Search

In this paper, I explore the reactions of financial amrket participants to news relating to the Kimberley Process Certification Scheme (KPCS), a body that regulates aspects of global diamond production and trade. I use an event study approach with data on the returns for shares of leading global mining and jewelry retail companies over the period from 1999 to 2011. I show that the most influential dates related to the KPCS for diamond mining companies were associated with regulatory actions in the early 2000s taken by the United Nations and the United States. These events were associated with lower returns for diamond mining companies. After 2004, jewelry companies experienced abnormal returns coinciding with KPCS-related events, while mining firms appear rarely affected by events during this time. The majority of returns for jewelry companies were negative for events which called into question the ability of the KPCS to ensure conflict-free diamond production and trade. Expanded legal diamond production in some cases coincided with positive returns for jewelry retail companies over the time period I consider. These results are consistent with the expectation that jewelry companies, which often market directly to consumers, are more sensitive to public perception concerning the KPCS and its credibility. The results are inconsistent with the point of view that the creation of the KPCS was seen by financial market participants as "good news" overall for diamond mining companies. The results also suggest that once trade restrictions were in place, mining companies were less affected by controversies surrounding the credibility of the KPCS.

This paper studies empirically the impact of mining on conflicts in Africa. Using novel data, we combine geo-referenced information over the 1997-2010 period on the location and characteristics of violent events and mining extraction of 27 minerals. Working with a grid covering all African countries at a spatial resolution of 0.5 x 0.5 degree, we find a sizeable impact of mining activity on the probability/intensity of conflict at the local level. This is both true for low-level violence (riots, protests), as well as for organized violence (battles). Our main identification strategy exploits exogenous variations in the minerals' world prices; however the results are robust to various alternative strategies, both in the cross-section and panel dimensions. Our estimates suggest that the historical rise in mineral price observed over the period has contributed to up to 21 percent of the average country-level violence in Africa. The second part of the paper investigates whether minerals, by increasing the financialcapacities of fighting groups, contribute to diffuse violence over time and space, therefore affecting the intensity and duration of wars. We find direct evidence that the appropriation of a mining area by a group increases the probability that this group perpetrates future violence elsewhere. This is consistent with "feasibility" theories of conflict. We also find that seccessionist insurgencies are more likely in mining areas, which is in line with recent theories of secessionist conflict.

Economic stability is dependent on the effective functioning and resilience of energy systems. Resilience is a term used across all research disciplines and in everyday discourse. As a concept it purports to serve as a useful indicator of sustainability and robustness, but it has proved difficult to measure. Ecological resilience, psychological resilience, risk management and energy security are all fields of research in which measures of the ability to respond to the unexpected are sought. The goal is to build adaptive capacity but quite different methods have been developed to achieve this end. Research on energy security, in particular, has focused on the security of oil supplies, not resilience or the adaptive capacity of the energy system or the role that renewable energy plays in building such capacity. This paper discusses how different disciplines seek to measure and build resilience and explores its connection with the state or quality of a system’s adaptive capacity. When the parameters of redundancy and diversity are present, resilience is enhanced. For this reason, in energy systems we must understand the size and scope of the key parameters required to facilitate the development of adaptive capacity and to build resilience that can enhance economic stability.

The Russian-Ukrainian crisis has revitalized the European concerns of supply disruptions of natural gas as experienced in 2006 and 2009. However, the European supply situation, regulation and infrastructure have changed since: imports aremore diversified, EU member states better connected and a common regulation on the security of supply has been introduced. Nevertheless, several East European countries are highly dependent on Russian natural gas. This paper investigates different Russian natural gas export disruptions scenarios and analyses short- and long-term reactions to ensure a sufficient supply of natural gas within Europe. We use the Global Gas Model (GGM), a large-scale mixed complementarity representation of the natural gas sector with a high-level of technical granularity with respect to storage and transportation infrastructure. We find that most of the EU member states are not severely affected by a complete drop out of Russian exports. Removing infrastructure bottlenecks within the EU should still be prioritized in order to secure a sufficient natural gas supply for all EU member states.

The discovery of oil and gas one hundred and fifty years ago, in Romania, United States and in further other states, has lead the way of human development towards a society based on hydrocarbons whereas the technical and technological competition between companies and states for the ultimate supremacy evolved and is still in progress. In the past century, the two world wars and the most recent conflicts we were and are contemporary with (Falkland Islands war, Iraq, Libya, Syria etc.) began with and for energy resources which resulted in a fierce battle on the front of research and streamline of this field. The technical and technology transfer in many areas, including the oil and gas one, disregarded ideological barriers imposed by the “Cold War” so that, through legal methods (imported licenses) and “reverse engineering” (intelligence), it carried through. Since the emergence of the “drilling method with rotary table”, discovered by the Romanian engineer Ioan Basgan which revolutionized the worldwide deep drilling technology and whose patent is still disputed by Romania and the United States, up to offshore drilling platforms, high pressure blowout preventers, drilling rigs for mining and transport for extreme weather conditions and to the controversial method of extracting shale gas, the transfer of science, engineering and technology knew and will know no boundaries.

This paper investigates the price spread between West Texas Intermediate and Brent during periods of supply disruptions. Using a sample of 50 events of Organization of the Petroleum Exporting Countries (OPEC) - related unplanned upstream production outages, this paper documents a statistically significant tightening in the price differential. The finding is robust even after accounting for 22 OPEC - related political conflicts, 104 extreme weather conditions in the Atlantic basin, and the period of infrastructural bottlenecks in and around the Cushing, Oklahoma. The result is further confirmed when examining the spread between Light Louisiana sweet and Brent. These findings suggest the need to hedge against such risks and give rise to speculative trading which can be facilitated using the vibrant paper markets.

Although most of the worldwide scientific community accepted and supported the theory that oil and gas formed during remote geological eras, from organic matter under anaerobic conditions, on the bottom of the seas and oceans and that it migrated to the so-called rock collectors, exhaustible in time, in the last decades, some researchers brought forward the theory of inorganic origin (abiogene) of oil and gas formation, including the idea that it should be renewable. The detection and exploitation of the great oil and gas field White Tiger, located in the Vietnamese coasts, hosted in granite, impossible to explain using the biogenic theory, and the recent development of hydraulic fracturing technology for shale gas are at the frontier of a scientific leap which raises many other questions: is the oil era coming to an end or to a new beginning? If energy resources are renewable, how will the human society evolve? What long-term effects on the environment will be recorded by using polluting technologies?

The discovery of shale gas reopens the fierce struggle for energy control at regional and global level and reconfigures the geostrategic interests map of the great powers. The new technology of unconventional gas extraction, hydraulic fracturing has supporters andopponents on its size. But at the gate of scientific discoveries beats a new form of energy: the energy based on thorium. Cheaper, safer, less polluting.

Higher national incomes are correlated with political stability. Is this relationship causal? We test three theories linking income to conflict with new data on export price shocks. Price shocks have no effect on new conflict, even large shocks in high-risk nations. Rising prices, however, weakly lead to shorter, less deadly wars. This evidence contradicts the theory that rising state revenues incentivize state capture, but supports the idea that rising revenues improve counter-insurgency capacity and reduce individual incentives to fight in existing conflicts. Conflict onset and continuation follow different processes. Ignoring this time dependence generates mistaken conclusions about income and instability. (JEL D72, D74, O13, O17, O19, Q02, Q34)

We estimate the impact of geo-located mining concessions on the number of conflict events recorded in the Democratic Republic of the Congo between 1997 and 2007. Instrumenting the variable of interest with historical concessions interacted with changes in international prices of minerals, we unveil an ecological fallacy: whereas concessions have no effect on the number of conflicts at the territory level (lowest administrative unit), they do foster violence at the district level (higher administrative unit). We develop and validate empirically a theoretical model where the incentives of armed groups to exploit and protect mineral resources explain our empirical findings. © Oxford University Press 2013. All rights reserved. ispartof: OXFORD ECONOMIC PAPERS-NEW SERIES vol:66 issue:3 pages:721-749 ispartof: location:Wageningen University, Wageningen status: published

We use fiscal data on 2,468 oil extraction agreements in 38 countries to study tax contracts between resource-rich countries and independent oil companies. We analyze why expropriations occur and what determines the degree of oil price exposure of host countries. With asymmetric information about a country's expropriation cost, even optimal contracts feature expropriations. Near linearity in the oil price of real-world hydrocarbon contracts also helps to explain expropriations. We show theoretically and verify empirically that oil price insurance provided by tax contracts is increasing in a country's cost of expropriation and decreasing in its production expertise. The timing of actual expropriations is consistent with our model. © 2013 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

This article explores the economic underpinnings of the Arab spring. We locate the roots of the regiosn's long-term economic failure in a statist model of development that is financed through external windfalls and rests on inefficient forms of intervention and redistribution. We argue that the rising cost of repression and redistribution is calling into question the long-term sustainability of this development model. A singular failure of tyhe Arab world is that it has been unable to develop a private sector that is independent, competetive and intergrated with global markets. We argue that developing such a orivate sector is both a political as well as a regional challenge. In so far as the private sector genertaes incomes that are independent of the rent streams controlled by the state and can pose a direct political challenge, it is viewed as a threat. And, the Arab world's economic fragmentation into isolated geographic units further undermines the prospects for private sector development. We explain this economic fragmentation as a manifestation of dentralized and segmented administrative structures. Revisiting the polictics and geo-politics of regional trade, we argue that overcoming regional economic barriers constitues the single most important collective action problem that the region has faced since the fall of the Ottoman Empire.

When considering engaging in conflict to secure control of a resource, a group needs to predict the amount of post-conflict leakage due to infiltration by members of losing groups. We use this insight to explain why conflict often takes place along ethnic lines, why some ethnic groups are more often in conflict than others (and some never are), and why the same groups are sometimes in conflict and sometimes at peace. In our theory ethnic markers help enforce group membership: in homogeneous societies members of the losing group can more easily pass themselves as members of the winning group, and this reduces the chances of conflict as an equilibrium outcome. We derive a number of implications of the model relating social, political, and economic indicators such as the incidence of conflict, the distance between ethnic groups, group sizes, income inequality, and expropriable resources. One of the insights is that the incidence of ethnic conflict is nonmonotonic in expropriable resources as a fraction of total resources, with a low incidence for either low or high values. We use the model’s predictions to interpret historical examples of conflict associated with skin pigmentation, body size, language, and religion.

India’s engagement with West Asia including Iran has always been a balancing act hovering between economic necessities and strategic pursuits. The paper briefly traces the evolution of Indo-Iran engagements and also analyses their respective macroeconomic parameters. It also outlines and discusses three major geopolitical and geo-economic influences including sanctions on Iran, payment mechanism, and Iran’s business environment. Moreover, the issues pertaining to access to oil, transit route through Afghanistan and other trade facilitation measures have also been discussed. The paper also uses the revealed comparative advantage index to identify some potential areas of cooperation. Also, it argues that India needs to be more cautious and pragmatic in its strategic endeavours.

This paper re-examines the effect of oil wealth on political violence. Using a unique historical panel dataset of oil discoveries, we show that simply controlling for country fixed effects removes the statistical association between the value of oil reserves and civil war onset. Other macro-political violence measures, such as coup attempts, are also uncorrelated with oil wealth. To further address endogeneity concerns, we exploit changes in oil reserves due to randomness in the success of oil explorations. We find little robust evidence that oil discoveries increase the likelihood of political violence. Rather, oil discoveries increase military spending in nondemocratic countries. (JEL D74, H56, O17, Q34, Q41) D oes oil wealth corrupt or strengthen regimes? The conventional wisdom dating back to at least Malthus is that resource scarcity triggers conflict. Since the end of the Cold War, however, resource abundance—particularly when that resource is oil—has been blamed for many civil wars in developing countries, and for political instability in the Middle East. If civil strife is caused by resource scarcity and poverty, why should oil revenues weaken states by fueling separatism and causing political instability? The puzzle is intensified by another popular argument for the oil curse—oil wealth enhances the stability and durability of authoritarian regimes because it strengthens dictators by funding patronage and repressive apparatuses. This paper uses data on historical oil explorations and discoveries to provide new evidence on the effect of oil wealth on political violence. In particular, we re-examine the “oil-fuels-war” hypothesis, and provide the first systematic analysis of the impact of oil wealth on coup attempts, irregular leadership transitions, and military spending, using a unique industrial dataset describing worldwide oil explorations, discoveries, extractions, and endowments since 1930.

This paper shows how food safety, food security and environmental risks associated with agriculture can be alleviated through sustainable agriculture. Today, most of the countries are arguably food insecure. Developed countries rely mostly on industrial agriculture which has led to increasing monocropping and imported food while developing countries are extremely vulnerable to food price inflation. The risks associated with food insecurity are political and economic instability. Modern industrial agriculture mindset assumes the reality of substitution between land and external chemicals and management systems that resulted in overvalued land and undervalued social costs of the negative externalities with the associated environmental risks of polluted water, acid rain and degraded soil. The globalization of the food production and the intensification of food trade enhance the risks associated with food safety. Food consumption all over the world is a mixture of imported agricultural products and domestic products making difficult to find the contamination source in case of a food scare. The development of agriculture is an essential way to raise national income and improve the welfare of rural dwellers whether a developing country or a developed country. The paper makes the case that sustainable agriculture is the best method for agricultural development with the largest opportunity for economic development and reduction or alleviation of environmental, food security and food safety risks.

Carbon markets emerged as a consequence of efforts carried out by the United Nations in its efforts aimed at combating the effects of climate change. The United Nations Framework Convention for Climate Change through the Kyoto Protocol (KP) is a key part of this effort as it encouraged the creation of market mechanisms by creating special financial instruments that spawned carbon markets. In the last years these assets have sharply decreased in value, to the point of endangering new projects. This paper analyzes if the decrease in value of these instruments is a consequence of the general recession of the world economy. It will also attempt to encourage the idea of generating wealth through clean, environmentally friendly processes. We found that it’s not possible to verify the given hypothesis because the global crisis has not seriously damaged the productive system of the KP participating members, who even increased their outputs while using cleaner technologies.

The environmental problems which the society is facing, ozone depletion, biodiversity loss, the spread of persistent organic pollutants, are a result of human activity with a worldwide impact, requiring immediate resolution. In this context, negotiation, signing and implementation of several multilateral environmental agreements (MEAs) are one of the best solutions, affordable and reliable. The aim of this study is to analyze the commercial measures, which to some extent, ensure stability, security, and expansion of MEAs. The paper discusses, also, the efficiency, necessity and the influences of trade measures in MEAs and the WTO role in signing these agreements.

The Union has adopted over the time many documents as regards the energetic security, documents that were fulfilled in accordance to the future evolutions, and also, why not mentioning, in accordance to the political internal and external interests of it, or by the mediation of various circles of economic interests. In any of the situations, it looks like the importance of energy has been more intensively understood after the second world war, when the governments have started the nationalization of the energetic sectors. Now we carry out an analysis of the current energy security policy and we ask to face its strengths, and weaknesses to better understand the context of the new european energy challenges.

With world military expenditure rising rapidly since 2000, one of the possible drivers that has drawn less attention has been the role of natural resource revenues, especially oil. Countries as diverse as Angola, Azerbaijan, Chad, Iraq, Kazakhstan, Nigeria, and Timor-Leste have seen huge rises in military expenditure on the back of rapidly increasing oil revenues. Natural resource extraction can generate conflict and create an imperative to protect resource infrastructure from internal or external threats. At the same time it provides a ready source of government revenue, and in particular foreign currency. The lack of transparency often associated with such revenues may facilitate off-budget spending or large, and possibly corrupt, arms purchases. Up to now, most econometric research has not considered the role of resource revenues as a determinant of military expenditure. We provide a preliminary analysis for the case of Algeria, estimating military expenditure as a function of oil revenues and other economic and security factors from 1975 to 2008. We find some evidence that oil revenues have had a statistically significant positive effect on Algerian military expenditure.

The rapid expansion of oil and gas extraction in large parts of the Marcellus fields in the Appalachian Basin and the Bakken fields in the Williston Basin of the Dakotas and Montana has reignited debate over the role of natural resource extraction as a rural economic growth strategy. While the popular media has focused on hydraulic fracturing and natural gas and oil production, there has been significant interest in silicon sand mining in western Wisconsin and southeastern Minnesota. This “frack sand” is used in oil and gas hydraulic fracturing activity. In this study we explore the relationship between non-oil and gas mining (NAICS 212) activities and economic growth for nonmetropolitan U.S. counties for the period 2000 to 2007. We find robust results suggesting that non-oil and gas mining is associated with lower population growth, and a positive impact on per capita income, but has no impact on employment growth.

This paper highlights the importance of natural resource concentration and ethnic group regional concentration for ethnic conflict. The existence of multiple conflict terrains (and hence multiple threat points) is the source of bargaining failure, similar to the one determined by the presence of offensive advantages. The theory predicts war to be more likely when resource concentration and group concentration are high, and the empirical analysis, both at the country level and at the ethnic group level, confirms the essential role of geographic concentration variables for civil war.

When looking at the conditions of trade in natural resources the world appears upside down: tariff protection in natural resources sectors is generally lower than for overall merchandise trade, while export restrictions are twice as likely as in other sectors. On the other hand, tariff escalation is significant in natural resources sectors, where materials in their raw state face, on average, lower duties than in their processed form. In this paper, we discuss how export taxes and tariff escalation may be the result of an uncooperative trade policy. Specifically, tariff escalation and export taxes can be “beggar-thy-neighbor” policies because governments may be tempted to use them to alter the relative price of exports to their advantage (terms-of-trade effect) or to expand the domestic processing industry at the expenses of foreign production (production relocation effect). In equilibrium, these policies offset each other in a Prisoners’ Dilemma situation, where trade is inefficiently low.

The Caspian Sea countries present growing importance in the global energy market. The largest energy producers in the region are Azerbaijan, Kazakhstan, and Turkmenistan. In recognition of the growing importance of Caspian countries in the global energy market, this article takes a look at the internal energy markets in the region and its oil and gas supply potential. The largest energy producers in the region are Azerbaijan, Kazakhstan, and Turkmenistan. The region has significantly expanded its oil and gas exports to international markets since the beginning of the 1990s and Azerbaijan, Kazakhstan, Turkmenistan all have the potential to increase hydrocarbon production in the coming years. The increases in output so far have been associated with, and encouraged by, an emerging diversity of export routes and markets. The big question for the Caspian region countries is how to sell their oil and gas. Their large neighbor, Russia, has lots of oil and gas of its own, plus an extensive pipeline network to move that oil and gas. Russia’s Gazprom gas monopoly therefore does not need Turkmenistan’s gas for the Russian market nor for re-export from Russia.

The considerations on the ability of forest to maintain ecological balance and numerous environmental protection functions require the exercise of a sensible management, consistent with regional development plans. This is the more necessary as, at this moment, we are situated well below the limit of a forestation, in terms of European woodland. The management of the forest biodiversity, seen as an economic and environmental manner, permits, among other things, a sustainable exploitation of the potential through specific actions, scheduled actions of timber production, deadlines of contraction, territorial redistribution of quotas of timber, a forestation measures.

Like any other human activity, without containing intentional elements, tourism, being a consumer of space and tourist resources, participates implicitly in the degradation and the pollution of the environment of the tourist potential, either through the direct pressure of the tourists on the landscape, the flora and the fauna, or on other tourist objectives which can be damaged partially or totally, or through the wrong conception of revaluation and equipment of some areas, points or tourist objectives. The natural environment probably represents the greatest wealth of the Romanian tourism. The protection of the environment is thus crucial for tourism. The tourist experience has demonstrated, in time, that, regardless of the type of tourism people practise, a series of impacts results and they are felt by the society as well as by the natural environment. The development of tourism in a certain area must not affect the social and economic interests of the resident population, nor of the environment, and, most of all, of the natural resources which constitute the main attraction together with the historic and cultural sites.

Cattle farmers and their neighbours. Study of the new professional discourses of a contested profession Today's farmers are facing growing criticism about their activities, around questions of pollution, sanitary affairs, climatic change or animal welfare, non-professional actors promoting their own definitions of what farming activities should be -or should not be. This particular situation provides a good opportunity to explore the new professional discourses developed by a contested profession, fostered to re-elaborate the sense of its activities. Based on a survey in a rural mountain community, we present the criticisms addressed to cattle farmers by non-farmers in the village, which stress problems about land ownership, manure management, and pasture maintenance. We highlight two types of professional discourse developed by cattle farmers in response to the criticisms : The first one combines a victimisation figure with the threat of giving up the job ; the second one claims responsibility and anticipation of the non-farmers' demands, as far as technical constraints make this anticipation possible., Le métier d'agriculteur est actuellement confronté à la montée d'une multiplicité d'interpellations (pollutions, problèmes sanitaires, changement climatique, bien-être animal...) qui proposent des définitions exogènes de ce que doivent être -ou ne pas être -les pratiques agricoles. Cette situation singulière apparaît propice à une exploration du renouvellement des rhétoriques professionnelles d'une profession contestée, amenée à réélaborer le sens de ses activités. A partir d'une enquête portant sur une commune rurale de montagne, nous présentons les principales critiques adressées aux éleveurs par les acteurs non-agriculteurs du village, concernant respectivement l'accès au foncier, 1'épandage des effluents et l'entretien des terrains. Nous identifions alors deux grands types de rhétorique professionnelle développés par les éleveurs en réponse à ces critiques : une première alliant une figure de victimisation à la menace de cessation de l'activité ; une deuxième revendiquant responsabilité et anticipation vis-à-vis des exigences exogènes sur fond de «contraintes techniques»., Granjou Céline, Mauz Isabelle. Les éleveurs et leurs voisins. Etude du renouvellement des rhétoriques professionnelles d'une profession contestée. In: Revue d’études en Agriculture et Environnement, Vol. 90, N°2, 2009. pp. 215-235.

The authors have developed a qualitative geographic research tool for case studies of conflict areas. They believe it can furnish convincing evidence on war motivation. They have used the tool to analyze concrete military actions and decisions and to trace them back to what provoked them. They have applied it to the conflict situation in the DR Congo between August 2007 and January 2008. In this article special attention is given to the role of natural resources in the armed conflict. Its importance as a war motivation factor is compared to three other conflict drivers found in the literature on the causes of war.

Besides other factors, the tensions and the repositioning on the global arena (“the Great Chessboard” as the American analyst Zbigniew Brzezinski called it) have a significant contribution for the start and development of the global economic crisis. This paper proves how the battle for the strategic energetic resources, mainly oil and natural gas, have deepened the global disequilibrium in what regards credit, commodity pricing and North-South divide. The analysis takes into consideration a framework in which the most important actors on the international level are changing but the resources and distribution are quite the same.

Thomas Friedman’s First Law of Petropolitics has acquired wide circulation and acceptance without being subjected to proper scrutiny. His claim that, in oil-rich, less-developed countries, there is an inverse correlation between the price of oil and the level of freedom is false. Friedman provides data for four countries to illustrate his thesis. This article shows his figures are incomplete, inappropriate, or misinterpreted. He specifies nine more countries that will conform to his prediction but when investigated, these, more often than not, also disprove his claim.

Um die Bestimmungsgründe, Ausbreitungsmechanismen und Wirkungen von Umweltinnovationen zu erklären, wurde bisher stark auf einzelnen Fallstudien abgestellt. Um die Forschung auf eine neue und breitere Grundlage zu stellen, führt das ifo Institut derzeit eine Studie zu Entstehung, Diffusion und Wirkungen von Umwelt- bzw. Nachhaltigkeitsinnovationen durch, die mit Hilfe einer branchenübergreifenden Unternehmensbefragung und einer Patentanalyse auf der Basis der Datenbank des Europäischen Patentamts innovations- und umweltbezogene Informationen gewinnt. In dem Beitrag wird ein Überblick über die bislang erzielten empirischen Ergebnisse gegeben. Es zeigte sich z.B., dass bei allen Innovationstypen die Innovationsneigung mit der Größe des Unternehmens zunimmt, große Unternehmen also von Skaleneffekten profitieren oder zumindest häufiger innovieren als kleine. Auffällig ist im Hinblick auf ökologisch bedeutsamste Innovation, dass diese in zwei Drittel aller Fälle sehr stark oder stark von zurückliegenden Innovationstätigkeiten begünstigt wird. Bezüglich der Art der Umweltentlastungen überwiegt schließlich die Verringerung der CO2-Emissionen und des Energieverbrauchs andere Arten von Umweltentlastungen.

Oxford Economic Papers, 61 (4), ISSN:0030-7653, ISSN:1464-3812

This article explores the main features of outward foreign direct investment by Russian corporations and some of the implications of their recent rise to global prominence for the theories of international investment. Surprisingly, lower middle-income Russia is a net capital exporter, and some of its firms, such as Gazprom, Lukoil, Norilsk Nickel, and Severstal, have already leapfrogged to a global status. This article also aims to identify issues for further analysis, such as the growing role of the state in controlling natural resource-based firms and its implications for the future of the Russian multinationals. It suggests that different investment theories fare divergently in trying to explain Russian outward foreign direct investment. For example, the eclectic paradigm could be applied to Russian multinationals with its extension to home-country factors. Other theories, however, would require more radical rethinking in future research.

Since early 2006, Russia has been attempting to change the rules on the international energy market to suit its own interests, with the ultimate goal of utilising its rich oil and gas reserves as an instrument to re-establish itself as a major player at the international level. The West has only little time to prepare for this new era of Russian foreign energy policy, as its dependence on imports of raw materials is increasing. Russia believes to be able to choose between serving the European and/ or the Asian market, and aims at building up a gas cartel, together with other gas exporting countries in the region. However, there is some doubt among observers about the extent to which the reserves will suffice for serving two continents at the same time with oil and gas, given an increasing national demand to be met as well. The EU is asked to continue its strategic energy partnership with Russia, but also to diversify the existing import structures. Russland versucht seit Beginn des Jahres 2006 die Spielregeln auf dem internationalen Energiemarkt zu seinen Gunsten zu verändern und seine reichhaltigen Erdgas- und Erdölreserven für eine Rückkehr als Großmacht auf internationaler Ebene zu instrumentalisieren. Der Westen hat wenig Zeit, sich auf die neue Ära der Energieaußenpolitik einzustellen, denn seine Abhängigkeiten von Rohstoffimporten werden ansteigen. Russland glaubt, künftig zwischen den europäischen und asiatischen Märkten wählen und mit anderen Exportstaaten der Region ein Gas-Kartell aufrichten zu können. Beobachter bezweifeln, ob Russland selbst über genügend Energiereserven verfügen würde, zwei Kontinente gleichzeitig mit Öl und Gas zu versorgen und die eigene wachsende Inlandsnachfrage zu befriedigen. Die EU muss einerseits die strategische Energiepartnerschaft mit Russland weiter verfolgen, andererseits die vorhandenen Importstrukturen zu diversifizieren versuchen.

We detail recent international sanctions against the Iranian economy and its government. The effects of these sanctions on the Iranian economy, the Iranian government and rural and urban Iranian households disaggregated by income decile are modelled using a Computable General Equilibrium (CGE) model which uses endogenous taxes to simulate the effects of sanctions. Results suggest that sanctions on Iranian oil exports had a serious negative effect on the Iranian economy, with very strong negative changes on real revenue earned by the Iranian government, but much more limited effects on the well-being of Iranian rural and urban households.

ASEAN member states (AMS) are confronted by serious environmental problems that threaten to undermine future growth and regional stability. This paper considers four major environmental challenges that policymakers across ASEAN will need to address towards 2030: water management, deforestation and land degradation, air pollution, and climate change. We argue that these challenges, each unique in its own way, exhibit the characteristics of wicked problems. As developed in the planning literature, and now applied much more broadly, wicked problems are dynamic and complex, encompass many issues and stakeholders, and evade straightforward, lasting solutions. Detailed case studies are presented to illustrate the complexity and significance of these environmental challenges, as well as their nature as wicked problems. The most important implication of this finding is that there will be no easy or universal solutions to environmental problems across ASEAN, as Environmental Performance Indicators (EPI) illustrate. This is a caution against over-optimism for formulating sector-specific solutions. It is not, however, a counsel for despair. We suggest general principles which may be useful across the board to tackle the issues and accelerate green growth. These are: a focus on cobenefits; an emphasis on stakeholder participation; a commitment to scientific and technological research; an emphasis on long-term planning; pricing reform; tackling governance issues, in addition to generally bolstering institutional capacity with regard to environmental regulation; and a strengthening of regionally coordinated approaches and international support.

International politics affects oil trade. But do financial and commercial traders who participate in spot oil trading also respond to changes in international politics? We construct a firm-level dataset for all U.S. oil-importing companies over 1986-2008 to examine how these firms respond to increases in "political distance" between the U.S. and her trading partners, measured by divergence in their UN General Assembly voting patterns. Consistent with previous macro evidence, we first show that individual firms diversify their oil imports politically, even after controlling for unobserved firm heterogeneity. However, the political pattern of oil imports is not entirely driven by the concerns of hold-up risks, which exist when oil transactions via term contracts are associated with backward vertical FDI that is subject to expropriation. In particular, our results indicate that even financial and commercial traders significantly reduce their oil imports from U.S. political enemies. Interestingly, while these traders diversify their oil imports politically immediately after changes in international politics, other oil companies reduce their oil imports with a significant time lag. Our findings suggest that in designing regulations to avoid harmful repercussions on commodity and financial assets, policymakers need to understand the nature of political risk.

This study aims to predict the possible negative effects on the Balearic tourism economy of the exploitation of marine oil fields near its coastline. We describe the current business structure of the islands’ tourism industry and then focus on the various kinds of spills that might affect it. Our conclusion is that the exploitation of the oil fields will significantly damage the tourism industry: a series of small-scale accidents followed by a large spill could destroy the complex structure of Balearic tourism, and would have severe repercussions for the economy of the archipelago.

This article theorizes about the implications for domestic climate politics of three distinct roles countries play in the global carbon supply chain: fossil fuel producer, manufacturer of carbon-intensive goods, and final consumer. Because international responsibility is assigned to territorial emissions, countries at either end of the global supply chain effectively evade environmental responsibility by shifting fossil fuel combustion to manufacturing countries. In so doing, they lessen the political challenges of reducing domestic emissions. Although exporters of carbon-intensive goods are reluctant to disadvantage local producers, importers can craft policies that both reduce territorial emissions and create local jobs. Ironically, fossil fuel exporters can emerge as leaders in reducing their own territorial emissions, a finding illustrated by case studies of British Columbia and Norway. The conclusion argues that shifting responsibility for carbon emissions to the point of either final consumption or fossil fuel extraction could facilitate an international climate agreement.

Nature conservation scientists and practitioners have voiced the concern that a conservation discourse based on economic arguments and monetary valuation may undermine conservation efforts by eroding ("crowding out") the influence of other arguments for nature conservation. This paper presents the results of a decision experiment in which nature conservation is framed using an economic, a non-economic, or a combined discourse before participants take hypothetical decisions on the construction of hydropower dams in the Bolivian Amazon. We find that an economic discourse with monetary valuation framing leads to significantly fewer pro-conservation decisions, that is, decisions against dam construction. This is the case when a cost-benefit analysis inclusive of environmental costs reveals that the dam is economically viable (i.e., there remains a trade-off between economics and conservation), but also when such a costs-benefit analysis indicates that the dam is not viable (i.e., no trade-off). The results suggest that an economic discourse with monetary valuation framing can indeed undermine nature conservation efforts. They also suggest that the effect can be avoided, however, by presenting non-economic arguments side by side with an economic rationale.

Motivated by tropical deforestation, we analyze (i) a novel theory of resource extraction, (ii) the optimal conservation contract, (iii) when the donor prefers contracting with central rather than local governments, and (iv) how the donor’s presence may induce institutional change. Deforestation can be legal or illegal in the model: each district decides how much to protect and how much to extract for sale on a common market. If districts are strong, in that they find protection inexpensive, extraction is sales-driven and districts bene.t if neighbors conserve. If districts are weak, they lose when neighbors conserve since the smaller supply increases the price and the pressure on the resource, and thus also the cost of protection. Consequently, decentralizing authority increases conservation if and only if districts are weak. Contracting with the central authority is socially optimal, but, on the one hand, the donor benefits from contracting with districts if they are weak; on the other hand, districts prefer to decentralize if they are strong. The presence of the donor may lead to a regime change that increases extraction by more than it is reduced by the contract itself.

This study examines the relationship between weather conditions, economic shocks and civil conflicts in Africa. While most studies rely on country-level data sets, this study exploits a panel data set of African first-order administrative units covering 1992-2010. Since sub-national gross domestic product for Africa is either unavailable or of poor quality, nighttime light data from satellites is exploited to predict economic growth at the sub-national level. In addition to IV/GMM estimation, the Lasso estimator is employed in order to generate optimal instruments for economic growth from rainfall and temperature variables. It is demonstrated that the Lasso estimator successfully addresses the challenges arising from non-linearities, heterogeneity across climate regions and weak identification. Furthermore, spatial econometric methods account for conflict spill-overs via political, geographical and ethnic ties. Estimation results provide no evidence that economic growth shocks have a significant causal impact on violence, but prices of capital-intensive commodities seem to be associated with civil conflicts.

Recent supply security concerns in Europe have revived interest into the natural gas market. Here, we investigate investment behavior and trade in an imperfect market structure under uncertainty in both supply and demand. We focus on three uncertain events: i) transit of Russian gas via Ukraine that may be disrupted from 2020 on; ii) natural gas intensity of electricity generation in OECD countries that may lead to higher or lower natural gas demand after 2025; and iii) availability of shale gas around the globe after 2030. We illustrate how timing of investments is affected by inter-temporal hedging behavior of market agents, such as when LNG capacity provides ex-ante flexibility (e.g., in Ukraine to hedge for a possible Russian supply disruption) or an expost fallback option if domestic or nearby pipeline supply sources are low (e.g., uncertain shale gas resources in China). Moreover, we find that investment in LNG capacities is more determined by demand side pull (due to higher needs in electric power generation) than by supply side push (higher shale gas supplies needing an outlet).

This article investigates the effect of natural resources on whether ethno-political groups choose to pursue their goals with non-violent as compared to violent means, distinguishing terrorism from insurgencies. It is hypothesized that whether or not the extraction of fossil fuels sparks violence depends both on the group’s characteristics and the state’s reaction. Data are taken from the Minorities at Risk Organizational Behavior (MAROB) project, covering 118 organizations in 13 countries of the Middle East and North Africa over the 1980-2004 period. The multinomial logit models combine group- and country-specific information and show that ethno-political groups are more likely to resort to rebellion rather than using non-violent means or becoming terrorists when representing regions rich in oil. This effect is enhanced for groups already enjoying regional autonomy or being supported by a foreign state but can be mitigated by power sharing arrangements.

We investigate the causes of an internal conflict by adding ambient climate factors to the existing bundle of most significant variables. It turns out that – controlling for possible associations – temperature could actually induce a conflict. We emphasise that temperature could not be a dominant reason in starting a conflict; however, it could escalate the chances when other factors are present. This paper mentions some of the related psychological studies to support this claim. We also show that grievance factors could actually be rightfully effective in starting an internal conflict alongside greed based reasons. In the end, we believe that it could be constructive to study ambient factors more often in economics.

We develop a continuous time dynamic game to provide with a benchmark theory of Arab Spring-type events. We consider a resource-dependent economy with two interacting groups, the elite vs. the citizens, and two political regimes, dictatorship vs. a freer regime. Transition to the freer regime can only be achieved if citizens decide to revolt given the concession/repression policy of the elite. Departing from the related literature, the revolution optimal timing is an explicit control variable in the hands of citizens. The elite is the strategic leader: she ultimately chooses her policy knowing the reaction function of citizens. In this framework, we provide with a full equilibrium analysis of the political regime switching game and notably emphasize the role of the direct switching cost of the citizens and of the elite's self-preservation options. In particular, we show how the incorporation of explicit revolution timing may change the conventional wisdom in the related institutional change literature. Finally, we emphasize how the theory may help explaining some key features of the Arab Spring.

Rare earth elements (REEs) have become increasingly important because of their relative scarcity and worldwide increasing demand, as well as China's quasi-monopoly of this market. REEs are virtually not substitutable, and they are essential for a variety of high-tech products and modern key technologies. This has raised serious concerns that China will misuse its dominant position to set export quotas in order to maximize its own profits at the expense of other rare earth user industries (wealth transfer motive). In fact, export restrictions on REEs were the catalyst for the U.S. to lodge a formal complaint against China in 2012 at the WTO. This paper analyzes possible wealth transfer effects by focusing on export quota announcements (so-called MOFCOM announcements) by China, and the share price reactions of Chinese REE suppliers, U.S. REE users, and the rest of the world REE refiners. Overall, we find limited support for the view of a wealth transfer in connection with MOFCOM announcements only when disentangling events prior to and post the initiation of the WTO trial, consistent with the trial triggering changes to ChinaÕs REE policy and recent announcement to abolish quotas. We do find, however, that extreme REE price movements have a first order effect on all companies in the REE industry consistent with recent market trends to enable hedging against REE price volatility.

A large literature investigates the relation between oil and conflict, yet no empirical study has found any link between oil and coups d’´etat. Using a new data set on oil production separated into onshore and offshore production, and covering 172 countries from 1900 to 2012, onshore oil is seen to promote coup while offshore oil prevents them. A likely mechanism is that onshore oil motivates military build-ups, while offshore oil does not. From a political leader’s point of view, a large military is a double-edged sword, because it may turn against him and stage a coup.

In many countries significant amounts of public funding are devoted to supporting firms’ R&D and innovation projects. Here, using panel data on the innovation activities of Irish manufacturing firms we examine the legacy effects of public subsidies for new product development and R&D. We examine five alternative mechanisms through which such effects may occur: input additionality, output additionality, and congenital, inter-organisational and experiential behavioural additionality. Tests suggest contrasting legacy effects with R&D subsidies generating legacy output additionality effects while new product development subsidies have legacy congenital and inter-organisational behavioural additionality effects. Our results have implications for innovation policy design and evaluation.

This paper investigates empirically the effect of market regulation and renewable energy policies on innovation activity in different renewable energy technologies. For the EU countries and the years 1980 to 2007, we built a unique dataset containing information on patent production in eight different technologies, proxies of market regulation and technology-specific renewable energy policies. Our main findings show that lowering entry barriers is a more significant driver of renewable energy innovation than privatisation and unbundling, but its effect varies across technologies, being stronger in technologies characterised by the potential entry of small, independent power producers. Additionally, the inducement effect of renewable energy policies is heterogeneous and more pronounced for wind, which is the only technology that is mature and has high technological potential. Finally, the ratification of the Kyoto protocol – determining a more stable and less uncertain policy framework - amplifies the inducement effect of both energy policy and market liberalisation.