Land use and pollution in a two-sector evolutionary model

Abstract

This paper proposes an evolutionary dual model in order to study heterogeneity of agriculture from an environmental perspective. In standard visions, land use changes are driven by productivity differentials across agricultural subsectors. Our model adds other two factors which can indirectly affect land allocation patterns: differences in environmental impact intensity and environmental vulnerability. By including these two dimensions in a parsimonious model, we shed new light on constraints or ability for an economy to reach a sectoral land allocation which efficiently balances environmental burden, environmental constraints and productivity. We find that, in case of trade-off between the three dimensions, farmers’ welfare grows along structural changes which allocate increasingly more land to the agricultural subsector with lower pollution intensity regardless its resilience and land productivity performance.