Predicting the risks from climate change to forage and crop production for animal feed

Climate change is expected to bring warmer temperatures, changes to rainfall patterns, and increased frequency of extreme weather. Projections of climate impacts on feed crops show that there will likely be opportunities for increased productivity as well as considerable threats to crop productivity in different parts of the world over the next 20 to 50 years. On balance, we anticipate substantial risks to the volume, volatility, and quality of animal feed supply chains from climate change. Adaptation strategies and investment informed by high quality research at the interface of crop and animal science will be needed, both to respond to climate change and to meet the increasing demand for animal products expected over the coming decades.

Assessing continental-scale risks for generalist and specialist pollinating bee species under climate change

Increased risks of extinction to populations of animals and plants under changing climate have now been demonstrated for many taxa. This study assesses the extinction risks to species within an important genus of pollinating bees (Colletes: Apidae) by estimating the expected changes in the area and isolation of suitable habitat under predicted climatic condition for 2050. Suitable habitat was defined on the basis of the presence of known forage plants as well as climatic suitability. To investigate whether ecological specialisation was linked to extinction risk we compared three species which were generalist pollen foragers on several plant families with three species which specialised on pollen from a single plant species. Both specialist and generalist species showed an increased risk of extinction with shifting climate, and this was particularly high for the most specialised species (Colletes anchusae and C. wolfi). The forage generalist C. impunctatus, which is associated with Boreo-Alpine environments, is potentially threatened through significant reduction in available climatic niche space. Including the distribution of the principal or sole pollen forage plant, when modelling the distribution of monolectic or narrowly oligolectic species, did not improve the predictive accuracy of our models as the plant species were considerably more widespread than the specialised bees associated with them.

Credit and liquidity components of corporate CDS spreads

This paper investigates the role of credit and liquidity factors in explaining corporate CDS price changes during normal and crisis periods. We find that liquidity risk is more important than firm-specific credit risk regardless of market conditions. Moreover, in the period prior to the recent “Great Recession” credit risk plays no role in explaining CDS price changes. The dominance of liquidity effects casts serious doubts on the relevance of CDS price changes as an indicator of default risk dynamics. Our results show how multiple liquidity factors including firm specific and aggregate liquidity proxies as well as an asymmetric information measure are critical determinants of CDS price variations. In particular, the impact of informed traders on the CDS price increases when markets are characterised by higher uncertainty, which supports concerns of insider trading during the crisis.

Broker use and the cost of liquidity in commercial real estate investment

Purpose – Commercial real estate is a highly specific asset: heterogeneous, indivisible and with less information transparency than most other commonly held investment assets. These attributes encourage the use of intermediaries during asset acquisition and disposal. However, there are few attempts to explain the use of different brokerage models (with differing costs) in different markets. This study aims to address this gap. Design/methodology/approach – The study analyses 9,338 real estate transactions in London and New York City from 2001 to 2011. Data are provided by Real Capital Analytics and cover over $450 billion of investments in this period. Brokerage trends in the two cities are compared and probit regressions are used to test whether the decision to transact with broker representation varies with investor or asset characteristics. Findings – Results indicate greater use of brokerage in London, especially by purchasers. This persists when data are disaggregated by sector, time or investor type, pointing to the role of local market culture and institutions in shaping brokerage models and transaction costs. Within each city, the nature of the investors involved seems to be a more significant influence on broker use than the characteristics of the assets being traded. Originality/value – Brokerage costs are the single largest non-tax charge to an investor when trading commercial real estate, yet there is little research in this area. This study examines the role of brokers and provides empirical evidence on factors that influence the use and mode of brokerage in two major investment destinations.

Climate-driven spatial mismatches between British orchards and their pollinators: increased risks of pollination deficits

Understanding how climate change can affect crop-pollinator systems helps predict potential geographical mismatches between a crop and its pollinators, and therefore identify areas vulnerable to loss of pollination services. We examined the distribution of orchard species (apples, pears, plums and other top fruits) and their pollinators in Great Britain, for present and future climatic conditions projected for 2050 under the SRES A1B Emissions Scenario. We used a relative index of pollinator availability as a proxy for pollination service. At present there is a large spatial overlap between orchards and their pollinators, but predictions for 2050 revealed that the most suitable areas for orchards corresponded to low pollinator availability. However, we found that pollinator availability may persist in areas currently used for fruit production, but which are predicted to provide sub-optimal environmental suitability for orchard species in the future. Our results may be used to identify mitigation options to safeguard orchard production against the risk of pollination failure in Great Britain over the next 50 years; for instance choosing fruit tree varieties that are adapted to future climatic conditions, or boosting wild pollinators through improving landscape resources. Our approach can be readily applied to other regions and crop systems, and expanded to include different climatic scenarios.

The mediating effect of environmental and ethical behaviour on supply chain partnership decisions and management appreciation of supplier partnership risks

Green supply chain management and environmental and ethical behaviour (EEB), a major component of corporate responsibility (CR), are rapidly developing fields in research and practice. The influence and effect of EEB at the functional level, however, is under-researched. Similarly, the management of risk in the supply chain has become a practical concern for many firms. It is important that managers have a good understanding of the risks associated with supplier partnerships. This paper examines the effect of firms’ investment in EEB as part of corporate social responsibility in mediating the relationship between supply chain partnership (SCP) and management appreciation of the risk of partnering. We hypothesise that simply entering into a SCP does not facilitate an appreciation of the risk of partnering and may even hamper such awareness. However, such an appreciation of the risk is facilitated through CR’s environmental and stakeholder management ethos. The study contributes further by separating risk into distinct relational and performance components. The results of a firm-level survey confirm the mediation effect, highlighting the value to supply chain strategy and design of investing in EEB on three fronts: building internal awareness, monitoring and sharing best practice.

State capitalism and social responsibility in China's banking industry

China’s financial system has experienced a series of major reforms in recent years. Efforts have been made towards introducing the shareholding system in state-owned commercial banks, restructuring of securities firms, re-organising equity of joint venture insurance companies, further improving the corporate governance structure, managing financial risks and ultimately establishing a system to protect investors (Xinhua, 2010). Financial product innovation, with the further opening up of financial markets and the development of the insurance and bond market, has increased liquidity as well as reduced financial risks. The U.S. subprime crisis indicated the benefit of financial innovations for the economy, but without proper control, they may lead to unexpected consequences. Kirkpatrick (2009) argues that failures and weaknesses in corporate governance arrangements and insufficient accounting standards and regulatory requirements attributed to the financial crisis. Similar to the financial crises of the last decade, the global financial crisis which sparked in 2008, surfaced a variety of significant corporate governance failures: the dysfunction of market mechanisms, the lack of transparency and accountability, misaligned compensation arrangements and the late response of government, all which encouraged management short-termism, poor risk management, as well as some fraudulent schemes. The unique characteristics of the Chinese banking system are an interesting point for studying post-crisis corporate governance reform. Considering that China modelled its governance system on the Anglo-American system, this paper examines the impact of the financial crisis on corporate governance reform in developed economies, and particularly, China’s reform of its financial sector. The paper further analyses the Chinese government’s role in bank supervision and risk management. In this regard, the paper contributes to the corporate governance literature within the Chinese context by providing insights into the contributing factors to the corporate governance failure that led to the global financial crisis. It also provides policy recommendations for China’s policy makers to seriously consider. The results suggest a need for the re-examination of corporate governance adequacy and the institutionalisation of business ethics. The paper’s next section provides a review of China’s financial system with reference to the financial crisis, followed by a critical evaluation of a capitalistic system and a review of Anglo-American and Continental European models. It then analyses the need for a new corporate governance model in China by considering the bank failures in developed economies and the potential risks and inefficiencies in a current State controlled system. The paper closes by reflecting the need for Chinese policy makers to continually develop, adapt and rewrite corporate governance practices capable of meeting the new challenge, and to pay attention to business ethics, an issue which goes beyond regulation.

Integrating risks of climate change into water management

The Working Group II contribution to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change critically reviewed and assessed tens of thousands of recent publications to inform about the assess current scientific knowledge on climate change impacts, vulnerability and adaptation. Chapter 3 of the report focuses on freshwater resources, but water issues are also prominent in other sectoral chapters and in the regional chapters of the Working Group II report as well as in various chapters of Working Group I. With this paper, the lead authors, a review editor and the chapter scientist of the freshwater chapter of the WGII AR5 wish to summarize their assessment of the most relevant risks of climate change related to freshwater systems and to show how assessment and reduction of those risks can be integrated into water management.

The impact of liquidity on senior credit index spreads during the subprime crisis

This paper examines the effects of liquidity during the 2007–09 crisis, focussing on the Senior Tranche of the CDX.NA.IG Index and on Moody's AAA Corporate Bond Index. It aims to understand whether the sharp increase in the credit spreads of these AAA-rated credit indices can be explained by worse credit fundamentals alone or whether it also reflects a lack of depth in the relevant markets, the scarcity of risk-capital, and the liquidity preference exhibited by investors. Using cointegration analysis and error correction models, the paper shows that during the crisis lower market and funding liquidity are important drivers of the increase in the credit spread of the AAA-rated structured product, whilst they are less significant in explaining credit spread changes for a portfolio of unstructured credit instruments. Looking at the experience of the subprime crisis, the study shows that when the conditions under which securitisation can work properly (liquidity, transparency and tradability) suddenly disappear, investors are left highly exposed to systemic risk.

Liquidity effects and FFA returns in the international shipping derivatives market

The study examines the impact of liquidity risk on freight derivatives returns. The Amihud liquidity ratio and bid–ask spreads are utilized to assess the existence of liquidity risk in the freight derivatives market. Other macroeconomic variables are used to control for market risk. Results indicate that liquidity risk is priced and both liquidity measures have a significant role in determining freight derivatives returns. Consistent with expectations, both liquidity measures are found to have positive and significant effects on the returns of freight derivatives. The results have important implications for modeling freight derivatives, and consequently, for trading and risk management purposes.

Risks, costs and labour markets: explaining cross-national patterns of far right party success in European Parliament elections

What is the impact of the economy on cross national variation in far right-wing party support? This paper tests several hypotheses from existing literature on the results of the last three EP elections in all EU member states. We conceptualise the economy affects support because unemployment heightens the risks and costs that the population faces, but this is crucially mediated by labour market institutions. Findings from multiple regression analyses indicate that unemployment, real GDP growth, debt and deficits have no statistically significant effect on far right-wing party support at the national level. By contrast, labour markets influence costs and risks: where unemployment benefits and dismissal regulations are high, unemployment has no effect, but where either one of them is low, unemployment leads to higher far right-wing party support. This explains why unemployment has not led to far right-wing party support in some European countries that experienced the 2008 Eurozone crisis.

Focus on environmental risks and migration: causes and consequences

Environmental change poses risks to societies, including disrupting social and economic systems such as migration. At the same time, migration is an effective adaptation to environmental and other risks. We review novel science on interactions between migration, environmental risks and climate change. We highlight emergent findings, including how dominant flows of rural to urban migration mean that populations are exposed to new risks within destination areas and the requirement for urban sustainability. We highlight the issue of lack of mobility as a major issue limiting the effectiveness of migration as an adaptation strategy and leading to potentially trapped populations. The paper presents scenarios of future migration that show both displacement and trapped populations over the incoming decades. Papers in the special issue bring new insights from demography, human geography, political science and environmental science to this emerging field.

Liquidity and the drivers of search, due diligence and transaction times for UK commercial real estate investments

Trading commercial real estate involves a process of exchange that is costly and which occurs over an extended and uncertain period of time. This has consequences for the performance and risk of real estate investments. Most research on transaction times has occurred for residential rather than commercial real estate. We study the time taken to transact commercial real estate assets in the UK using a sample of 578 transactions over the period 2004 to 2013. We measure average time to transact from a buyer and seller perspective, distinguishing the search and due diligence phases of the process, and we conduct econometric analysis to explain variation in due diligence times between assets. The median time for purchase of real estate from introduction to completion was 104 days and the median time for sale from marketing to completion was 135 days. There is considerable variation around these times and results suggest that some of this variation is related to market state, type and quality of asset, and type of participants involved in the transaction. Our findings shed light on the drivers of liquidity at an individual asset level and can inform models that quantify the impact of uncertain time on market on real estate investment risk.

How do people perceive, understand, and anticipate responding to flash flood risks and warnings? Results from a public survey in Boulder, Colorado, USA

This study investigates flash flood forecast and warning communication, interpretation, and decision making, using data from a survey of 418 members of the public in Boulder, Colorado, USA. Respondents to the public survey varied in their perceptions and understandings of flash flood risks in Boulder, and some had misconceptions about flash flood risks, such as the safety of crossing fast-flowing water. About 6% of respondents indicated consistent reversals of US watch-warning alert terminology. However, more in-depth analysis illustrates the multi-dimensional, situationally dependent meanings of flash flood alerts, as well as the importance of evaluating interpretation and use of warning information along with alert terminology. Some public respondents estimated low likelihoods of flash flooding given a flash flood warning; these were associated with lower anticipated likelihood of taking protective action given a warning. Protective action intentions were also lower among respondents who had less trust in flash flood warnings, those who had not made prior preparations for flash flooding, and those who believed themselves to be safer from flash flooding. Additional analysis, using open-ended survey questions about responses to warnings, elucidates the complex, contextual nature of protective decision making during flash flood threats. These findings suggest that warnings can play an important role not only by notifying people that there is a threat and helping motivate people to take protective action, but also by helping people evaluate what actions to take given their situation.

Students’ perception of privacy risks in using social networking sites for learning: a study of Uganda Christian University

Although social networking sites (SNSs) present a great deal of opportunities to support learning, the privacy risk is perceived by learners as a friction point that affects their full use for learning. Privacy risks in SNSs can be divided into risks that are posed by the SNS provider itself and risks that result from user’s social interactions. Using an online survey questionnaire, this study explored the students’ perception of the benefits in using social networking sites for learning purposes and their perceived privacy risks. A sample of 214 students from Uganda Christian University in Africa was studied. The results show that although 88 % of participants indicated the usefulness of SNSs for learning, they are also aware of the risks associated with these sites. Most of the participants are concerned with privacy risks such as identity theft, cyber bullying, and impersonation that might influence their online learning participation in SNSs.