THE EFFICIENCY OF SEQUESTERING CARBON IN AGRICULTURAL SOILS

Agricultural tillage practices are important human-induced activities that can alter carbon emissions from agricultural soils and have the potential to contribute significantly to reductions in greenhouse gas emission (Lal et al., The Potential of U.S. Cropland, 1998). This research investigates the expected costs of sequestering carbon in agricultural soils under different subsidy and market-based policies. Using detailed National Resources Inventory data, we estimate the probability that farmers adopt conservation tillage practices based on a variety of exogenous characteristics and profit from conventional practices. These estimates are used with physical models of carbon sequestration to estimate the subsidy costs of achieving increased carbon sequestration with alternative subsidy schemes.     

Leadership in Public Good Provision: A Timing Game Perspective

We address in this paper the issue of leadership when two governments provide public goods to their constituencies with cross‐border externalities as both public goods are valued by consumers in both countries. We study a timing game between two different countries: before providing public goods, the two policymakers non‐cooperatively decide their preferred sequence of moves. We establish conditions under which a first‐ or second‐mover advantage emerges for each country, highlighting the role of spillovers and the complementarity or substitutability of public goods. As a result, we are able to prove that there is no leader when, for both countries, public goods are substitutable. When public goods are complements for both countries, each of them may emerge as the leader in the game. Hence a coordination issue arises. We use the notion of risk‐dominance to select the leading government. Finally, in the mixed case, the government for whom public goods are substitutable becomes the leader.     

Projecting scenarios for South-east Asia and the South-west Pacific

The article describes further work to validate and assess a method of futures projection. The full methodology is shown in the context of a projection of plausible future trends for South-east Asia and the South-west Pacific. A number of scenarios are developed and it is shown that the future for that region may be fraught with considerable problems. Finally, the methodology is assessed and suggestions for future work are made.     

Estimating the price of default risk

A firm's instantaneous probability of default is modeled asa translated square-root diffusion process modified to allowthe process to be correlated with default-free interest rates.The parameters of the process are estimated for 161 firms. Anextended Kalman filter approach is used that incorporates boththe time-series and cross-sectional (term structure) propertiesof the individual firms' bond prices. The model is reasonablysuccessful at fitting corporate bond yields, while key featuresof the term structures of yield spreads are captured in thesigns and magnitudes of the resulting parameter estimates.     

THE SCOPE FOR NON‐PROFIT OBJECTIVES IN A MIXED OLIGOPOLY UNDER INTERNATIONAL COMPETITION

We ask how the scope for non‐profit objectives in a state‐owned enterprise (SOE) in a mixed oligopoly changes because of competition from firms in another country. There is no change if costs and demand are given, unless the trade partner is a low‐cost country. However, the scope for non‐profit objectives is limited by the country's relative size if wages are market‐clearing and if workers and firms are stationary, because of reduced competitiveness caused by higher real wage rates. The total surplus is then not affected by the actions of the SOE. International trade does not otherwise reduce the scope for its non‐profit objectives if workers and firms are mobile, but productivity differences might require restrictions in order to avoid a complete relocation of the workforce in either country.