voluntary disclosure of evaded taxes increasing revenue or increasing incentives to evade many countries apply lower fines to tax evading individuals when they voluntarily disclose the tax evasion they committed i model such voluntary disclosure mechanisms theoretically and show that while such mechanisms increase the incentive to evade taxes they nevertheless increase tax revenues net of administrative costs i confirm the importance of administrative costs in a survey of german competent local tax authorities i then test the effects of voluntary disclosure on the tax evasion decision using the introduction of the 2009 offshore voluntary disclosure program in the u s for identification the analysis confirms that the introduction of voluntary disclosure increases tax evasion

material flows vs natural capital what makes an economy sustainable abstract in the discourse about sustainable development constant natural capital is frequently referred to as a criterion for ecological sustainability but what is natural capital the concept will be analyzed by presenting arguments in favour of using the term and different versions of sustainability strong and weak subsequently a critique of the natural capital concept is brought forward from an ecological as well as from an economic perspective following this critique the use of material inputs and the material input per unit of service mips as a measure for the environmental impact potential is suggested dematerialisation is understood to be an alternative management rule for sustainability in conclusion a change of perspective is proposed due to the conceptual and measurement problems associated with the constant natural capital criterion which refers to a stock it seems more reasonable from a scientific as well as from a practical perspective to add flows i e material inputs to a decision criterion for whether a development is sustainable or not

natural resources curse or blessing are natural resources a curse or a blessing the empirical evidence suggests that either outcome is possible this paper surveys a variety of hypotheses and supporting evidence for why some countries benefit and others lose from the presence of natural resources these include that a resource bonanza induces appreciation of the real exchange rate deindustrialization and bad growth prospects and that these adverse effects are more severe in volatile countries with bad institutions and lack of rule of law corruption presidential democracies and underdeveloped financial systems another hypothesis is that a resource boom reinforces rent grabbing and civil conflict especially if institutions are bad induces corruption especially in nondemocratic countries and keeps in place bad policies finally resource rich developing economies seem unable to successfully convert their depleting exhaustible resources into other productive assets the survey also offers some welfare based fiscal rules for harnessing resource windfalls in developed and developing economies

guidelines for exploiting natural resource wealth the principles of how best to manage the various components of national wealth are outlined where the permanent income hypothesis the hotelling rule and the hartwick rule play a prominent role as far as managing natural resource wealth is concerned a case is made to use an intergenerational sovereign wealth fund to smooth consumption across generations a liquidity fund for the precautionary buffers to deal with commodity price volatility and an investment fund to park part of the windfall until the country is ready to absorb extra spending on domestic investment capital scarcity implies that a positive part of the windfall should be spent on domestic investment the conclusions highlight the political economy problems that will have to be tackled with these normative proposals for managing wealth the author 2014 published by oxford university press

the concept of natural capital the natural environment is now commonly viewed as a form of capital asset or natural capital also included are ecosystems that provide important goods and services to the economy managing natural capital has consequences for sustainable development however there are contrasting weak versus strong sustainability views which in turn have implications for green accounting natural resource based sovereign wealth funds have emerged as key financial instruments for compensating resource depreciation with greater economy wide investments recent scientific evidence recommends demarcating safe operating spaces to limit exploitation of critical global biophysical subsystems or processes these challenges suggest that the concept of natural capital is pivotal to sound policy

measuring natural capital towards accounts for the uk and a basis for improved decision making the paper describes the ongoing project begun by the uk office for national statistics and the department for the environment food and rural affairs in 2011 to compile comprehensive natural capital accounts for the uk it describes the basis on which the accounts have been constructed discusses key issues which have arisen and presents the results to date it also sets out how restoration accounts for individual projects can not only facilitate conventional cost benefit analysis but also add to relevant material for decision makers more widely the paper describes how natural capital accounts can underpin well based decision making for example in implementation of the uk government s new 25 year plan for the environment in addition by providing information on one of the missing capitals such accounts can augment analysis of the behaviour of the economy generally

strong sustainability critical natural capital and the capability approach this article is an attempt to conceptually improve the notion of strong sustainability by creating a rapprochement between its core concept critical natural capital and the capability approach we first demonstrate that the capability approach constitutes a relevant framework for analysing the multiple links between human well being and critical natural capital second we demonstrate that the rapprochement between critical natural capital and the capability approach can form both the normative basis and the informational basis for a deliberative approach to human development which embraces a strong sustainability perspective this conceptual rapprochement as illustrated in our case study opens up avenues of research towards the practical implementation of human development projects from a strong sustainability perspective

accounting technologies and sustainability assessment models abstract within ecological economics there is recognition of the need for new approaches to decision making to support sustainable development initiatives there is an increasing acknowledgement of the limitations of cost benefit analysis approaches as a measure of the un sustainability of organizational activities these are viewed as particularly inappropriate within the participatory settings that sustainable development proponents seek to foster they also fail to deal with the highly contested nature of sustainable development discourse in contemporary pluralist democracies while advances have been made in the field of multi criteria decision making there is still a relative dearth of versatile models that accommodate monetization in a way that recognizes the limits of calculative technologies this article introduces readers to developments within the accounting discipline designed to support sustainable development decision making and evaluation in particular it proposes sustainability assessment models as a viable alternative to cost benefit analysis sustainability assessment models are based on an inter disciplinary approach that recognizes the need for accountings that facilitate more participatory forms of decision making and accountability as such they address many of the weaknesses in current approaches to cost benefit analysis the authors first experiences with sustainability assessment models were with bp and the united kingdom oil and gas sector where models were developed as a means of making previously external costs more central to organizational decision making later work has included exploration of a range of decision making situations in private and public sector organizations in both the united kingdom and new zealand this has involved more explicit attention to plural values and issues of participation dialogue and democracy

an economic analysis of tax amnesties abstract tax amnesties have frequently been justified as politically popular ways to generate increases in government revenue this paper examines the circumstances under which amnesties are likely to have a beneficial impact on revenue collections it concludes that while in general it may be correct to impose a reduced penalty on individuals who voluntarily disclose tax evasion shortlived amnesties of the type most frequently observed in practice are unlikely to generate genuinely additional revenue particularly when judged against the potential danger of reducing future tax compliance

inflation and tax evasion an empirical analysis this paper contains an analysis of the effect of inflation on aggregate tax evasion in the united states over the period 1947 81 it is found that tax evasion in both absolute and relative terms is positively related to the inflation rate further the results indicate that aggregate evasion has risen in both absolute and relative terms with increases in the marginal tax rate but has fallen with increases in the detection probability the penalty rate and the wage share of income finally evasion has risen in absolute terms but has fallen in relative terms when real true income has risen

the rationality of a safe minimum standard the safe minimum standard sms is a policy shift to safety defaults to forestall irreversible outcomes critics charge an inconsistency what justifies business as usual cannot also justify switching to the sms currently the sms is only a procedural shift where economic optimality procedures are buttressed by extra special focus on uncertainty yet social welfare function may not be complete enough warranting a more fundamental sms shift numerous moral positions support this sms approach this sms also operationalizes the intolerable cost as a trigger point noting societies with lower tolerance for sacrifice must trigger the sms earlier

the contribution of l c gray to the economic theory of exhaustible natural resources and its roots in the history of economic thought abstract the paper opens with an assessment of natural resources economics up to 1913 14 when gray published his two pioneering articles in natural resources economics part i an in depth study of gray weighing his contribution to the microeconomic theory of the mine and the macroeconomic theory of conservation against current literature constitutes the main body of the paper part ii gray and hotelling s contributions to the theory of the mine are compared part iii the paper concludes with a comparison drawn between the author s findings and the scant attention previously paid to gray s contributions to natural resources economics so far as i know this is the first attempt to apply economic theory to this particular problem of conservation h c taylor unpublished letter to c r van hise may 23 1913 a reference to gray s economic possibilities of conservation

building the consensus the moral space of earth measurement abstract we chart the moral space of earth measurement with the aim to develop practical tools to evaluate and improve earth measurement frameworks including environmental economic accounting and ecosystem services based on a survey of environmental ethics we develop four concepts that are fundamentally important to fostering agreement in debates over earth measurement frameworks among stakeholders with diverging belief systems the four concepts can thus be used as criteria to evaluate the completeness and defensibility of existing measurement frameworks the first two concepts the consideration of broad human values and long time frames follow the landmark work by bryan norton we further propose the adoption of the capital approach and precaution as the third and fourth concept respectively we conclude with suggestions for how current frameworks could be rendered more complete defensible and internationally acceptable

social accounting and welfare measurement in a growth model with human capital this paper addresses social accounting and welfare measurement in an economy where human capital is an important factor in the economic system human capital accumulation depends on the time consumers spend in education however human capital is also a separate argument in the production function facing firms which gives rise to a production externality in a command optimum where the externality is internalized we show that an augmented nnp measure is the appropriate welfare indicator we also discuss the taxtransfer system required for the decentralized economy to reach a command optimum

a framework for the practical application of the concepts of critical natural capital and strong sustainability this paper develops a methodology for identifying that natural capital called critical natural capital cnc the maintenance of which is essential for environmental sustainability by consideration of the characteristics of natural capital of the environmental functions that these characteristics enable natural capital to perform and of the importance of these functions to humans and the biosphere it shows how sustainability standards in respect of these environmental functions may be derived the difference between the current situation and these standards is termed the sustainability gap the methodology that emerges from bringing these ideas together into a single analytical framework enables policy makers to identify the extent of current unsustainability the principal causes of it the elements and processes of natural capital the cnc which need to be maintained or restored to close the sustainability gap and the costs of so doing the framework should therefore be of use in identifying priorities and policies for moving towards environmental sustainability

plea bargaining with the irs abstract the purpose of this paper is to propose a new evasion counteracting policy and to prove its welfare improving property the new fatota policy allows a target group of businesses to choose between the following two options paying a fixed amount of taxes thus exempting themselves from tax audits or paying only the amount they choose to pay and subject to possible tax audits it is shown that fatota is very similar to the plea bargaining system of the u s criminal proceedings and our results can be treated as an extension of the grossman katz analysis to the crime of tax evasion

wealth and sustainability for economists in 1974 it was a live question whether the exhaustion of natural resources such as oil would necessarily lead to the decline of economic activity solow showed that constant levels of consumption could be sustained in the face of exhaustibility if there is sufficient substitutability between produced and natural factors of production hartwick then proved that underpinning this result is a saving rule set investment in produced capital equal to the value of resource depletion at each point in time a large literature has shown that a comprehensive measure of the change in real wealth net saving plays a central role in determining whether current well being can be sustained in particular current declines in real wealth signal that future well being will also decline a result that has been confirmed empirically using data for developing countries changes in wealth and sustainability are therefore joined at the hip the current composition of wealth serves to define the policy challenges that countries face in achieving sustainable development if substitution possibilities are limited between natural and other factors of production as one might expect then technical progress is a necessary complement to policies for sustainability

the diversity of design of tsos it is puzzling today to explain diversity and imperfection of actual transmission monopoly designs in competitive electricity markets we argue that transmission monopoly in competitive electricity markets has to be analysed within a wilson 2002 modular framework applied to the management of electricity flows at least three modules make the core of transmission design 1 the short run management of network externalities 2 the long run management of network investment and 3 the coordination of neighboring transmission system operators for cross border trade in order to tackle this diversity of designs of tsos we show that for each of these modules three different basic ways of managing them are possible among the identified twenty seven options of organisation we define an ideal tso second we demonstrate that 1 monopoly design differs from this ideal tso and cannot handle these three modules irrespective of the institutional definition and allocation of property rights on transmission while 2 definition and allocation of property rights on transmission cannot ignore the existing electrical industry and transmission network structure they have to complement each other to be efficient some conclusions for regulatory issues of transmission systems operators are derived from this analysis of network monopoly organisation

positive freedom markets and the welfare state the comparative merits of market and certain distinguished non market resource allocation mechanisms have continually been at the centre of debate in economics and political philosophy doubtless it will remain there for here one faces the grandest of human concerns embracing as it does issues bearing on liberty and welfare the aspirations of people their potential and re alized capabilities and the fulfillment of their needs it enables us to see individuals in a social context to ask about the possible features of a civil society the obligations that people may have to themselves to one another and to agencies then again we are able to enquire into the obli gations that agencies have to people and to one another the extent to which responsibility needs to be delegated among offices and persons the role that dispersed information may play in an swers to these and so on the debate is central to any discussion of the kind of society we ought to aspire to be members of

enforcement leverage when penalties are restricted in the united states empirical studies of the enforcement of continuous compliance with environmental regulations especially air and water pollution regulations have repeatedly demonstrated the following i for most sources the frequency of surveillance is quite low ii even when violations are discovered fines or other penalties are rarely assessed in most states iii sources are nonetheless thought to be in compliance a large part of the time the evidence for the apparently low level of enforcement activity is found in a number of case studies of state and local enforcement of air and water quality regulations conducted jointly by the environmental protection agency epa and council on environmental quality ceg together with periodic surveys of implementation of air and water quality legislation conducted by the general accounting office gao these surveys show

critical natural capital revisited ecological resilience and sustainable development abstract the maintenance of critical natural capital is an important objective of sustainable development critical natural capital represents a multidimensional concept as it mirrors the different frameworks of various scientific disciplines and social groups in valuing nature this article revisits the concept of critical natural capital and examines its relation to the concept of ecological resilience i propose that ecological resilience can help a great deal in specifying the ecological criticality of specific renewable parts of the natural capital more specifically i suggest that the degree of ecological resilience is inversely related to the degree of threat ecosystems are prone to the concept of ecological resilience may complement other measures such as integrity or vulnerability in estimating the degree of threat specific ecosystems are exposed to the empirical estimates of ecological resilience add a further criterion in order to build a comprehensive and clear conception of critical natural capital

are we a nation of tax cheaters new econometric evidence on tax compliance the theoretical basis for the economic approach to tax compliance has at least until recently been inadequate and the limited empirical work based on it is seriously flawed in this paper we briefly review both as well as new theoretical and especially empirical work on the tax compliance problem with respect to the latter we present preliminary results based cm a state level time series cross section data set drawn in part from the annual reports of the commissioner of internal revenue

incorporating distributional considerations in the safe minimum standard approach endangered species and local impacts abstract explicitly incorporating current distributional concerns into the safe minimum standard sms approach is the objective of this study the sms approach is a collective choice process that prescribes protecting a minimum level of a renewable natural resource unless the social costs of doing so are somehow excessive or intolerably high more complete implementation of an sms approach if it is to be a pragmatic policy tool requires that distributional considerations be included in determining whether the economic consequences of preservation actions are intolerable two case studies involving the us endangered species act are used to illustrate how distributional concerns might be incorporated into the sms approach

limits to substitution between ecosystem services and manufactured goods and implications for social discounting this paper examines implications of limits to substitution for estimating substitutability between ecosystem services and manufactured goods and for social discounting based on a model that accounts for a subsistence requirement in the consumption of ecosystem services we provide empirical evidence on substitution elasticities we find an initial mean elasticity of substitution of two which declines over time towards complementarity we subsequently extend the theory of dual discounting by introducing a subsistence requirement the relative price of ecosystem services is non constant and grows without bound as the consumption of ecosystem services declines towards the subsistence level an application suggests that the initial discount rate for ecosystem services is more than a percentage point lower as compared to manufactured goods this difference increases by a further half percentage point over a 300 year time horizon the results underscore the importance of considering limited substitutability in long term public project appraisal

clarifying protected and utilitarian values of critical capital abstract sustainable development may be defined as a non declining value of capital stocks social natural built and human over time the ability for substitution between and within each stock over time has been widely debated resulting in the identification and then preservation of critical capital stocks we propose that critical can be defined from two ethical perspectives teleological or consequentialist goal or ends based and deontological moral duty and rule based the consequential ethic ensures critical capitals are utilitarian in value and they generate goods and services for the maintenance of human wellbeing whilst deontologically critical capital depends on culturally and psychologically protected values which may vary locally or at least as for e g biodiversity be open to conflicting opinions this separation in the basis for defining critical capital stocks leads to awareness that some tradeoffs between critical capital stocks may be irreconcilable or likely to lead to outrage a framework is developed to guide practitioners as to how to identify critical capital stocks using both protected and utilitarian values examples show that protected values are likely to be specific to community ethnic religious cultural etc and require different methods for resolving substitutability of capital stocks to achieve sustainable development

net national product as an indicator of sustainability net national product nnp can potentially serve several objectives among others to measure value added and to be an indicator of welfare in the aftermath of the world commission on environment and development however it also seems important to investigate whether the concept of nnp can serve as an indicator of sustainability my point of departure following hicks 1946 ch 14 is therefore to require that nnp should measure what can be consumed in the present period without reducing future consumption possibilities and in line with this to argue that the nnp should equal the maximum per capita consumption level that can be sustained if sufficiently many facilitating assumptions are made then a concept of nnp that serves as an exact indicator of sustainability can easily be constructed for instance for a closed economy with a constant population a stationary technology and with only one capital good it follows that the present does not reduce future consumption possibilities if and only if it does not decrease the stock of the single capital good hence under the assumption that the one capital good k is identical to the one consumption good x nnp defined as y x k measures the maximal sustainable consumption at time t because then x y is equivalent to k the purpose of this note is to establish that with multiple capital goods it is not in general possible to construct an exact indicator of sustainability on the

the integration of natural capital into development policies in response to the united nations sustainable development goals there has been a rising awareness of the need to address simultaneously the preservation of natural capital stocks and poverty alleviation at multiple scales focusing on tropical forest rich developing countries the article overviews the extent to which natural capital considerations are integrated into existing development policies and interventions the review finds that the explicit consideration of natural resources is left out of many commonly applied development interventions leading to suboptimal and unsustainable outcomes the interventions that do tackle both development and conservation goals are often not coordinated and are implemented at a site by site basis without providing the socially efficient levels of natural capital stocks or ensuring the long term sustainability of the development and conservation impacts bringing in perspectives from development economics environmental economics and applied conservation this article makes the case for a better integration of development and conservation goals in interventions in developing countries and outlines the emerging frontiers for research and policy

national accounts and environmental resources in the paper optimal growth theory is used to derive the appropriate definition of the net national product concept when there are environmental resources and environmental damage to take into account the basic conclusions are that conventional defined np should be corrected by deducting environmental damage and adding the value of the net change of all resources

the ecology of natural capital accounting natural capital is increasingly widely discussed and included in corporate and governmental accounts using a variety of different approaches and metrics here i argue that natural capital is fundamentally an emergent feature of structures and functions of the natural environment therefore its valuation and metrics for reporting on its condition and the way that it is represented in accounts need to reflect these defining features and not rest solely on measurable flows of goods and services natural capital is an asset and its many contributions to the economy and society often called ecosystem services are both malleable and adaptable their value changes with time and context as they become more or less important and relevant for particular purposes unlike most produced assets natural assets are multifunctional adaptable and resilient and within limits they have the capacity to regrow or reorganize themselves maintaining this capacity is therefore the key priority for a responsible owner or manager of natural assets currently most metrics for natural capital are based on the quality or quantity of flows of goods and services on the geographical distribution of particular ecosystems or land sea uses and by reference to ecosystem services delivered by particular ecosystems the advantages and disadvantages of these different approaches are discussed but i propose instead using the quality of fundamental ecological processes and functions which properly represent the functioning and capabilities of the natural capital system upon which society and the economy depend

this blessed plot when should capital gains on land be regarded as income national balance sheets for a number of advanced economies show land to be a valuable form of natural capital whose value has increased sharply over the last twenty years or so this paper investigates when or whether capital gains on land should be counted as a component of income while development projects can lead to increases in rental rates and land values it is shown that although the benefits any project should be counted as income increases in rental rates and land values should not normally be seen as additional real income however if land benefits from exogenous land saving technical progress the resulting capital gains can be seen as income applying the same principle to human capital it is shown on a steady growth path that these capital gains are equal to weitzman s 1997 growth premium in the relationship between income and sustainable consumption

political institutions of electricity regulation the case of turkey abstract turkey has been going through a liberalization process in its electricity market over the last decade so far the regulatory content of the market reforms has been in the center of attention in the literature to the negligence of regulatory governance however recent studies which applied the theoretical insights of new institutional economics to utilities regulation have demonstrated that political endowments of the country draw the boundaries to which extent such regulatory content can be effectively implemented in line with these studies this paper adopts an institutional approach and attempts to identify the political endowments of turkey in order to further analyze whether the market reforms succeeded in bringing about sufficient checks to cure the institutional problems in other words the paper takes a picture of the overall regulatory arena the results show that the current regulatory structure especially government regulator relations yet fails to meet good regulatory governance criteria the paper also provides some policy suggestions

taking natural capital seriously the paper sets out a pragmatic case for preserving the aggregate level of natural capital in the face of the declines in biodiversity and the rising population and major increases in consumption that economic growth will bring in this century the accounting framework to achieving this objective is considered focused on the role of asset registers particular attention is paid to renewable assets at risk of falling below critical thresholds these assets are key components of the balance sheet capital maintenance expenditures are required to maintain the value of assets intact since renewable natural assets should not be depreciated but rather treated as assets in perpetuity within the aggregate substitutions with other forms of capital are permitted but only if there is compensation for any detriment to natural capital offsetting is one mechanism for achieving this compensation the case for enhancing the aggregate is considered and the paper shows how a broader national plan over a generation could contribute to the policy objective of leaving the next generation with a richer endowment of natural capital the policy instruments for embedding natural capital into public policy are reviewed

regulation and competition issues in thai electricity sector abstract this paper explores the issues related to regulatory reform and liberalisation leading toward competition in the thai electricity sector which is still under the monopoly control of state owned enterprises soes following an overview of the current market structure of the thai electricity sector the process of liberalisation and deregulation that contributes to the uncompetitive market structure under soes control is examined the author asserts that there are problems within the energy commission and the energy industry act be 2550 2007 that contribute to the continuance of an uncompetitive electricity supply possible reforms to the thai electricity regulation are proposed with the aim of creating market competition and efficiency in the thai electricity sector

between ostrom and nordhaus the research landscape of sustainability economics abstract we survey the emerging research area of sustainability economics through a quantitative full text analysis of peer reviewed journal publications from 1987 to 2013 to identify relevant contributions we draw on existing definitions of sustainability economics for a keyword based identification strategy a combined focus on a the human nature relationship b the long term uncertain future c normative orientation towards sustainability and d economic analysis our analysis of a random subsample of 343 relevant papers reveals that i sustainability economics is a rapidly developing research area ii while theoretical contributions shaped the area in earlier years applied work now constitutes the largest share of contributions iii the research landscape can be clustered into eleven research clusters these range from participatory governance of social ecological systems associated with the work of elinor ostrom to questions of intertemporal allocation and distribution applied to climate economics associated with the work of william nordhaus iv the research area is broad in scope and heterogeneous and there is relatively little interaction between important clusters v relevant contributions are published in more than 100 journals ten journals publish half of all contributions led by ecological economics and 40 appear in non economics journals underscoring the importance of interdisciplinary dialogue

the build up of local sustainable development politics a case study of company leaders in france abstract the purpose of this study is to examine business leaders perceptions on sustainable development and their expectations about local governments using a questionnaire on a cross section of 32 french business leaders we examine the following questions can issues related to sustainable development extend beyond questions of profit and future economic dynamism the modern global economic crisis in combination with the ongoing ecological one makes regional attractiveness more topical than ever if local governments invest in sustainable development policy it might satisfy not only citizens but also firms in the territory while attracting new ones as well to determine if firms are really interested in such a policy as well as understand their expectations this research undertook interviews with 32 business leaders we found that local governments should act with firms as partners to increase resilience and sustainability the expectations of business leaders and their sensitivity to sustainable development suggest that sustainable development policies could improve the attractiveness of a local economy especially in the context of the current environmental and economic crises

a review of the stern review on the economics of climate change the stern review calls for immediate decisive action to stabilize greenhouse gases because the benefits of strong early action on climate change outweighs the costs the economic analysis supporting this conclusion consists mostly of two basic strands the first strand is a formal aggregative model that relies for its conclusions primari ly upon imposing a very low discount rate concerning this discount rate aspect i am skeptical of the review s formal analysis but this essay points out that we are actual ly a lot less sure about what interest rate should be used for discounting climate change than is commonly acknowledged the review s second basic strand is a more intuitive argument that it might be very important to avoid possibly large uncertain ties that are difficult to quantify concerning this uncertainty aspect i argue that it might be recast into sound analytical reasoning that might justify some of the review s conclusions the basic issue here is that spending money to slow global warming should perhaps not be conceptualized primarily as being about consump tion smoothing as much as being about how much insurance to buy to offset the small change of a ruinous catastrophe that is difficult to compensate by ordinary savings

agriculture after brexit the paper considers the impact of the common agricultural policy cap on the uk and sets out three options for a new british agricultural policy after brexit these options are carrying over the subsidy regime with an emphasis on food security and self sufficiency maintaining the cap architecture but shifting more of the cap subsidies away from payments for land ownership towards more spending on environmental schemes and providing public money only for public goods the third option is advocated after a transitional path allows time for farmers to adapt

the politics of regulation in the turkish electricity market abstract turkey began reforming the electricity market in 2001 the regulatory reform aimed to liberalize the market however the institutional and political structure was not ready for creating an efficiently working competition the independent regulator did not have both experience and will to direct the industry to a more competitive environment currently the reform has slowed down and political preferences drive the industry this paper studies the reasons for the slowdown in the reform efforts by focusing on the relationships between the government judiciary and the independent regulator we conclude that strategic behaviors of players in the market including the judiciary the government and the regulator have made the introduction of competition to the market more costly

valuing the invaluable how much is the planet worth this article explores the valuation of natural capital by critically analysing alternative approaches to it it considers the problems associated with applying economic values to natural capital and the limitations of such exercises it examines different methods that are more familiar to accountants than economists of using what is sometimes termed an engineering approach to estimating the costs of maintaining and restoring existing assets it considers the arguments that are used to justify the two in particular it addresses the question of what we are seeking to do by determining the value of natural capital what is the question to which valuation is supposed to be the answer

deregulating with no regulator is the german electricity transmission regime institutionally correct abstract from 1998 to 2005 the german transmission grid has been put under a self regulated arrangement it seems hard to believe that transmission lines can be opened to third party access only with a negotiated access regime and no regulator supervision it seems contradictory with the notion of ex post contractual hazards promoted by v goldberg and o williamson if a weak institutional arrangement is implemented one might assume that it has to be harmful to network and market access if it is not to be inefficient why and how could it work when looking at rules and prices for accessing the transmission network and the corresponding wholesale markets in germany the club arrangement for transmission opening does not appear so harmful accordingly we have to reconsider the ex ante and ex post institutional mechanism of such a club arrangement ex ante we first reconsider skills and strengths of industrial consumers and german business associations in defining and assessing rules of transmission access we underline that incomplete vertical and horizontal integration of german electricity companies impeded extensive cartel collusion ex post we first look at a strong competition authority backing then we discover that ex ante and ex post dimensions are much more mixed and reinforced in an open cumulative pro competition process framed by the competition authority

natural capital assets systems and policies natural capital is a concept whose time has come but is in danger of being greenwashed to suit vested interests as has happened to sustainability it is a hard concept based upon assets rather than utility natural capital assets provide the foundations for positive freedom by providing for future generations capabilities and choices this is especially the case for renewable natural capital which can provide nature s bounty forever provided the assets are not driven below critical thresholds natural capital assets lend themselves to accounting to balance sheets and risk registers and require capital maintenance cost benefit analysis being partial and on a project by project basis has a limited role since the natural environment comes in systems and is less amenable to marginal analysis three principles are core to the design of natural capital policies these are public goods with public monies polluter pays and compensation in the form of net environmental gain

corporate natural capital accounting accounting is an important practical mechanism by which corporations are held to account for their performance and impact this is consequential for corporate responsibility for the conservation of natural capital while there is clear evidence of increasing corporate accounting and reporting with respect to aspects of natural capital however such efforts are at best nascent this is in part because the purpose and meaning of corporate natural capital accounting is not in itself well established and in part because existing institutional structures and incentives do not lend themselves to giving a full account of natural capital impact in this context the paper argues that there is essentially a need for natural capital accounting and reporting systems that serve two distinct purposes the first which is the more likely to be satisfied by existing market structures is oriented towards the informational needs of shareholders and is concerned with supporting a transition towards environmentally sustainable business models the second in contrast acknowledges that a shareholder oriented perspective constrains natural capital to be important if and only if its conservation privately affects shareholders which is unlikely to ensure an accounting that contributes to the conservation of natural capital as an end in itself this second purpose of strengthening corporate natural capital accountability is unlikely to be satisfied within existing market structures instead it stands in need of a regulatory solution

the consumption of a finite planet well being convergence divergence and the nascent green economy a variety of global metrics indicate the earth has overshot its capacity to supply source and sink resources without substantial negative feedback here the relationship between consumption indicators oil freshwater vehicle and meat consumption gdp mathrm co 2 emissions and well being is analysed latitudinally across 189 countries and longitudinally over 60 years within three affluent countries all latitudinal analyses show the characteristic consumption cliff and affluent uplands shape e g at low per capita gdp life satisfaction increases sharply up the cliff with rising gdp after a threshold well being is independent of gdp across the affluent uplands longitudinal analyses of japan uk and usa since the 1950s show per capita gdp has grown between 3 and 8 fold but mean levels of well being remained unchanged consumption patterns are now converging on those typical in affluent countries indicators for seven baskets of countries affluent north america europe oceania affluent asia fast developing brics and civets high income resource extractors poor with green peaks and the poorest show the factors of consumption between the poorest and affluent 5 to 100 fold and the fast developing and affluent 2 to 10 fold a finite planet cannot resource such convergence one indicator climate change grows more of a concern as evidence emerges yet denial remains strong a priority is to create opportunities for divergent ways of living although material culture has been sought as the means to meet personal well being it has failed both the affluent and poorest a green economy will require human attachments to both place and possessions thus reducing disposal and damage such entanglement produces high affiliation that improves life satisfaction as does much non material consumption as yet most political and economic systems are far from recognising these imperatives though there have been notable policy innovations a shift to a green economy is inevitable it is simply whether it occurs before or after the world becomes locked into severe climate change and other consequences of harm to natural capital

the impact of regulatory governance and privatization on electricity industry generation capacity in developing economies this article assesses whether a regulatory law and higher quality regulatory governance are associated with superior outcomes in the electricity industry the analysis for 28 developing economies over 1980 2001 draws on theoretical and empirical work on the impact of telecommunications regulators in developing economies controlling for privatization and competition and allowing for country specific fixed effects both regulatory law and higher quality regulatory governance are positively and significantly associated with higher per capita generation capacity this positive impact increases for more than 10 years as experience develops and regulatory reputation grows the results are robust to estimating alternative dynamic specifications including error correction models to inclusion of economy governance political risk indicators and to controlling for possible endogeneity biases the article concludes with a short discussion of causality in panel data modeling of governance models and the policy

electricity industry restructuring in iran abstract iran as a developing country with a growing population has an increasing energy consumption in particular the electricity consumption with the average annual growth rate of 7 24 has been increasing considerably over the past two decades in step with the changes in the world electricity industry initial steps towards restructuring in iran s electricity industry were taken during the 1990s resulting in the launching of iranian wholesale electricity market in november 2003 achieving long term security of supply clarification of the electricity price and the attraction of the private investments are some of the main goals of the electricity industry restructuring in iran the privatization and breaking of the governmental monopoly was officially started in 2000 with the beginning of the third development plan which led to the 48 05 contribution of the private sector in the annual energy generation in 2015 this paper investigates the process of restructuring in iranian electricity industry comprehensively the current situation and the history of iran s electricity industry as well as the operating principles of iran s electricity market and its prominent characteristics including its regulations entities and administrative process are discussed in this paper moreover some of the results including privatization process and the changes in the electricity price are investigated in this paper

natural resources national accounting and economic depreciation abstract the current value hamiltonian in an aggregate optimal growth problem with heterogeneous capital stocks including exhaustible renewable and environmental stocks is the nnp function routine substitutions reveal that the using up of natural resource stocks is representable as easy to interpret economic depreciation magnitudes we obtain true nnp inclusive of natural resource stock diminution implications for actual national accounting practices are also discussed

applying the concept of natural capital criticality to regional resource management this paper applies the concept of natural capital stock and identifies its critical elements in a regional sustainable development context in order to assess its conceptual and practical relevance assessment of the physical stock of natural capital was undertaken for central region in scotland it was found that the concept can be a useful way of assessing and giving greater recognition to natural resources at a regional or local level however identification of critical levels of resources was less straightforward the lack of clear guidelines relating to criteria of criticality natural capital category aggregation issues and conflicts between types of critical natural capital were encountered as major issues the application of an absolute preservation rule was found to suffer from the same general disadvantages as any absolute rule nevertheless the assessment of natural capital and identification where possible of critical elements were thought to be a useful adjunct to sustainable development work

global inspection games abstract in the tax evasion game a typical example of inspection game audits are costly and audit probabilities are determined by the tax agency based on the tax returns submitted by taxpayers we find that if taxpayers incomes are correlated e g when they are subject to a common shock the optimal audit probability for low declarations is an increasing function of the average declaration as the latter is an informative signal of the realized level of income since a taxpayer s optimal declaration is an increasing function of the probability of an audit the optimal auditing rule creates incentives for taxpayers to coordinate their declarations the resulting coordination game features multiplicity of equilibria and thus strategic uncertainty about the equilibrium that will be selected when we add a source of fundamental uncertainty about the type of agency taxpayers face the situation can be realistically modeled as a global game further and unlike the coordination game before it yields a unique and usually interior equilibrium which is consistent with empirical evidence and supported by the data collected in a computerized experiment the model can be applied to other inspection games of economic interest such as the regulation of industries and the allocation of welfare benefits among others

avoiding tax avoidance a repeated game theoretic approach abstract we propose an optimal auditing scheme for the tax authorities who face a given tax and penalty functions and a given budget constraint under our proposed strategy individuals can be classified into one of three groups each group is characterized by two parameters i the probability of being audited in that group and ii into which group will an individual move if ii a he reported truthfully ii b he cheated it is then shown that there is a choice of these parameters so that in equilibrium i e when every individual maximizes his payoff given the auditing strategy the percentage of individuals that cheat is arbitrarily small

are ecosystem services replaceable by technology this paper assesses the evidence for and against the view that the processes that deliver ecosystem services are so fundamental within ecosystems that neither the services themselves nor the goods that they deliver to humans could be replaced technologically i consider cases where the natural processes have been replaced and also the probably more common and usually less invasive cases where they have been enhanced by technological interventions supporting services are probably least amenable to technology with the major exception of nutrient cycling which has been extensively replaced by the use of chemical fertilizers final services offer more examples of actual or potential replacement including the highly controversial example of geoengineering for climate regulation finally there are numerous examples of replacement technologies for environmental goods especially in the case of energy fossil and many renewable fuels fibres artificial fibres and biochemicals industrial pharmaceuticals the full economic costs of replacement technologies have rarely been explored and in some cases it appears that the replacement is more expensive than the natural service enhancement technologies in contrast supplement the output of ecosystem services and are probably in most cases more benign the doubts about true costs and the fact that many supporting and final services seem either irreplaceable or only replaceable at huge cost adds to the need to protect them

a review of the stern review on the economics of climate change how much and how fast should we react to the threat of global warming the stern review argues that the damages from climate change are large and that nations should undertake sharp and immediate reductions in greenhouse gas emissions an examination of the review s radical revision of the economics of climate change finds however that it depends decisively on the assumption of a near zero time discount rate combined with a specific utility function the review s unambiguous conclusions about the need for extreme immediate action will not survive the substitution of assumptions that are consistent with today s marketplace real interest rates and savings rates

the optimal use of fines and imprisonment abstract this paper examines the use of fines and imprisonment to deter individuals from engaging in harmful activities these sanctions are analyzed separately as well as together first for identical risk neutral individuals and then for two groups of risk neutral individuals who differ by wealth when fines are used alone and individuals are identical the optimal fine and probability of apprehension are such that there is some underdeterrence if individuals differ by wealth then the optimal fine for the high wealth group exceeds the fine for the low wealth group when imprisonment is used alone and individuals are identical the optimal imprisonment term and probability may be such that there is either underdeterrence or overdeterrence if individuals differ by wealth the optimal imprisonment term for the high wealth group may be longer or shorter than the term for the low wealth group when fines and imprisonment are used together it is desirable to use the fine to its maximum feasible extent before possibly supplementing it with an imprisonment term the effects of risk aversion of these results are also discussed

sustainability constraints versus optimality versus intertemporal concern and axioms versus data sustainable sustained or survivable development are defined here as distinct sustainability constraints on intertemporal distribution in a context which ignores uncertainty environmental and intratemporal concerns such constraints are neither self contradictory nor redundant for they can conflict with maximizing the present value of utility optimality nor inferior since the axioms underlying optimality are ethically arbitrary and refuted by empirical psychological data axiomatic arguments may clarify but cannot resolve debates about intertemporal concerns data suggest that sustainability constraints are not respected and that intertemporal welfare functions containing a preference for sustained improvement may better reflect what bodies politic mean by sustainability

adaptability of competitive electricity reforms a modular analysis abstract among the competitive electricity reforms that have been implemented in europe and the us for the last 18 years none has survived over several years without major changes their changing nature raises the question of their adaptability two characteristics of reforms play a key role on their adaptation properties firstly they are modular objects in the sense of baldwin c 2008 where do transactions come from modularity transactions and the boundaries of firms industrial and corporate change 17 1 155 195 secondly they are produced in an institutional process which leads to incomplete rules and designs pistor k xu c 2003 incomplete law international law and politics 35 931 1013 we propose a typology of adaptations based on the framework proposed by williamson o e 1991 comparative economic organization the analysis of discrete structural alternatives administrative science quarterly 36 2 269 296 for contracts 1 in case of small disturbances adaptations are realized quasi automatically by autonomous decisions of the institutions governing the implementation of reforms 2 in case of middle range disturbances adaption is made by coasian bargaining 3 finally in case of strong disturbances or when bargaining is not feasible the adaptation of reforms is in the hands of legislative and executive institutions north d c 2005 le processus du developpement economique editions d organisation these institutions can reform the reforms joskow p l 2006 introduction to electricity sector liberalization lessons learned from cross country studies in sioshansi f p ed electricity market reform an international perspective elsevier amsterdam pp 1 32 hogan w w 2002 electricity market restructuring reforms of reforms journal of regulatory economics 21 103 132 the role of these types of adaptations in each electricity reform is a consequence of the allocation of rights to the regulator to stakeholders and to legislative and executive institutions

importance and threat as determining factors for criticality of natural capital abstract an important issue in the debate about the use and conservation of natural ecosystems is the degree to which these ecosystems and their functions should be considered critical this paper presents some guidelines to determine the criticality of natural capital based on two main criteria the first criterion is the importance of natural ecosystems ecological socio cultural and economic and the second is the degree of threat based on the quantity and quality of the remaining natural areas in a given region it is argued that the two criteria are complementary and need to be taken into account simultaneously when determining the criticality of natural capital finally the paper presents and discusses some possibilities for the development of a critical natural capital index for europe

choices and the value of natural capital sustainability requires maintaining opportunities for future generations so they can meet their needs opportunities are passed to future generations through a set of capital assets nature provides an important class of these assets but markets seldom reveal the marginal value of natural capital rather the marginal social worth or asset price must be imputed based on intertemporal exchange in the context of assessing whether intertemporal allocation rules lead to sustainable development appropriate asset prices must be based on the actual allocations and trade offs society makes therefore measuring economic programmes that enable the measurement of asset prices is an important empirical task we review the theory of measuring natural capital asset prices and discuss the key elements of measuring economic programmes that enable the measurement of natural capital asset prices we place the measurement of economic programmes and natural capital asset prices in the context of wealth based sustainability metrics