Political economy of the Kyoto Protocol

The Kyoto Protocol, negotiated in December 1997, is the firstinternational treaty to limit emissions of greenhouse gases.But Kyoto does not mark the conclusion to international cooperationon climate change. It is really just a beginning. This papershows that, in the aggregate, the benefits of undertaking theKyoto reductions should exceed the corresponding costs providedthese are achieved cost-effectively. But, although Kyoto seeksto promote cost-effectiveness, it may yet prove very costly.Moreover, the agreement may not even achieve the reductionsthat it promises, either because emissions will relocate tothe countries that are not required to stay within Kyoto-prescribedceilings or because 'paper' trades will be promoted by the protocol'smechanisms. More fundamentally, Kyoto does not deter non-compliance,and it only weakly deters non-participation. These flaws needto be mended, but the nature of the problem makes that an especiallydifficult task.     

New development: Financial reforms played in two octaves— yet again?

Major public service reforms are underway at the national level in Australia. The reforms are being implemented progressively over a three-year period. This is the third in a series of articles looking at the implementation of these reforms and focuses on the second stage, which was supposed to be completed in 2015. The author examines the recent report of the Joint Committee of Public Accounts and Audit which reviewed the development of the ‘Performance Framework’ through a series of public hearings. He explains why, for good governance, particularly in a difficult economic and budgetary climate (domestically and internationally), public interest considerations must prevail, not just in issues about ‘how’ but also about ‘what’ is being actually achieved. There is considerable scope for shared learning and experience across governments and sectors of the economy in any reforms of the public sector.     

Commentary: Performance Audit of PPPs – Getting the Basics Right

Performance auditing (PA) is an important vehicle for assessing Value for Money (VFM) of Public‐Private Partnerships (PPPs), as well as providing assurance to the Parliament and to the public about the accountability for the supporting strategic and operational frameworks. Experience to date with PPPs in Australia has been limited and mixed in terms of results. Few projects have reached the mature stage, let alone been completed. It has been suggested that we can learn from the audit approaches and systems developed by the National Audit Office in the UK. Australian Audit Offices need to ensure that they have robust PA/VFM auditing systems, analytical methodologies and tools in place to undertake quality evaluations at various stages of a PPP, but experience to date at federal and state levels also indicates that there is still a lot to do to get the basis elements of PPPs “right”.     

Explaining value chain differences in MRIO databases through structural path decomposition

Many multiregional input–output (MRIO) databases are used to calculate consumption-based accounts. Results feature in climate policy discussion on emissions reduction responsibilities; yet studies show that outcomes produced by each database differ. This paper compares the emissions associated with value chains from Eora, EXIOBASE, GTAP and WIOD. Structural path analysis identifies the largest paths in each database and the differences in common paths are calculated. For the top 100 value chain paths that contain the largest difference, structural path decomposition is used to identify the contribution each part of the value chain makes towards the difference. The results identify and quantify key flows that are the cause of difference in the databases. From these, we can conclude that key MRIO database construction decisions, such as using the residence or territorial principle for emissions allocation and whether energy spends are reallocated based on physical data, are the major causes of differences.     

THE EU/IMF RESCUE PROGRAMME FOR IRELAND: 2010–13

The EU/IMF €85 billion rescue of the Irish economy required Ireland to address critical problems in banking and bank regulation, the public finances and structural reform. Ireland must also address weak expertise in economics in the public sector and in banking, rent‐seeking, regulatory capture, moral hazard, lack of accountability and failures of corporate governance.     

Loan loss accounting and procyclical bank lending: The role of direct regulatory actions

I provide evidence that loan loss accounting affects procyclical lending through its impact on regulatory actions. Regulators are more likely to place banks with inadequate loan loss allowances under enforcement actions that restrict lending, leading these banks to lend less during downturns. Further, I find that banks with lower regulatory ratings lend less when they have more timely provisions, consistent with research theorizing that timely provisions increase transparency and inhibit regulatory forbearance. This regulatory action mechanism expands on prior research that has focused on the effect of loan loss recognition on regulatory capital adequacy during economic downturns.     

‘Someone else’s blood’: directed blood donation for neonatal transfusion and parental perceptions of risk

In Canada, parents can give blood exclusively for their child’s transfusion, a process known as directed donation. This qualitative study aimed to understand parents’ perceptions in seeking to provide blood for their newborn. Ten parents whose preterm children were cared for in the Neonatal Intensive Care Unit of one Canadian hospital were interviewed. The beliefs and experiences of parents with regard to directed donation were analyzed with reference to their understanding of the risks and benefits of this form of transfusion. Interview data revealed that parents had little knowledge or understanding of the medical benefits and risks of directed donation and based their decision to seek this type of transfusion largely on emotional grounds. In addition, despite their preference for directed donation, most infants whose parents were interviewed in this study, for practical reasons could not be given this type of transfusion. This may have magnified risk perceptions of non‐directed transfusions. Parents need to be better informed about the medical risks and benefits of directed donation and the actual likelihood that their child will be able to receive this type of transfusion.