Journal
PROCEEDINGS OF THE NATIONAL ACADEMY OF SCIENCES OF THE UNITED STATES OF AMERICA
Volume 116, Issue 14, Pages 6737-6742Publisher
NATL ACAD SCIENCES
DOI: 10.1073/pnas.1816093116
Keywords
cash transfers; natural resources; poverty; bioeconomic models; CGE
Categories
Funding
- David and Lucile Packard Foundation [2014-40350]
- World Bank Global Environmental Facility Capturing Coral Reef and Related Ecosystem Services project
- National Institute of Food and Agriculture
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A new generation of poverty programs around the globe provides cash payments to poor and vulnerable households. Studies show that these social cash transfer programs create income and welfare benefits for poor households and the local economies where they live. However, this may come at the cost of damaging local environments if cash payments stimulate food production that conflicts with natural resource conservation. Evaluations of the economic impacts of poverty programs do not account for the welfare consequences of environmental impacts, which are potentially large for poor communities closely tied to natural resources. We use an ex-ante policy simulation tool, a bioeconomic local computable general equilibrium model parameterized with microsurvey data, to analyze the expected welfare consequences of environmental degradation caused by a cash transfer program. For a Philippine fishing community that is a net importer of fish, we show that a government cash transfer program initially increases real incomes for all households. However, increased demand for fish leads to a decline in the local fish stock that reduces program benefits. Household groups experience declines in real income benefits of 2-63%, with fishing households suffering the largest. declines. Impacts on local fish stocks depend on the extent to which markets link fishing communities to outside regions through trade. Greater market integration can mitigate the fish stock decline, but this reduces the local income benefits of cash transfers.
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