Economic Development in Extreme Environments

The role of the environment in the development process is frequently framed as a one-way interaction, with humans decoupling from natural systems, and often damaging them in the process. When the environment is granted an influential role, it is often in establishing the initial conditions under which development will take place, for example, through natural resource endowments or climate factors. However, in some extreme environments, it may be responsible for not only the initial opportunities available in a society, but also for continuously shaping those opportunities through time. The field of Sustainable Development is fundamentally concerned with this two-way interaction between the environment and society, recognizing both as part of a coupled system. The chapters in this volume demonstrate some of the costs associated with development in an extreme environment using methods from climate science, ecology, remote sensing, and economics. By looking at places exposed to tropical cyclones, to persistent pollution resulting from fires that burn readily in a drought-prone location, to annual floods that frequently and randomly strike households in a country, we see that the environment critically shapes aspects of societies and their economic opportunities. By no means are all opportunities dictated by the environment. However, these chapters robustly illustrate that the environment imposes some critical boundaries on development in extreme environments and policies aiming to increase welfare must take account of the coupling of social and natural systems.