The Open Economy and the Environment

The Open Economy and the Environment

Development, Trade and Resources in Asia

Ian Coxhead and Sisira Jayasuriya

The Open Economy and the Environment asks what globalization means for environmental quality and the use of natural resources in developing economies. The authors develop theoretical models that trace the effects of trade and trade liberalization on sectoral resource allocation, factor returns, income and welfare, as well as incentives to clear forest and degrade agricultural land. The models reflect important developing economy features including spatial distinctions between uplands and lowlands, open-access forest resources and the special features of domestic food markets. The authors also analyze representative economy submodels, explore empirical cases based on applied general equilibrium models of Asian economies, and examine welfare and environmental implications of migration, trade liberalization and development policy.

Chapter 6: Protection, Food Policy and the Environment in the Philippines

Ian Coxhead and Sisira Jayasuriya

Subjects: development studies, development economics, economics and finance, development economics, environmental economics, environment, environmental economics


6.1 INTRODUCTION In this chapter we study interactions between policies, economic growth and the environment in the Philippines. We focus on deforestation and land degradation issues, and also on the causes and consequences of interregional migration and the relative price movements that help to drive natural resource allocation decisions. We also consider some urban/industrial pollution issues. In the following sections, we first review recent economic and environmental trends (section 6.2). Next, in section 6.3 we examine specific recent economic trends and policy initiatives that have a bearing on environment and development, in particular the effects of partial trade liberalization, and those of the Green Revolution in a policydistorted economy. Using an AGE model of the Philippine economy (section 64), we present some simulation results indicating likely trends in economic and environmental variables given trade liberalization or technical progress in agriculture. Section 6.5 presents a brief conclusion. 6.2 THE STATE OF THE PHILIPPINE ENVIRONMENT1 The Philippines’ environment and natural resource sector is generally classified as comprising five major interlinked, and sometimes overlapping, ecosystems: 1. 2. 3. 4. 5. forest and upland; agriculture/cropland; fresh water; coastal and marine; and urban/industrial.2 Some of these ecosystems include significant mineral and other natural resources; others also host a rich variety of flora and fauna. The country is 141 142 The open economy and the environment home to 5 per cent of the world’s flora, 6 per cent of the birds, and 4 per cent of the mammals; 67 per cent of...

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