Environmental cost of soil erosion in Sri Lanka: tax/subsidy policy options |
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| Affiliation: | 1. School of Economics, Griffith University, Nathan, QLD 4111, Australia;2. School of Business, La Trobe University, Bundoora, VIC 3083, Australia;3. Ministry of Plantation Industries, Colombo, Sri Lanka;1. Department of Chemical and Process Engineering, Faculty of Engineering, University of Moratuwa, Sri Lanka;2. Division of Polymer, Textile and Chemical Engineering Technology, Institute of Technology, University of Moratuwa, Sri Lanka;3. Sri Lanka Institute of Nanotechnology (Pvt) Ltd, Sri Lanka;4. Department of Chemistry, Faculty of Science, University of Colombo, Sri Lanka;1. AgResearch, Ruakura Research Centre, Hamilton, New Zealand;2. AgResearch, Lincoln Research Centre, Lincoln, New Zealand;3. New Zealand Institute of Plant & Food Research, Christchurch, New Zealand;4. AgResearch, Grasslands Research Centre, Palmerston North, New Zealand;1. Department of Chemical Engineering, Imperial College London, South Kensington Campus, London SW7 2AZ, UK;2. Royal Brompton and Harefield NHS Foundation Trust, Sydney Street, London SW3 6NP, UK;3. National Heart and Lung Institute, Imperial College London, London SW7 2AZ, UK;4. Clinical Operational Research, University College London, Department of Mathematics, 4 Taviton Street, London WC1H 0BT, UK;1. Faculty of Electrical and Computer Engineering, Shahid Beheshti University, A.C., Tehran, Iran;2. Department of Industrial Engineering, University of Salerno, Fisciano, Italy |
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| Abstract: | The on-site and off-site impacts of land degradation, particularly in the form of soil erosion, pose a serious problem in many developing countries. In Sri Lanka, the implementation of wide-ranging policy reforms and institutional changes designed to move the country toward an outward oriented market economy, have strengthened concerns about environmental degradation and the sustainability of the country's natural resource base. The environmental impact of many of the policy reforms and economic changes are determined by complex economy-wide, inter-sectoral interactions. A computable general equilibrium model incorporating soil erosion is developed to analyse the impacts of various policy reforms in Sri Lanka. Our analysis establishes three important results. First, economic losses from soil erosion in Sri Lanka are substantial. Second, trade liberalisation reforms increase national income and marginally reduce soil erosion. Third, while trade liberalisation has a positive impact on soil erosion, complementary policies which directly target soil erosion, such as tax/subsidy incentives, are needed to minimise social losses from soil erosion. |
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