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ABSTRACTThe World Trade Organization is not explicitly in the business of environmental protection, but through recent initiatives it has sought to better understand the complex relationship between trade and the environment and its role in promoting sustainable trade growth. In line with these initiatives, this paper discusses ways it might explicitly consider ecosystem services impacts when ruling on trade disputes so as to internalise ecosystem services externalities. We propose a change to existing methods of settling trade disputes to include a comparison between the traditional gains from trade and the multilateral change in ecosystem services associated with trade by incorporating a penalty system into the dispute resolution process. If this comparison assesses damages to ecosystem services to exceed the gains from trade then the penalty system suggests trade should not be allowed to take place. This penalty system in turn can create an incentive for exporting countries to reduce their impacts on ecosystem services to facilitate trade.

Several letters to the editor are presented in response to articles from past issues including "English for Everyone," "It's Not Easy Being English," and "Back to the U.S.S.R.," from the August 20-27, 2007 issue.

Several letters to the editor are presented in response to articles from past issues including "English for Everyone," "It's Not Easy Being English," and "Back to the U.S.S.R.," from the August 20-27, 2007 issue.

This paper develops the key finding of Ozanne, Hogan and Colman (2001) that risk aversion among farmers ameliorates the moral hazard problem in relation to agrienvironmental policy compliance. It is shown that risk averse farmers who face uncertainty in their production income are more likely to comply with such a policy as a means of risk management. In addition, it is shown that a principal who has control over both the level of monitoring and the size of penalty, if detected, can reduce non‐compliance by adjustments to these instruments which increase the variance of farmers' income but leave the expected penalty unchanged. It is concluded that risk management by both principals and agents has the potential to diminish the moral hazard problem, especially given proposed developments in agri‐environmental policy in the European Union.

This paper proposes modifications to the existing EU set‐aside policy which are designed to alleviate the problem of output slippage associated with heterogeneous land quality by using “incentive‐compatible” mechanisms drawn from principal‐agent theory. Specifically, it is suggested that there should be differential reference yields based on land quality to discourage the “adverse selection” of lower quality land for set‐aside, and that the scope of set‐aside monitoring should be expanded to include both the quantity and the quality of land set‐aside so as to discourage “moral hazard” problems. The potential of these modifications is illustrated using a numerical analysis, which is also used to evaluate the role of a range of factors which determine the set‐aside decision. Finally, an estimate of the “benefits” from reducing slippage required to justify the costs of including these modifications is provided.

This paper proposes modifications to the existing EU set-aside policy which are designed to alleviate the problem of output slippage associated with heterogeneous land quality by using "incentive-compatible" mechanisms drawn from principal-agent theory. Specifically, it is suggested that there should be differential reference yields based on land quality to discourage the "adverse selection" of lower quality land for set-aside, and that the scope of set-aside monitoring should be expanded to include both the quantity and the quality of land set-aside so as to discourage "moral hazard" problems. The potential of these modifications is illustrated using a numerical analysis, which is also used to evaluate the role of a range of factors which determine the set-aside decision. Finally, an estimate of the "benefits" from reducing slippage required to justify the costs of including these modifications is provided.

This note takes the view that existing studies of the impact of the Agenda 2000 cereal reform package have mis‐specified the impact of this package on a producer's price distribution. It is argued that an accurate assessment of this package requires use of the methodology outlined in Fraser (1991), and that use of this methodology highlights the central role of expected world prices in determining whether producer perceptions of this impact are favourable or unfavourable. A numerical analysis in the context of wheat producers generates an estimate for expected world prices of 111–112 Euros/tonne above which producers will perceive the package favourably. This estimate is found to be robust with respect to the key parameters of the analysis.

This paper analyses the impact of royalties in the context of a bilateral monopoly bargaining process. It is shown that the bilateral monopoly model is characterised by two distinct forms which are distinguished by the shape of the seller's marginal cost function. It is also shown that the output effect of introduction of royalties is ambiguous both because of the role of the bargaining process and because of these two distinct forms of bilateral monopoly. Therefore, it is argued that no unambiguous conclusion can be reached regarding the impact of imposing royalties on the level of production.

This paper undertakes an assessment of the impact of implementing the European Commission's Agenda 2000 cereal proposals for specialist wheatgrowers in Denmark. The economic model of a representative farm developed in Rygnestad and Fraser (1996) is extended to include a model of nitrate leaching and then used to simulate the impact of implementing the proposals. The results of this simulation are compared and contrasted with those of the sectoral and regional impact studies reported in European Commission (1998b). In particular, the proposals are shown to have an environmentally‐beneficial effect in terms of reduced nitrate leaching, with the magnitude of this effect dependent both on the quality of land and on the ex ante set‐aside rate.

This paper assesses the impact of the partial switch from price support towards compensatory payments of the May 1992 CAP cereal reform in the context of heterogeneous land quality. Two characteristics of land quality are identified: expected yield per hectare and the variability of yield per hectare. It is shown that the impact of the CAP reform on expected cereal income and the variability of cereal income is positive or negative depending on the level of each of these characteristics respectively. In particular, farmers with land which is both relatively low and unreliably yielding benefit from the CAP reform, while those with land which is both relatively high and reliably yielding lose from the CAP reform. The implications of these findings for the allocation of land between crops and livestock and the selling price of agricultural land are discussed.

This article investigates the impact of a protein premiums and discounts system on the income stream from growing wheat. Based on a biological relationship between protein and yield in uncertain seasonal conditions, it shows that such a system reduces the expected level and variability of wheat income. It is subsequently argued, using a numerical analysis, that protein payments affect both the attraction to wheat growers of forward contracts and the value of land used for wheat. The nature of both of these impacts is related to the level of seasonal variability affecting the land. Consequently, wheat growers in the more unreliable regions of the wheatbelt may have been particularly disadvantaged by the system.

This paper presents a model of the optimal set-aside decision of a risk averse producer which takes account of the trade-off between the certain return to set-aside land and the higher (in expectation) but more uncertain return to cropping. The model is applied to the case of European wheat production. The ratio of set-aside premium to expected net revenue per hectare required for producers to find it optimal to set-aside the qualifying proportion of land is shown to be both very close to unity and relatively insensitive to changes in key parameter values. By contrast, once attractive set-aside premiums have been established, it is shown that the optimal set-aside proportion of land is relatively sensitive to these values.

This paper assesses the impact of the partial switch from price support towards compensatory payments of the May 1992 CAP cereal reform in the context of heterogeneous land quality. Two characteristics of land quality are identified: expected yield per hectare and the variability of yield per hectare. It is shown that the impact of the CAP reform on expected cereal income and the variability of cereal income is positive or negative depending on the level of each of these characteristics respectively. In particular, farmers with land which is both relatively low and unreliably yielding benefit from the CAP reform, while those with land which is both relatively high and reliably yielding lose from the CAP reform. The implications of these findings for the allocation of land between crops and livestock and the selling price of agricultural land are discussed.

Digital technology is having a major impact on many areas of society, and there is equal opportunity for impact on science. This is particularly true in the environmental sciences as we seek to understand the complexities of the natural environment under climate change. This perspective presents the outcomes of a summit in this area, a unique cross-disciplinary gathering bringing together environmental scientists, data scientists, computer scientists, social scientists, and representatives of the creative arts. The key output of this workshop is an agreed vision in the form of a framework and associated roadmap, captured in the Windermere Accord. This accord envisions a new kind of environmental science underpinned by unprecedented amounts of data, with technological advances leading to breakthroughs in taming uncertainty and complexity, and also supporting openness, transparency, and reproducibility in science. The perspective also includes a call to build an international community working in this important area.

A letter to the editor is presented in response to the article related to the churches in London, England.

Several letters to the editor are presented in response to articles in previous issues including one on Sergeant Jill Stevens in the December 2007 issue, another on the Army Reserve Chinooks used in high-altitude rescues on Mount Rainer in the December 2007 issue, and "Pushing Out Afghan Poppies," in the November issue.

This paper examines the impact of increased price uncertainty on the decision to set aside croppable land. It is shown that the standard response of increased set-aside may not occur if the commodity in question is also subject to a price-support policy. In this situation, conflicting effects on the set-aside decision arise because an increase in underlying price uncertainty may increase not just the variability but also the expected level of producer prices