Poverty and the Environment
Understanding Linkages at the Household Level
Kirk HamiltonThe World Bank
Motivation
Are poverty reduction and environmental management mutually reinforcing?The development community has invested a
lot in both of these Does environmental management
contribute to poverty reduction?Poverty has multiple dimensions, including
health status, income and consumption
The macro picture
Low income countries
High income countries
Share of natural resources in total wealth %
29% 2%
Population per sq. km. of forest 324 104
Deforestation rate (% per year) 0.5% -0.1%
Access to improved water source (% of population)
75% 99%
Access to improved sanitation (% of population)
36% ..
Under-5 mortality per 1000 live births 122 7
Understanding the micro level
Concentrating on the household level gives direct evidence of environmental impacts on human welfare
Understanding impacts implies that interventions and policy reforms can be better designed
Poverty-Environment Linkages at the Household Level
Returns to Assets
Shocks
Natural Capital
Human Capital
HealthProduced
Capital
En
vironmental
Change
Po
licy and other
changes
HouseholdWelfare
HouseholdAssets
Poverty-Environment Linkages at the Household Level
Returns to Assets
Shocks
Natural Capital
Human Capital
HealthProduced
Capital
En
vironmental
Change
Po
licy and other
changes
HouseholdWelfare
HouseholdAssets
Environmental income
Environmental income as percent of total income
Resource-rich areas
Resource-poor/ low-
access areas
Average
Study Poor Rich Poor Rich Poor Rich
Jodha (1986) 9–26 1–4
Cavendish (2000) 44 30
Vedeld and others (2004)
32 17
Narain, vant Veld, and Gupta (2005)
41 23 18 18
Chettri-Khattri (forthcoming)
20 14 2 1
Resource dependence and income growth
Vedeld et al. (2004) find that use of environmental resources rises 1% for each 1% rise in income
Policy implications:Poverty reduction may not directly reduce
pressure on natural resourcesComplementary resource management
reforms may be needed
Environment and health
Empirical regularities
Child mortality is strongly linked to safe water, clean cooking fuels
Positive externalities exist for community coverage of water supply and sanitation
The nutritional status of children (stunting and wasting) is linked to environmental factors via diarrheal disease
Policy implications
Health outcomes are linked to environmental factors as well as health interventions
Targeting water and sanitation to poor communities can be effective because of the positive externalities linked to coverage
Female education and access to health information is important in reducing child mortality
Policy reforms
Policy reforms
1. Creating rights to common property resources
Namibia community conservancies, Nepal forest user groups
2. Strengthening private property rights Increasing tenure security in Guizhou
increased land investments by 2.8 times
3. Creating incentives for better management
Irrigation management transfer in the Philippines
Policy reforms
4. Participation in novel markets Nicaragua payments for environmental
services: moderately poor households had higher participation than the non-poor
5. Increasing access to services Argentina water privatization – increased
access to safe water decreased child mortality by 5 percent
Overall conclusions
The poor depend on the environment as a source of income
Environmental factors affect the health of poor households
Policy reforms in the natural resource / infrastructure sectors can yield welfare benefits
Need for better data