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Human Development in the Era of Globalization

Essays in Honor of Keith B. Griffin

Edited by James K. Boyce, Stephen Cullenberg, Prasanta K. Pattanaik and Robert Pollin

Honoring Keith Griffin’s more than 40 years of fundamental contributions to the discipline of economics, the papers in this volume reflect his deep commitment to advancing the well-being of the world’s poor majority and his unflinching willingness to question conventional wisdom as to how this should be done.
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Chapter 9: Environment, Poverty and Development

Charles Perrings


* Charles Perrings The problem The Brundtland Report supported the notion that there are close causal links between environmental change and poverty, both within and between generations. This reflected existing evidence of a correlation between poverty and accelerating environmental degradation in many countries, especially in SubSaharan Africa. Since that time, considerable effort has been committed to uncovering the microeconomic connections between poverty, resource degradation and population growth. In two seminal studies, Dasgupta (1993, 2001) has explored the connection between poverty, fertility decisions and environmental change. Others have focused on the connection between poverty and discount rates (Perrings, 1989; Holden et al., 1998), poverty and savings or investment rates (Bartolini and Bonatti, 2002), or poverty and institutional conditions (Lopez, 1992; Heath and Binswanger, 1996). The empirical evidence is however ambiguous. While poverty appears to be positively correlated with environmental degradation in some cases, it does not in others (Ekborn and Bojo, 1999; Duraiappah, 1996; Markandya, 2000, 2002). This chapter reconsiders the relation between poverty and environmental resources, noting that the stock of assets includes not only produced capital, but also natural or environmental capital. Most existing measures of capital neglect the latter. The most inclusive of all System of Natural Accents (SNA) measures, net national product (NNP), still excludes depreciation of both human and natural capital along with transboundary environmental flows. One attempt to capture at least the first of these is the genuine savings index (GSI) due to Hamilton and Clemens (1999) and Hamilton (2000). Dasgupta (2001) has developed the same...

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