How can we improve air pollution? Try increasing trust first

Environmental policies are characterized by salient short-term costs and long-term benefits that are difficult to observe and to attribute to the government's efforts. These characteristics imply that citizens’ support for environmental policies is highly dependent on their trust in the government's capability to implement solutions and commitment to investments in those policies. Using novel survey data from Mexico City, we show that trust in the government is positively correlated with citizens’ willingness to support an additional tax approximately equal to a day's minimum wage to improve air quality and greater preference for government retention of revenues from fees collected from polluting firms. We find similar correlations using the perceived quality of public goods as a measure of government competence. These results provide evidence that mistrust can be an obstacle to better environmental outcomes.

An assessment of the Extractive Industries Transparency Initiative (EITI) using the Bayesian corruption indicator

Advocated across the international community for more than 15 years, the Extractive Industries Transparency Initiative (EITI) is now widely recognised as a hallmark anti-corruption scheme in the extractive sector. This study presents an assessment of the relationship between EITI membership and countries’ progress in tackling corruption. It provides the first study that looks at this issue using a ‘state-of-the-art’ indicator called the Bayesian Corruption Indicator. It also introduces an innovative estimation strategy combining entropy balancing with a difference-in-difference framework to address the baseline inequalities that exist between member and non-member countries. Contrary to the findings of many leading studies, this analysis finds corruption scores have improved significantly among EITI member countries. In particular, the evidence is strongest when we examine a sub-group of EITI members designated fully compliant with the initiative's transparency standards.

Impact of work resumption on air quality after subsiding of COVID-19: evidence from China

This paper explores the short-run impact of work resumption, extensively launched on February 10, 2020 in China, on air quality after the subsiding of COVID-19. Utilizing the data of 1012 air-quality monitoring sites in 233 cities derived from the Real-time Release Air Quality Platform and the difference-in-differences method, we find that alternative measures of air quality index in non-Hubei provinces increase significantly, compared with those in Hubei province which was temporarily not allowed work resumption due to the severity of epidemic. Specifically, our results reveal a rise in AQI of 11.28 per cent, in PM2.5 of 12.47 per cent, in PM10 of 10.49 per cent, and in NO2 of 23.64 per cent, relative to the baseline mean. Moreover, the deterioration of air quality is found to be caused by intracity rather than intercity migration.

Open access renewable resources, urban unemployment, and the resolution of dual institutional failures

This paper investigates how poverty reduction and natural resource preservation can be simultaneously achieved in a small open dual economy with urban wage rigidity, open access rural resources, and rural-urban migration. An increase in the export tax rate on the rural resource good increases urban unemployment in both the short run and the long run with resource dynamics. Given the institutional failures, the first-best policy is an urban wage subsidy combined with either a rural wage subsidy at a lower rate or, if the urban output price is sufficiently high, a rural tax. When the institutional failures can be resolved endogenously, an increase in the export tax on the resource good can induce rural institutional change away from open access. However, tariff protection of urban manufacturing hinders such a rural institutional change.

Worth its weight in gold: is the extractive industries transparency initiative a credible signalling mechanism to investors?

This paper seeks to understand the link between resource governance and investor expectations in resource-rich countries. We test whether voluntary membership in the Extractive Industries Transparency Initiative (EITI), a public-private partnership that promotes transparency and accountability in the extractives sector, behaves as a credible signalling mechanism to investors that governments in resource-rich countries can manage resource revenue and adhere to sustainable fiscal policies in the medium and long run. Using an interrupted time series analysis coupled with a fixed effects model, we examine whether investor expectations on the price of sovereign debt behave as a credible signalling mechanism in the presence of certain conditions. Results indicate that in some cases there is a significant change in spread on the default price of sovereign debt as a result of announcement of either EITI candidacy or EITI compliance. However, it is clear that EITI membership alone is not a sufficient signal to investors that a country can effectively manage its resource revenues in the long run because the result of EITI implementation is heavily influenced by country-specific conditions.

Investigating the role of spatial spillovers as determinants of land conversion in urbanizing Canada

Although the impacts of income, population growth, and other important determinants of land-use change have been widely studied, there is less understanding of how spatial spillovers matter. Utilizing a spatial econometric approach, we investigate the main determinants of natural landscape conversion, focusing on quantifying local and global spatial spillovers. The empirical investigation applies to the Edmonton Metropolitan Region and the Calgary Regional Partnership in Canada. Key results include: (1) determinants of land conversion have significant spillover effects; (2) income, population density, road density, natural land endowment and land suitability for agriculture are all found to have influences on natural land conversion both in the own and neighboring areas; and (3) local (i.e., within the immediate neighboring areas) and global (in the entire study region) spillovers are different in strength and direction. Our work provides useful information for understanding the spillover issues in land conservation, resource governance, and optimal conservation design.

Export market participation and environmental actions of enterprises in Vietnam

The outcome of environmental actions from participation in the export market are examined by unpacking some mechanisms that explain the estimated relationship. The empirical strategy utilizes the variation in the distance between the location of the sampled enterprises and the top 25 destinations of Vietnamese exports across sectors, and the weight of each sampled export to total exports in each period, to obtain exogenous variation in the enterprise's export market participation. The result shows a positive relationship between the enterprise's export participation and its overall engagement in environmental actions (such as the sum of its environmental actions, the sum of actions in the investments in equipment towards environmental issues, and total expenditure for the purchase of equipment for environmental actions). Possible mechanisms are international standardization, national certification, and strong enforcement of environmental regulations from export market engagement.

Tradeoffs between fertility and child development attributes: evidence from coral bleaching in Indonesia

Coral bleaching is associated with large income shocks and a substantial decrease in protein consumption among the affected fishery households in Indonesia [Chaijaroen (2019) Long-lasting income shocks and adaptations: evidence from coral bleaching in Indonesia. Journal of Development Economics136, 119–136]. According to the health and economics literature, early childhood exposures to shocks such as those from coral bleaching can have long-lasting effects on health, schooling, and other later-life outcomes. This paper explores how the mass coral bleaching in 1998 affected household decisions on fertility and child development. Using the Indonesian Family Life Survey (IFLS) and a triple differences approach, results from 2000 suggest an increase in fertility and an increased likelihood of severe childhood stunting among the affected households. For comparison, rainfall shocks are associated with a decrease in fertility and smaller adverse effects on child health and schooling outcomes. This study suggests that the effects of coral bleaching might have been underestimated, and our findings yield more targeted policy recommendations on climate shock mitigation.