Environmental, developmental and financial risks of tropical timber plantation investment funds

This paper examines economic development and the environment within a market-based approach through financial instruments that incorporate a considerable array of risks. It investigates how financial markets combine finance and sustainable development by analyzing investment funds participating in tropical forest plantations. These funds project high expected returns and carry huge financial risks, especially country risk, price risk, and credit risk. Environmental and developmental risks do not appear to be very large, as most plantations are established on former farmland and as the quantitative impact of the plantations seems limited.     

中国煤电企业环境压力测试

中国煤电行业的发展伴随着各种环境风险,本文以典型煤电企业为例,在产能过剩、能效标准提高、环境保护税、全国碳市场、水资源税和非水可再生能源规划目标的风险约束下,建立环境成本内部化和环境风险分析工具,考虑不同压力情境下对煤电企业价值的影响,构建环境风险影响财务成本的压力测试框架。结果表明,对单个风险而言,产能过剩和碳市场风险对企业价值的影响是大多数地区在不同情景中面临的主要风险驱动因素。对于综合风险压力测试而言,各地区1 000MW超超临界机组乐观情景及悲观情景的企业价值距合理回报预期企业价值相差小,而300MW和600MW亚临界机组因能效水平低、经营成本高等原因在环境风险压力下企业价值偏离合理回报较多。随着环境风险严重程度的不断增加,环境压力测试有助于煤电企业和金融机构了解环境风险对企业财务状况的影响,从而对投资决策产生影响。     

Situating Hazard Vulnerability: People’s Negotiations with Wildfire Environments in the U.S. Southwest

This article is based on a multimethod study designed to clarify influences on wildfire hazard vulnerability in Arizona’s White Mountains, USA. Findings reveal that multiple factors operating across scales generate socially unequal wildfire risks. At the household scale, conflicting environmental values, reliance on fire insurance and firefighting institutions, a lack of place dependency, and social vulnerability (e.g., a lack of financial, physical, and/or legal capacity to reduce risks) were found to be important influences on wildfire risk. At the regional-scale, the shift from a resource extraction to environmental amenity-based economy has transformed ecological communities, produced unequal social distributions of risks and resources, and shaped people’s social and environmental interactions in everyday life. While working-class locals are more socially vulnerable than amenity migrants to wildfire hazards, they have also been more active in attempting to reduce risks in the aftermath of the disastrous 2002 Rodeo-Chediski fire. Social tensions between locals and amenity migrants temporarily dissolved immediately following the disaster, only to be exacerbated by the heightened perception of risk and the differential commitment to hazard mitigation displayed by these groups over a 2-year study period. Findings suggest that to enhance wildfire safety, environmental managers should acknowledge the environmental benefits associated with hazardous landscapes, the incentives created by risk management programs, and the specific constraints to action for relevant social groups in changing human-environmental context.     

Due diligence assessment of non-financial risk: Prophylaxis for the purchaser

Most large mining companies grow by acquisition and conduct due diligence assessments in order to identify the opportunities and risks associated with potential acquisitions.Due diligence assessment is usually restricted to considering the financial aspects of an asset, and often overlooks the non-financial risks that may compromise the economic viability or operability of a project. However, experience has shown that neglecting non-financial risk areas such as environmental, socio-economic and sustainability performance may be problematic and, under extreme circumstances, potentially disastrous, particularly in a developing world context.This paper examines the due diligence process and identifies the limitations of conventional assessments based solely on financial risk. It presents practical recommendations on structuring due diligence assessments to consider non-financial risk so that the full risk profile of an asset can be identified.     

Comparative risk analysis for metropolitan solid waste management systems

Conventional solid waste management planning usually focuses on economic optimization, in which the related environmental impacts or risks are rarely considered. The purpose of this paper is to illustrate the methodology of how optimization concepts and techniques can be applied to structure and solve risk management problems such that the impacts of air pollution, leachate, traffic congestion, and noise increments can be regulated in the long-term planning of metropolitan solid waste management systems. Management alternatives are sequentially evaluated by adding several environmental risk control constraints stepwise in an attempt to improve the management strategies and reduce the risk impacts in the long run. Statistics associated with those risk control mechanisms are presented as well. Siting, routing, and financial decision making in such solid waste management systems can also be achieved with respect to various resource limitations and disposal requirements.     

Reinsurer Opinions of Environmental Management Systems Concerning Insurance for Pollution

Despite an increasing interest in reinsurance and environmental manage ment systems (EMSs) concerning pollution, little research has been conducted on the subject. This paper presents the findings from a survey of reinsurers' views on this issue. Reinsurers give EMSs a cursory consideration in their pollution risk assessments because they inadequately appraise pollution liability, have no explicit requirements regarding risk management and there is little evidence to show that they are effective at reducing environmental risks. Reinsurers' underwriting assessments and post-loss investigations are poorly developed concerning public liability insurance. Reinsurance and EMSs are currently weak methods to prevent and control pollution risks.     

From Iran: Does Improvement in Corporate Environmental Performance Affect Corporate Risk Taking?

Superior corporate environmental performance (CEP) has become essential to the competitive advantage and financial success of businesses. However, the main reasons managers pay attention to environmental performance are improved reputation in the capital market and profitability, as well as reductions in operating costs and risks. This article describes the findings of a study that examines the relationship between CEP, using a reduction of carbon dioxide (CO₂) emissions as a measure, and corporate risk taking. In addition to indicating a significant negative relationship between CEP and firm risk, the study results also show that a 1% improvement of CEP decreases corporate risk by 3%.     

Impact of the FTSE4Good Index on firm price: an event study

This paper examines whether corporate financial performance is affected by public endorsement of environmental and social performance. Event study methodology, which relies on the notion of market efficiency, is used to examine the relationship between positive and negative announcements and changes in share prices or daily returns. Inclusion in and deletion from the FTSE4Good UK Index is used as a proxy measure for good (poor) corporate social responsibility. The abnormal or unexpected daily returns associated with an event are calculated and their significance tested. The results show a trend towards positive and negative announcements having the expected effects on daily returns. But these movements are not significant and the data do not suggest that a firm's presence on the index brings it any significant financial return for signalling its corporate social responsibility.     

环境法视域下的生物安全风险规制

生物安全领域的环境风险包括科技风险、生态风险和环境健康风险三种类型。我国目前尚未形成健全的生物安全风险规制制度体系,科技风险规制机制不健全、生态风险规制忽视生物多样性保护、环境健康风险规制领域尚存空白等问题依然存在。为此,应确立多元化的立法目的体系,推动风险规制的类型化制度安排,有效衔接生物安全立法与环境保护法律规范,以最大限度地预防和降低生物安全风险可能带来的损害。     

论环境风险预防原则中的风险阈值

如何把环境风险预防原则确立为环境法的基本原则,一个重要的问题就是"环境风险"的界定。通过对法律意义上的环境风险进行分析,指出确立风险阈值的原因,即我国对"环境风险"的界定不清,环境风险的风险性缺乏法定依据以及不同种类的利益之间存在冲突等,进而从明确环境风险的类型、评估环境风险量度、明确责任归结三方面思考了风险阈值的确立问题。     

Info-Gap Decision Theory for Assessing the Management of Catchments for Timber Production and Urban Water Supply

While previous studies have examined how forest management is influenced by the risk of fire, they rely on probabilistic estimates of the occurrence and impacts of fire. However, nonprobabilistic approaches are required for assessing the importance of fire risk when data are poor but risks are appreciable. We explore impacts of fire risk on forest management using as a case study a water catchment in the Australian Capital Territory (ACT) (southeastern Australia). In this forested area, urban water supply and timber yields from exotic plantations are potential joint but also competing land uses. Our analyses were stimulated by extensive wildfires in early 2003 that burned much of the existing exotic pine plantation estate in the water catchment and the resulting need to explore the relative economic benefits of revegetating the catchment with exotic plantations or native vegetation. The current mean fire interval in the ACT is approximately 40 years, making the establishment of a pine plantation economically marginal at a 4% discount rate. However, the relative impact on water yield of revegetation with native species and pines is very uncertain, as is the risk of fire under climate change. We use info-gap decision theory to account for these nonprobabilistic sources of uncertainty, demonstrating that the decision that is most robust to uncertainty is highly sensitive to the cost of native revegetation. If costs of native revegetation are sufficiently small, this option is more robust to uncertainty than revegetation with a commercial pine plantation.     

The costs and benefits of reforestation in Liping County, Guizhou Province, China

Reducing greenhouse gases in the atmosphere is becoming a pressing issue for the global community. Afforestation and reforestation are promoted worldwide as an effective means of sequestering carbon. For its national interest and global concerns, China has made great efforts to protect its existing forests and develop programs of afforestation and reforestation. Based on two surveys recently conducted in Liping County, Guizhou province, this paper investigates the economic changes associated with the implementation of the "Grain For Green" policy. Based on the analytical framework of benefit cost analysis, this paper concludes that the implementation of the reforestation of sloping agricultural land policy would not be possible if there were no government subsidies for the peasants. The short term economic returns of land and labour from forestation are substantially lower than those generated from grain or cash crop production on the steep slope lands. The government subsidies provide great economic incentives for peasants to take part in the project. The subsidies in fact have elevated peasant income in rural Liping. The estimated potential economic returns of plantations over the long run indicate that the removal of the government financial subsidies would not create an economic crisis for the peasants if the current market conditions continue.     

Local Environmental Investments and Sustainable Development: the evaluation of environmental projects in Scotland supported by the European Agriculture Guidance and Guarantee Fund

In the UK for the period 1994-99, a broad range of environmental projects were given financial support through the European Agriculture Guidance and Guarantee Fund under the Objective 1 and Objective 5b programmes. This paper is concerned with the ex-post evaluation of these projects set within a Sustainable Development framework. The aim was to identify project types or characteristics that offered the greatest return on investment. A classification of six broad project types was adopted. The evaluation revealed that there were significant differences between individual projects with respect to the type and scale, and temporal and social distribution of the benefits they delivered. In particular, as well as delivering environmental and economic benefits, many projects made a significant contribution to the development of human and social capital. The paper concludes that it is possible to improve the basis for future project selection in order to maximise the returns on environmental investments in the context of sustainable development.     

A method for assessing environmental risk: A case study of Green Bay,Lake Michigan,USA

The Science Advisory Board of the US Environmental Protection Agency has recommended that risk reduction strategies become the centerpiece of environmental protection. The goal in developing such strategies is to identify opportunities for greatest reduction of ecological risks. This is a perspective that is significantly more comprehensive than the traditional focus on human health risks arising from environmental degradation. The identification of ecological risks upon which environmental protection efforts should be focused requires an ecological risk assessment methodology that is based on anthropogenic stressors affecting an ecosystem and a set of impaired use criteria. A methodology based on this concept is developed and discussed in this article. The methodology requires that risk values be assigned to each ecosystem stressor-impaired use pair that reflect the degree to which the given stressor contributes to ecosystem risk as measured by the given impaired use criterion. Once these data are available, mathematical analyses based on concepts from fuzzy set theory are performed to obtain a ranking of ecosystem stressors. The methodology has been tested by applying it to a case study involving Green Bay of Lake Michigan. A workshop was held in which 11 persons with extensive knowledge of the Green Bay ecosystem determined risk values through a group-consensus process. The analytical portion of the methodology was then used to rank the ecosystem risks (stressors) from several perspectives, including prevention management and remediation management. The overall conclusion of the workshop participants was that the fuzzy set decision model is a useful and effective methodology for differentiating environmental risk.     

Beta estimates of shares on the JSE Top 40 in the context of reference-day risk

A topic of interest in the finance world is measuring systematic risk. Accurately measuring the systematic risk component—or Beta—of an asset or portfolio is important in many financial applications. In this work, we consider the efficiency of a range of Beta estimation methods commonly used in practice from a reference-day risk perspective. We show that, when using the industry standard data sample of 5 years of monthly returns, the choice of reference-day used to calculate underlying returns has a significant impact on all of the Beta estimation methods considered. Driven by this finding, we propose and test an alternative nonparametric bootstrap approach for calculating Beta estimates which is unaffected by reference-day risk. Our primary goal is to determine a point-estimate of Beta, independent of reference-day.     

Local Environmental Investments and Sustainable Development: The evaluation of environmental projects in Scotland supported by the European Agriculture Guidance and Guarantee Fund

In the UK for the period 1994-99, a broad range of environmental projects were given financial support through the European Agriculture Guidance and Guarantee Fund under the Objective 1 and Objective 5b programmes. This paper is concerned with the ex-post evaluation of these projects set within a Sustainable Development framework. The aim was to identify project types or characteristics that offered the greatest return on investment. A classification of six broad project types was adopted. The evaluation revealed that there were significant differences between individual projects with respect to the type and scale, and temporal and social distribution of the benefits they delivered. In particular, as well as delivering environmental and economic benefits, many projects made a significant contribution to the development of human and social capital. The paper concludes that it is possible to improve the basis for future project selection in order to maximise the returns on environmental investments in the context of sustainable development.     

气候变化风险互联网络及系统性管理

气候变化风险能够在部门内与部门间进行传递和放大,形成多个复杂嵌套的风险互联网络,导致了系统性风险的产生。对气候变化风险互联网络的刻画能够帮助理解风险产生与演化的过程,削减气候变化对社会经济系统的直接物理风险,及碳达峰与碳中和建设过程中可能伴随的转型风险。本文识别了四类典型的气候变化风险互联网络,涵盖食品—能源—水系统、公共健康、宏观经济和金融市场、社会安全等四类部门或领域。针对每一类网络,分别总结了主要的气候变化风险传递路径及当前的研究进展和局限,并概述了开展系统性风险管理的建议。     

Risk of public disclosure in environmental farm plan programs: Characteristics and mitigating legal and policy strategies

Although various studies have shown that farmers believe there is the need for a producer-led initiative to address the environmental problems from agriculture, farmers in several Canadian provinces have been reluctant to widely participate in Environmental Farm Plan (EFP) programs. Few studies have examined the key issues associated with adopting EFP programs based on farmers’, as opposed to policy makers’, perspectives on why producers are reluctant to participate in the program. A study adapting Van Raaij’s (1981) conceptual model of the decision-making environment of the firm, and prospect theory on value functions associated with the gains and losses from risky choices can be used to characterize how farmers perceive potential risks in environmental farm planning. This framework can be used to assert that farmers are concerned about risks of public disclosure of potentially incriminating environmental information from farms because the EFP program requirements for identification and extensive documentation of farm information is perceived by farmers as facilitating the accessibility of environmental information to the public, and public investigative efforts. Although the EFP program does not explicitly generate information about the environmental conditions of a farm nor the disclosure of such information to the public, it creates the possibility of generating and divulging potentially incriminating information that the farmer may want to treat as confidential. Yet, alone, these risks of public disclosure concerns should not prevent farmers from participating in the EFP. Awareness of and participation in environmental farm planning can be increased if farmers and policy makers understand what the risks are, and how they arise. Aspects of the EFP process that have the potential to generate risk of public disclosure concerns relate to farm reviews, documentation and record keeping, and corrective action plans. There are legal and policy instruments that can offer various forms of protection and help minimize such risks, and these need to be assessed.     

Salmon Farming in First Nations' Territories: A Case of Environmental Injustice on Canada's West Coast

This paper argues that salmon aquaculture operations situated in First Nations' claimed territories on Canada's West Coast create issues of environmental injustice. Salmon farms are associated with various environmental problems including pollution of the aquatic environment, risks to wild salmon, and food safety issues. These environmental problems constitute issues of environmental injustice due to the disproportionate, and different, impacts they have on coastal First Nations in comparison with other Canadians. The paper draws on material from several reviews of British Columbian (BC) salmon aquaculture to analyse coastal BC First Nations' claims and concerns about salmon farming along three environmental justice dimensions: distribution, participation and recognition. Qualitative evidence is obtained suggesting that coastal First Nations face disproportionate health risks from salmon farms, are excluded from decision-making processes with respect to the farms, and feel that their worldviews, identities, and ways of life are both ignored and at risk from the farms.