monitoring versus incentives abstract this paper analyzes the trade off between monitoring and incentives in a principal agent relationship with moral hazard we derive general results on the optimal monitoring incentives mix for the case where both parties are risk neutral and the agent faces a limited liability constraint we show that the principal uses less monitoring and stronger incentives if the agent s liability limit is relaxed or if monitoring costs increase to induce more effort on the part of the agent the principal resorts to more monitoring or to stronger incentives or both in particular there are cases where the cheapest way to induce more effort is to use lower powered money incentives but with much more precise monitoring

temporary emancipation from land from the industrial revolution to the present time abstract ecological and thermodynamic analysis shows that the tremendous speed of matter and energy degradation of the earth is the genuine cause of land deterioration the temporary emancipation from land since the industrial revolution still heavily depends upon land based resources especially fossil fuels stored in the past the prophetic views of liebig and marx concerning land deterioration are reconsidered not only the essential differences but also similarities between manufacturing and farming will be presented several technological proposals for a secure food supply will be critically appraised this study suggests a drastic reorientation of economic activites in the future to preserve our land

protectionism trade and measures of damage from exotic species introductions unintentional introductions of nonindigenous plants animals and microbes cause significant ecological and agricultural crop damage worldwide trade in both manufactured and agricultural goods is a primary vector for such introductions fusing simple models of trade and biological introductions we explore the links between trade protectionism and damage arising from exotic species introductions we show that it is possible for freer trade to reduce damage arising from exotic species invasions we also show how current measures of damage heavily weighted toward agricultural damage serve as misleading indicators of how restrictions to trade affect total losses arising from exotic species

disguised protectionism global trade rules and alien invasive species current international law strongly favors policies designed to make imports safer e g in terms of invasive species over policies explicitly designed to discourage imports we show that this preference may be counterproductive a externality in trade is incorporated into a political economy model of policy formation nations can address the externality by inspecting cargo and imposing a fine on contaminated imports we compare the equilibrium when inspection is the only policy option relative to the equilibrium that emerging when nations may also manipulate the tariff ruling out the tariff causes socially excessive stringency in general social welfare losses if domestic supply is highly inelastic and in some circumstances an increase in the real tariff measured as the difference between world and domestic prices

dynamic sanitary and phytosanitary trade policy this paper characterizes the optimal use of sanitary and phytosanitary standards to prevent the introduction of harmful pests and diseases through international trade because established pest and disease infestations grow and spread over time their introduction has intertemporal consequences in a dynamic economic model an efficient trade policy balances the costs of sps measures against the discounted stream of the costs of control and social damages that are avoided by using sps measures where future growth of any established infestation is accounted for we examine when phytosanitary trade policy makes good economic sense when it is efficient to provide full protection against pests and diseases and when restrictive but not fully protective trade policy is efficient

avoiding invasives trade related policies for controlling unintentional exotic species introductions abstract international commodity trade serves as the primary conduit for unintentional introductions of damaging exotic species we use a simple model of contaminated goods trade to analyze the optimal mix of tariffs and inspections as means of controlling damage from this negative externality among other policy relevant results we find that 1 while it is always optimal to employ tariffs there are non trivial cases in which inspections should optimally be set to zero 2 a higher infection rate requires a higher tariff but beyond a point optimal inspections decrease in the infection rate and finally 3 taking a dynamic view and considering future effects of current introductions leads unambiguously to more stringent inspections but may give rise to higher or lower tariffs

protectionism versus risk in screening for invasive species abstract i examine the extent to which enforcement of a biosecurity import restriction us border inspections for foreign pests and diseases is used as a protectionist trade barrier the parameters of a structural model of border inspection are estimated using a detailed dataset documenting the outcome of us agricultural border inspections i find that inspections are conducted in a manner that places an implied welfare weight on domestic producers relative to consumers ranging from 1 to 1 63 i also find evidence that the inspection agency takes terms of trade into account when inspecting agricultural imports these results suggest that border inspections are used as a protectionist non tariff barrier

environmental and resource economics a canadian retrospective the paper reviews research contributions to environmental and resource economics by scholars in canada we focus mainly on work from the past 25 years but also highlight earlier pathbreaking work we begin by looking at broad trends in research both internationally and within canada we then review canadian contributions to various topics in the field canadians have played a leading role in the development of the field especially in resource economics international environmental economics and the valuation of environmental amenities

new methodology for the ecological footprint with an application to the new zealand economy abstract sustainable development has become a primary objective for many countries throughout the world since the late 1980s a major difficulty associated with sustainable development objectives however is the absence of reliable indicators to measure progress towards the goal of sustainability the ecological footprint provides an estimate of the land area necessary to sustain current levels of resource consumption for a given population on an aggregate basis the ecological footprint may be compared with the amount of ecologically productive land available to give an indication of whether consumption patterns are likely to be sustainable this paper proposes the use of a modified form of input output analysis to calculate the ecological footprint the input output approach provides a consistent means of calculating an ecological footprint using data collected as part of the system of national accounts in most developed countries in addition it makes explicit the link between the level of economic activity in a country and its corresponding impact on the environment an application of this methodology to new zealand indicates that it takes 3 49 has of ecologically productive land per year to sustain the average new zealander s current level of consumption

the choice between emission taxes and output taxes under imperfect monitoring we consider a regulator s choice between environmentally motivated emissions taxes and output taxes we investigate how the optimal instrument depends on the monitoring cost function the firm s technology and on social preferences regarding output and environmental quality pure emissions taxes are usually not optimal with monitoring costs pure output taxes are optimal under sufficiently high monitoring costs sufficiently limited options for emission reduction by means other than output reduction and sufficiently high substitutability of the output finally conditions for the optimality of mixed taxes are given

counterfeit product trade the authors analyze trade in both legitimate and counterfeit products domestic firms ow n trademarks and establish reputations for delivering high quality pr oducts in a steady state equilibrium foreign suppliers export legiti mate low quality merchandise and counterfeits of domestic brand name merchandise heterogeneous home consumers either purchase low quality imports or brand name products rationally expecting some degree of counterfeiting of the latter the authors describe the positive and normative effects of counterfeiting in comparison with a no counterfe iting benchmark they also provide a welfare analysis of border inspe ction policy and of policy regarding the disposition of counterfeit g oods that are confiscated at the border copyright 1988 by american economic association

how trade politics affect invasive species control abstract trade has become the main mode of transport for many invasive species including diseases and agricultural pests most species are brought to their new homes unintentionally which constitutes a market failure rooted in international trade unless it is practical to drive invasion risk to zero the external costs may justify a tariff in this paper we analyze the political process likely to govern the formation of tariffs so justified using a straightforward incorporation of an invasive species externality into grossman and helpman s gh well known political economy model we show that our measure of disguised protectionism the gap between the optimal tariff and that set in the equilibrium of the political economy game is equal to the tariff that would be set if there were no invasive species and no international disciplines on trade policy the informational needs required to distinguish disguised protectionism from legitimate public goods protection are formidable

growth with endogenous risk of biological invasion wemodelbiologicalinvasionsasanunintendedby productofcapitalaccumulation we distinguish three spillover effects 1 a negative production externality 2 anegative or positive consumption externality and 3 an increase in the risk of futurewelfare loss we also consider the implications when households self protect byallocating income to reduce the potential damages from a biological invasion anoptimal output tax for production externalities is straightforward and can beaugmented in the case of negative or positive spillover effects on consumer welfare policiestocorrecttheeffectofinvasionsonendogenousriskaremoredifficulttodesign jel o13 o41 q2

optimal border policies for invasive species under asymmetric information this paper analyzes the problem faced by a border protection agency if endogenous exporter abatement activities affect invasive species risk allowing for unobservable differences in abatement cost we show how the optimal inspection penalty regime differs from the symmetric information case departing from previous literature we allow for technical assistance a policy instrument specifically permitted and commonly employed under article 9 of the world trade organization sanitary and phytosanitary agreement we find the information asymmetry can make it optimal for the importing country to provide technical assistance grants for exporter risk abatement even if it would otherwise be inefficient further we show that fungibility of technical assistance with inputs in other sectors of the exporting economy affects the qualitative nature of optimal policy if technical assistance has no outside value in the exporter s country optimal policy is characterized by a menu of contracts balancing higher tariffs with lower penalties for being caught with an invasive if technical assistance can be used in other sectors of the exporter s economy it can introduce countervailing incentives making a uniform tariff penalty combination optimal

towards an accurate description of affordability this paper draws upon the poverty literature and examines the desirable properties of a descriptive statistic of affordability namely that it should satisfy three axioms monotonicity transfer and transfer sensitivity the descriptive statistics of headcounts and averages do not satisfy these three axioms and policies using these statistics as allocative tools may be misallocating resources the paper advocates the use of a foster greer thorbecke statistic fgt examples of different hypothetical households are used to show the contradictory results that can be obtained by using the current statistics as a case study the paper compares regional affordability rankings in england by looking at the fgt headcount and mean values of the rent income ratio using the 1995 96 existing tenants survey

tariff escalation and invasive species damages we investigate the interface between trade and damages from invasive species is focusing on escalation in tariffs between raw input and processed good markets and its implication for is based damages the current tariff escalation in processed agro forestry products motivates our analysis tariff escalation exacerbates the likelihood of is introduction by biasing trade flows towards increased trade of primary commodity flows and against processed product trade we show that a reduction of tariff escalation by lowering the tariff on processed goods increases allocative efficiency and reduces is based damages a win win situation we also identify policy menus for trade reforms involving tariffs on both raw input and processed goods leading to win win situations

trade and the environment a partial synthesis there is an emerging consensus in the environmentalist community opposing free trade while some economists view this as simply another outlet for protectionism recent work has begun to move beyond the rhetoric to probe more deeply into the theoretical and empirical relationships between international trade and environmental quality the purpose of the present paper is twofold we first integrate some of the existing literature by using the simple concepts of general equilibrium pollution supply and demand our survey of the trade and environment literature is more

fish trade liberalization under 21st century trade agreements the ceta and newfoundland and labrador fish and seafood industry abstract both classical ricardo and neo classical heckscher ohlin theories of international trade assume that free trade results in welfare gains for all involved a more recent literature dedicated to liberalization of trade in renewable resources finds that welfare effects depend on certain factors such as the country s status as importer or exporter the state of the renewable resource stocks and the size of the country on the world market chichilnisky 1993 brander and taylor 1997a emami and johnston 2000 hannesson 2000 or remain theoretically indeterminate and require empirical analysis nielsen 2009 fish trade liberalization is provided in the comprehensive economic and trade agreement ceta concluded by the canadian government in 2013 with the european union eu this new type of 21st century trade agreement challenges both the conventional theory of international trade and renewable resource based sectors of economic activity such as fish and seafood by opening them up to industrial type international competition and integration the paper uses the theoretical framework of ecological economics costanza et al 2015 to demonstrate that the declining newfoundland and labrador nl fish and seafood industry is not ready to participate gainfully in implementation of the ceta it also uses the concept of policy space rodrik 2007 pauwelyn 2008 to recommend some policy changes that can prepare the nl fish and seafood sector for competitive and beneficial participation in the ceta restructuring the fish and seafood sector with a focus on small scale elimination of harmful subsidies and redirecting them to achieve lower costs of operation better trained labor force and more just and sustainable supply marketing networks will make it fit to benefit from the gains from trade and to contribute to a more equitable distribution of the benefits of the fishery to the fishers and local communities

biosecurity incentives network effects and entry of a rapidly spreading pest abstract protection against pest invasion is a public good yet the nature of private incentives to avoid entry is poorly understood this work shows that due to increasing returns or network effects private actions to avoid entry are strategic complements this means that compulsory action at least by a subset of parties can be an effective policy both heterogeneity in biosecurity costs and the effect of private actions on the extent of the invasion threat are shown to have ambiguous effects on the magnitude of welfare loss due to strategic behavior communicated leadership by some party is preferred to simultaneous moves and it may be best if the party with highest biosecurity costs assumes a leadership role

total embodied energy requirements and its decomposition in china s agricultural sector abstract humanity faces the important challenge of understanding and integrating human and natural processes including agriculture in china the scarcity of arable land 0 09 ha per capita increasing population and migration of the workforce to cities pose a significant challenge for food security agricultural energy productivity has therefore become a key concern in this study we used input output analysis to measure energy productivity at a national agro ecosystem scale for china using the total embodied energy requirement teer to reveal hidden energy flows we introduced a structural decomposition technique that reveals how changes in teer for the agricultural sector were driven by changes in energy use technology and the inter relationships among two agricultural sectors farming and animal husbandry the results will help both policymakers and farmers to improve the efficiency and environmental compatibility of agricultural production declining teer for both sectors means that china s overall agro ecosystem has increased its energy productivity since 1978 due to improved relationships between the agricultural sectors and increased use of biological energy however the net positive energy income decreased in the farming sector and an increasing proportion of fossil energy use accompanied by increased energy income in the animal sector provide incentives to increase yield and decrease labor by using more fossil energy thus raising more animals in the animal husbandry sector overuse of fossil energy since 1990 has resulted in decreasing fossil energy efficiency requiring immediate measures to improve the use of fossil fuel intensive materials such as fertilizers

environmental regulation in an open economy abstract environmental regulation by a large trading country affects the world price of traded commodities a series of second best environmental taxes are derived which explicitly incorporate trade effects for cases which depend on the type of externality the regulating country s commodity trade balance and the presence or absence of trade taxes in the regulated market a coordinated policy solution using both tax and tariff instruments also is derived the practical implications for domestic environmental policy making which emerge from the theoretical results are evaluated

a model of optimal import phytosanitary inspection under capacity constraint growth and liberalization of world trade have increased the risks of introduction of quarantine plant pests into importing countries import inspection of incoming commodities is a major tool for prevention of pest introductions related to world trade but inspection capacities are limited this article develops a theoretical and an empirical model for the optimal allocation of inspection effort for phytosanitary inspection of imported commodities when the inspecting agency has a limited capacity it is shown that the optimal allocation of inspection effort equalizes marginal costs of pest introduction across risky commodity pathways the numerical illustration finds the optimal allocation of inspection effort of chrysanthemum cuttings imported in the netherlands the numerical results suggest that ceteris paribus greater inspection effort should be allocated to pathways whose inspection yields a greater reduction in the expected costs of pest introduction the numerical results also suggest that import inspection has a high marginal benefit in particular we found that each additional euro of the inspection capacity decreases the expected costs of pest introduction from 18 to 49 euros depending on the initial inspection capacity

economic incentives for managing filterable biological pollution risks from trade infectious livestock disease problems are biological pollution problems prior work on biological pollution problems generally examines the efficient allocation of prevention and control efforts but does not identify the specific externalities underpinning the design of efficiency enhancing policy instruments prior analyses also focus on problems where those being damaged do not contribute to externalities we examine a problem where the initial biological introduction harms the importer and then others are harmed by spread from this importer here the externality is the spread of infection beyond the initial importer this externality is influenced by the importer s private risk management choices which provide impure public goods that reduce disease spillovers to others making disease spread a filterable externality we derive efficient policy incentives to internalize filterable disease externalities given uncertainties about introduction and spread we find efficiency requires incentivizing an importer s trade choices along with self protection and abatement efforts in contrast to prior work that targets trade alone perhaps surprisingly we find these incentives increase with importers private risk management incentives and with their ability to directly protect others in cases where importers can spread infection to each other we find filterable externalities may lead to multiple nash equilibria

tariffs and the risk of invasive pest introductions in commodity imports theory and empirical evidence abstract we investigate using tariffs as corrective taxes to reduce risks from biological invasions due to expanded world trade a theoretical analysis indicates that higher tariffs have ambiguous effects on invasive pest introductions an econometric analysis using data from us department of agriculture surveillance screening indicates that tariff rates exert a negligible influence on expected invasive pest introductions from commodities currently facing positive tariffs removal of duty free status would decrease expected pest intercepts but undermine other goals of us trade policy and lower consumer welfare consumer welfare loss is on the order of 38 million per expected intercept avoided

managing dynamic epidemiological risks through trade there is growing concern that trade by connecting geographically isolated regions unintentionally facilitates the spread of invasive pathogens and pests forms of biological pollution that pose significant risks to ecosystem and human health we use a bioeconomic framework to examine whether trade always increases private risks focusing specifically on pathogen risks from live animal trade when the pathogens have already established and traders bear some private risk we find two results that run counter to the conventional wisdom on trade first uncertainty about the disease status of individual animals held in inventory may increase the incentives to trade relative to the disease free case second trade may facilitate reduced long run disease prevalence among buyers these results arise because disease risks are endogenous due to dynamic feedback processes involving valuable inventories and markets facilitate the management of private risks that producers face with or without trade