The 21st century faces two defining challenges: the first is to avert dangerous climate change and a deterioration of natural resources which would seriously jeopardize the quality of life of present and future generations. The second is to deliver social development and decent work for all. Green jobs and the promotion of the green economy have become the key drivers for achieving an economic and social development that is also environmentally sustainable.
Land degradation has not been comprehensively addressed at the global level or in developing countries. A suitable economic framework that could guide investments and institutional action is lacking. This study aims to overcome this deficiency and to provide a framework for a global assessment based on a consideration of the costs of action versus inaction regarding desertification, land degradation, and drought (DLDD). Most of the studies on the costs of land degradation (mainly limited to soil erosion) give cost estimates of less than 1 percent up to about 10 percent of the agricultural gross domestic product (GDP) for various countries worldwide. But the indirect costs of DLDD on the economy (national income), as well as their socioeconomic consequences (particularly poverty impacts), must be accounted for, too. Despite the numerous challenges, a global assessment of the costs of action and inaction against DLDD is possible, urgent, and necessary. This study provides a framework for such a global assessment and provides insights from some related country studies.
Healthy land ecosystems are essential to sustainable development, including food security and improved livelihoods. Yet, their key services have usually been taken for granted and their true value underrated, leading to land degradation becoming a critical global problem. This pattern of undervaluation of lands is about to change in view of the rapidly rising land prices, which is the result of increasing shortage of land and high output prices. Despite the urgent need for preventing and reversing land degradation, the problem has yet to be appropriately addressed. Policy actions for sustainable land management are lacking, and a policy framework for action is missing. Such a framework for policy action needs to be supported by evidence-based and action-oriented research. The Economics of Land Degradation (ELD) initiative seeks to develop such a science basis for policy actions to address land degradation.
Through this paper, the author builds an equilibrium search and matching model of an economy with an informal sector and rural-urban migration to analyze the effects of budget-neutral green tax policy (raising pollution taxes, while cutting payroll taxes) on the labour market.
The key results of the paper suggest that when general public spending varies endogenously in response to tax reform and higher energy taxes can reduce the income from self-employed work in the informal sector, green tax policy can produce a triple dividend: a cleaner environment, lower unemployment rate and high after-tax income of the private sector. This is due to the ability of the government, by employing public spending as an additional policy instrument, to reduce the overall tax burden when an increase in energy tax rates does not exceed somr threshold level. Thus governments should employ several instruments if they are concerned with labour market implications of green tax policies.