Annual Review of Resource Economics - Current Issue

Rapid advances and diffusion of artificial intelligence (AI) technologies have the potential to transform agriculture globally by improving measurement, prediction, and site-specific management on the farm, enabling autonomous equipment that is trained to mimic human behavior and developing recommendation systems designed to autonomously achieve various tasks. Here, we discuss the applications of AI-enabled technologies in agriculture, including those that are capable of on-farm reinforcement learning and key attributes that distinguish them from precision technologies currently available. We then describe various ways through which AI-driven technologies are likely to change the decision space for farmers and require changes to the theoretical and empirical economic models that seek to understand the incentives for their adoption. We conclude with a discussion of areas for future research on the economic, environmental, and equity implications of AI-enabled technology adoption for the agricultural sector.

The focus of this review is the shadow economy (SE) in agriculture. Our research aim is to empirically quantify the SE in the agricultural sector based on data collected in the EU-15 member states from 1996 to 2019. We apply the multiple indicators multiple causes model to estimate the levels and development of the SE in these countries. Furthermore, we investigate how the size of the agricultural SE differs between the EU-15 member states and how it affects the economy overall. The results show that (a) the main potential for SE lies in agricultural subsidies, the effects of taxation, the share of imports, and factor income in agriculture; (b) certain patterns and differences exist among the countries, which can be associated with the north-south-west divide; and (c) there are higher levels of SEs in agriculture compared to in the overall economies. This review emphasizes the potential for measuring the SE in agriculture, while recognizing current methodological limitations. Recommendations include diversifying methods, standardizing definitions internationally, and enhancing theoretical foundations. Furthermore, expanding research to include more regions and improve visibility and transparency in measurements is crucial if informed policy is to be made to benefit agriculture globally.

We discuss the economics of geographical indications (GIs), a form of collective branding of products based on their geographic origin. GIs serve as essential tools in addressing market failures stemming from information asymmetries and supporting the provision of high-quality products in competitive settings. They are increasingly used in wine and food markets. We briefly review the institutional development of GIs, discuss the basic economic theory arguments that rationalize the use of GIs, and characterize their key functions. We then examine the empirical evidence from studies that have probed various features of GIs. We find consensus on the potential for GIs to address a very real market failure and the positive role that policies and supporting institutions can play. We also uncover limitations and unresolved problems. GIs have both efficiency and distributional consequences, their international implications remain controversial, and tensions between tradition and innovation emerge while confronting new challenges such as climate change.

We review the literature on the performance of groundwater institutions, including command-and-control (CAC) approaches, market-based institutions (MBIs), and voluntary approaches, and evaluate how they will perform as agriculture adapts to climate change. Both CAC approaches and MBIs lead to uneven distributional impacts on farmers, and voluntary approaches have not been successful in reducing water withdrawal on a large scale. A polycentric approach of regulation plus local management might perform well. Climate change will increase the irrigation demand for groundwater and demand flexible and properly scoped institutions that attend to local conditions.

Wildlife species generate significant economic value through recreational opportunities, ecosystem services, and their existence and preservation for future generations. Policymaker decisions about fish and wildlife conservation, population management, hunting and fishing limits, and damage assessments all rely to some extent on nonmarket valuation estimates of the species in question. Focusing on individual species, we present a comprehensive review of the nonmarket valuation literature from 1990 to 2023. We quantify studies by species and synthesize the characteristics of these species. We examine why certain species or uses have been the historical focus. Finally, we offer some insights into gaps in our knowledge and directions for future research. While the wildlife valuation literature is extensive, we question the scope of coverage and speculate on the reasons for such heavy coverage of some species and limited coverage of others. Charisma, endemism, and rarity play a large role, as do species with large use values.

This review discusses the role of road transport policies in achieving the European Union's ambitious zero-emission target for the transportation sector by 2050 and provides an overview of the empirical literature that studies the effectiveness of urban transport policies. The analysis is divided into two parts. First, we study policies that are relevant in the transitional phase from internal combustion engine vehicles to battery electric vehicles (BEVs), then we discuss policies that will remain relevant as we switch entirely to BEVs. In the best-case scenario, the transition can be driven by fuel taxes, but in case fuel taxes are not feasible or acceptable, a combination of penalties for buying polluting vehicles and subsidies for scrappage of such vehicles might be the best compromise. In the long run, road space will be increasingly at a premium, and to ensure its efficient use, increasingly sophisticated road-pricing policies will be needed.

This article reviews the literature on the economic impacts of disasters caused by extreme weather and climate events to draw lessons on how societies can better manage these risks. While evidence that richer, better-governed societies suffer less and recover faster from climate extremes suggests adaptation, knowledge gaps remain, and little is known about the efficiency of specific adaptation actions. I review various “no or low” regrets adaptation options that are recommended when uncertainties over climate change impacts are high. I discuss how governments can play an important role in adaptation by directly providing public goods to manage disaster risks or by facilitating private agents’ adaptation responses but also highlight the political economy of policy and coordination failures.

Environmental and resource challenges continue to grow in magnitude and complexity. Addressing these challenges requires expansive thinking to formulate and implement effective solutions. Transdisciplinary research, considered the pinnacle of integration across disciplines, offers a powerful approach for addressing complex questions. Three key themes emerge from transdisciplinary research in the context of environmental economics: (a) There are degrees of transdisciplinarity that contribute to new emergent approaches and on-the-ground application through behavior and practice changes; (b) there are many examples of environmental economics research that exhibit characteristics of transdisciplinary research, but aspects of transdisciplinarity could be expanded in many cases; and (c) there are various barriers (cross-disciplinary, individual, and systemic) facing economists in the application of a transdisciplinary approach. While transdisciplinary research comes with its own barriers, environmental economists could generate large potential gains in formulating and implementing solutions by exploring the transdisciplinary mindset and approach.

This article reviews the past 25 years of empirical research on the rural nonfarm economy (RNFE) in developing countries; that literature has evolved in ways that track and mirror the rural transformation itself. Since 2000, rapid urbanization, structural transformation, and a sharp series of economic, climate, and disease shocks have influenced trajectories in the RNFE. It has grown to become, on average, the predominant source of income for rural households in developing countries. Both segments of the RNFE—activities linked to agricultural value chains as well as those unrelated to the agricultural sector—have grown. Understanding how each component of the RNFE influences rural incomes, employment, resilience, women, youth, and farming and natural resource management practices is, therefore, more important than ever.

Forced migration has a complex relationship with the environment. The type of policy responses required to alleviate distress migration and improve the livelihoods of involuntary migrants while preserving the environment for broader society will vary by context. We highlight the need to better identify the related mechanisms underlying forced migration and their practices in receiving areas in an attempt to self-integrate. Implementation of safety net programs has risen. Such programs have the potential to promote migration as a risk management strategy and disincentivize the adoption of poor environmental practices in receiving areas. We discuss how available satellite data combined with machine learning approaches open new opportunities to discover solutions to the migration-related environmental issues of Africa.

Many low- and middle-income countries have made tremendous gains in electrification over the past few decades. These improvements in electricity access have enabled a growing body of empirical evidence on its impacts. This article complements prior reviews on the impacts of electrification by addressing several major remaining challenges faced by the electricity sector in developing countries—impediments to maximizing electricity services᾽ economic effects, obstacles to recovering utility costs, difficulties in forecasting future electricity demand, and uncertainty regarding the future adoption of climate-mitigating technologies—and the existing microeconomic causal evidence addressing those challenges. We describe how randomized experiments have complemented the quasi-experimental evidence and then highlight some remaining gaps in the existing literature. Specifically, we highlight climate adaptation within the electricity sector in developing countries, which remains a crucial gap in both the discussion on and financing of electrification for development. We use case studies of Nepal and Pakistan in South Asia—a region that both recently experienced great electrification gains and is among the most vulnerable to climate change—to illustrate the need for additional work on adaptation in the electricity sector. We conclude by linking to recent discussions on climate adaptation finance.

The global value chain (GVC) framework may provide a systematic approach to depict and advance sustainable path options at the global, national, and local scales. However, a coherent picture of the fragmented body of knowledge on the sustainability implications of GVCs is lacking. In an attempt to delineate the most effective perspective for addressing sustainability challenges within GVCs, this review explores the main academic streams that have emerged in response to the pressing need for detailed insights into GVCs. These academic streams include sociological, economic, and management approaches. We examine the intersections and distinctions among them, evaluating whether they converge or diverge in addressing sustainability within GVCs. By discussing the limitations and potential of these approaches, we suggest a possible integrated and appropriate research agenda to achieve an encompassing and still operative perspective to address current sustainability challenges.

Food supply chain resilience has become a priority for policymakers in recent years. Prompted by several systemic disruptions and the increased likelihood of future shocks, significant attention and public financial investment have been devoted to preparing supply chains to be more able to absorb shocks and more nimbly respond in the future. Food and agricultural supply chains have been particularly scrutinized due to widespread shortages and food price inflation of key staples in recent years. Varied perspectives have emerged about the factors that contribute to the resiliency of food supply chains and the interventions that will be most effective. This article reviews the perspectives on food supply chain resilience generally. Furthermore, we attempt to synthesize the methodologies that have been used to study resilience and offer some guidance for economists studying the topic moving forward.