The "Macroeconomics and the environment" programme
This programme corresponds to one of the Ferdi’s natural research thrusts pursued jointly with the Iddri within the IDGM framework. It is most important to examine the relations between macroeconomic and environmental variables, as these are still imperfectly known. The IDGM launch conference marked a desire to cooperate in this effort and underlined the usefulness of a debate bringing together some of the foremost specialists from both North and South on commerce, aid and the environment.
Work on this programme follows three core strands:
►Economic policy and the environment
►Environmental policy indicators
►Climate vulnerability
Economic policy and the environment
Are traditional macroeconomic policies detrimental to the environment? A difficult question as their environmental impact is seldom assessed. Such an assessment is one of the Ferdi’s objectives. The starting point was the analysis by CERDI researchers of the outcome of macroeconomic policies on deforestation. Cross-disciplinary research first revealed the influence of the depreciation of real exchange rates on deforestation in low-income countries with weak institutions (paper published in the JDE). Various studies were later carried out for Brazil and for Latin America in general, and highlighted the influence of monetary instability on deforestation. The Ferdi’s aim is to develop this type of research, mainly through cooperation between the CERDI and the Iddri, and to broaden its scope.Indicators of environmental policy
A CERDI―Iddri research team has developed an indicator of avoided deforestation in which observed deforestation is corrected for the influence of structural factors that are independent of policy. This index can thus be used in a system to encourage the reduction of emissions resulting from deforestation (“compensated successful efforts”). The publication of this index in Ecological Economics elicited important discussion.At the end of December the Ferdi will present another new “pollution exchange” indicator, which measures the respective intensities of pollution emitted by exported and imported products.
Climate vulnerability(top)
The Ferdi has worked extensively on the economic vulnerability of low-income countries. It now wishes to extend its analysis of vulnerability by developing an indicator of vulnerability to climate change. Various official UN documents show that a need for such an indicator is keenly felt.Like the economic vulnerability index, this indicator, which is under development, seeks to identify a small number of structural characteristics (i.e. independent of current economic policy) that are measurable, comparable and reasonably representative of the risks incurred by climate change in each individual developing country. Among other applications, it should be possible to use this indicator to allocate available resources to help developing countries adapt to climate change.