_income rich & asset poor_ has environmental product harvesting as the primary coping strategy as compared to about one-tenth for the _income & asset poor_ households, which is in line with the hypothesis of forest playing a safety net and poverty-preventing role for some groups after an income loss.

We also find evidence of the environmental strategy being relatively more important for coping with moderate than severe income shocks. Among the active strategies (ignoring the “do nothing” response), 22% of the respondents stated that harvesting more environmental products is their primary response to a moderate income shock. Given the _de facto_ open or easy access to forests and other natural habitats, this is an option available to many households. At the same time, the potential for significantly higher income from environmental resources, following an income shortfall, also has its limits. Harvesting more is a labor-intensive strategy compared with, for example, liquidating assets. Limited market access often constrain the opportunities for converting forest products into cash.

Looking at forest loss in the village during the period 2000-2010, there are huge differences across types of forests and regions. In dry forests in general and in Africa – the poorest region, the _income_ & _asset poor_ have experienced far greater forest loss over the past decade than other groups. Causality can run both ways, but this result is consistent with theories on a poverty-environmental degradation nexus. Yet, the simple fact that degradation in dry forests and in Africa is highest in the areas where the poorest live is a worrying result. An important source of both regular income and safety net is shrinking.

While environmental income serves several functions, the IPPC AR5 also warns that continuous “warming and changes in precipitation are increasing tree mortality in a wide range of forest systems, acting via heat stress, drought stress, pest outbreaks, and a wide range of other indirect impact mechanisms” (Scholes et al. 2014, 303). In the long term, the ecosystems’ capacity to provide the wide range of products the rural households rely on is at risk. In this scenario, the poorest would be more exposed and more vulnerable than the better-off groups.

# **6.3 Policy relevance**

The challenge of sustainable use of forest and other natural environments is twofold: ensure resource access for the poor, while limiting long-term degradation and protecting the biophysical resource. In a worst case scenario, removing incomes that make up more than one-fourth of total household income will increase and deepen poverty profoundly. Furthermore, environmental income plays a stabilizing role in rural economies and for individual households. Maintaining this resource base, therefore, provides win-win opportunities for the long term. The PEN data, demonstrating that such a significant proportion of household income is derived from environmental resources, suggest that the win-win potential is larger than commonly perceived.

One challenge for policy designers and decision-makers is to distinguish between destructive and non-destructive uses. This concerns both the type of harvests (e.g., cutting down living trees vs. collecting dead branches for firewood) but also the level of extraction (i.e., to keep harvest within the natural regeneration). Another challenge concerns which groups should have access to the resources. A “fence and fine” approach will restrict the poorest access to natural resources. Permitting uses dominated by the poor, e.g., subsistence uses that have limited degrading effects on the resource base, may reduce the negative livelihoods impacts of conservation policies or projects. At the same time, forest clearing is increasingly driven by large-scale, commercial actors (Rudel 2007), also suggesting that the nature of the conventional poverty-environmental trade-off has 31