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There is much controversy surrounding the poverty-environmental degradation nexus. The predominant school of thought argues that poverty is a major cause of environmental degradation and if policy makers want to address the environmental issues, then they must first address the poverty problem. Another school of thought argues that this causal link is too simplistic and the nexus is governed by a complex web of factors. In this paper, a formal structure for analyzing the complex web of factors is formulated and used to review the existing literature on the links between poverty and the degradation of four natural resource sectors. The analysis highlights the institutional and market failures which encourage unsustainable activities, which in turn forces some income groups into poverty. Another important factor is the role of conflicts between different agents (income groups) in the poverty-environmental degradation nexus. The analysis also highlighted the presence of feedback loops between environmental degradation and poverty.