bank, October.

    Book  Google Scholar 

  46. World Bank (2008) Word Development Report 2008: Agricultural Development. Washington DC: The World Bank.

    Google Scholar 

  47. C. Elbers, T. Fujii, P. Lanjouw, B. Özler and W. Yin (2007) “Poverty Alleviation Through Geographic Targeting: How Much Does Disaggregation Help?”, Journal of Development Economics, 83: 198–213.

    Article  Google Scholar 

  48. D. Coady, M. Grosh and J. Hoddinott (2004) “Targeting Outcomes Redux”, World Bank Research Observer, 19(1): 61–85.

    Article  Google Scholar 

  49. K. Higgins, K. Bird and D. Harris (2010) “Policy Responses to the Spatial Dimensions of Poverty”, ODI Working Paper 328. London: Overseas Development Institute, p. 20.

    Google Scholar 

  50. Barbier (2005), op. cit.; Barbier, E. B. (2010) “Poverty, Development and Environment”, Environment and Development Economics, 15: 635–660.

    Article  Google Scholar 

  51. David Carr (2009) “Population and Deforestation: Why Rural Migration Matters”, Progress in Human Geography, 33: 355–378.

    Article  Google Scholar 

  52. Jill L. Caviglia-Harris and D. Harris (2008) “Integrating Survey and Remote Sensing Data to Analyze Land Use Scale: Insights from Agricultural Households in the Brazilian Amazon”, International Regional Science Review, 31: 115–137.

    Article  Google Scholar 

  53. Ian Coxhead, Gerald E. Shively and X. Shuai (2002) “Development Policies, Resource Constraints, and Agricultural Expansion on the Philippine Land Frontier”, Environment and Development Economics, 7: 341–364.

    Article  Google Scholar 

  54. S. Dercon, et al. (2009) “The Impact of Agricultural Extension and Roads on Poverty and Consumption Growth in Fifteen Ethiopian Villages”, American Journal of Agricultural Economics, 91: 1007–1021.

    Article  Google Scholar 

  55. M. Maertens, M. Zeller and R. Birner (2006) “Sustainable Agricultural Intensification in Forest Frontier Areas”, Agricultural Economics, 34: 197–206.

    Article  Google Scholar 

  56. Coxhead et al. (2002), op. cit.; Dercon et al. (2009), op. cit.; Maertens et al. (2006), op. cit.; M. R. Bellon, et al. (2005) “Targeting Agricultural Research to Benefit Poor Farmers: Relating Poverty Mapping to Maize Environments in Mexico”, Food Policy, 30: 476–492;

    Article  Google Scholar 

  57. A. Dillon, M. Sharma and X. Zhang (2011) “Estimating the Impact of Rural Investments in Nepal”, Food Policy, 36: 250–258.

    Article  Google Scholar 

  58. Erin Sills and Jill L. Caviglia-Harris (2008) “Evolution of the Amazonian Frontier: Land Values in Rondônia, Brazil”, Land Use Policy, 26: 55–67.

    Article  Google Scholar 

  59. World Bank (2008), op. cit.; Christopher B. Barrett (2008) “Smallholder Market Participation: Concepts and Evidence from Eastern and Southern Africa”, Food Policy, 33: 299–317.

    Article  Google Scholar 

  60. Bellon et al. (2005), op. cit.; Dercon et al. (2009), op. cit.; Dillon et al. (2011), op. cit.; A. Ansoms and A. McKay (2010) “A Quantitative Analysis of Poverty and Livelihood Profiles: The Case of Rural Rwanda”, Food Policy, 35: 584–598.

    Article  Google Scholar 

  61. B. Cunguara and I. Darnhofer (2011) “Assessing the Impact of Improved Agricultural Technologies on Household Income in Rural Mozambique”, Food Policy, 36: 378–390.

    Article  Google Scholar 

  62. D. Müller and Z. Zeller (2002) “Land Use Dynamics in the Central Highlands of Vietnam: A Spatial Model Combining Village Survey Data with Satellite Imagery Interpretation”, Agricultural Economics, 27: 333–354.

    Article  Google Scholar 

  63. S. K. Pattanayak, et al. (2003) “Taking stock of agroforestry adoption studies”, Agroforestry Systems, 57: 173–186.

    Article  Google Scholar 

  64. T. Yamano and Y. Kijima (2010) “The Association of Soil Fertility and Market Access with Household Income: Evidence from Rural Uganda”, Food Policy, 35: 51–59.

    Article  Google Scholar 

  65. S. V. Lall, H. Selod and Z. Shalizi (2006) “Rural-Urban Migration in Developing Countries: A Survey of Theoretical Predictions and Empirical Findings”, World Bank Policy Research Working Paper 3915, May 2006. Washington DC: The World Bank, p. 48.

    Book  Google Scholar 

  66. See, for example, C. L. Gray (2009) “Rural Out-Migration and Smallholder Agriculture in the Southern Ecuadorian Andes”, Population and Environment, 30: 193–217.

    Article  Google Scholar 

  67. C. Greiner and P. Sakdapolrak (2013) “Rural-Urban Migration, Agrarian Change, and the Environment in Kenya: A Critical Review of the Literature”, Population and Environment, 34: 524–533.

    Article  Google Scholar 

  68. M. Mendola (2008) “Migration and Technological Change in Rural Households: Complements or Substitutes?”, Journal of Development Economics, 85: 150–175.

    Article  Google Scholar 

  69. M. Mendola (2012) “Review Article: Rural Out-Migration and Economic Development at Origin: A Review of the Evidence”, Journal of International Development, 24: 102–122.

    Article  Google Scholar 

  70. L. K. VanWey, G. R. Guedes and A. O. D’Antona (2012) “Out-Migration and Land-Use Change in Agricultural Frontiers: Insights from Altamira Settlement Project”, Population and Environment, 34: 44–68.

    Article  Google Scholar 

  71. David W. Pearce (2007) “Do We Really Care About Biodiversity?” Environmental and Resource Economics, 37: 313–333.

    Article  Google Scholar 

  72. For further discussion, see Edward B. Barbier (2012) “Can Global Payments for Ecosystem Services Work?”, World Economics, 13: 157–172.

    Google Scholar 

  73. United Nations Development Programme (UNDP) (2006) Human Development Report 2006. Beyond Scarcity: Power, Poverty and the Global Water Crisis. New York: UNDP.

    Google Scholar 

  74. R. E. Just and S. Netanyahu (1998) “International Water Resource Conflicts: Experience and Potential”, chapter 1 in R. E. Just and S. Netanyahu (eds), Conflict and Cooperation on Transboundary Water Resources, Kluwer Academic Publishers, Boston, pp. 1–26.

    Chapter  Google Scholar 

  75. E. Stephen Draper and James E. Kundell (2007) “Impact of Climate Change on Trans-Boundary Water Sharing”, Journal of Water Resources Planning and Management, 133(5): 405–415.

    Article  Google Scholar 

  76. Meredith A. Giordano and Aaron T. Wolf (2003) “Sharing Waters: Post-Rio International Water Management”, Natural Resources Forum, 27: 163–171;

    Article  Google Scholar 

  77. Aaron T. Wolf (2007) “Shared Waters: Conflict and Cooperation”, Annual Review of Environment and Resources, 32: 3.1–3.29.

    Article  Google Scholar 

  78. Anik Bhaduri and Edward B. Barbier (2008) “International Water Transfer and Sharing: The Case of the Ganges River”, Environment and Development Economics, 13: 29–51.

    Article  Google Scholar 

  79. Edward B. Barbier and Anik Bhaduri (2015) “Transboundary Water Issues”, Chapter 18 in Robert Halvorsen and David Layton (eds), Handbook on the Economics of Natural Resources. Edward Elgar: Cheltenham, pp. 502–528.

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. University of Wyoming, USA

    Edward B. Barbier

Authors
  1. Edward B. Barbier
    View author publications

    You can also search for this author in PubMed Google Scholar

Copyright information

© 2015 Edward B. Barbier

About this chapter

Cite this chapter

Barbier, E.B. (2015). Making the Transition. In: Nature and Wealth. Palgrave Macmillan, London. https://doi.org/10.1057/9781137403391_10

Download citation

Publish with us

Policies and ethics

Search

Navigation