Based on a model where climate change affects productivity, the second-best optimal carbon tax is found to exceed marginal social damage by 53% and ‘‘marginal private damage’’ (aggregate households’ willingness to pay) by 73%. Annual welfare gains are estimated at $3.58 billion when...

The incentives for growing fuelwood on small farms are examined using survey data from Kenya. The analysis finds that tree planting is a competitive activity and that farmers are responsive to incentives to plant trees. These incentives vary across households facing different factor...