THE ENVIRONMENT

AND
DEVELOPMENT
Discussion Points
10.1 Environment and Development: The Basic Needs
10.2 Rural Development and the Environment: A Tale of Two Villages

10.3 Global Warming and Climate Change: Scope, Mitigation and Adaptation

10.4 Economic Models of Environment Issues

10.5 Urban Development and the Environment

10.6 The Local and Global Costs of Rain Forest Destruction

10.7 Policy Options in Developing and Developed Countries

What do you think is the connection between
Environment and Development?

Environment and development is crucial, as sustainable development

seeks to balance economic growth with ecological integrity and social
equity. Development often depends on natural resources, but unregulated
growth can lead to environmental degradation, pollution, and climate
change, which disproportionately affect vulnerable communities. A holistic
approach that incorporates environmental considerations—such as resource
management, climate resilience, and biodiversity protection—into
development planning is essential for ensuring that progress meets the
needs of both present and future generations.
4
 ENVIRONMENT AND DEVELOPMENT: BASIC ISSUES
The livelihood of more than half of the economically active population in the
developing world directly depends in whole or part on the environment through
agriculture, as well as animal husbandry, hunting, fishing, forestry, and foraging. This
alone underscores the importance of the seventh Millennium Development Goal: to
“ensure environmental sustainability.” Environmental quality affects, and is affected
by, economic development.
 The interaction between Environmental
In recent years,
poverty and environmental degradation can also
economists focused degradation can lead to a detract from the pace of
on the important self-perpetuating process in economic development by
which, as a result of ignorance imposing high costs on
implications of
or economic necessity, developing
environmental issues communities may countries through health
for the success of inadvertently destroy or related expenses and the
development efforts. exhaust the resources on
reduced productivity of
which they depend for
It is clear that classic resources in which the
survival. Rising pressures on
market failures lead poorest 20% of the poor in
environmental resources in
both rural and urban areas
to too much developing countries can
will experience the
environmental have severe consequences for
consequences of
self-sufficiency, Income
degradation. distribution, and future growth
environmental ills most
potential. acutely
 Severe environmental degradation, due to
population pressures on marginal land, has
led to falling farm productivity and per capita
food production. Since the cultivation of
marginal land is largely the domain of lower-
income groups, the losses are suffered by
those who can least afford them.
Achieving environmentally
sustainable growth is synonymous
with our definition of economic
It is thus very important that the long-term development.
implications of environmental quality be
considered in economic analysis, Why? The
exclusion of environmental costs from
calculations of GNI is a major factor in the
historical absence of environmental
considerations from development economics.
The growing consumption needs of people in developing countries may have global
implications as well. The destruction of the world’s remaining forests, which are concentrated in a
number of highly indebted developing countries will greatly contribute to climate change
caused by global warming through the greenhouse effect.

At the same time, developing countries, particularly those in sub-Saharan Africa and South Asia, are
predicted by climate models to suffer most from future global warming and climate change.

Yet to date, most of the greenhouse gases causing the problem were emitted
in developed countries, creating what may be termed environmental dependence.
Developing nations will be reliant on the developed world to take immediate steps to
reduce emissions and to develop new technologies that will reduce the inevitable NEXT SLIDE
warming and climate change.
1.Sustainable Development and Environmental Accounting
The term sustainability reflects the need for careful balance between economic
growth and environmental preservation. sustainability generally refers to “meeting
the needs of the present generation without compromising the needs of future
generations.” a development path is sustainable “if and only if the stock of overall
capital assets remains constant or rises over time.”
Future growth and overall quality of life are critically dependent on the quality of the
environment. It is important that development policymakers incorporate some form
of environmental accounting into their decisions. For example,if an environmental
resource is damaged or depleted in one area, a resource of equal or greater value
should be regenerated elsewhere.
Overall capital assets are meant to include not only manufactured capital
(machines, factories, roads) but also human capital (knowledge, experience, skills)
and environmental capital (forests, soil quality, rangeland).
The correct measure of sustainable net national income
(NNI*) is the amount that can be consumed without
diminishing the capital stock. Symbolically,
NNI* = GNI - D m - D n

where NNI* = sustainable national income, includes costs of activities

to reverse or avert environmental decay.
Dm = depreciation of manufactured capital assets
Dn = depreciation of environmental capital.

An even better measure but more difficult to calculate:

NNI** = GNI - D m - D n - R - A
R = expenditure required to restore environmental capital (forests, fisheries, etc.)
A = expenditure required to avert destruction of environmental capital (air pollution,
water and soil quality, etc.)
2. Population, Resources, and the Environment

A slowing of population growth rates would help ease many environmental

problems. However, the rate and timing of fertility declines, and thus the eventual
size of world population, will largely depend on the commitment of governments to
creating economic and institutional conditions that are conducive to limiting
fertility.

Increasing population density has contributed to severe and accelerating

degradation of the very resources that these growing populations depend on for
survival. If increases in GNI and food production are slower than population growth,
per capita levels of production and food self-sufficiency will fall.
3.Poverty and the Environment

The poor are usually the main victims of environmental degradation. The poor suffer
more from environmental decay because they must often live on degraded lands
that are less expensive because the rich avoid them. For environmental policies to
succeed in developing countries, they must first address the issues of landlessness,
poverty, and lack of access to institutional resources. Insecure land tenure rights,
lack of credit and inputs, and absence of information often prevent the poor from
making resource-augmenting investments that would help preserve the
environmental assets from which they derive their livelihood.
4.Growth versus the Environment

Evidence indicates that the very poor cause considerable environmental

destruction as a direct result of their poverty. It follows that increasing the economic
status of the poorest group would provide an environmental windfall.
However, as the income and consumption levels of everyone else in the economy
also rise, there is likely to be a net increase in environmental destruction.
At one point, it was widely believed that as per capita incomes increase, pollution
and other forms of environmental degradation would first rise and then fall in an
inverted-U pattern. (This idea is referred to as the environmental Kuznets curve
because Kuznets’s hypothesis that inequality would first rise and then fall as
incomes increased, also traces such an inverted-U pattern.) According to the
theory, as incomes rise, societies will have both the means and the willingness to
pay for environmental protection. Indeed, there is good evidence that this inverted-
U relationship holds for some local pollutants such as particulate matter in the air,
sulfur dioxide, and nitrogen oxides.
5. Rural Development and the Environment

To meet the expanded food needs of rapidly growing populations, it is estimated

that food production in developing countries will have to increase by at least 50% in
the next three decades. Because land in many areas of the developing world is
being unsustainably overexploited by existing populations. In addition, poverty
alleviation efforts must target women’s economic status in particular to reduce their
dependence on unsustainable methods of production. The increased accessibility
of agricultural inputs to small farmers and the introduction (or reintroduction) of
sustainable methods of farming will help create attractive alternatives to current
environmentally destructive patterns of resource use. Land-augmenting
investments can greatly increase the yields from cultivated land and help ensure
future food self-sufficiency.
6. Urban Development and the Environment
Demonstrated that rapid population increases accompanied by heavy rural-urban
migration is leading to unprecedented rates of urban population growth,
sometimes at twice the rate of national growth

7. The Global Environment and Economy

As total world population grows and incomes rise, net global environmental
degradation is likely to worsen. Some trade-offs will be necessary to achieve
sustainable world development. By using resources more efficiently, a number of
environmental changes will actually provide economic savings, and others will be
achieved at relatively minor expense.
8.The Nature and Pace of Greenhouse Gas–Induced
Climate Change
Environmental scientists and economists are increasingly appreciating that the
impacts of global warming are likely to be felt earlier than expected. The developed
countries will have to take the lead and bear most of the costs in funding both
remediation and adaptation in low-income countries, but developing countries will
also need to play a significant role in limiting global warming to safeguard their own
futures.

9. Natural Resource–Based Livelihoods as a Pathway

out of Poverty: Promise and Limitations
more than half of the economically active people in the developing world depend
on agriculture, hunting, fishing, or forestry and is y important to a majority of the
poor and under the right policy conditions can offer a pathway out of poverty
10.The Scope of Domestic-Origin Environmental Degradation:
An Overview
Environmental challenges in developing countries caused by poverty include health
hazards created by lack of access to clean water and sanitation, indoor air pollution
from biomass stoves, and deforestation and severe soil degradation— all most
common where households lack economic alternatives to unsustainable patterns
of living. The principal health and productivity consequences of environmental
damage include water pollution and scarcity, air pollution, solid and hazardous
wastes, soil degradation, deforestation, loss of biodiversity, and global warming–
caused climate change.
It is estimated that over 60% of the poorest people residing in developing countries
struggle for survival on agriculturally marginal soils. This trend is greatly worsened in
some areas of the developing world by strong inequalities in the distribution of land,
which force an ever-growing class of landless workers onto increasingly taxed,
ecologically sensitive soils.
Airborne pollutants also take a high toll on the health of citizens in developing
countries.
The burning of biomass fuels for cooking and the boiling of water create
dangerously high levels of indoor pollution to which 400 million to 700 million
people, mostly women and children, are exposed each year
An environmental problem shared by both the urban and the rural poor is the
prevalence of unhealthy conditions created by the lack of clean water and
sanitation. This in turn contributes greatly to the spread of infectious diseases
which lead to a 9 million child deaths each year.
Airborne pollutants also take a high toll on the health of citizens in developing
countries. Dependence on biomass fuels such as wood, straw, and manure is
closely related to poverty. The burning of biomass fuels for cooking and the boiling
of water create dangerously high levels of indoor pollution.
RURAL DEVELOPMENT AND
THE ENVIRONMENT
A TALE OF TWO VILLAGES
 The Village in
Sub-Saharan Africa
dealing with a tough situation:
unsustainable practices for survival
The residents of the African village, located in a semiarid landscape,
have been warned by international experts that cutting the remaining
trees and cultivating marginal land will only worsen the hardships that
they already endure.
Trees serve many functions, the most important of which is to
provide firewood for cooking.
As a result of the intensification of land use by a rapidly growing
population, the cutting of trees for firewood, and the clearing of
marginal land for cultivation, the soil is increasingly exposed to
destructive environmental forces.
Desertification - The transformation of a region into dry, barren land with
little or no capacity to sustain life without an artificial source of water
Loss of topsoil and declining output result in fewer crops for market and
less food for families.
Women spend long hours collecting firewood, contributing to the cycle of
environmental degradation.
 Most farmers are newcomers, drawn
by government promises of land
and prosperity

A settlement near The public resettlement program, which

distributes property titles to settlers willing

the Amazon
to clear the land, is designed to reduce the
overcrowding of cities and stem the flow of
rural-to-urban migrants.
In contrast to the African village, this
settlement has no shortage of rainfall,
wildlife, or trees. In fact, the forest is an
obstacle for migrant farmers and is
regularly burned to make room for
cultivation.
Though burning the forest may temporarily
provide the landless with a modest source
of income, the land, like 90% of rain forest
soil worldwide, is not very fertile and can
sustain intensive cultivation for only a few
years.
Environmental
Deterioration
in Villages
Economic necessity often forces small farmers to use resources in ways that
guarantee short-term survival but reduce the future productivity of
environmental assets. Unsustainable patterns of living may be imposed by
economic necessity.
In periods of prolonged and severe food shortages, desperately hungry
farmers have been known to eat the seeds with which they would have
planted the next year’s crop, knowingly paving the way for future disaster.
In periods of prolonged and severe food shortages, desperately hungry
farmers have been known to eat the seeds with which they would have
planted the next year’s crop, knowingly paving the way for future disaster.
One immediate result
of this type of
environmental pressure
is SOIL EROSION
Loss of valuable topsoils resulting from overuse of farmland, and
deforestation and consequent flooding of farmland.
This process of environmental degradation leads to persistent declines
in local per capita food production and may eventually lead to
desertification
Another factor in the cycle of rural poverty and
environmental destruction is

DEFORESTATION
The clearing of forested land either for agricultural purposes or for logging and
for use as firewood.
The vast majority of wood cut in the developing world is used as fuel for cooking
Deforestation can lead to a number of environmental maladies that over time
can greatly lower agricultural yields and increase rural hardships
 SCOPE OF THE PROBLEM
In 2007, the Intergovernmental Panel on Climate Change (IPCC)18 released its fourth
assessment report. It concluded that the developing world, particularly the poorest
countries, can expect major consequences from global warming, involving larger and
more severe heat waves, hurricanes, floods from heavy rains, prolonged droughts, losses
of valuable species, and crop and fishing losses.
The IPCC identified four zones highly vulnerable to greenhouse gas–
induced climate change: sub-Saharan Africa because of drying, Asian
megadeltas because of flooding, small islands due to multiple
sensitivities, and the Arctic
Sub-Saharan Africa will be hit particularly hard. The IPCC report
concluded that by 2020, although adaptations would help, and
certain regions such as Ethiopian highlands would gain from
lengthened growing seasons, conditions will already worsen. The
study projected that 75 to 250 million people in Africa will be exposed
to increased “water stress due to climate change” by 2020
In Asia, millions of people live in low-lying areas in the path of
typhoons of expected increasing frequency and intensity or otherwise
at greater risk of ocean or river flooding.
In Latin America, warming was projected to cause further losses of
Amazon forest and biodiversity by midcentury, while agriculture will
be harmed in drier areas.
SCOPE OF THE PROBLEM
The 2006 Stern Review on the Economics of Climate Change
concluded that “the poorest developing countries will be hit
earliest and hardest by climate change, even though they have
contributed little to causing the problem.

As a strategy, the Stern Review suggests establishing a long-

term quantity cap on greenhouse gases in the atmosphere to
guard against environmental catastrophe. This would involve
long-term limits on the amount of greenhouse emissions equal
to a quantity that the earth can absorb. In the short term,
policies could be designed to limit the economic burden if
abatement costs turn out initially to be unexpectedly high.
 Mitigation
Many strategies have been proposed for mitigation of emissions, including development
of “carbon markets,” taxes on carbon,
and subsidies to encourage faster technological progress.
As a policy strategy, the Stern Review suggests establishing a long-term quantity
cap on greenhouse gases in the atmosphere to guard against environmental
catastrophe. This would involve long-term limits on the amount of greenhouse
emissions equal to a quantity that the earth can absorb. In the short term, policies
could be designed to limit the economic burden if abatement costs turn out initially
to be unexpectedly high.
 Mitigation
Policies and mechanisms have been introduced essentially to pay for costs of avoiding
emissions in developing countries
Deforestation in developing countries contributes over 20% of harmful greenhouse gases, in
addition to the losses it causes of valuable biodiversity and the environmental services of
cleaning air and water. Helping developing countries reduce greenhouse gas emissions has
emerged as an important dimension for foreign aid
Indeed, the need to develop and implement a mechanism for paying developing countries
for forest preservation was agreed at the 2007 Bali negotiations on climate change and was
to have been finalized at the 2009 Copenhagen summit. The resulting Reducing Emissions
from Deforestation and Forest Degradation (REDD) mechanism, along with enhanced
incentives for reestablishing and maintaining forests with engagement of indigenous
communities that depend on them (known as REDD-plus), became part of the December
2009 Copenhagen accord.
ADAPTATION
A significant amount of climate change
is now essentially inevitable. Thus
adaptation to climate change in
developing countries is critical for
protecting livelihoods and continuing to
make development gains.
The UNDP has defined climate change
Cubao Narrow
adaptation as “a process by which
strategies to moderate, cope with and
take advantage of the consequences of
climatic events are enhanced, developed
and implemented.”
ADAPTATION
Adaptation takes place in two
forms: “planned” (or policy)
adaptation undertaken by
governments and “autonomous”
(or private) adaptation undertaken
Cubao Narrow

directly by households, farms, and

firms in response to climate
change they experience or
anticipate.
ADAPTATION
As suggested by Arun Agrawal and Nicolas Perrin,
depending on how risks are reduced or avoided,
five classes of adaptation strategies can be
identified. Mobility avoids risks across space.
Storage reduces risks experienced over time.
Diversification reduces risks across assets owned
by households or collectives. Communal pooling
Cubao Narrow
involves joint ownership of assets and resources;
sharing of wealth, labor, or incomes from particular
activities across households or mobilization and use
of resources held collectively during time of
scarcity. Exchange can substitute for the first
four classes of adaptation strategies
ECONOMIC MODELS
ENVIRONMENTAL
PRIVATELY OWNED RESOURCES

1. Economic Models of Environment

Neoclassical theory is used to address market failures related to
environmental externalities, with a focus on efficient resource allocation.
Market failures lead to inefficiencies that can be corrected using
neoclassical principles.

2. Optimal Consumptions of Resources

The optimal consumption of a natural resource occurs when the total net
benefits to society are maximized.
This is achieved when the marginal cost of producing or extracting an
additional unit equals its marginal benefit to consumers (point Q*).
PRIVATELY OWNED RESOURCES

3. Market Dynamics
In a perfectly competitive market, the “invisible hand” ensures that the
equilibrium quantity (Q*) is produced.
The upward-sloping marginal cost curve indicates increasing extraction
costs as resources become scarcer.
4. Scarcity and Rationing
Scarcity rents can arise when a resource is limited over time, allowing
owners to charge higher prices by withholding some supply.
The market price reflects the present value of marginal net benefits,
creating an incentive for efficient resource allocation.
PRIVATELY OWNED RESOURCES

5. Conditions for Efficient Resource Allocation

Universality: All resources should be privately owned.
Exclusivity: Owners must be able to exclude others from using their
resources.
Transferability: Owners should be able to sell resources when desired.
Enforceability: The distribution of benefits must be legally enforceable.
6. Implications of Property Rights
If the four conditions are not met, inefficiencies in resource allocation
can occur.
To correct misallocation, efforts should focus on eliminating market
distortions.
 PRIVATELY OWNED RESOURCES
7. Models of Inefficiency
Various models exist to explain inefficiencies and evaluate alternative solutions arising from
imperfections in property markets.

Common Property Resources:

1. Definition and Challenges:
• Common property resources (e.g., arable land) are publicly owned and accessible to all, leading to
competition that erodes potential profits or scarcity rents.
• Neoclassical theory suggests that without scarcity rents, inefficiencies in resource allocation will
arise.

2. Resource Allocation Dynamics:

• In a privately held land scenario, landowners will hire labor until the marginal product equals the
market wage (point L*).
• As more workers are added, diminishing returns reduce the average product, leading to a situation
where hiring additional workers results in costs exceeding their marginal productivity.
Common Property Resources:

3. Tragedy of the Commons

• Under common ownership, workers can fully benefit from their output until too many workers lower
the average product to the wage level (point Le).
• When marginal product falls below the wage, social welfare declines, illustrating the “tragedy of the
commons” where overuse leads to resource depletion without generating scarcity rents.

4. Implications of Common Property

• Privatization of resources can lead to increased overall welfare and more efficient resource allocation.
• Neoclassical models prioritize efficiency over equity, neglecting income distribution and the
concentration of resource ownership.

5. Inefficiencies in Developing Countries

• Family farmers may hesitate to invest in land improvements due to insecurity of tenure and lack of
access to credit.
• Providing extended tenure rights could enhance productivity and investment in land.
Common Property Resources:

6. Property Rights Considerations

• The challenge remains in determining who should obtain land titles if privatization is pursued.
• Simple auctions for publicly owned land may not align with development goals.

7. Successful Management of Common Resources

• Elinor Ostrom’s research highlights that under certain conditions, communities can effectively manage
common property resources.
• Successful management is often based on stable social norms and rules that encourage cooperation
among resource users.
• Continuous vigilance and support are necessary as development can create incentives for individuals
to exploit common resources for personal gain
 Public Goods and Bads:

1. Externalities and Public Goods/Bads

• An externality occurs when an individual’s actions affect others without compensation, leading to
market inefficiencies.
• A public good benefits everyone without diminishing in availability (e.g., clean air), while a public bad
negatively affects others without being exhausted (e.g., air or water pollution).

2. Overproduction of Public Bads

• Because individuals do not bear the full costs of public bads, there is often excessive production of
these goods, resulting in socially nonoptimal outcomes.

3. Example: Environmental Degradation

• Deforestation illustrates the concept of a public bad, causing issues like erosion, loss of groundwater,
and pollution, which harm the wider community.
• Conversely, environmental conservation (e.g., tree preservation) acts as a public good, benefiting all.
 Public Goods and Bads:

4. Demand for Public Goods

• Aggregate demand for public goods is calculated by vertically summing individual demand curves,
unlike private goods, where horizontal summation is used.
• This approach captures the total benefits to society from each unit of a public good.

5. Marginal Costs of Preservation

• The marginal cost of preserving public goods includes maintenance costs and opportunity costs (e.g.,
potential uses of trees for firewood or lumber).

6. Socially Optimal Quantity

• The optimal level of public goods (like trees) is determined at the intersection of the aggregate demand
curve and the marginal cost (MC) curve, maximizing total net benefits to society.
Limitations of the Public-Good Framework:
1. Pricing Mechanism Challenges
• Determining the appropriate prices for public goods is problematic.
• Individuals lack incentive to reveal their true benefit from a public good, leading to the free-rider
phenomenon, where some benefit without contributing.

2. Government Information Deficiencies

• Governments may address market inefficiencies but struggle to achieve perfect resource allocation
due to limited information.
• Collecting fees to fund public goods, such as forest preservation, is often impractical.

3. Challenges in Development Contexts

• In developing regions, taxing impoverished populations with little cash income makes fee collection
nearly impossible.
• Collecting payments from subsistence users (e.g., those cutting trees for basic needs) is also
challenging.

4. Neoclassical Theory’s Utility

• Despite these challenges, neoclassical theory helps explain how market failures occur and how
inefficiencies in highly commercialized economies can be mitigated.
URBAN DEVELOPMENT AND
THE ENVIRONMENT
 Environmental Problems of Urban Slums

1. Living Conditions
• Urban slum residents face challenges similar to those in rural poverty, including long work hours,
uncertain income, and tough choices between basic needs like nutrition and medical care.
• Despite higher average urban incomes, the poorest often endure worse environmental conditions.

2. Health Threats
• Pollutants are prevalent in urban slums, affecting health inside and outside homes.
• Poor cooking methods (e.g., burning fuels) expose women and children to harmful smoke, leading to
severe respiratory issues, equivalent to smoking several packs of cigarettes daily.
• Many children miss school to assist in household work, increasing their health risks.

3. Infectious Diseases
• Contaminated food and water lead to high rates of diarrhea, particularly among young children,
resulting in malnutrition and increased vulnerability to other diseases.
• Families often lack sufficient funds for medical treatment, leading to high opportunity costs and
limited access to care.
 Environmental Problems of Urban Slums

4. Gender Disparities
• Medical attention often prioritizes boys, reflecting societal norms that value male contributions to
household income, affecting survival rates.

5. Environmental Exposures
• Children in slums are also at risk from air pollution due to vehicle emissions and industrial discharges,
with high levels of atmospheric lead present due to lack of emission controls.

6. Impact on Education
• Exposure to environmental hazards and frequent illness hinder children’s ability to perform
academically, perpetuating cycles of poverty.

7. Need for Solutions

Addressing environmental issues in urban slums is crucial for the Millennium Development Goals.
• Solutions require understanding the complex interactions of various factors, categorized into
urbanization/industrial growth issues and community-wide problems exacerbated by urban congestion.
 Industrialization and Urban Air Pollution

1. Urbanization and Environmental Impact

• Urbanization and industrialization in developing countries initially lead to rising incomes but also
worsen environmental conditions, particularly air quality.
• This phenomenon is often represented by the Environmental Kuznets Curve, which suggests that
pollution increases with income up to a point, after which it decreases as nations develop and can afford
cleaner technologies.

2. Sources of Air Pollution

• Major contributors to urban air pollution include energy consumption, vehicular emissions, and
industrial production.
• Industrial processes generate waste, often disposed of untreated in the environment, increasing
pollution levels.
 Industrialization and Urban Air Pollution

3. Externalities and Social Costs

• Pollution leads to external costs not reflected in market prices. The market equilibrium price often
underestimates the true social cost of pollution.
• Implementing a pollution tax can align private costs with social costs, raising prices and reducing
consumption to a socially optimal level.

4. Toxic Emissions and Health Risks

• High levels of pollutants pose severe health risks, especially to vulnerable populations like children.
• The World Health Organization reports that billions of people live in urban areas with unsafe levels of
air pollution.

5. Case Studies
• In Bangkok, high airborne lead levels significantly lowered children’s IQs.
• Mexico City reported high blood lead levels in 70% of children, illustrating the severe impact of urban
pollution on public health.
 Problems of Congestion, Clean Water, and Sanitation

1. Health Threats from Water and Sanitation

• The most critical environmental issues for urban poor health in developing countries are lack of access
to clean water and inadequate sanitation.
• As of 2009, over a billion people lacked access to improved water sources, and 1.5 billion lacked
improved sanitation facilities.

2. Misleading Urban Statistics

• Urban access statistics can be deceptive; many residents are counted as having access if they share a
single faucet with a large number of people, often at significant distances from their homes.
• Consequently, many poor urban dwellers resort to collecting drinking water from polluted sources,
such as rivers and canals.

3. Crowding and Disease Spread

• Overcrowding in urban slums intensifies exposure to poor sanitary conditions, including raw sewage
and garbage, leading to higher disease transmission rates.
• Death rates in urban slums can exceed those in rural areas, despite rural areas generally having fewer
services.
 Problems of Congestion, Clean Water, and Sanitation

4. Economic and Health Costs

• The lack of sanitation and clean water results in significant health and economic costs, impeding
improvements in living standards.
• Children with access to adequate sanitation facilities are 60% less likely to die from diarrhea compared
to those without.

5. Chronic Illness and Poverty

• Chronic health issues stemming from poor sanitation and water quality contribute to poverty by
affecting nutrition, school performance, and productivity, creating a cycle of disadvantage.

6. Inequitable Access
• Higher-income households generally have access to adequate water and sanitation services, while the
poorest often lack these due to illegal housing status, which disqualifies them from government
services.
• As a result, the poor frequently purchase contaminated water from vendors at much higher costs than
piped water.
 Problems of Congestion, Clean Water, and Sanitation

7. Infrastructure Investment Delays

• Delayed investments in water and sanitation infrastructure lead to higher future costs.
• Overreliance on private wells can deplete groundwater supplies, causing land subsidence and flooding
in cities like Bangkok and Mexico City.

8. Contamination and Economic Impacts

• Contaminated water sources threaten public health and can impede foreign exchange earnings by
preventing agricultural exports due to health standard violations in developed countries.

9. Cost of Preventive Measures

• Preventive measures to improve water and sanitation access are often more cost-effective than
dealing with the consequences of neglecting these issues.
THE LOCAL AND GLOBAL
COSTS OF RAIN FOREST
DESTRUCTION
 RAIN FOREST
DESTRUCTION
Changes in patterns of land use in the developing
countries currently make their largest contribution
to global concentrations of greenhouse gases.

Greenhouse gases - Gases that trap heat within the

earth’s atmosphere and can thus contribute to
global warming.
Clearing rain forests reduces the
environment’s absorptive capacity for CO2. In
addition, accelerating extinctions pose a
dangerous threat to biodiversity, with an
estimated 12% of the world’s bird species,
24% of mammal species, and 30% of fish
species vulnerable or in immediate danger of
extinction, largely in rain forest areas.40

Biodiversity - The variety of life forms

within an ecosystem
Rain forest preservation provides a public good. Because the political and
economic costs of preserving the rain forests are often masked or ambiguous,
maintaining a forest may appear to be an almost costless venture. In fact, because
of the important roles that rain forests play in the domestic economies of many
developing nations, the true costs of preserving all remaining forests may be
extraordinarily high.
It is therefore unreasonable to assume that the few and often
still highly indebted countries that contain the majority of
remaining rain forests should be responsible for single-
handedly providing this global public good.
Global public good
A public good, whose benefits reach
across national borders and
population groups.
POLITICAL OPTIONS IN
DEVELOPING AND
DEVELOPED COUNTRIES
 What Developing Countries Can Do
A range of policy options is available for governments in developing countries. Seven stand
out:
(1) proper resource pricing,
(2) community involvement,
(3) clearer property rights and resource ownership,
(4) improving economic alternatives for the poor,
(5) raising the economic status of women,
(6) policies to abate industrial emissions, and
(7) taking a proactive stance toward adapting to climate change
 How Developed Countries Can Help
Developing Countries
Industrial countries can help developing nations in their efforts to improve the
environment of development in three areas:
Debt-for-nature swap - The
(1) trade liberalization,
exchange of foreign debt held by
(2) debt relief, and
an organization for a larger
(3) financial and technological assistance quantity of domestic debt that is
used to finance the preservation of
a natural resource or environment
in the debtor country.
 HH
TTTHA
AN
AN
NK
KKY
YO
YO
OU
U!
U!!
 SSE
EN
EN
NT
TE
TD
E
EDDB
BY
BY
Y:::
RR
PPPRE
EES Claire Curato
Chelsea Libando
Shanah Gomez
Isaiah John Odrona