Costs and benefits of commodity control

The author considers the international commodity agreement as an economic instrument, and discusses its benefits and costs with respect to price stabilization and the building-up of buffer stocks. The author asserts that there is a wide range of economic arguments that can be employed to support the case for price stabilization as a form of commodity control. However, he argues that price stabilization is not desirable in all cases, because each commodity market is unique, and there can be certain costs associated with stabilization, in addition to the beneficial aspects. The feasibility of private financing of a part of the costs of buffer stock and export quota operations is also     

Paper recycling and social policy

This paper examines the problems and operation of waste paper recycling in the UK. Long- and short-term forecasts for demand are developed, showing demand strongly correlated with Gross Domestic Product. These are used to simulate a buffer stock scheme and establish costs for operating such a scheme. The authors conclude, given that the only large source of waste paper not fully exploited is the householder, then grants for developing waste upgrading technologies are likely to be more effective than buffer stock schemes.     

Optimal stabilization of the copper market: The problem of information

This paper investigates the scope for stabilizing commodity prices by buffer stock interventions. Optimal control is used, rather than simulation, to evaluate the scope for intervention at best. Applications to a world copper market model show that substantial but extensive gains to stabilization are possible. These gains cannot be realised by traditional bandwidth decision rules. An important difficulty is setting the level at which prices should be stabilized. The lack of this information severely reduces the achievable gains.     

The profitability of the buffer stocks operated under the International Tin Agreements,1956–77

In this paper estimates are made of the profitability of the tin buffer stocks operated under the International Tin Agreements. The issue of buffer stock profitability is important because under UNCTAD's Common Fund proposals some funds will be raised from money or capital markets and commercially competitive rates of interest must be paid. If a buffer stock fails to be commercially profitable, these interest payments will have to be subsidized from governmental contributions or elsewhere. Although it does seem that the International Tin Agreements have been broadly self- financing, the limited influence that they have had on market price fluctuations still leaves open the question of their usefulness.     

External benefits of buffer stocks

In a recent paper, Turner and Grace¹ discuss a simulation of a buffer stock agency acting in the waste paper market in the UK. As with other writers on this subject, they consider that a buffer stock agency would have lost money if it had operated in the UK market over the period 1961–1974, a finding in keeping with simulations of primary commodity schemes². However, Turner and Grace legitimately ask whether there are any external benefits associated with a buffer stock scheme and credit the scheme with savings in that waste paper bought by the buffer stock agency does not enter the waste stream, and hence results in savings to the waste disposal authority. This paper examines the question of whether buffer stock agencies will have any such associated external benefits, and argues that benefits are positive, but are not of the magnitude implied in previous studies     

Would commodity market stabilization agreements redistribute economic resources to developing countries?: The case of copper

There has been strong pressure, particularly within UNCTAD, for international stabilization agreements for the major commodity markets, in order to stabilize prices and to redistribute resources towards the developing country producers. However, no empirical evidence on the feasibility or desirability of these proposals has appeared. As an illustration of the possibilities, this paper makes estimates of the stabilizing power and costs of buffer stock interventions in the world copper market. We find that price and revenue stabilization is technically possible; but that to generate income transfers to the developing countries is prohibitively expensive and creates a further problem of redistribution among developing country producers.     

The international natural rubber agreement 1979

The International Natural Rubber Agreement (INRA) 1979 is the first, and so far the only, commodity agreement to emerge from the negotiations under the Integrated Programme for Commodities (IPC). The agreement is examined in the context of the issues relating to international stock and as an indicator for future development. The author concludes that while the principle of joint responsibility for financing international stock has been for the first time accepted in INRA, this has been achieved at the cost of reducing the scope of the regulatory mechanism, and that the single-instrument pattern that the agreement has adopted may not be suitable or acceptable in other commodities.     

Nitrogen in the Baltic Sea--policy implications of stock effects

We develop an optimal control model for cost-effective management of pollution, including two state variables, pollution stock and ecosystem quality. We apply it to Baltic Sea pollution by nitrogen leachates from agriculture. We present a sophisticated, non-linear model of leaching abatement costs, and a simple model of nitrogen stocks. We find that significant abatement is achievable at reasonable cost, despite the countervailing effects of existing agricultural policies such as price supports. Successful abatement should lead to lower nitrogen stocks in the sea in 5 years or less. However, the rate of ecosystem recovery is less certain. The results are highly dependent on the rate of self-cleaning of the Baltic Sea, and less so on the discount rate. Choice of target has a radical effect on the abatement path chosen. Cost-effectiveness demands such a choice, and should therefore be used with care when stock effects are present.     

METHOD TO IDENTIFY EFFECTWE RIPARIAN BUFFER WIDTHS FOR ATLANTIC SALMON HABITAT PROTECTION1

ABSTRACT: Successful restoration of declining anadromous species is dependent upon effective riparian buffer zone management. Natural resource managers, policy developers and local conservation groups require science‐based information concerning the width at which a given buffer will be effective for its stated purpose. This paper summarizes a method developed in 1999 to determine effective riparian buffer widths for Atlantic salmon habitat protection as part of the Atlantic Salmon Conservation Plan for Seven Maine Rivers. A major assumption of the method is that no two buffers are alike with respect to their effectiveness and that various buffer characteristics dictate the required width for a given level of effectiveness. The method uses a predictive model that generates suggested riparian buffer widths as a function of specific, measurable buffer characteristics (such as slope, soil characteristics, and plant community structure and density) that affect buffer function. The method utilizes a variable‐width, two‐zone approach and specifies land uses that are consistent with desired buffer function within the two zones.     

COPPER PRICE STABILIZATION: WELFARE CONSEQUENCES AND BUFFER STOCK COSTS

International debate and economic literature on export earnings from trade in raw materials have focused on two main subjects: the ability to increase incomes arising from the exports and the possibility of stabilizing these incomes. One alternative that has been suggested and discussed with regard to the second issue is a buffer stock that would decrease the fluctuations in raw material prices. Two objections that have been made to this proposal are that, with stabilization, producers could lose their welfare benefits; and that financial costs are too great. In this article, market conditions required so that copper producers may be benefited by price stability are discussed, and the profitability of a copper buffer stock is measured. Depending on the characteristics of demand and supply curves in the copper market, the article concludes that producers may obtain welfare and income benefits from price stabilization and that for certain degrees of stability the management of the copper buffer stock can yield a positive internal rate of return close to that of alternative investments. Des discussions au niveau international et des ouvrages économiques en matière de recettes d'exportation provenant du commerce des matiêres premières ont mis l'accent sur deux sujets principaux: la capacité d'accroître les revenue de ces exportations et la possibilité de stabiliser ces revenue. Une option, suggérée et débattue au sujet du second point, consiste en l'établissement d'un stock régulateur qui tendrait à diminuer les fluctuations des prix des matiêres premières. Cependant, deux objections ont été soulevées, à savoir: la stabilisation pourrait avoir des repercussions néfastes sur les bénéfices des producteurs et les coûts financiers pourraient être trap élevés. L'article considère les conditions de marché requises pour permettre aux producteurs de cuivre de bénéficier de la stabilité des prix ainsi que la rentabilité d'un stock régulateur en matière de cuivre. En se basant sur les caractéristiques des courbes de l'offre et de la demande dans le marché du cuivre, l'article conclut que les producteurs peuvent bénéficier de la stabilisation des prix et que, à certains degrés de stabilité, la gestion d'un stock régulateur de cuivre peut engendrer un taux de rendement interne positif avoisinant ceux d'autres investissements. Los debates internacionales y la literature sobre los ingresos de exportatión de materias primas han enfocado dos temas principals: la habilidad de aumentar el ingreso resultante de estas exportaciones y la posibilidad de estabilizar dichos ingresos. La creación de una reserva de compensación para contrarrestar las fluctuaciones de los precios de materias primas ha sido propuesto y discutido. Las objeciones hechas a esta propuesta argumentan que los beneficios para los productores disminuiría con la estabilización y que los costos financieros serian demasiado grandes. En este artículo se discuten las condiciones de mercado que permitirían a los productores de cobre beneficiarse de la estabilidad de precios y se mide también la rentabilidad de la reserva de compensación para el cobre. Basándose en las características de las curvas de demanda y oferta en el mercado del cobre, el artículo concluye que los productores pueden salir gananciosos con la estabilización de precios y que para ciertos grados de estabilidad, la administración de la reserva de compensación del cobre puede producir una tasa interna de retorno positive, comparable a otras inversiones alternatives.     

Use of system dynamics for proper conservation and recycling of aggregates for sustainable road construction

A significant amount of mineral aggregates are used in constructing, rehabilitating and maintaining roads. As local (nearby) quarries get exhausted, aggregates need to be hauled from sources that are at ever-greater distances. Hence, over time the cost of trucking as well as the amount of emissions generated by trucking increases with a decrease of local natural aggregate stocks. The objectives of this study are to construct and utilize a system dynamics model of the depletion of a stock of natural aggregates due to pavement construction and maintenance, and determine the effect of using local and nonlocal aggregates, recycling and project cancellation (slowing growth) on the paving of roads. Long-term simulations are carried out with available aggregate stock, trucking distance and cost data. The quality of roads and a sustainability score, based on engineering, economic and environmental factors (emissions) are evaluated for different scenarios. An optimal combination of the use of local and nonlocal recycled aggregates, recycling and project cancellation is recommended. The proposed system dynamics model could be utilized by agencies to plan for the proper utilization of aggregate resources for road development and maintenance/rehabilitation projects.     

Modelling the effects of trade-offs between long and short-term objectives in fisheries management

Fisheries management is typically a complex problem, from both an environmental and political perspective. The main source of conflict occurs between the need for stock conservation and the need for fishing community well-being, which is typically measured by employment and income levels. For most fisheries, overexploitation of the stock requires a reduction in the level of fishing activity. While this may lead to long-term benefits (both conservation and economic), it also leads to a short-term reduction in employment and regional incomes. In regions which are heavily dependent on fisheries, short-term consequences of conservation efforts may be considerable. The relatively high degree of scientific uncertainty with respect to the status of the stocks and the relatively short lengths of political terms of office, generally give rise to the short-run view taking the highest priority when defining policy objectives. In this paper, a multi-objective model of the North Sea is developed that incorporates both long-term and short-term objectives. Optimal fleet sizes are estimated taking into consideration different preferences between the defined short-term and long-term objectives. The subsequent results from the model give the short-term and long-term equilibrium status of the fishery incorporating the effects of the short-term objectives. As would be expected, an optimal fleet from a short-term perspective is considerably larger than an optimal fleet from a long-run perspective. Conversely, stock sizes and sustainable yields are considerably lower in the long-term if a short-term perspective is used in setting management policies. The model results highlight what is essentially a principal-agent problem, with the objectives of the policy makers not necessarily reflecting the objectives of society as a whole.     

Cropland Riparian Buffers throughout Chesapeake Bay Watershed: Spatial Patterns and Effects on Nitrate Loads Delivered to Streams

We used statistical models to provide the first empirical estimates of riparian buffer effects on the cropland nitrate load to streams throughout the Chesapeake Bay watershed. For each of 1,964 subbasins, we quantified the 1990 prevalence of cropland and riparian buffers. Cropland was considered buffered if the topographic flow path connecting it to a stream traversed a streamside forest or wetland. We applied a model that predicts stream nitrate concentration based on physiographic province and the watershed proportions of unbuffered and buffered cropland. We used another model to predict annual streamflow based on precipitation and temperature, and then multiplied the predicted flows and concentrations to estimate 1990 annual nitrate loads. Across the entire Chesapeake watershed, croplands released 92.3 Gg of nitrate nitrogen, but 19.8 Gg of that was removed by riparian buffers. At most, 29.4 Gg more might have been removed if buffer gaps were restored so that all cropland was buffered. The other 43.1 Gg of cropland load cannot be addressed with riparian buffers. The Coastal Plain physiographic province provided 52% of the existing buffer reduction of Bay‐wide nitrate loads and 36% of potential additional removal from buffer restoration in cropland buffer gaps. Existing and restorable nitrate removal in buffers were lower in the other three major provinces because of less cropland, lower buffer prevalence, and lower average buffer nitrate removal efficiency.     

Application of a GIS-based stream buffer generation model to environmental policy evaluation

In this article a GIS method is presented for riparian environmental buffer generation. It integrates a scientifically tested buffer width delineation model into a GIS framework. Using the generally available data sets, it determines buffer widths in terms of local physical conditions and expected effectiveness. Technical burdens of data management, computation, and result presentation are handled by the GIS. The case study in which the method was used to evaluate the stream buffer regulations in a North Carolina county demonstrates its capability as a decision support tool to facilitate environmental policy formulation and evaluation, and environmental dispute resolution.     

HYDRODYNAMIC SIMULATIONS OF A CONSTRUCTED WETLAND IN SOUTH FLORIDA1

ABSTRACT: This paper describes the application of the SHEET2D model to the Florida's Everglades Nutrient Removal (ENR) Project. The ENR Project is a 3815 acre (1545 ha) pilot project, located in Palm Beach County. The operation of the treatment system will be used to demonstrate the performance of larger scale constructed wetland systems for removal of phosphorus from Everglades Agricultural Area (EAA) stormwater runoff. It is currently the largest stormwater wetland treatment system in the world. The SHEET2D model was used to analyze the performance of the ENR Project. SHEET2D is a two-dimensional, depth-averaged hydrodynamic model that is applicable to shallow water flow conditions. Subsequently, results from SHEET2D simulations were used to develop the ENEMOD model. ENRMOD is a lumped parameter box water quality model that can be used to analyze the long term performance of the ENR project with respect to hydrology and phosphorus uptake. Localized short-circuiting in the agricultural ditches within the project area was analyzed by using the RBFVM-2D model, which is a finite volume hydrodynamic model that is also applicable to shallow water flow conditions. The SHEET2D model was employed to simulate the hydraulics of the structures between cells and the hydrodynamics of the sheet-flow moving across the buffer cell and treatment cells. Collection, distribution, and larger discharge canals within the project were simulated by means of the MultiBasin Routing (MBR) model features that are built into the SHEET2D model. Constant inflows (75 to 600 cfs [2.1 to 17 m³/s]) were used in all runs to simulate the discharge of the ENR Project based on the proposed operating schedule for the outflow pump station. The model simulated 30 days to reach steady state conditions. Under steady state conditions, the hydraulic retention times were computed for the project and the split of flow between the two treatment trains of the entire project from the common buffer cell. Additionally, design components such as height of the levees, capacity of the structures, and hydrographs at specified grids were obtained.     

REDUCING THE RISK OF FISHERY RESOURCE DISASTERS: A BIOECONOMIC APPROACH TO SUSTAINABLE RESOURCE MANAGEMENT1

Abstract: Recognition is growing that fisheries must be both ecologically and commercially sustainable. The bioeconomic models proposed herein constitute an analytic framework capable of integrating the ethics and Societal values associated with fisheries preservation. Specifically, we focus on the normalized optimal (equilibrium) fish population, z*, a dimensionless variable representing biomass as a proportion of environmental capacity. We model z* as a function of (a) the dimensionless "bionomic growth ratio", γ, which is the ratio of the discount rate to the intrinsic population growth rate, and (b) the preservation coefficient, Ω, which is the ratio of the preservation value (a measure of Society's value for the stock) to price, assuming that the population growth rate and intrinsic growth rate are fixed. It is shown that increasing Ω significantly impacts z*, particularly for moderate values of γ (2 γ 4). Finally, stochastic population models are used to analyze the risk of a fish stock collapse due to harvesting pressures. The bioeconomic models and simulations herein described improve the accuracy and reliability of maximum sustainable yield management.     

Modeling Stream Shade: Riparian Buffer Height and Density as Important as Buffer Width1

DeWalle, David R., 2010. Modeling Stream Shade: Riparian Buffer Height and Density as Important as Buffer Width. Journal of the American Water Resources Association (JAWRA) 46(2):323-333. DOI: 10.1111/j.1752-1688.2010.00423.x Abstract: A theoretical model was developed to explore impacts of varying buffer zone characteristics on shading of small streams using a path-length form of Beer’s law to represent the transmission of direct beam solar radiation through vegetation. Impacts of varying buffer zone height, width, and radiation extinction coefficients (surrogate for buffer density) on shading were determined for E-W and N-S stream azimuths in infinitely long stream sections at 40°N on the summer solstice. Increases in buffer width produced little additional shading beyond buffer widths of 6-7 m for E-W streams due to shifts in solar beam pathway from the sides to the tops of the buffers. Buffers on the north bank of E-W streams produced 30% of daily shade, while the south-bank buffer produced 70% of total daily shade. For N-S streams an optimum buffer width was less-clearly defined, but a buffer width of about 18-20 m produced about 85-90% of total predicted shade. The model results supported past field studies showing buffer widths of 9-11 m were sufficient for stream temperature control. Regardless of stream azimuth, increases in buffer height and extinction coefficient (buffer density) were found to substantially increase shading up to the maximum tree height and stand density likely encountered in the field. Model results suggest that at least 80% shade on small streams up to 6-m wide can be achieved in mid-latitudes with relatively narrow 12-m wide buffers, regardless of stream azimuth, as long as buffers are tall (≈30 m) and dense (leaf area index ≈6). Although wide buffers may be preferred to provide other benefits, results suggest that increasing buffer widths beyond about 12 m will have a limited effect on stream shade at mid-latitudes and that greater emphasis should be placed on the creation of dense, tall buffers to maximize stream shading.     

THE USE OF BINARY OPTIMIZATION AND HYDROLOGIC MODELS TO FORM RIPARIAN BUFFERS1

ABSTRACT: Riparian buffers are considered important management options for protecting water quality. Land costs and buffer performance, which are functions of local environmental characteristics, are likely to be key attributes in the selection process, especially when budgets are limited. In this article we demonstrate how a framework involving hydrologic models and binary optimization can be used to find the optimal buffer subject to a budget constraint. Two hydrologic models, SWAT and REMM, were used to predict the loads from different source areas with and without riparian buffers. These loads provided inputs for a binary optimization model to select the most cost efficient parcels to form a riparian buffer. This methodology was applied in a watershed in Delaware County, New York. The models were parameterized using readily available digital databases and were later compared against observed flow and water quality data available for the site. As a result of the application of this method, the marginal utility of incremental increases in buffer widths along the stream channel and the set of parcels to form the best affordable riparian buffer were obtained.     

Two methods to define and compute visual buffer strips in a forested environment

Several approaches can be used to define and construct visual buffer strips around proposed new facility sites in a forested environment. A visual buffer strip of a given value, defines a region around an object within which the probability of an unblocked view of all or portions of it by an observer are less than the buffer strip probability value. Two primary approaches are used to define visual buffer strips that take into account the size of the vegetative elements and their individual effects on visibility. Several variations and combinations of the approaches are possible. One approach defines a visual buffer strip based on the average probability of a clear view of points along the object by an observer; the other approach is based on the visibility of the feature as a whole. The computation and construction of visual buffer strips based on these two concepts are presented. Comparisons of the two approaches for specific feature shapes are also described.     

Setting Priorities for Research on Pollution Reduction Functions of Agricultural Buffers

The success of buffer installation initiatives and programs to reduce nonpoint source pollution of streams on agricultural lands will depend the ability of local planners to locate and design buffers for specific circumstances with substantial and predictable results. Current predictive capabilities are inadequate, and major sources of uncertainty remain. An assessment of these uncertainties cautions that there is greater risk of overestimating buffer impact than underestimating it. Priorities for future research are proposed that will lead more quickly to major advances in predictive capabilities. Highest priority is given for work on the surface runoff filtration function, which is almost universally important to the amount of pollution reduction expected from buffer installation and for which there remain major sources of uncertainty for predicting level of impact. Foremost uncertainties surround the extent and consequences of runoff flow concentration and pollutant accumulation. Other buffer functions, including filtration of groundwater nitrate and stabilization of channel erosion sources of sediments, may be important in some regions. However, uncertainty surrounds our ability to identify and quantify the extent of site conditions where buffer installation can substantially reduce stream pollution in these ways. Deficiencies in predictive models reflect gaps in experimental information as well as technology to account for spatial heterogeneity of pollutant sources, pathways, and buffer capabilities across watersheds. Since completion of a comprehensive watershed-scale buffer model is probably far off, immediate needs call for simpler techniques to gage the probable impacts of buffer installation at local scales.