Enforcing Member State Compliance with EU Environmental Law: A Critical Evaulation of the Use of Financial Penalties

The 1993 Treaty on European Union finally closed a legal vacuum in
EU law, by giving the Court the power to impose financial penalties to
enforce compliance with its judgments. Today, this power is found
within Article 260(2) of the Treaty on the Functioning of the
European Union. Drawing upon case law, this article examines the
role that the Court’s enforcement powers have played in relation to
EU environmental law. It argues that EU law has yet to make full use
of their potential. The article commences with the Commission and
questions whether it has sufficient resources to carry out its functions
under Article 260(2). The article also examines the ongoing problem of
Member State delay in complying with Court judgments and the
weight given to environmental considerations in the Court’s decision
making on financial penalties. The article concludes by examining the
implications of the Lisbon Treaty.

Modeling Multivariate Interest Rates Using Time-Varying Copulas and Reducible Nonlinear Stochastic Differential Equations

We propose a new approach for modeling nonlinear multivariate interest rate processes based on time-varying copulas and reducible stochastic differential equations (SDEs). In the modeling of the marginal processes, we consider a class of nonlinear SDEs that are reducible to Ornstein--Uhlenbeck (OU) process or Cox, Ingersoll, and Ross (1985) (CIR) process. The reducibility is achieved via a nonlinear transformation function. The main advantage of this approach is that these SDEs can account for nonlinear features, observed in short-term interest rate series, while at the same time leading to exact discretization and closed-form likelihood functions. Although a rich set of specifications may be entertained, our exposition focuses on a couple of nonlinear constant elasticity volatility (CEV) processes, denoted as OU-CEV and CIR-CEV, respectively. These two processes encompass a number of existing models that have closed-form likelihood functions. The transition density, the conditional distribution function, and the steady-state density function are derived in closed form as well as the conditional and unconditional moments for both processes. In order to obtain a more flexible functional form over time, we allow the transformation function to be time varying. Results from our study of U.S. and UK short-term interest rates suggest that the new models outperform existing parametric models with closed-form likelihood functions. We also find the time-varying effects in the transformation functions statistically significant. To examine the joint behavior of interest rate series, we propose flexible nonlinear multivariate models by joining univariate nonlinear processes via appropriate copulas. We study the conditional dependence structure of the two rates using Patton (2006a) time-varying symmetrized Joe--Clayton copula. We find evidence of asymmetric dependence between the two rates, and that the level of dependence is positively related to the level of the two rates. (JEL: C13, C32, G12) Copyright The Author 2010. Published by Oxford University Press. All rights reserved. For permissions, please e-mail: journals.permissions@oxfordjournals.org, Oxford University Press.

Northern Ireland's Consent to the Climate Change Act 2008: An Illusion?

This is the first in a two-part analysis of Northern Ireland’s engagement with the climate governance regime created by the UK Climate Change Act 2008. It contends that UK devolution has shaped this national regime and may itself be shaped by the national low carbon transition, particularly in the case of the UK’s most devolved region. In essence, while Northern Ireland’s consent to the application of the Act appeared to represent a long-term commitment to share power in the interests of present and future generations and thus to devolution itself, this first article argues that it was also potentially illusory. The second article argues that making an effective commitment to climate governance will require its devolved administration to allow constitutional arrangements designed for conflict resolution to mature. Failure to do so will have important implications for the UK’s putative ‘national’ low carbon transition and the longer term viability of devolution in the region.

Committing to Effective Climate Governance in Northern Ireland: A Defining Test of Devolution

This is the second of a two-part analysis exploring the interaction between UK devolution and governance of the national low carbon transition. It argues that devolution shaped the national climate governance regime created by the Climate Change Act 2008, but will itself be tested and even altered as the traction of the low carbon imperative intensifies. This dynamic is explored in the specific context of the UK’s most devolved region. The first article argued that devolution facilitated and arguably forced Northern Ireland’s devolved administration to give a highly qualified and potentially illusory consent to the regional application of the UK Act. The second article argues that making a more effective commitment to climate governance will be a defining test of its devolution arrangements but will require constitutional arrangements designed for conflict resolution to mature. Failure to do so will have important implications for the UK’s putative ‘national’ low carbon transition and the longer-term viability of devolution in the region.

The Strategic Environmental Assessment Directive: A Potential Lever for Independent Regulation in Northern Ireland?

Accepted for publication - will appear in advance view JEL and hard copy publication in (2012) Vol 24(2).

University Competition, Grading Standards, and Grade Inflation

We develop a model of strategic grade determination by universities distinguished by their distributions of student academic abilities. Universities choose grading standards to maximize the total wages of graduates, taking into account how the grading standards affect firms' productivity assessment and job placement. We identify conditions under which better universities set lower grading standards, exploiting the fact that firms cannot distinguish between good and badA''s. In contrast, a social planner sets stricter standards at better universities. We show how increases in skilled jobs drive grade inflation, and determine when grading standards fall faster at better schools. (JEL I21)

Sequence Effects in the Valuation of Multiple Environmental Programs Using the Contingent Valuation Method

In contingent valuation, the willingness to pay for hypothetical programs may be affected by the order in which programs are presented to respondents. With inclusive lists, economic theory suggests that sequence effects should be expected. However, when policy makers allocate public budgets to several environmental programs, they may be interested in assessing the value of the programs without the valuations being affected by the order in which the programs are presented. Using single-bounded dichotomous choice contingent valuation questions, we show that if respondents have the possibility to revise their willingness-to-pay answers, sequence effects are mitigated. (JEL Q51, Q54)

Attaining Subsidiarity-Based Multilevel Governance of Genetically Modified Cultivation?

The cultivation of genetically modified (GM) crops in the EU is highly harmonised, but with persisting conflicts over authority. The Commission responded to internal and external pressures with a more flexible approach to coexistence, a proposed opt-out clause and a promise to review the existing EU GM regime, providing an opportunity to consider and suggest paths of development. This article considers the post-authorisation policy-making powers of Member States and subnational regions, in light of subsidiarity-based multilevel governance. It considers the different approaches to risk-centred issues and more general policy choices. Overall, the developments occurring at the EU level are strengthening subsidiarity-based multilevel governance within the GM cultivation regime, but with significant opportunities to improve it further through focussing on the complementary powers, coordination and the regional levels in particular.

Max Weber and the First World War: Protestant and Catholic living standards in Germany, 1914-1919

We assess informal institutions of Protestants and Catholics by investigating their economic resilience in a natural experiment. The First World War constitutes an exogenous shock to living standards since the duration and intensity of the war exceeded all expectations. We assess the ability of Protestant and Catholic communities to cope with increasing food prices and wartime black markets. Literature based on Weber (1904, 1905) suggests that Protestants must be more resilient than their Catholic peers. Using individual height data on some 2,800 Germans to assess levels of malnutrition during the war, we find that living standards for both Protestants and Catholics declined; however, the decrease of Catholics’ height was disproportionately large. Our empirical analysis finds a large statistically significant difference between Protestants and Catholics for the 1915–19 birth cohort, and we argue that this height gap cannot be attributed to socioeconomic background and fertility alone.