As China pursues high-quality, innovation-driven growth, it faces rising economic policy uncertainty (EPU) fuelled by information gaps, changing policy priorities and geopolitical tensions. Yet how EPU shapes green technology innovation remains contested. Analysing panel data from A-share listed companies (2009–2019), this study reveals that EPU motivates enterprises to improve green innovation levels. Mechanism analysis shows that EPU increases R&D investment and strengthens environmental, social and governance (ESG) performance, especially among large and state-owned enterprises, while significantly reducing the effectiveness of environmental subsidies. These findings suggest EPU acts as a strategic catalyst, though patent growth may partly reflect strategic filing behaviour rather than substantive technological progress. Consequently, policy frameworks must provide predictable, long-term support. Governments should improve subsidy mechanisms and promote adaptive R&D strategies to utilize uncertainty as a driver for green transformation. While the 2009–2019 scope ensures data reliability, the results’ external validity should be considered alongside post-2020 macroeconomic and geopolitical shifts.

This paper examines how disparities in market-based and non-market-based environmental policy instruments affect gross exports and domestic value added in exports, distinguishing between intermediate and final goods and services at the industry level. We estimate a theory-based gravity model with country-industry-time fixed effects using Poisson Pseudo Maximum Likelihood for 32 countries, 56 industries and the period 2000–2014. The results show that the widening gap in market-based instruments between countries is associated with competitiveness losses for high-polluting industries – especially producers of intermediate goods – while low-polluting industries experience short-run gains in comparative advantage, with effects concentrated in the manufacturing sector and driven largely by OECD–non-OECD trade. By contrast, the effects of non-market-based regulatory gaps depend on the time period and the institutional quality of the destination country and are associated, in some cases, with export growth in low-polluting industries and with industrial technology upgrading.

We examine the impact of temperature shocks on the saving behaviour of rural households in Ethiopia. Two rounds of survey data and time-series temperature data from Climate Engine/Terra Climate are used for this analysis. We find that the probability of household saving falls following an increase in temperature anomalies, measured by standardized deviations, and this impact is channelled through time and risk preferences. More specifically, temperature shocks increase risk-taking and impatience, both of which are linked to a reduced probability of saving. As a result, preserving long-term welfare requires the promotion of commitment-based saving instruments, including saving mechanisms with automatic deductions at harvest time. Our heterogeneity analysis demonstrates that, compared to their counterparts, poor households’ saving behaviour and those without credit access are more affected by temperature shocks. Therefore, policies aimed at mitigating the adverse effects of climate change on household financial outcomes, such as saving, should prioritize these groups.

As sustainability challenges intensify globally, evaluating the environmental impacts of the Belt and Road Initiative (BRI) has become increasingly important. Using panel data from 176 countries spanning 2003–2022, this study examines the influence of BRI on environmental sustainability using ecological footprint per capita (lnEF) as a comprehensive indicator and difference-in-differences (DiD) methodology. BRI participation leads to a 5 per cent increase in the lnEF among partner countries. Dual-channel analysis shows that renewable energy consumption mitigates ecological pressure, whereas information and communication technology development partially mediates the effects of BRI participation and environmental outcomes. Pronounced heterogeneity effects were observed for (i) countries joining between 2016 and 2019 (in Europe, Central Asia, the Middle East and North Africa), and (ii) countries in upper-middle- and high-income groups. Propensity score matching–DiD and robustness checks showed consistent findings. This study offers policy recommendations that emphasize environmental assessments, green technology support and international cooperation on sustainability.

Climate change impacts are expected to be unevenly distributed across locations and population groups. However, to date, evidence on the effects of warming on within-country inequality remains limited. In this paper, we test the relationship between gradual warming (i.e., climate change) and long-run distributional dynamics within countries, using a global panel dataset over the period 1955–2015. We find that warming increases overall income inequality, as well as the concentration of income at the top of the income distribution. We also show that these effects persist over time. We complement our main findings with an exploratory analysis of the relationship between warming and several additional dimensions of inequality, including the concentration of wealth, inequality in the spatial distribution of economic activity within countries, and measures of inequality in life expectancy. Overall, our analysis presents a rich picture of the far-reaching distributional effects of global warming.

We develop a health demand model informed by Grossman's theoretical framework, examining how air pollution governance (APG) affects health and income inequality. Analysis of the China Health and Nutrition Survey data reveals that APG has markedly enhanced the health status of local residents, consequently mitigating regional income inequality. For every doubling of air pollution control, the likelihood of residents falling ill diminishes by 40.3 per cent; in contrast to regions with inadequate APG, the income inequality coefficient in regions with robust APG declines by approximately 6.2 per cent. An in-depth examination of the welfare implications of APG, both theoretically and empirically, reveals that such governance enhances the ‘production possibility frontier’ for the population, thereby augmenting individual utility.

This study examines the association between air pollution exposure and health using a representative survey sample from Siddharthanagar municipality of Nepal. Our data on household characteristics, spatial locations and individual lung function allow us to understand heterogeneity in exposure and respiratory health. We examine exposure differential through three potential mechanisms – occupation, residence and exposure avoidance. We employ a simultaneous equations model to account for the endogenous choice of avoidance and spatial error models to control for the spatial spillover of health outcomes. We find that outdoor workers and those residing near brick kilns have lower lung function. Exposure avoidance positively correlates with lung function. Exposure avoidance, however, is low among marginalized outdoor workers and individuals residing in polluted areas, further exacerbating the exposure gap among socioeconomic subgroups. The study advances the case of environmental inequity through the ‘triple jeopardy’ of low socioeconomic status, exposure differences and poor health.

Energy-efficient biomass cookstoves and small solar systems play an important role in the transition to clean energy. Despite their affordability and scalability, uptake remains low among households in sub-Saharan Africa. This paper examines whether household-level behavioural factors help explain this under-adoption. Drawing on data from real-purchase offers in rural Rwanda and Senegal, we analyse how willingness to pay for the technologies varies with risk aversion, innovation resistance, time preferences and beliefs. These traits explain part of the variation in purchase decisions, though effects are generally moderate. The findings improve our understanding of consumer behaviour with regard to innovative consumer goods at the base of the pyramid and inform policy and market strategies of suppliers entering these markets. We conclude by recommending that behavioural approaches be applied conservatively and only in conjunction with efforts to improve affordability and access.

The Kyoto Protocol and the subsequent Doha Amendment represent crucial milestones in international environmental efforts to establish binding emission reduction targets for the participating members. Many studies have examined the effects of the former, but not many the latter, on emissions reduction; however, their impact is inconclusive. One major reason may be due to the heterogeneous issue arising from the fact that countries ratified and implemented those agreements at different times. This study is the first to employ the staggered difference-in-difference method to analyse the two agreements within a unified framework. We empirically found that ratifying the Kyoto Protocol has significantly contributed to a decrease in global carbon dioxide emissions, although the impacts of the Doha Amendment are not statistically clear, underscoring the substantial role those agreements can play in protecting the global environment. Our findings are robust across several techniques, including the imputation estimator and the average group-time treatment approach.

In the Southern and Eastern Mediterranean (SEMed) region, the transition to low-carbon power must be achieved while ensuring security of supply, affordability and development. Using the Just and Sustainable Energy Transition framework and a neo-institutional lens, we analysed 470 study–country–family observations (2000–2025) across 11 jurisdictions and 7 instrument families to create an institutional mechanism map. Three regularities stand out. Systems performance signals dominate in nine countries, primarily through time-differentiated pricing, settlement discipline and codified connection, queuing and curtailment rules. Financing and integration risks are often addressed together where auctions, revenue-support schemes, published access terms and standardised long-term contracts coexist with system rules. Equity-related signals arise where prosumer compensation and reconciliation rules influence participation and cost sharing at the retail margin. These patterns provide an interpretive basis for sequencing constraint-led reforms in SEMed power systems that target binding risks while respecting fiscal and distributional constraints.

Market-based instruments are increasingly incorporated into developing countries’ environmental regulation, which has historically been dominated by command-and-control (CAC). To discover whether this shift can enhance efficiency, the two policy instruments are compared in the context of agricultural fire regulation. We unveil optimal policy principles, such as incentivizing compliance proportionally to non-compliance’s net benefit. A simulation based on data from Brazilian Amazon municipalities accounts for ambiguous land tenure, indirect deforestation and non-additionality. The results reveal that CAC, when perfectly sanctioned, is more efficient than market-based policy. Such primacy is exacerbated in the realistic case where sanctions are likely to be cancelled on appeal to the judicial power and legally limited in size, because of the opportunities to better address adverse selection and to generate revenue with fines. Therefore, we show that market-based policy is not necessarily superior to CAC and that imperfect sanctioning does not inevitably lead to inefficiency.

Marine protected areas (MPAs) have proliferated to protect marine ecosystems and manage unsustainable fishing, but their outcomes vary by economic and governance contexts. Drawing on a panel dataset spanning 1995–2021 and employing the Pressure–State–Response framework, this study analyses how MPA coverage is associated with overexploited fish stocks and examines Official Development Assistance (ODA). Results show MPAs in high-income countries are associated with lower overexploited catch rates, reflecting robust governance. In low-income nations, however, limited capacity is often linked to ‘paper parks’ with negligible impact. Multi-purpose ODA – supporting sustainability goals – appears more effective than single-purpose ODA and is associated with better conservation outcomes. Integrating MPAs with fisheries management, supported by international assistance for enforcement, appears important for bridging disparities in effectiveness. By highlighting the interplay among economic conditions, governance and funding, this study offers higher-level insights into factors that shape MPA effectiveness, contributing to broader policy discussions on marine conservation.

Even though the incidence of conflicts between Fulani nomadic pastoralists and sedentary communities in Nigeria has risen significantly in the last decade, there is a notable lack of research examining how these conflicts influence distrust towards members of the Fulani ethnic group and Muslims. Using novel survey data from Kaduna, the state with the third-highest incidence of pastoral conflict in Nigeria, this study addresses that gap. Regression analyses show that exposure to pastoral conflict increases distrust towards the Fulani and Muslims. This suggests a contagion effect whereby the Fulani are conflated with the broader Muslim population, due to the Muslim identity of nomadic Fulani pastoralists. Disaggregating the data by religious affiliation reveals a pattern: conflict exposure raises distrust only among Muslim respondents, while effects are statistically insignificant among Christians. Among Muslims, the positive effect suggests that pastoral conflict erodes in-group cohesion. The null effect among Christians may reflect the way in which pastoral conflicts align with pre-existing religious fault lines.

The scope sensitivity test is used to validate value estimates of non-market environmental goods and services derived from the contingent valuation method. The absence of economic scope could suggest invalid value estimates. Recent studies have attributed scope insensitivity to affective, cognitive, and behavioral factors. In this study, we extend the behavioral insights in explaining scope insensitivity by incorporating insights from the theory of mental accounting. Our empirical results indicate that if subjects consider the environmental good as part of their recreational budget within a mental accounting framework, we can explain the scope insensitivity with otherwise standard preference.

This study examines the impact of climate change, defined as long-term changes in temperature and precipitation patterns due to natural and human factors, on women's employment in Burkina Faso, highlighting labour market participation and gender disparities. Using a static computable general equilibrium model calibrated with a gender-specific social accounting matrix, it evaluates two climate scenarios: a 2.4°C temperature increase and a 7.5 per cent decrease in precipitation by 2050. The results indicate that these climate shocks significantly reduce women's employment opportunities. The supply of paid labour for women may decrease by 3.9 per cent, with skilled women experiencing greater job losses than their unskilled counterparts. In rural areas, the domestic workload could increase by up to 0.28 per cent, further limiting women's labour market participation. These changes reinforce gender inequalities and contribute to a decline in real GDP. To counter these effects, investments in climate-resilient agriculture, water and energy infrastructure, and women's entrepreneurship are essential. Gender-responsive policies are needed to promote inclusive economic growth and reduce employment disparities.

This study examines the intricate relationship between financial development, institutional quality and environmental efficiency. While financial development has the potential to support environmental sustainability, concerns remain regarding its unintended negative effects through unchecked economic expansion. The objective of this research is to investigate how financial development affects environmental efficiency and to assess the moderating role of institutional quality, particularly when financial development proxies reflect financial market accessibility and efficiency. Using a directional distance function within a stochastic frontier framework and incorporating multiple financial development indicators alongside measures of institutional quality, we find that financial development significantly reduces environmental inefficiency, with institutional quality strengthening this effect. These results highlight the importance of policy approaches that simultaneously enhance financial development and institutional quality. Furthermore, our findings support targeted initiatives such as promoting green finance, building institutional capacity and investing in research and data infrastructure to inform evidence-based policymaking for sustainable development.

We describe the main insights from the papers included in this special issue, Challenges for the Development of Latin America in the Anthropocene: Current Research in Environmental Economics. The contributions are organized around three themes: the economic and welfare impacts of temperature variability, the role of institutions and user rights in shaping environmental governance and the effectiveness of regulatory instruments for managing ambient and atmospheric pollution. Together, these papers show that environmental outcomes in Latin America are deeply shaped by institutional capacity, governance quality and social inequality. By combining rigorous empirical analysis with attention to local contexts, they demonstrate how environmental economics can inform policy responses to the triple planetary crisis of climate change, biodiversity loss and pollution.

Environmental taxation is often justified by the ‘double dividend’ hypothesis, yet evidence overwhelmingly derives from high-income countries. In low-income countries (LICs), where broadening the tax base is a central fiscal priority, we identify a special case – the ‘tax base’ double dividend– in which environmental levies simultaneously curb emissions and strengthen revenue capacity. Exploiting Uganda’s 2018 reform of vehicle import duties as a natural experiment, we use administrative microdata covering all motor vehicle imports and a difference-in-differences strategy to assess this proposition. The reform generated substantial revenue gains alongside modest improvements in the emissions profile of imports. Effects varied by vehicle type, highlighting the need for policy tailoring. Drawing on these results, we outline design principles for LICs, emphasising sequencing, enforcement and inter-agency coordination. Uganda’s experience shows that administratively simple, import-based carbon taxes can serve as an effective and politically feasible entry point to carbon pricing while advancing domestic resource mobilisation.

Droughts are becoming increasingly common in India, where 50 per cent of the labour force works in agriculture, and most agricultural production is rainfall-dependent. This paper investigates the extent to which rural households adapt to drought – defined as rainfall deficiency – by reallocating labour from agriculture to other sectors of the economy. We estimate a household-level fixed-effects regression model and find that household agricultural employment declines in the year following a drought. Furthermore, these effects are mediated by job skills and land ownership. We find that households with working members who have completed primary education account for most of the workers who exit the agricultural sector. In contrast, we find that households that own land increase their agricultural labour share after experiencing a drought. Thus, while we find that drought causes households to diversify away from agriculture on aggregate, the extent of this structural change is mitigated by the behaviour of landowners.