The Philippines is inherently vulnerable to adverse natural events of extreme intensity purely based on its geographic location.1 The warm western Pacific waters, normally around 28°C, contribute to the formation of typhoons, 18–20 of which reach the Philippines each year on average. Cagayan Valley (Region 2), Central Luzon (Region 3), and the Cordillera Administrative Region (CAR) are particularly vulnerable, averaging about seven to nine typhoons per year (Figure 8.1). Flooding occurs in a number of regions, the Western Visayas registering the highest incidence. The Philippines also rests on the Pacific “Ring of Fire”, where most of the earth's volcanic eruptions and earthquakes occur. Geophysical events, such as earthquakes and tsunamis, occur with regularity, albeit at long intervals. The Bicol Region, home of the active Mayon Volcano, experienced the greatest number of volcanic eruptions during 1991–2006. Earthquakes of moderate and high magnitude occur most frequently in the Central Visayas and Bicol regions (Figure 8.1).

Climate projections for the Philippines are similar to those in many other parts of the world (Chapters 2 and 4, this volume). Using the Intergovernmental Panel on Climate Change (IPCC) for the “A1B scenario” most relevant to the Philippines, Cinco et al. (2013) projected that mean yearly temperatures will rise between 1.9°C and 2.2°C by 2050, over baseline levels of between 25.5°C and 27.6°C (derived as averages of minimum and maximum temperatures for the 1971–2000 period). Increasing rainfall concentration and mean rainfall levels indicate that the wet seasons of June–August and September–November will become wetter in Luzon and Visayas towards 2050, yet higher rainfall concentrations combined with higher temperatures are likely to increase moisture stress in the dry season. In particular, it is expected that the frequency of damaging storms will increase. Although disputed by some (Cruz et al. 2007), evidence also suggests that the frequency of droughts will increase (Miyan 2015). One implication of these changes is that farmers’ experience of the frequency, duration, strength, and timing of rainfall and the frequency of droughts will be less reliable than previously; hence, the accuracy of their subjective decision-making processes will decline, causing their level of risk to rise. Past experience will become — and is already becoming — less useful as a predictor of future experience. The bottom line is that risk and uncertainty facing farmers are increasing.

This chapter deals with promoting the common good through better energy, resource and environmental policies as well as improved management of natural disaster risks, including climate change. Increasing gross domestic product (GDP) will be insufficient to meet the aspirations of the Philippine people for higher levels of living, inasmuch as GDP does not measure welfare. Largely because of the omission of these elements, we begin with a discussion of green accounting — the method of extending national income accounting to include the degradation of the environment and the depletion of natural resources.

As we discuss in the second part, comprehensive national income accounting can be further extended to include natural disasters and other shocks to the ecological–economic system. Even policy distortions can be accounted for by including them as constraints to the system. Thus, environmental resource conservation, disaster preparedness and policy reform all become potential sources of welfare growth. The later section deals with the mission of sustainable development, particularly how the Sustainable Development Goals (SDGs) relate to the mission of improving the welfare of Filipinos.

Increasing Levels of Living in the Face of Environmental Degradation and Resource Depletion

Stewardship of natural resources and the environment should not be treated as a separate objective from management of the economy (World Commission on Environment and Development 1987). The fundamental premise of sustainable income and green accounting, which have a long history in the Philippines and other countries, is that nature and the economy are part of the same system (the environomy) as shown in Figure 6.1. And one system requires one unifying measure of performance.

To convert the most common indicator of the size of an economy, GDP, into a measure of national well-being, several adjustments must be made. It is well known that GDP overestimates public welfare by failing to deduct depreciation — that portion of investment that simply replaces capital which has worn out or become obsolete. Deducting capital depreciation from GDP yields net domestic product (NDP). And since income is a better measure of welfare than production, we need to subtract the income earned in the Philippines by foreigners, add income earned by Philippine citizens abroad, and add remittances to the Philippines by non-citizens.

ABSTRACT

Sustainability science emerged from the felt need to employ appropriate science and technology in the pursuit of sustainable development. The existing sustainability science agenda emphasises the importance of using a systems approach, stressing the many interactions between natural and human systems. Despite its inertia and avowed purpose of being practical and feasible, however, sustainability science has yet to embrace the policy sciences. In pursuit of this objective, we first trace the history of thought of sustainable development, including its definition and operationalisation.

Sustainable development encompasses sustainable growth and dynamically efficient development patterns. Two promising approaches to sustainable growth are contrasted. Negative sustainability counsels policy makers to offset any decrease in natural capital with at least the same value of net investment in produced capital. This sustainability criterion cannot determine how and how much to conserve natural capital nor how much to build up human and productive capital. Indeed, there is ambiguity regarding what prices to use in summing the values of diverse capital assets. To fill the void, we offer positive sustainability, which maximises intertemporal welfare while incorporating system linkages, dynamic efficiency, and intertemporal equity. This provides a solid and operational framework for sustainable growth. In addition, sustainable development must include the lessons from development theory, including how optimal patterns of production, consumption, and trade change with standards of living.

However, like Tolstoy's unhappy families, there are many pathways to unsustainable development. We describe two broad causes of unsustainable growth – rent-seeking and preservationism. We also illustrate patterns of unsustainable development by drawing on lessons from the Philippines. While specialisation is the engine of growth, fragmentation is the anchor. In addition to natural fragmentation from natural trade barriers in an island archipelago, rent-seeking promotes economic stagnation. Low economic growth in turn exacerbates population pressure and environmental degradation – the vicious circle of unsustainable development.

FROM SUSTAINABLE DEVELOPMENT TO SUSTAINABILITY SCIENCE

As discussed in Chapter 1, there are many ambiguous, conflicting, and nonoperational images and definitions of sustainable development. Starting with Barbier's (1987) Venn diagram, there are now 178 images and possibly as many as 5,000 definitions. How then can sustainability be scientific? Is the mission impossible? In this final chapter, which draws from the 13 chapters that precede it, we suggest that sustainability science is possible and necessary to effectively deal with pressing global challenges including water scarcity, climate change, and poverty.

As detailed in Chapter 3, sustainability science not only adapts scientific knowledge to specific problems but also develops new methods for dealing with the dynamic, spatial, behavioural, and interactive complications of resource systems under pressure from humankind. By focusing on specific resource management and/or policy questions and interacting with stakeholders, research is organised to inform real-word decision-making.

To deliver on this promise, we need a policy framework built on a meaningful and operational concept of sustainable development and methods to adapt policy science to problems involving resource systems. As reviewed in Chapter 1, sustainable development literature that is compatible with policy science typically abstracts from sectoral priorities and focuses on the problem of sustainable growth.

Two promising approaches to sustainable growth were compared. Negative sustainability enjoins policy makers to conserve natural capital in accordance with dynamic efficiency and to invest in productive capital such that genuine investment is positive or at least zero. This sustainability criterion is negative in the sense of precluding what not to do. There are no policy principles to guide how and how much to conserve natural capital, nor how much to build up human and productive capital. Indeed there is ambiguity about which prices to use in summing the values of diverse capital assets.

An alternative to negative sustainability is positive sustainability, which maximises intertemporal welfare while incorporating interlinkages within the total economic and environmental system (environomy), dynamic efficiency, and intertemporal neutrality. The framework provides conditions for determining optimal depletion of natural capital and growth of produced capital.

ABSTRACT

We outline an approach for integrating sustainability science with policy science. We briefly review the types of policy analysis that need to be adapted to questions of environmental resource management and develop two of them in detail – optimisation and valuation for benefit-cost analysis.

Optimal resource management has to take into account the interactions with the surrounding ecosystem. Without well-established markets for these impacts, externality problems arise, leading to inefficient resource management. Traditional resource economics may not be capable of explaining the problem of resource management with interacting stocks, especially where the stock of an extractive resource impacts the stock of a second resource.

In our first application, groundwater extraction reduces the aquifer stock, thus decreasing submarine groundwater discharge (SGD) and impairing the health of the nearshore marine ecosystem. We show analytically that incorporating the external effects on nearshore resources increases the optimal sustainable steady-state level of groundwater head. Numerical simulations are illustrated using data from the west coast of the Island of Hawaiʿi. Two different approaches for incorporating the effects of SGD on marine algae are examined. We find that including algae's market value directly in the objective function calls for a slightly lower water extraction rate in all periods. If a minimum constraint is placed on the stock of the keystone species, greater conservation may be indicated. The constraint also results in non-monotonic optimal paths of water extraction, head level, and water price.

Our next application involves the beneficial effects of wetlands on the fishery in Bandon Bay, Thailand. We apply a partial equilibrium analysis to determine the effects of changes in mangrove area on off-shore fishery production. Under an open-access fishery scenario, depleting one square kilometer of mangrove area decreases the fish stock in the area by around 10.62 percent, and decreases the fishery production by 10.44 percent. If the fishery is efficiently managed, welfare losses of mangrove conversion are higher.

INTRODUCTION

This chapter assesses the nature and degree of environmental degradation and resource depletion in China and their relationship to economic activity and environmental policies. We describe regulatory and other policies and consider their political economy determinants. Inasmuch as this objective can only be partially achieved, we hope to contribute to a research agenda for environmental and resource economics in China.

Claims have been made that the damage to China's environment is significant and has had a negative influence on economic growth. Critics argue that uncontrolled waste of resources and environmental degradation have offset much of China's economic growth over the past twenty-five years. Accordingly, a secondary objective of this chapter is to address whether environmentally augmented accounting substantially reduces the magnitude of China's economic gains.

We begin by reviewing evidence on air and water pollution, including environmental Kuznets curves (EKCs) for three major air pollutants, in the section on “Pollution.” “Natural Capital” follows with an overview of the country's natural resources, and how their quality and quantity have changed over time. In the section on the “Natural Resources Kuznets Curve,” we develop a theory regarding a country's natural resource Kuznets curve and apply it to empirical data on the value of China's natural resource degradation over a thirty-year period. To formally address the question of China's growth rate, we extend green accounting theory to facilitate a comparison of conventionally measured net national product (NNP) and green NNP (GNNP).

INTRODUCTION

At the 1995 UN Social Summit, 117 countries pledged to adopt programmes to rid themselves of extreme poverty; the UN Millennium Summit agreed to halve global poverty by 2015. According to the International Fund for Agricultural Development (IFAD 2001), these targets are not being met. Thirty million people a year should have been released from poverty for the 2015 target to be met. But, says IFAD, the figure is no more than 10 million a year, a rate of progress that makes the target unattainable. Since 75 per cent of extreme poverty occurs in rural areas, IFAD suggests that the whole question be looked at in the context of the rural world. “Current development efforts grossly and increasingly neglect agriculture and rural people,” says Dr. Michael Lipton, Director of the Poverty Research Unit at Sussex University, who co-authored the report. Between 1987 and 1998, for instance, agricultural aid to low-income or least developed countries, which account for over 85 per cent of the world's poor, shrank by two-thirds.

Since the 1980s, however, the economics of agricultural development has arguably been in decline. Donor agencies have often found agricultural development contrary to the precepts of the Washington Consensus and of even less worth in the face of low agricultural prices. Economists often leave agricultural issues to the agricultural economics profession. But development is not a high status enterprise in the departments of Agricultural and Resource Economics. This leaves agricultural development twice marginalised in the academe, and non-academic institutions are hard-pressed to fill the void, despite the heroic efforts of a few stalwart crusaders and organisations. The following review of agricultural development thinking is offered in the spirit that understanding of previous thinking may help to identify new frontiers that today's researchers will find suitably promising and challenging.

FADS AND FANCIES IN THE ECONOMICS OF AGRICULTURAL DEVELOPMENT

The economic development literature has gone through recognisable stages of fad and fancy. The 1950s and early 1960s was dominated by the planning mentality. The rest of the 1960s witnessed an era of dualism wherein the import protection of industry was justified by asserting that the marginal product of labour in agriculture was relatively low (Ranis and Fei 1961). The 1970s was the “growth with equity” decade.