Network externalities across financial institutions

We propose and estimate a financial distress model that explicitly accounts for the interactions or spill-over effects between financial institutions, through the use of a spatial continuity matrix that is build from financial network data of inter bank transactions. Such setup of the financial distress model allows for the empirical validation of the importance of network externalities in determining financial distress, in addition to institution specific and macroeconomic covariates. The relevance of such specification is that it incorporates simultaneously micro-prudential factors (Basel 2) as well as macro-prudential and systemic factors (Basel 3) as determinants of financial distress. Results indicate network externalities are an important determinant of financial health of a financial institutions. The parameter that measures the effect of network externalities is both economically and statistical significant and its inclusion as a risk factor reduces the importance of the firm specific variables such as the size or degree of leverage of the financial institution. In addition we analyze the policy implications of the network factor model for capital requirements and deposit insurance pricing.

Mortality of Migratory Birds from Marine Commercial Fisheries and Offshore Oil and Gas Production in Canada

There is an imminent need for conservation and best-practice management efforts in marine ecosystems where global-scale declines in the biodiversity and biomass of large vertebrate predators are increasing and marine communities are being altered. We examine two marine-based industries that incidentally take migratory birds in Canada: (1) commercial fisheries, through bycatch, and (2) offshore oil and gas exploration, development, and production. We summarize information from the scientific literature and technical reports and also present new information from recently analyzed data to assess the magnitude and scope of mortality. Fisheries bycatch was responsible for the highest levels of incidental take of migratory bird species; estimated combined take in the longline, gillnet, and bottom otter trawl fisheries within the Atlantic, including the Gulf of St. Lawrence, and Pacific regions was 2679 to 45,586 birds per year. For the offshore oil and gas sector, mortality estimates ranged from 188 to 4494 deaths per year due to the discharge of produced waters resulting in oil sheens and collisions with platforms and vessels; however these estimates for the oil and gas sector are based on many untested assumptions. In spite of the uncertainties, we feel levels of mortality from these two industries are unlikely to affect the marine bird community in Canada, but some effects on local populations from bycatch are likely. Further research and monitoring will be required to: (1) better estimate fisheries-related mortality for vulnerable species and populations that may be impacted by local fisheries, (2) determine the effects of oil sheens from produced waters, and attraction to platforms and associated mortality from collisions, sheens, and flaring, so that better estimates of mortality from the offshore oil and gas sector can be obtained, and (3) determine impacts associated with accidental spills, which are not included in our current assessment. With a better understanding of the direct mortality of marine birds from industry, appropriate mitigation and management actions can be implemented. Cooperation from industry for data collection, research to fill knowledge gaps, and implementation of mitigation approaches will all be needed to conserve marine birds in Canada.

Dust production and the release of iron oxides resulting from the aeolian abrasion of natural dune sands

Global dust trajectories indicate that significant quantities of aeolian-transported iron oxides originate in contemporary dryland areas. One potential source is the iron-rich clay coatings that characterize many sand-sized particles in desert dunefields. This paper uses laboratory experiments to determine the rate at which these coatings can be removed from dune sands by aeolian abrasion. The coatings impart a red colour to the grains to which previous researchers have assigned variable geomorphological significance. The quantities or iron removed during a 120 hour abrasion experiment are small (99 mg kg(-1)) and difficult to detect by eye; however, high resolution spectroscopy clearly indicates that ferric oxides are released during abrasion and the reflectance of the particles alters. One of the products of aeolian abrasion is fine particles (<10 mum diameter) with the potential for long distance transport. Copyright (C) 2004 John Wiley Sons, Ltd.

REMOTE SENSING OF AEOLIAN DUST PRODUCTION AND DISTRIBUTION

Airborne dust is of concern due to hazards in the localities affected by erosion, transport and deposition, but it is also of global concern due to uncertainties over its role in radiative forcing of climate. In order to model the environmental impact of dust, we need a better knowledge of sources and transport processes. Satellite remote sensing has been instrumental in providing this knowledge, through long time series of observations of atmospheric dust transport. Three remote sensing methodologies have been used, and are reviewed briefly in this paper. Firstly the use of observations from the Total Ozone Mapping Spectrometer (TOMS), secondly the use of the Infrared Difference Dust Index (IDDI) from Meterosat infrared data, thirdly the use of MODIS images from the rapid response system. These data have highlighted the major global sources of dust, mist of which are associated with endoreic drainage basins in deserts, which held lakes during Quaternary humid climate phases, and identified the Bodele Depression in Tchad as the dustiest place on Earth.

The use of life cycle assessment to compare the environmental impact of production and feeding of conventional and genetically modified maize for broiler production in Argentina

The paper presents the methods and results of a life-cycle assessment (LCA) applied to the production of maize grain from a conventional variety compared with maize grain from a variety genetically modified to be herbicide tolerant and insect protected and to contain an enhanced oil and lysine content, and its impact when fed to broiler chickens. The findings show that there are both environmental and human health benefits of growing GM maize including lower impacts on global warming, ozone depletion, freshwater ecotoxicity and human toxicity. However, when considered in terms of the use of maize as a feed input to broiler chicken production, the benefits of the GM alternative become negligible compared to the use of conventional maize.

Terrestrial carnivores and human food production: impact and management

1. The production of food for human consumption has led to an historical and global conflict with terrestrial carnivores, which in turn has resulted in the extinction or extirpation of many species, although some have benefited. At present, carnivores affect food production by: (i) killing human producers; killing and/or eating (ii) fish/shellfish; (iii) game/wildfowl; (iv) livestock; (v) damaging crops; (vi) transmitting diseases; and (vii) through trophic interactions with other species in agricultural landscapes. Conversely, carnivores can themselves be a source of dietary protein (bushmeat). 2. Globally, the major areas of conflict are predation on livestock and the transmission of rabies. At a broad scale, livestock predation is a customary problem where predators are present and has been quantified for a broad range of carnivore species, although the veracity of these estimates is equivocal. Typically, but not always, losses are small relative to the numbers held, but can be a significant proportion of total livestock mortality. Losses experienced by producers are often highly variable, indicating that factors such as husbandry practices and predator behaviour may significantly affect the relative vulnerability of properties in the wider landscape. Within livestock herds, juvenile animals are particularly vulnerable. 3. Proactive and reactive culling are widely practised as a means to limit predation on livestock and game. Historic changes in species' distributions and abundance illustrate that culling programmes can be very effective at reducing predator density, although such substantive impacts are generally considered undesirable for native predators. However, despite their prevalence, the effectiveness, efficiency and the benefit:cost ratio of culling programmes have been poorly studied. 4. A wide range of non-lethal methods to limit predation has been studied. However, many of these have their practical limitations and are unlikely to be widely applicable. 5. Lethal approaches are likely to dominate the management of terrestrial carnivores for the foreseeable future, but animal welfare considerations are increasingly likely to influence management strategies. The adoption of non-lethal approaches will depend upon proof of their effectiveness and the willingness of stakeholders to implement them, and, in some cases, appropriate licensing and legislation. 6. Overall, it is apparent that we still understand relatively little about the importance of factors affecting predation on livestock and how to manage this conflict effectively. We consider the following avenues of research to be essential: (i) quantified assessments of the loss of viable livestock; (ii) landscape-level studies of contiguous properties to quantify losses associated with variables such as different husbandry practices; (iii) replicated experimental manipulations to identify the relative benefit of particular management practices, incorporating (iv) techniques to identify individual predators killing stock; and (v) economic analyses of different management approaches to quantify optimal production strategies.

Simulating global properties of electroencephalograms with minimal random neural networks

The human electroencephalogram (EEG) is globally characterized by a 1/f power spectrum superimposed with certain peaks, whereby the "alpha peak" in a frequency range of 8-14 Hz is the most prominent one for relaxed states of wakefulness. We present simulations of a minimal dynamical network model of leaky integrator neurons attached to the nodes of an evolving directed and weighted random graph (an Erdos-Renyi graph). We derive a model of the dendritic field potential (DFP) for the neurons leading to a simulated EEG that describes the global activity of the network. Depending on the network size, we find an oscillatory transition of the simulated EEG when the network reaches a critical connectivity. This transition, indicated by a suitably defined order parameter, is reflected by a sudden change of the network's topology when super-cycles are formed from merging isolated loops. After the oscillatory transition, the power spectra of simulated EEG time series exhibit a 1/f continuum superimposed with certain peaks. (c) 2007 Elsevier B.V. All rights reserved.

Assessing the date of the global oil peak: the need to use 2P reserves

Combining geological knowledge with proved plus probable ('2P') oil discovery data indicates that over 60 countries are now past their resource-limited peak of conventional oil production. The data show that the global peak of conventional oil production is close. Many analysts who rely only on proved ('1P') oil reserves data draw a very different conclusion. But proved oil reserves contain no information about the true size of discoveries, being variously under-reported, over-reported and not reported. Reliance on 1P data has led to a number of misconceptions, including the notion that past oil forecasts were incorrect, that oil reserves grow very significantly due to technology gain, and that the global supply of oil is ensured provided sufficient investment is forthcoming to 'turn resources into reserves'. These misconceptions have been widely held, including within academia, governments, some oil companies, and organisations such as the IEA. In addition to conventional oil, the world contains large quantities of non-conventional oil. Most current detailed models show that past the conventional oil peak the non-conventional oils are unlikely to come on-stream fast enough to offset conventional's decline. To determine the extent of future oil supply constraints calculations are required to determine fundamental rate limits for the production of non-conventional oils, as well as oil from gas, coal and biomass, and of oil substitution. Such assessments will need to examine technological readiness and lead-times, as well as rate constraints on investment, pollution, and net-energy return. (C) 2007 Elsevier Ltd. All rights reserved.

Global oil peaking: responding to the case for 'abundant supplies of oil'

This paper examines aspects of the case against global oil peaking, and in particular sets out to answer a viewpoint that the world can have abundant supplies of oil "for years to come". Arguments supporting the latter view include: past forecasts of oil shortage have proved incorrect, so current predictions should also be discounted; many modellers depend on Hubbert's analysis but this contained fundamental flaws; new oil supply will result from reserves growth and from the wider deployment of advanced extraction technology; and that the world contains large resources of unconventional oil that can come on-stream if the production of conventional oil declines. These arguments are examined in turn and shown to be incorrect, or to need setting into a broader context. The paper concludes therefore that such arguments cannot be used to rule out calculations that the resource-limited peak in the world's production of conventional oil will occur in the near term. Moreover, peaking of conventional oil is likely to impact the world's total availability of oil where the latter includes non-conventional oil and oil substitutes. (C) 2008 Elsevier Ltd. All rights reserved.

Increased temperature sensitivity of net DOC production from ombrotrophic peat due to water table draw-down.

The production and release of dissolved organic carbon (DOC) from peat soils is thought to be sensitive to changes in climate, specifically changes in temperature and rainfall. However, little is known about the actual rates of net DOC production in response to temperature and water table draw-down, particularly in comparison to carbon dioxide (CO2) fluxes. To explore these relationships, we carried out a laboratory experiment on intact peat soil cores under controlled temperature and water table conditions to determine the impact and interaction of each of these climatic factors on net DOC production. We found a significant interaction (P < 0.001) between temperature, water table draw-down and net DOC production across the whole soil core (0 to −55 cm depth). This corresponded to an increase in the Q10 (i.e. rise in the rate of net DOC production over a 10 °C range) from 1.84 under high water tables and anaerobic conditions to 3.53 under water table draw-down and aerobic conditions between −10 and − 40 cm depth. However, increases in net DOC production were only seen after water tables recovered to the surface as secondary changes in soil water chemistry driven by sulphur redox reactions decreased DOC solubility, and therefore DOC concentrations, during periods of water table draw-down. Furthermore, net microbial consumption of DOC was also apparent at − 1 cm depth and was an additional cause of declining DOC concentrations during dry periods. Therefore, although increased temperature and decreased rainfall could have a significant effect on net DOC release from peatlands, these climatic effects could be masked by other factors controlling the biological consumption of DOC in addition to soil water chemistry and DOC solubility. These findings highlight both the sensitivity of DOC release from ombrotrophic peat to episodic changes in water table draw-down, and the need to disentangle complex and interacting controls on DOC dynamics to fully understand the impact of environmental change on this system.

Alternative explanations for rising dissolved organic carbon export from organic soils

Since 1988, there has been, on average, a 91% increase in dissolved organic carbon (DOC) concentrations of UK lakes and streams in the Acid Waters Monitoring Network (AWMN). Similar DOC increases have been observed in surface waters across much of Europe and North America. Much of the debate about the causes of rising DOC has, as in other studies relating to the carbon cycle, focused on factors related to climate change. Data from our peat-core experiments support an influence of climate on DOC, notably an increase in production with temperature under aerobic, and to a lesser extent anaerobic, conditions. However, we argue that climatic factors may not be the dominant drivers of DOC change. DOC solubility is suppressed by high soil water acidity and ionic strength, both of which have decreased as a result of declining sulphur deposition since the 1980s, augmented during the 1990s in the United Kingdom by a cyclical decline in sea-salt deposition. Our observational and experimental data demonstrate a clear, inverse and quantitatively important link between DOC and sulphate concentrations in soil solution. Statistical analysis of 11 AWMN lakes suggests that rising temperature, declining sulphur deposition and changing sea-salt loading can account for the majority of the observed DOC trend. This combination of evidence points to the changing chemical composition of atmospheric deposition, particularly the substantial reduction in anthropogenic sulphur emissions during the last 20 years, as a key cause of rising DOC. The implications of rising DOC export for the carbon cycle will be very different if linked primarily to decreasing acid deposition, rather than to changes in climate, suggesting that these systems may be recovering rather than destabilising.

A nutrient increment method for reducing bias in global biogeochemical models

Assimilation of physical variables into coupled physical/biogeochemical models poses considerable difficulties. One problem is that data assimilation can break relationships between physical and biological variables. As a consequence, biological tracers, especially nutrients, are incorrectly displaced in the vertical, resulting in unrealistic biogeochemical fields. To prevent this, we present the idea of applying an increment to the nutrient field within a data assimilating model to ensure that nutrient-potential density relationships are maintained within a water column during assimilation. After correcting the nutrients, it is assumed that other biological variables rapidly adjust to the corrected nutrient fields. We applied this method to a 17 year run of the 2° NEMO ocean-ice model coupled to the PlankTOM5 ecosystem model. Results were compared with a control with no assimilation, and with a model with physical assimilation but no nutrient increment. In the nutrient incrementing experiment, phosphate distributions were improved both at high latitudes and at the equator. At midlatitudes, assimilation generated unrealistic advective upwelling of nutrients within the boundary currents, which spread into the subtropical gyres resulting in more biased nutrient fields. This result was largely unaffected by the nutrient increment and is probably due to boundary currents being poorly resolved in a 2° model. Changes to nutrient distributions fed through into other biological parameters altering primary production, air-sea CO2 flux, and chlorophyll distributions. These secondary changes were most pronounced in the subtropical gyres and at the equator, which are more nutrient limited than high latitudes.

Global pollinator declines: trends, impacts and drivers

Pollinators are a key component of global biodiversity, providing vital ecosystem services to crops and wild plants. There is clear evidence of recent declines in both wild and domesticated pollinators, and parallel declines in the plants that rely upon them. Here we describe the nature and extent of reported declines, and review the potential drivers of pollinator loss, including habitat loss and fragmentation, agrochemicals, pathogens, alien species, climate change and the interactions between them. Pollinator declines can result in loss of pollination services which have important negative ecological and economic impacts that could significantly affect themaintenance of wild plant diversity, wider ecosystemstability, crop production, food security and human welfare.

Thermodynamic analysis of snowball Earth hysteresis experiment: Efficiency, entropy production and irreversibility

We present an extensive thermodynamic analysis of a hysteresis experiment performed on a simplified yet Earth-like climate model. We slowly vary the solar constant by 20% around the present value and detect that for a large range of values of the solar constant the realization of snowball or of regular climate conditions depends on the history of the system. Using recent results on the global climate thermodynamics, we show that the two regimes feature radically different properties. The efficiency of the climate machine monotonically increases with decreasing solar constant in present climate conditions, whereas the opposite takes place in snowball conditions. Instead, entropy production is monotonically increasing with the solar constant in both branches of climate conditions, and its value is about four times larger in the warm branch than in the corresponding cold state. Finally, the degree of irreversibility of the system, measured as the fraction of excess entropy production due to irreversible heat transport processes, is much higher in the warm climate conditions, with an explosive growth in the upper range of the considered values of solar constants. Whereas in the cold climate regime a dominating role is played by changes in the meridional albedo contrast, in the warm climate regime changes in the intensity of latent heat fluxes are crucial for determining the observed properties. This substantiates the importance of addressing correctly the variations of the hydrological cycle in a changing climate. An interpretation of the climate transitions at the tipping points based upon macro-scale thermodynamic properties is also proposed. Our results support the adoption of a new generation of diagnostic tools based on the second law of thermodynamics for auditing climate models and outline a set of parametrizations to be used in conceptual and intermediate-complexity models or for the reconstruction of the past climate conditions. Copyright © 2010 Royal Meteorological Society

Cloud optical depth retrievals from the Aerosol Robotic Network (AERONET) cloud mode observations

Cloud optical depth is one of the most poorly observed climate variables. The new “cloud mode” capability in the Aerosol Robotic Network (AERONET) will inexpensively yet dramatically increase cloud optical depth observations in both number and accuracy. Cloud mode optical depth retrievals from AERONET were evaluated at the Atmospheric Radiation Measurement program’s Oklahoma site in sky conditions ranging from broken clouds to overcast. For overcast cases, the 1.5 min average AERONET cloud mode optical depths agreed to within 15% of those from a standard ground‐based flux method. For broken cloud cases, AERONET retrievals also captured rapid variations detected by the microwave radiometer. For 3 year climatology derived from all nonprecipitating clouds, AERONET monthly mean cloud optical depths are generally larger than cloud radar retrievals because of the current cloud mode observation strategy that is biased toward measurements of optically thick clouds. This study has demonstrated a new way to enhance the existing AERONET infrastructure to observe cloud optical properties on a global scale.