IV. Analytical extensions and policy issues

1. IV-B IV. Analytical extensions and policy issues

2. IV-B Deforestation and soil depletion • Large economic magnitudes in SE Asia • Disproportionately large involvement of the poorest households • Strong spatial elements: uplands & forests • Institutional issues • ‘Open access’ to forests • Free disposal of soil runoff and other pollutants • Economy-wide ‘drivers’ • Prices and policies • Intersectoral and interregional labor markets

3. IV-B Subwatersheds of Upper Manupali River, Bukidnon Source: Deutsch et al. 2001

4. IV-B E-coli counts by sub-watershed Source: Deutsch et al. 2001

5. IV-B Source: Deutsch et al. 2001

6. IV-B Can local actions and policies solve watershed problems? • Local actions -- by households and governments -- are certainly necessary • But not sufficient, when institutions and markets have external drivers • Land and forest tenure laws may be weak/unenforced • Farm prices set in national or global markets

7. IV-B A stylized upland-lowland model • Lowland economy: • Manufacturing and ‘lowland food’ production • Upland economy: • ‘upland food’ production and non-food crop • Land produced by forest clearing • Interregional linkages: • Labor market • Food market (food is non-traded)

8. IV-B

9. IV-B

10. IV-B

11. IV-B

12. IV-B

13. IV-B

14. IV-B

15. IV-B

16. IV-B

17. IV-B

18. IV-B

19. IV-B Concluding remarks • U-L model combines two ‘small’ models to obtain richer specification and results • Predictions of comparative static effects depend on key parameter values • Can define different economic ‘types’ based on alternative parameter sets (see OEE Chapter 3) • Empirical and micro research should guide structural and parameter assumptions.