Lecture Note, Natural Resource and Environmental Economics Chapter Two

CHAPTER II
ENVIRONMENT AND DEVELOPMENT: SOME ISSUES

2.1 Introduction
For a long period of time, development economics ignores the issue of the environment. This
is partly because of the special features that the environmental goods own. For a good to be
considered as economic good,
9 it must be marketable (tradable)
9 it must provide utility
9 It must be relatively scarce.

However, because of the problem of market failure, natural resources were not considered as
economic good. Hence, even in the 1950's and 1960's environmental (natural) resources
were considered as free goods. Because of this a number of environment related problems
have arisen. These include, rapid deforestations, over grazing/fishing, pollution etc. (For the
detail look at the following attachment.) These problems, if left unchecked, will undermine
the economic development.

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Attachment: Types (or forms) of environmental degradation

Environment refers to both the quality and quantity of natural resource. Hence
environmental degradation is the deterioration of the environment both in quality and
quantity.
1. Water related problems
- Water shortages
- Water pollution & contamination
2. Forest relate E. Problems
- Deforestation →↓ in forest coverage
- Degradation of forest →↓ in forest productivity and loss of diversity
3. Land related E. problems
- Land related E. problems
- Sanitation →↓ in salt content
- Nutrient loss
- Land scarcity
- Overgrazing etc
4. Fishery related E. problems
- Ore fishing
- Fish poisoning/contamination
- Loss of fish species
5. Urban related problems
- Congestion
- Air , water and notice pollution
N.B. As quality problems are worsen quantity problems emerge.
Note also that environmental degradation has three aspects/dimension
- Quantity
- Quality
- Diversity composition (species)

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In the late 1960's and 1970's concern of environmental degradation began in the
industrialized countries and was extended to less developed countries by the 1980's. Thus, it
is only after 1980s that environmental issues were treated as development issue and people
observe that development is related to the environment.
Who is the victim of environmental problem? Both developed and developing country.
However, the most pressing issues in LDCs are not necessarily the same as in the former
countries.
The most immediate environmental problem facing developing countries include,
- unsafe water - deforestation
- Soil depletion - inadequate reforestation
- indoor smoke (from use of biomass fuel such as wood, straw, dung)
- Outdoor smoke (from coal burning).

But for developed countries, the main concerns are issues like global warming (carbon
dioxide emission, depletion of stratospheric ozone, photochemical smokes, acid rain and
hazardous wastes).
The reason environmental problems differ so substantially between less and more developed
countries is that few if any forms of environmental degradation tend to remain constant with
economic growth. Some of the environmental problems such as inadequate urban sanitation
tend to improve as income increases, others, and of course most environmental problems,
such as urban air pollution initially worsen but then improve as income rises, and still others
such as carbon dioxide emissions tend to worsen steadily with increasing income.(Detailed
explanation on the relation ship between the environmental problems and the economic
growth will be dealt in section 2.3)

The Environmental problems of less and more developed countries are of course not
completely independent of each other. If the carbon dioxide emissions that come primarily
from rich countries are causing greenhouse warming, less developed countries are affected.
Loss of Biodiversity due to destruction of tropical rainforests in less destruction of tropical
rainforests in less developed country is a problem for more developed countries as well.

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Attachment
Industrial countries need to solve their own problems but they also have a crucial role to play
in helping to improve the environments of developing countries
1. Developing countries need to have access to loss- polluting technologies and to learn
from the success and failures of industrial countries environmental policies.
2. Some of the benefits from environmental policies in developing countries (e.g., the
protection of tropical forests biodiversity) accrue to reach countries, which are
therefore to bear an equivalent part of the costs.
3. Some of the potential problems facing developing countries (particularly global
warming acid ozone depletion) stem from high consumption levels in rich countries;
therefore the burden of finding and implementing solutions should be on the rich
countries.
4. The strong and growing evidence of the links between poverty reduction and
environmental goals makes a compelling case for greater support for programs to
reduce poverty and population growth.
5. The capacity of developing countries to enjoy sustained economic growth will
depend on industrial country's economic policies; improved access to trade and
capital markets, policies to increase saving and lower world interest rates, and
policies that promote robust, environmentally responsible growth in industrial
countries will all help--------

Poverty and the environment

There is a strong relationship between poverty and the environment. In terms of causation,
poverty leads to environmental degradation and environmental degradation worsen poverty.
This implies that poverty leads to environmental degradation and in turn environmental
degradation leads to poverty.
Poor people are forced to engage in number of activities like fetching water, fire
wood collection, cattle grazing, etc. This causes environmental degradation
The environmental degradation can lower labor productivity of the poor. For
example, fuel wood become scarce, and poor people spend more time collecting fuel
wood consequently the poor earn lower income.

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Principal health and productivity consequences of environmental problems

Environmental Effect on health Effect on productivity
problem
water pollution & - deaths and illness, - declining fisheries,
water scarcity - poor household hygiene and - household time and municipal costs
- added health risks caused by of providing safe water shortages
water scarcity
Air pollution - premature deaths - restriction on vehicle and industrial
- childhood chronic coughing activity during critical episodes;
- Effect of acid rain on forests and
water bodies.
Solid and Disease spreads by rotting pollution of ground water resources
hazardous wastes garbage and blocked drains.
Deforestation Localized flooding leading to loss of sustainable logging potential
death and disease of erosion prevention and carbon
sequestration
Solid degradation - reduce nutrition for poor Field or land productivity loss
farmers on depleted soils
- greater susceptibility to drought
loss of potential loss of new drugs reduction of ecosystem adaptation
biodiversity and loss of genetic resources
Atmospheric - Possible shift in vector born Regional change in agricultural
changes diseases. productivity.
- risks from domestic natural
disaster.

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2.2 Population Growth and the Environment

Population growth leads to environmental degradation. How do more people pollute the
environment?
1. population growth increase the demand for goods and services this cause environmental
degradation
2. more people produce more waste- additional stress on assimilative capacity of the
environment. Hence, there should be policies for reducing population growth rate.
Some of the policies used to reduce population growth include
a. access to family planning should be increased
- encourage people to use contraceptive
b. Educate the people to the benefit of having small family
c. marriage age law
- people should not be allowed to marry before they reach certain age.
d. Economic incentives and disincentives
E.g. free education, house allowance, free food etc
e. Using force
- Putting this people producing more children in to prison.

Of course there are some individual who argues to population as an asset and creative so that
it will find solutions to the environmental problem.

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2.3 Economic growth and the Environment

Is economic growth lead to environmental degradation?
Three patterns of relationship between economic growth and environmental degradation.
1. Some environmental problems decline as income rise
This is because increasing income provides the resources for public services such as
sanitation safe water, rural electricity

Environmental
degradation

PCI

2. Some environmental problems initially worsen but then improve as income rise.
E.g. Most forms of air and water pollution.

Environmental
degradation

PCI

Rationale (the Conventional explanation)

At early stage of economic growth, people don't worry about the environmental problems; they worry
about PCI growth. But when they grow more and more, they taste that pollution is the major
problem. People look at environmental quality. As income rises, people attach high value to the
environmental quality. They need clear air, water etc. People, then start to take measure to reduce
pollution as they grow more. Because they have the ability to do: they have more resources and
afford to reduce environmental problems. As they use environmental policies, environmental
degradation declines.

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The tendency of many forms of environmental degradation to follow an "inverted U" when
plotted against income has been christened the "Environmental Kuznet Curve."
Environmental Kuznet Curve comes from Kuznet Curve, named after Simon Kuznet. Kuznet
Curve shows the relation ship between Per capita income and income inequality. At lower
level of development income inequality is low; as economic growth increases it increases
initially and then as countries grow more and more income inequality become low.

Attachment: The "Environmental Kuznet curve"

We have seen that some environmental degradation increases first and then decreases with per capita
income. Because this is reminiscent of Kuznet’s conjecture for income inequality, this inverted U
relationship has become known as the "Environmental Kuznet curve"
The cause of the upswing of the inverted U is simply that the greater out put per head generates more
emissions, all else equal.
The cause of downswing is more controversial.
The conventional explanation is that richer consumers demand higher environmental quality, richer
governments are better able to enforce regulations that yield the higher environmental quality their
constituents demand, and more technologically advanced producers are better able to control their
emission

A more pessimistic explanation focuses on the composition of out put. Richer countries produce
more service relative to manufactures, and with in manufacturing they tend to specialize in "cleaner"
industries. Demand for the output of dirty industries in met by imports from poorer countries.

If this latter explanation is correct, then at the global level of income growth of countries with per
capita incomes above the turning point of the inverted for a certain form of environmental
degradation does not improve environmental quality but instead distribute degradation to poor
countries.

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3. Some indicators of environmental stress worsen as income increase

E.g. Emissions of carbon and nitrogen oxides and municipal wastes are current
examples.
In this cases abatement is
Environmental relatively expensive and the
degradation
costs associated with the
emission and waste are not yet
perceived as high often because
they are borne by someone else.
PCI

Rationale:
- As income grows, people consume more and more of petroleum products that results
in the emission of CO2. This changes the composition of the atmosphere and leads to
global warming (environmental degradation)
- As income grows, people tend to consume packed products, whose package becomes
waste material.
Note: The above analysis does not imply an inevitable relationship between income levels
and particular environmental problems; countries can choose polices that result in much
better (or worse) environmental conditions than those in other countries at similar income
levels. Nor does it imply a static picture, as a result of technological progress, some of these
curves have shifted down word over recent decades, providing an opportunity for countries to
develop in a less damaging manner than was possible earlier.
- Developed countries come up with technique which reduce emission. Poor countries
rely on technique developed by DC and reduce pollution
- Influence of donor on poor countries to take measure on environmental pollution.

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Lecture Note, Natural Resource and Environmental Economics Chapter Two

2.4 Sustainable Development: Basic Concept

Economic Growth is simply defined as Sustainable rise in per capita income. The use of the
term “Development” rather than “Economic growth” implies acceptance of the limitation of
the use of measures such as a gross national product (GNP) to measure the well-being of
nations. However, development embraces wider concerns of the quality of life. Since
“development” is a value word, implying change that is desirable there is no consensus as to
its meaning. What constitute development depends on what social goals are being advocated
by the development agency, government, analyst or adviser. We take development to be a
vector of desirable social objectives; i.e. it is a list of attributes which society seeks to
achieve or maximize. The element of this might include,
- Increase in real per capita income
- Improvement in health and nutritional status
- Educational achievement
- Access to resource
- A “fairer” distribution of income
- Increase in basic freedoms

The term Sustainable Development (SD) was bought into common use by the World
Commission on the Environment and Development (The Brundtland Commission) whose
report is known as “Our Common Future” in 1987.
According to the commission, Sustainable Development was defined as: “Development that
meets the needs of the present without compromising the ability of the feature generations to
meet their own needs”.
This definition highlights both an equity dimension (inter generational and intra generational)
and social/ Psychological dimension (need is used instead of want).
Compared to economic development, SD is a much wider concept. It is a situation in which
the development vector does not decrease over time. i.e., it is economic development that
endures over the long run (or that lasts forever). The emphasis on sustainability suggests that
what is needed is a policy effort aimed at making these developmental achievements test well
in to the future. Hence the goal of SD is principally an equity rather than efficiency issue and

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this is not to say that economic efficiency is irrelevant to SD but it is not a sufficient
condition for SD.

Sustainability is concerned with knowledge of what the resource capacity is and managing
the resource to the maximum of that capacity, but not beyond. Therefore, sustainability is
using the interest produced by natural capital but never eating in to the capital itself.

SD can alternatively defined as, ‘….the maximum development that can be achieved without
running down the capital asset of a nation, which are its resource base”. The base is
interpreted widely to encompass man made capital (Km) natural capital (Kn), human capital
(Kh) and moral ( ethical) and cultural capital ( Kc).

Sustainable development has three set of objectives:

1. Economic objectives:
- It includes promoting growth or efficiency
2. Social objectives:
- It includes fulfilling people’s cultural, material, spiritual needs in equitable
manner.
3. Environmental objectives:
- It includes maintaining and improving the long-term validity of the ecosystem.

The triangular representation of the objectives of the sustainable development.

Economic Objectives
[Efficiency/ Growth]
- income
redistribution - Environmental assets
- Employment - Relation
- Targeted - Internalization of
assistance externalities

Social Objectives Ecological Objectives

[Poverty/Equity] [Natural Resource]

- Popular participation
- Consultation
- of Economics
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The central rational for SD is to increase people’s standard of living (broadly defined) and in
particular, the well-being of the least advantaged people in the societies, while at the same
time avoiding uncompensated future costs.

From the above discussions we can concluded that SD involves in balancing among the
following.
a) balancing between human needs & ability of the environment to meet these needs .
b) balancing between the needs of the present & future generation
c) balancing between the poor & the rich.

Weak Vs Strong Sustainability

Weak sustainability rule merely requires that the overall stock of capital assets (Km+Kn+Kh)
should remain constant overtime. I.e. the total value of that man-made physical capital stock,
human capital stock, and natural capital stock should not decrease. This rule is consistent
with any one asset can be reduced as long as another capital asset is increased to compensate;
(i.e. increase in other capital stocks can substitutes for decrease in the natural capital stock.)

On the Strong Sustainability view, it is not sufficient to just protect the overall level of
capital, rather, Kn must be protected, because at least some of Kn (initial Kn) is non
substitutable. Thus, the SS rule requires that Kn be constant and the rule would be monitored
& measured via physical indicators; i.e., the natural capital stock should not decrease.

Pre requisite for SD

The two important aspects of SD are
i. Respect & concern for people
ii. Respect for Ecosystem.
1. Respect and concern for people
Development is likely to be sustainable if it improves the quality of human life for a
long time; and these qualities include:

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- Long and healthy life

- Access to education
- Need for decent standard of living
- Political freedom
- Guarantee on human rights, etc.

2. Respect for Ecosystem

Development must be conservation best; i.e., it must protect the structure, functions &
diversity of the world’s natural system.
It includes:
- the need to conserve the life support system
- the need to conserve the biological diversity (all species of animal & plants)
- ensure that all uses of renewable resource are sustainable
- Keep with the current capacity of the earth of population.
- Minimize the depletion of non renewable resources, how? Via
ƒ recycling
ƒ efficiency
ƒ switching to renewable substitutes

Signs of unsustainable Development

There are some signs of unsustainable development

1. increasing population and consumption of resources
ƒ Since industrial revolution, the population has increased 8 folds
ƒ Water with drawl have grown from 100 – 4000 km3 year
2. Poverty
ƒ More than a billion live in absolute poverty
ƒ One fifth of them can not get enough food
ƒ Every year million of children die from mal nutrition & preventable diseases
3. Resource Depletion
ƒ In less than 200 years the planet has lost 6 million km2 of forests.

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ƒ Every year 700,000 km2 of agricultural land made un productive

4. Pollution
ƒ It is becoming a major problem on industrialized counters. It affects the health
of the people; e.g. Cancer
5. Global climate change
ƒ Global warning because of ozone layer
6. Debt problems
ƒ The cumulative debt of low income countries is more than 1 trillion and the
interest payment has reached 60 million dollar per year.
ƒ Since 1984, there has been a net transfer of resource from developing to
developed countries.

Attachment
What are the major focuses of economists after 1950’s
ƒ In 1950’s & 1960’s, the focus of economic thought was ‘growth of output’
based on economic efficiency.
ƒ In 1970’s, there was an attempt to employ strategies which ‘promote
economic growth & reduce income inequality’ among different groups in a
given society.
ƒ In 1980’s there was a grown concept that environmental degradation was a
major barrier to development and because of that the protection of
environment has become the major objectives of the development process.

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National Accounting Practice and Macroeconomic Performance

Traditionally, the economic activity of a country was measured by GDP (and preferably by
NNP). I hope you know what GDP and GNP are and their components. But do these
indicators tell us what is really happening to the environment?
The traditional measures of aggregate income have long been recognized to reflect welfare
only partially, due to their inadequate treatment of non marketed asset-human capital and
natural resources.
The two major criticisms of the current System of National Accounts which was advocated
by UN (UN-SNA) are:
1. It fails to account for informal economics, black economics and other non-marketable
assets.
2. Services provided by the environment are not taken in to account.

A country can fell its forests, erode its soils, exhaust its minerals, pollute its aquifers, and
erase its wildlife, without adversely affecting its measured income. Hence, NNP clearly fails
as a measure of SD owing to many aspects of natural resource depletion being ignored by
SNA; whilst is expenditure on pollution clean up actually adds to NNP, with any loss in
welfare due to the pollution itself being ignored. This can hide a permanent loss of wealth
beneath an illusion of gains in income.
How do we make an adjustment? We have two approaches:-
1. Physical Resource Accounting (PRA) approach
This is making the adjustment in physical terms via the physical inculcator. Examples of the
physical indicators include
ƒ Deforestation:- measuring the volume of forest decline
⇒ by how much the forest decline per year.
ƒ Soil degradation:- measuring the amount of soil fertility decline
⇒by how much does the soil quality go down? How many tones of soils are lost?
ƒ Water pollution:- measuring the volume/quality of water decline
⇒ what is happening to the total quantity and quality of water?

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The challenge associated to this approach is that the calculation is not an easy task, it requires
in put-out put calculation in physical terms. In this approach, as the name indicates, we are
talking about changes in physical terms.
⇒ Basically, this is the work of natural scientists.

2. Monetary Accounting (MA):

⇒ this is particularly the interest of economists. In this case we try to attach monetary value
to the change. Here, we will be able to come up with a single aggregate measure and we can
tell what is happening to the economy. We convert the different measurement used in
monetary value. This is not possible in the case of PRA. But, how do we attach monetary
measure? Again we have two methods.

a) Environmentally Adjusted Domestic Product (EDP):

Net Domestic Product (NDP) is total income earned by the economy in any year less an
allowance for the depreciation of man made capital.
NDP = GDP – Dmc Dmc= depreciation of manmade capital.

Note that Dmc is subtracted because it is the used part of capital in production process (or it is
a loss in the value of the asset). But it is not only the man made capital which is lost in the
production process. In the production process we also lose natural resource capital. Hence,
NDP is not the true measure of a country’s economic activity and sustainable development.
A country’s economic activity and its sustainable development is obtained if the loss of
natural resource capital is taken in to account. The measurement so obtained is called
Environmentally Adjusted Domestic Product (EDP). When is an environmentally adjusted
measure of NDP (or EDP) a good measure of sustainable development?
1st. When all elements of NDP are correctly valued interims of current economic situation.
2nd. When this is true in a fore ward looking sense too (prices reflect future scarcity).
3rd. When all depreciation of natural capital is similarly allowed for as well.
Consequently, we have EDP= GDP – Dmc – DNc
DNc = depreciation of natural capital which includes renewable, non renewable
= also includes loss of environmental quality.

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EDP is the annual pay offs from one total (natural plus manmade) capital stock. EDP can rise
through time if this total capital stock rises, and/or as technology improves. But if we fail to
account for a loss of natural capital, our NDP measure exaggerates the real increase because
that change in NDP may be at the expense of degrading the environment. Hence, in relative
term, EDP better shows what is happening in the economy, and you may start taking
measures. The main challenge to this adjustment is that practically measuring DN is difficult.
Note: The adjustment of the entire system of national accounts for resource depletion and
environmental degradation is known as ‘’Green National Accounting’’

b) Genuine savings (GeS):

- Saving is very important for economic growth.
- ↑s →↑I→ ↑output
- Developing countries have low level of saving which leads to low level of
development.
From your macroeconomics, recall that it is net saving that really boosts the investment of a
country and hence its economic growth. Net saving is usually computed as:
Net Savings=Gross Savings - Dmc

The problem related to the above calculation is that it does not take in to account what
happens to natural resource. It considers only the man made capital. Just as the entire system
of national accounts can be adjusted for resource depilation and environmental degradation,
so can the saving rates. This adjustment has become known as Genuine Savings.

The concept of genuine savings is implied from the definition of weak sustainability.
Genuine savings are savings adjusted not for depreciation of the man made capital stock but
also for depletion of natural resource and degradation of the environment

Genuine Savings = Net savings - DNc.

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Note: high dependency of natural resource results in lower GS. Countries which depends on
natural resource have lower GS. Failure to account for depletion of natural resource results in
wrong policy presentations.

Policies for Development and the Environment

Some policies that are designed for efficient income growth can complement those for
environmental protection and some others substitute them. To overcome the causes of
environmental damages, two category of policies are required (available).

1. Win-Win Policies
These are policies that improve both the economic efficiency and the environment. Such
objectives can be attained:
a) By correcting (preventing) policy failures
E.g. -Eliminating subsidy for the use of fossil fuels, eliminating subsidy on chemical
fertilizers etc.
b) By improving access to resource and technology
E.g. - Definition properly right (improves over grazing, over fishing)
- Use of better technology (↓ environmental degradation)
c) By promoting equitable income and growth.
The most important of the win –win opportunities that remains unexploited is related to
poverty reduction: not only is attacking poverty as a moral imperative, but it is essential for
environmental stewardship. Because of the very complex link between poverty and the
environment, it is usually the poor who suffer most from the consequence of
environmental degradation and pollution and also who seriously affect (promote)
environmental degradation. Unlike the rich,
ƒ The poor cannot afford to protect themselves from contaminated water
ƒ In cities they are more likely to spend much of their time on the streets, breathing
polluted air;
ƒ In rural areas they are more likely to cook on open fires of wood or dung, inhaling
dangerous fumes:

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The poor may also draw a large part of their likelihood from un marketed environmental
resources: common grazing lands, for example, or forests where food, fuel, and building
materials have traditionally been gathered. The loss of such resources may particularly harm
the poorest. Sound environmental policies are thus likely to be powerfully redistributive.
Win – win policies may also include
i. Investing in human resource/human capital investment,
⇒ interims of education, health, nutrition, family planning, etc.
ii. Investing in a better sanitation & safe water, and
iii. Improved research & extension services can both improve the environment and raise
incomes.

2. Forgeted Environmental Policies

The win-win policies are not enough to ensure environmental quality. Strong public
institutions and policies for environmental protection are also essential.
The world has learned over the past two decades to rely more on markets and less on
government to promote development. But environmental protection is one area in which
government must maintain a central role. Private markets provide little or no incentive for
curbing pollution. Whether it be air pollution in urban centers, the dumping of unsanitary
wastes in public waters, or the over use of land whose ownership is unclear, there is a
compelling care for public action.

Here, there may be trade offs between income growth and environmental protection,
requiring a careful assessment of the benefits and costs of alternative policies as they affect
both today’s population and future generations. The evidence indicates that the gains from
protecting the environment are often high and that the costs in forgone income are modest if
appropriate policies are adopted.

- The forgetted environmental policies aim at

ƒ Changing the behavior of polluters
ƒ Specific environmental problems

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These policies include

a) Policies based on incentives
e.g.: Taxation- government charges polluters according to the amount they pollute.
b) Policies based on quantitative restrictions (command a control policy).
e.g.: Setting emission standards. (I.e. a legal limit on how much pollutant a firm
emits).

Economy Wide Policies and the Environment

Here we point out how different policies are related to and affect the environment.
Trade liberalization:
⇒ This is advised by donors
⇒ It includes, removal of taxes on export, tariffs etc.
- This results in higher competition, and in order to remain in the country, factories
have to increase product, w/c intern results in higher pollutions.
- It also encourages exports, especially NR for LDCS.
Price liberalization:
⇒ This includes removal of price control, removal of subsidy.
This was advocated on the ground that it increases efficiency. Subsidy, on the other
hand, leads to misallocation of resources. But subsidy on kerosene for instance
encourages people to buy and use it. This decreases the pressure on fire wood as a
source of energy which decreases reforestation.
Exchange Rate Reform:
E.g. Devaluation: discourage import and encourages export (because when you
devalue the domestic currency exporters may get more money from an export of a
dollar item). This, (especially for LDCS,) encourages export of NR – it may lead to
deforestation.
Institutional reforms:
• Privatization:- this is transfer of some resources which were owned by the
state this ↑ Production → ↑ waste product.
• Fiscal reform:- this is change in taxation. ↓ Aggregate tax →encourage more
production → farmers may have an incentive to clear the forest.

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• Financial liberalization:- this includes changes in interest rate. ↑i→↓I

(industrialization) →↑pollution.
• Land reform: this is change of properly right from state to the private.

Attachment: (From ETV)

Drought → Deforestation → Drought
Uses of the forest:
- Protecting the ecosystem
- Balancing temp
- Home for wild life
- Drops (40% of medicine is from plants)
- Source of energy
- Recreational use
- Source of good
- Source of income.
- Brazil owns 65% of Amazon forest but 36% of total deforestation is in Brazil?
- Congo, has the largest forest coverage in Africa.
Ethiopian cases
- In early 19th c, 35% of the country is covered with dense forest. ⇒ 42 mill. Hectare.
- In early 1950’s only 16% of the land was loved by dense forest ⇒ 19-mill lecture.
Around 1980’s the figure is reduced to 3.6% ⇒ 4 mill Hectare.
- As a result, Ethiopia annually lose 3.5 million tone of fertile land. X (S. Africa lose
300-400 tone of …)
From the 19th c, world temp ↑ by 0.4 to 0.8 rainfall dedine by 20 to 49%
* One hectare forest absorbs 20% of carbon dioxide.
Causes
Major: high Populn → dd of arable lend as source of income.
Others: *↑ Top →dd of grazing land → deforestation
* Ill managed grazing system
* Lack of investor due to lack of market and lack of attention

Arba Minch University, Department of Economics 21 ©tefedha, 2006