Land conflicts in developing countries are costly both directly and through increased land degradation. An important policy goal is to create respect for borders. This often involves mandatory, expensive interventions. We propose a new policy design, which in theory promotes neighborly relations at low cost. A salient feature is the option to by-pass regulation through consensus. The key idea combines the insight that social preferences transform social dilemmas into coordination problems with the logic of forward induction.

When designing schemes such as conditional cash transfers or payments for ecosystem services, the choice of whom to select and whom to exclude is critical. We incentivize and measure actual contributions to an environmental public good to ascertain whether being excluded from a rebate can affect contributions and, if so, whether the rationale for exclusion influences such effects. Treatments, i.e., three rules that determine who is selected and excluded, are randomly assigned.

This thesis consists of three self-contained chapters on issues related to spillover effects of behavioral and policy interventions aimed at reducing negative incentives provided by consumption and production subsidies, and discusses the implications for environmental policy design. The first two chapters investigate spillover effects of a behavioral intervention aimed at incentivizing residential water savings in Colombia.

We use rich survey data to investigate the economic impact of a climate-friendly rice farming method known as the system of rice intensification (SRI) on the welfare of rain-dependent smallholder farmers in Africa. SRI reduces water consumption by half, which makes it a promising farming system in the adaptation to climate change in moisture-constrained areas, and it does not require flooding of rice fields, resulting in reduced methane emissions.

An attempt to reconcile the effects of temperature on economic productivity at the micro and macro levels produces predictions of global economic losses due to climate change that are much higher than previous estimates.