Taking stock after the Warsaw COP. CEPS Commentary, 4 December 2013

Drawing on his direct participation in the latest round of climate talks in Warsaw, Andrei Marcu looks at the results of the 19th COP through the lens of three basic questions, with a view to understanding how much progress was made and where we stand two years ahead of Paris. Are the targets adequate and how do we reach environmentally adequate targets? Can one understand and compare what other Parties are promising to do to ensure that the level of effort is comparable and equitable, and that companies are not asked to do more than their competitors in other jurisdictions? Is there comparability and equity in the eyes of the beholder? Do we understand what tools each country uses (what is available, what one gets as support) to ensure that no one country (and its companies) gets an easier ride or competitive advantage in meeting the commitment/promises that countries make. The author asserts that these questions need to be answered if an agreement is to be reached in 2015. And if they are not, he warns of mistrust, fear of carbon leakage and the temptation to resort to protectionist measures to compensate for competitive disadvantage.

Coltan from Central Africa, International Trade and Implications for Any Certification. Bruges European Economic Policy (BEEP) 23/2012

The exploitation of coltan in Central Africa can be considered a case of conflict minerals due to its nature. Many international organizations and bodies, national governments and private sector organizations seek to address this conflict, in particular via transparency, certification and accountability along the material supply chain. This paper analyses the international trade dimension of coltan and gives evidence on the dimension of illicit trade of coltan. The authors start from the hypothesis that illicit trade of coltan sooner or later will enter the market and will be reflected in the statistics. The paper is structured in the following manner: first, a short section gives a profile of coltan production and markets; second, an overview of the mining situation in the Democratic Republic of Congo (DRC) and related actors. The third section addresses mechanisms, actors and measurement issues involved in the international trade of coltan. The final part draws lessons for certification and conflict analysis and offers some guidance for future research. The paper identifies two main possible gateways to trace illegal trade in coltan: the neighbouring countries, especially Rwanda, and the importing countries for downstream production, in particular China. Our estimation is that the value of such illicit trade comes close to $ 27 million annually (2009), roughly one fifth of the world market volume for tantalum production. With regard to any certification the paper concludes that this will become challenging for business and policy: (a) Central Africa currently is the largest supplier of coltan on the world market, many actors profit from the current situation and possess abilities to hide responsibility; (b) China will need to accept more responsibility, a first step would be the acceptance of the OECD guidelines on due diligence; (c) better regional governance in Central Africa comprises of resource taxation, a resource fund and fiscal coordination. An international task force may provide more robust data, however more research will also be needed.

Farm-level Capital: Capital positions, structures, the dynamics of farm-level investments, capital accumulation and leverage positions. Factor Markets Working Paper No. 7, October 2011

This Factor Markets Working Paper describes and highlights the key issues of farm capital structures, the dynamics of investments and accumulation of farm capital, and the financial leverage and borrowing rates on farms in selected European countries. Data collected from the Farm Account Data Network (FADN) suggest that the European farming sector uses quite different farm business strategies, capabilities to generate capital revenues, and segmented agricultural loan market regimes. Such diverse business strategies have substantial, and perhaps more substantial than expected, implications for the financial leverage and performance of farms. Different countries adopt different approaches to evaluating agricultural assets, or the agricultural asset markets simply differ substantially depending on the country in question. This has implications for most of the financial indicators. In those countries that have seen rapidly increasing asset prices at the margin, which were revised accordingly in the accounting systems for the whole stock of assets, firm values increased significantly, even though the firms had been disinvesting. If there is an asset price bubble and it bursts, there may be serious knock-on effects for some countries.

Income Distributional Effects of Decoupled Payments Single Payment Scheme in the European Union. Factor Markets Working Paper No. 29, July 2012

This paper analyses the effects of the Single Payment Scheme (SPS) with and without farm structural change, and focuses on how income distributional effects and farm restructuring are impacted by the SPS under: alternative entitlement tradability, cross-compliance and CAP 'greening' requirements, different SPS implementation models, the entitlement stock, market imperfections and institutional regulations. The authors find that the SPS implication details are highly significant, since farmers’ benefits can range from 100% of the SPS value to a negative policy incidence, and farm structural change may also be hindered by the SPS.

RED vs. REDD: Biofuel Policy vs. Forest Conservation. Factor Markets Working Document No. 41, May 2013

This paper assesses the complex interplay between global Renewable Energy Directives (RED) and the United Nations programme to Reduce Emissions from Deforestation and forest Degradation (REDD). We examine the interaction of the two policies using a scenario approach with a recursive-dynamic global Computable General Equilibrium model. The consequences of a global biofuel directive on worldwide land use, agricultural production, international trade flows, food prices and food security out to 2030 are evaluated with and without a strict global REDD policy. We address a key methodological challenge of how to model the supply of land in the face of restrictions over its availability, as arises under the REDD policy. The paper introduces a flexible land supply function, which allows for large changes in the total potential land availability for agriculture. Our results show that whilst both RED and REDD are designed to reduce emissions, they have opposing impacts on land use. RED policies are found to extend land use whereas the REDD policy leads to an overall reduction in land use and intensification of agriculture. Strict REDD policies to protect forest and woodland lead to higher land prices in all regions. World food prices are slightly higher overall with some significant regional increases, notably in Southern Africa and Indonesia, leading to reductions in food security in these countries. This said, real food prices in 2030 are still lower than the 2010 level, even with the RED and REDD policies in place. Overall this suggests that RED and REDD are feasible from a worldwide perspective, although the results show that there are some regional problems that need to be resolved. The results show that countries directly affected by forest and woodland protection would be the most economically vulnerable when the REDD policy is implemented. The introduction of REDD policies reduces global trade in agricultural products and moves some developing countries to a net importing position for agricultural products. This suggests that the protection of forests and woodlands in these regions reverses their comparative advantage as they move from being land-abundant to land-scarce regions. The full REDD policy setting, however, foresees providing compensation to these countries to cover their economic losses.

Will improved access to capital dampen the need for more agricultural land? A CGE analysis of agricultural capital markets and world-wide biofuel policies. Factor Markets Working Paper No. 48, May 2013

This paper analyses the consequences of enhanced biofuel production in regions and countries of the world that have announced plans to implement or expand on biofuel policies. The analysis considers biofuel policies implemented as binding blending targets for transportation fuels. The chosen quantitative modelling approach is two-fold: it combines the analysis of biofuel policies in a multi-sectoral economic model (MAGNET) with systematic variation of the functioning of capital and labour markets. This paper adds to existing research by considering biofuel policies in the EU, the US and various other countries with considerable agricultural production and trade, such as Brazil, India and China. Moreover, the application multi-sectoral modelling system with different assumptions on the mobility of factor markets allows for the observation of changes in economic indicators under different conditions of how factor markets work. Systematic variation of factor mobility indicates that the ‘burden’ of global biofuel policies is not equally distributed across different factors within agricultural production. Agricultural land, as the pre-dominant and sector-specific factor, is, regardless of different degrees of inter-sectoral or intra-sectoral factor mobility, the most important factor limiting the expansion of agricultural production. More capital and higher employment in agriculture will ease the pressure on additional land use – but only partly. To expand agricultural production at global scale requires both land and mobile factors adapted to increase total factor productivity in agriculture in the most efficient way.

Breaking the boundaries. The transformation of Central European gas markets. OSW Point of View Number 46, December 2014

According to the European Council decision of February 2011, the process of creating the European Union’s internal gas market should be completed by the end of 2014. Therefore, it is worth summarising the changes which have taken place in the gas markets of Central Europe so far. The past few years have seen not only a period of gradual ‘marketisation’ of the national gas sectors, but also the building of new gas infrastructure, a redrawing of the gas flow map, and changes in the ownership of the Central European gas companies. Another change in Central Europe is the fact that individual states and companies are moving away from their traditional focus on their national gas markets; instead, they are beginning to develop a variety of concepts for the regional integration of Central European markets. This publication attempts to grasp the main elements of the ongoing transformation of Central Europe’s gas markets, with particular emphasis on the situation in Poland, the Czech Republic, Slovakia and Hungary.

Sustaining international competitive advantage through capability renewal: the case of CEMEX. ACES Working Papers, August 2009

In this paper we do not enter in the dispute of whether a new theory is needed to explain the factors that make it possible for EMNEs to give their initial steps beyond their home markets. Rather, we are interested in finding out how some of these firms have been able to sustain their international competitive edge for decades allowing them to become major players in their industry at the global level.

Does Mandatory IFRS Adoption in the EU Level the International Playing Field Between Foreign and Domestic Analysts? ACES Working Papers, October 2011

International Financial Reporting Standards (IFRS) have been promoted as a global set of financial reporting standards that will help integrate global capital markets. We examine whether the mandatory European-wide adoption of IFRS in 2005 improved the forecast accuracy for foreign analysts relative to that of domestic analysts. We find that, on average, foreign analysts experience no incremental improvement in forecast accuracy relative to domestic analysts. However, we find that those foreign analysts who are familiar with IFRS do experience an incremental improvement in forecast accuracy relative to domestic analysts. We also find that this incremental improvement in forecast accuracy relative to domestic analysts is concentrated among firms domiciled in countries with both strong enforcement regimes and domestic accounting standards that differ significantly from IFRS. Our results highlight that both familiarity with IFRS and the quality of countries' enforcement environments play key roles in determining the extent to which IFRS adoption can reduce information asymmetry between foreign and domestic analysts.

Reforming the Market Design of EU Electricity Markets: Addressing the Challenges of a Low-Carbon Power Sector. CEPS Task Force Report, 27 July 2015

This CEPS Task Force Report focuses on whether there is a need to adapt the EU’s electricity market design and if so, the options for doing so. In a first step, it analyses the current market trends by distinguishing between their causes and their consequences. Then, the current blueprint of EU power market design – the target model – is briefly introduced, followed by a discussion of the shortcomings of the current approach and the challenges in finding suitable solutions. The final chapter offers an inventory of solutions differentiating between recommendations shared among Task Force members and non-consensual options.

Addressing fragmentation in EU mobile telecom markets. Bruegel Policy Contribution ISSUE 2015/13, July 2015

- Mobile telecommunications markets are an important part of the European Commission’s strategy for the completion of the European Union Digital Single. The use of mobile telecommunications – particularly mobile data access – is growing and becoming an increasingly important input for the economy. - The EU currently does not have a unified mobile telecommunications market. The EU compares favourably to the United States in terms of prices and connection speed, but lags behind in terms of coverage of high-speed 4G wireless connections. -Europe’s long-term goal should be to make data access easier by increasing highspeed wireless coverage while keeping prices down for users. An increase in cross-border competition could help to achieve that goal. - The Commission has two important levers to help stimulate cross-border supply:(a) ensuring competition in intra-country mobile markets in order to provide an incentive for operators to expand into other jurisdictions, and (b) reducing mobile operators’ costs of expansion into multiple EU countries. The further development of policies on international roaming and radio spectrum management will be central to this effort.

Aviation English: Structure and Importance of an International Airborne Language

In today’s globalized world, air travel is one of the fastest growing markets. Millions of aircrafts take off and then touch down all around the world each day. This well-synchronized symphony, however, is much more complex than it seems, and communication – language - plays a crucial role during a plane’s journey. Misunderstandings and miscommunications can have disastrous effects, so the adoption of a standard phraseology to be used during flight is a means to overcome language barriers, avoid ambiguous expressions and guarantee a safe and effective operation of an aircraft. Little is known about the interaction that goes on between pilots and air traffic controllers (ATCOs), and even though the language of aviation is English, cockpit communication can be hard to understand for people who are not familiar with this specific language. The scope of this thesis is to examine the origins of this uncommon language, the characteristics and peculiarities of air communication and to shed a little light on this mystery called Aviation English.

Why do countries enter into preferential agreements on trade in Services? assessing the potential for negotiated regulatory convergence in asian Services markets

Presentation made by Pierre Sauvé and Anirudh Shingal at the Asian International Economists Network (AIEN) Workshop, Asian Development Bank, Manila.

Spatially explicit estimates of stock size, structure and biomass of North Atlantic albacore tuna (Thunnus alalunga) in the North Atlantic for the period 1987-2011, compiled from statistics about ICCAT fishery region L6

The development of the ecosystem approach and models for the management of ocean marine resources requires easy access to standard validated datasets of historical catch data for the main exploited species. They are used to measure the impact of biomass removal by fisheries and to evaluate the models skills, while the use of standard dataset facilitates models inter-comparison. North Atlantic albacore tuna is exploited all year round by longline and in summer and autumn by surface fisheries and fishery statistics compiled by the International Commission for the Conservation of Atlantic Tunas (ICCAT). Catch and effort with geographical coordinates at monthly spatial resolution of 1° or 5° squares were extracted for this species with a careful definition of fisheries and data screening. In total, thirteen fisheries were defined for the period 1956-2010, with fishing gears longline, troll, mid-water trawl and bait fishing. However, the spatialized catch effort data available in ICCAT database represent a fraction of the entire total catch. Length frequencies of catch were also extracted according to the definition of fisheries above for the period 1956-2010 with a quarterly temporal resolution and spatial resolutions varying from 1°x 1° to 10°x 20°. The resolution used to measure the fish also varies with size-bins of 1, 2 or 5 cm (Fork Length). The screening of data allowed detecting inconsistencies with a relatively large number of samples larger than 150 cm while all studies on the growth of albacore suggest that fish rarely grow up over 130 cm. Therefore, a threshold value of 130 cm has been arbitrarily fixed and all length frequency data above this value removed from the original data set.

Spatially explicit estimates of stock size, structure and biomass of North Atlantic albacore tuna (Thunnus alalunga) in the North Atlantic for the period 1967-1986, compiled from statistics about ICCAT fishery region L5

The development of the ecosystem approach and models for the management of ocean marine resources requires easy access to standard validated datasets of historical catch data for the main exploited species. They are used to measure the impact of biomass removal by fisheries and to evaluate the models skills, while the use of standard dataset facilitates models inter-comparison. North Atlantic albacore tuna is exploited all year round by longline and in summer and autumn by surface fisheries and fishery statistics compiled by the International Commission for the Conservation of Atlantic Tunas (ICCAT). Catch and effort with geographical coordinates at monthly spatial resolution of 1° or 5° squares were extracted for this species with a careful definition of fisheries and data screening. In total, thirteen fisheries were defined for the period 1956-2010, with fishing gears longline, troll, mid-water trawl and bait fishing. However, the spatialized catch effort data available in ICCAT database represent a fraction of the entire total catch. Length frequencies of catch were also extracted according to the definition of fisheries above for the period 1956-2010 with a quarterly temporal resolution and spatial resolutions varying from 1°x 1° to 10°x 20°. The resolution used to measure the fish also varies with size-bins of 1, 2 or 5 cm (Fork Length). The screening of data allowed detecting inconsistencies with a relatively large number of samples larger than 150 cm while all studies on the growth of albacore suggest that fish rarely grow up over 130 cm. Therefore, a threshold value of 130 cm has been arbitrarily fixed and all length frequency data above this value removed from the original data set.