wind turbines

Environmental Economics and Policy

Research cluster

Human-induced environmental change and scarcity is presenting decision-makers with a growing number of critical policy choices. An indispensable element in making these choices is evolving research from a range of social science disciplines.

Our research draws on a focused array of expertise in geography, political science and economics

The central aim of the Environmental Economics and Policy cluster is to contribute to this process by advancing empirical understanding of environmental performance, behaviour and governance.

Research agenda

Our research agenda covers state, market and civil society actors and explores the interrelationships with other policy spheres and regulation (social, economic and political) across a range of geographic scales, from the local to the global, both in the developed and developing worlds. This includes diverse studies of the social costs of climate change, renewable energy in the Middle East, water resource management in Spain and the impacts of major events such as the Olympic Games.

Recent appointments have strengthened our research expertise on environment and development to include research on farming and biodiversity in Ethiopia, as well as community forest management in Namibia and Malaysia.


The cluster has attracted substantial grants from the European Commission, British Government and the Alcoa Foundation. The biggest achievement in terms of grant application has been the successful bids for an ESRC Centre for Climate Change Economics and Policy (CCCEP) and the Grantham Research Institute on Climate Change and the Environment.

As a result, we enjoy close links with the Grantham Research Institute, chaired by Lord Stern of Brentford, as well as the research programmes of CCCEP. With these awards, the LSE has emerged as one of the leading places in the world to research and study the environment and climate change.


The cluster's research draws on expertise in geography, political science and economics. We have the largest group of full-time academic environmental economists in UK universities (and probably one of the largest elsewhere). All members have strong expertise in environmental economics and policy and are regularly involved in high profile policy work. Staff have acted as advisors and consultants for the United Nations, the World Bank, the OECD and other international organisations, as well as UK government departments (such as Defra) and the private sector.

Academic staff

Prof Giles Atkinson, Professor of Environmental Policy

Dr Allan Beltran-Hernandez, LSE Fellow in Environmental Economics

Prof Simon Dietz, Professor of Environmental Policy

Dr Ben Groom, Associate Professor of Environment & Development Economics

Dr Nancy Holman, Associate Professor of Urban Planning

Prof David Jones, Emeritus Professor of Geography & Environment

Dr Karlygash Kuralbayeva, LSE Fellow in Environmental Economics

Dr Michael Mason, Associate Professor of Environmental Geography

Prof Susana Mourato, Professor of Environmental Economics

Prof Eric Neumayer, Professor of Environment & Development

Dr Kirstie O'Neill, LSE Fellow in Environment

Dr Charles Palmer, Associate Professor of Environment & Development

Dr Kasia Paprocki, Assistant Professor in Environment

Dr Richard Perkins, Associate Professor of Environmental Geography

Dr Sefi Roth, Assistant Professor of Environmental Economics


Research projects

The Effectiveness of Community Conservation Agreements in Lore Lindu National Park, Sulawesi, Indonesia

Staff involved: Dr. Charles Palmer

In collaboration with: Prof. Stefanie Engel (ETH Zurich, Switzerland); Prof. Alex Pfaff (Duke University, US); Stability of Rainforest Margins in Indonesia (STORMA), Germany & Indonesia.

Funding: Robert Bosch Foundation, Germany. 

In protected areas in many developing countries, the overexploitation of forest resources is a recurring theme. A major reason for this observed overexploitation and encroachment is that a large part of the benefits from forest protection occurs beyond the local level, e.g., in the form of biodiversity conservation, carbon sequestration, and watershed services. Top-down policies to conserve these have failed due to the lack of appropriate monitoring and enforcement capacities and because considerations of social fairness prevent government authorities from effectively implementing a purely prohibitive approach. Lore Lindu National Park in Sulawesi, Indonesia, was established by the central government in 1993 via such an approach; boundaries were drawn up and communities relocated without consultation or compensation. The ineffectiveness of this approach is demonstrated by the continued use of Park resources by local communities.

An alternative policy is to translate environmental benefits that occur beyond the local level into real economic incentives for local communities. Beginning in 2001, the Park authorities initiated a co-management approach known as 'community conservation agreements' between the Park and communities living in the vicinity of the Park. Since then, conservation agreements have been facilitated in around 40 communities located in around the Park and with historical claims to forest areas inside the Park, by various NGOs, including the Nature Conservancy (TNC) and CARE International. While there appears to be variation across the agreements made, communities typically commit to complying with specified conservation and forest management rules in return for a more explicit acknowledgement of their property rights over the forest inside the Park along with other benefits such as agricultural assistance.

The general objective of the research is to better understand the emergence of conservation agreements and their influence on actual community land use and extraction behaviour. The impacts to be considered are ecological (impacts on forest in LLNP), social and economic (on community welfare and land usage).

Transboundary Climate Security: Climate Vulnerability and Human Security in the Jordan River Basin

Staff involved: Michael Mason

Visit the project website.

The Impacts of Tropical Biofuel Production on Land Use

Staff involved: Charles Palmer

In collaboration with: Saraly Andrade de Sa (Ph.D. Candidate, ETH Zurich, Switzerland); Prof. Stefanie Engel (ETH Zurich); Center for International Forestry Research (CIFOR), Brazil.  

Funding: (1) Professorship in Environmental Policy and Economics, ETH Zurich; (2) Commission for Research Partnerships with Developing Countries (KFPE), Switzerland; (3) Research Fellow Partnership Programme for Agriculture, Forestry and Natural Resources (RFPP), ETH Zurich. 

There are two emerging trends with regards to rising global demand for biofuels and land use. First, the increase in production of biofuel feedstock demands more land thus placing direct pressure on potential agricultural land currently still under forest cover. Second, the reallocation of agricultural land for biofuels along with other factors such as increasing human populations have led to rising demand and hence, higher prices for agricultural commodities and other foodstuffs. Consequently, rising biofuel demand may be indirectly leading to the expansion of food production into forest frontiers.

To date, most research to evaluate biofuels have focused on their merits for reducing greenhouse gas emissions or fossil fuel use. Focusing on emission or energy use, however, ignores the full range of environmental impacts of biofuels particularly where forests are being felled to make way for biofuel crops. Not only is the carbon storage capacities of forests destroyed but also biodiversity and other environmental services are likely to be lost as well. Many of the economically important biofuels, including Brazilian sugarcane ethanol and Indonesian/Malaysian palm-oil diesel, have greater aggregate environmental costs than fossil fuels. However, there are a number of important indirect effects of biofuels, whether environmental or social, e.g. rising food costs. The empirical evidence for these remains poor. This project aims to empirically demonstrate the strength of the direct and indirect effects of biofuel production on land-use at the forest frontier.

First, the economics of land-use will be developed in order to better understand decision-making in the production of commodities. Second, and on the basis of land-use economics, an econometric model will be estimated using secondary market and remote sensing data. Expert interviews will be conducted to complement the quantitative analysis. Given its leading position in biofuel markets, Brazil has been chosen as the research site of interest for this project. The current lack of quantitative analyses on the impacts of biofuel production on land use, deforestation and food production implies that research outputs could potentially contribute not only to the policy debate on the supposed environmental benefits of biofuels as a strategy to help mitigate climate change but also to the food vs. fuel debate.


See also: research programmes undertaken by the Grantham Research Institute on Climate Change and the Environment


The Environmental Economics and Policy cluster and Grantham Research Institute run the MSc in Environmental Economics and Climate Change.