Australia’s carbon pricing scheme protects the profits of polluters and, as a consequence, has a negligible impact on the carbon emissions emanating from Australian industries. I concentrate on the assistance given to emissions-intensive, trade-exposed industries and use a post Keynesian approach to explain that, despite the rhetoric, industries and firms will not move offshore under a carbon price and industry assistance is unnecessary. When assistance is given, profits are protected and could increase in certain industries, which occurred in the comparable European emissions trading scheme. In orthodox economic theory, despite this negligible impact on profits, any method of pricing carbon causes a reduction in emissions because firms seek to adjust technology and factor inputs at the margin and abate until marginal abatement costs equal the carbon price. However, from a post Keynesian perspective, the government’s prediction of a transformed economy and clean energy future will not occur unless the carbon pricing policy reduces the corporate profits of emitting firms. Thus, complementary policies are required to take the burden of reducing emissions off the more symbolic carbon market established. I further argue that a carbon tax without any industry assistance is a preferred approach and that where plant shutdown does occur, carbon emissions around the world will fall and workers could be compensated at a far smaller cost than the adjustment assistance given to industries in the policy’s current form.

We have produced a series on the Bank of England's profits from its foundation in 1694 to the present time. This has not been available before. We explain the path of these profits over more than 300 years and account for their changing pattern. We next examine from where the profits derived, first in ‘normal times’, and then seeking, in particular, the impact of wars and financial crises. Other questions are: how much derived from seignorage; to what extent were profits passively acquired? Finally, we examine what the distribution regime was, and if, and how, that changed. This becomes more interesting in the period after nationalisation with some surprising results.

Entrepreneurs should act as stewards of entrepreneurial rent. Entrepreneurial rent is the difference between the ex post value of a venture and its ex ante costs. It is the result of competition among buyers and sellers within the market process rather than the sole efforts of the entrepreneur. As a result, entrepreneurs should allocate entrepreneurial rent for the benefit of other market participants rather than consuming it for themselves. The moral obligation to steward entrepreneurial rent is consistent with traditional bases of property rights and the norm of social welfare maximization, and it applies to corporations and their shareholders, as well as individual entrepreneurs.

A method of calculating the cost to farmers of herbicide resistance in weeds is described along with examples to demonstrate the inherent difficulties and benefits. The main problem is defining cropping systems/practices and herbicide strategies that prevent the development of resistance. The benefits include focusing advisory and research efforts and helping to persuade farmers to adopt practices that prevent the development of resistance.

This paper takes a broad look at tax in general and some of the tax issues peculiar to life offices. A theoretical model for the taxation of life offices and their policyholders is then developed. Moving from theory to practice, the paper then offers its own solution to the ‘puzzle’. Appended by way of background reading are brief histories and summaries of life office tax in the UK, New Zealand, USA and Canada.

There is currently no international standard for profit reporting in life insurance companies. The paper sets out the issues which an international standard for life companies will need to address, bearing in mind compatibility with existing International Accounting Standards, in particular IAS 32 Financial Instruments: disclosure and presentation, IAS Exposure Draft E62 (now IAS 39); Financial instruments; recognition and measurement and the discussion paper of March 1997 prepared by the Steering Committee on Financial Instruments entitled ‘Accounting for Financial Assets and Financial Liabilities’. The paper discusses possible approaches to the issues which arise and comments on each, ending with some final conclusions.

This paper reviews the present statutory valuation method and regime. It discusses the usefulness and effectiveness of the method in relation to the current range of insurance contracts. It suggests a possible alternative approach to statutory valuation which could enable offices to demonstrate both their solvency and their ability to meet policyholders' reasonable expectations. It reviews the effects of introducing the suggested method and its relationship with other current reporting issues.

Economic weights have been estimated in two breeds (Latxa and Manchega) using economic and technical data collected in 41 Latxa and 12 Manchega dairy sheep flocks. The traits considered were fertility (lambing per year), prolificacy (number of lambs), milk yield (litres) and longevity (as productive life, in years). A linear function was used, relating these traits to the different costs in the flock. The variable costs involved in the profit function were feed and labour. From this function, economic weights were obtained. Labour is considered in the Latxa breed to be a constraint. Moreover, farm profits are unusually high, which probably means that some costs were not included according to the economic theory. For that reason, a rescaling procedure was applied constraining total labour time at the farm. Genetic gains were estimated with the resulting economic weights to test if they give any practical difference. Milk yield only as selection criterion was also considered. The medians of the estimated economic weights for fertility, prolificacy, milk yield and longevity were 138.60 € per lambing, 40.00 € per lamb, 1.18 € per l, 1.66 € per year, and 137.66 € per lambing, 34.17 € per lamb, 0.73 € per l, 2.16 € per year under the linear approach in the Latxa and Manchega breeds respectively. Most differences between breeds can be related to differences in production systems. As for the genetic gains, they were very similar for all economic weights, except when only milk yield was considered, where a correlated decrease in fertility led to a strong decrease in profit. It is concluded that the estimates are robust for practical purposes and that breeding programmes should consider inclusion of fertility. More research is needed to include other traits such as somatic cell score, milk composition and udder traits.

The economic weights for somatic cell score (SCS) have been calculated using profit functions. Economic data were collected in the Latxa breed. Three aspects have been considered: bulk tank milk payment, veterinary treatments due to high SCS, and culling. All of them are non-linear profit functions. Milk payment is based on the sum of the log-normal distributions of somatic cell count, and veterinary treatments on the probability of subclinical mastitis, which is inferred when individual SCS surpass some threshold. Both functions lead to non-standard distributions. The derivatives of the profit function were computed numerically. Culling was computed by assuming that a conceptual trait culled by mastitis (CBM) is genetically correlated to SCS. The economic weight considers the increase in the breeding value of CBM correlated to an increase in the breeding value of SCS, assuming genetic correlations ranging from 0 to 0.9. The relevance of the economic weights for selection purposes was checked by the estimation of genetic gains for milk yield and SCS under several scenarios of genetic parameters and economic weights. The overall economic weights for SCS range from − 2.6 to − 9.5 € per point of SCS, with an average of − 4 € per point of SCS, depending on the expected average SCS of the flock. The economic weight is higher around the thresholds for payment policies. Economic weights did not change greatly with other assumptions. The estimated genetic gains with economic weights of 0.83 € per l of milk yield and − 4 € per point of SCS, assuming a genetic correlation of − 0.30, were 3.85 l and − 0.031 SCS per year, with an associated increase in profit of 3.32 €. This represents a very small increase in profit (about 1%) relative to selecting only for milk yield. Other situations (increased economic weights, different genetic correlations) produced similar genetic gains and changes in profit. A desired-gains index reduced the increase in profit by 3%, although it could be greater depending on the genetic parameters. It is concluded that the inclusion of SCS in dairy sheep breeding programs is of low economic relevance and recommended only if recording is inexpensive or for animal welfare concerns.

Cow-herd standardized performance analysis (SPA) data for Texas, Oklahoma, and New Mexico were used to determine economic factors affecting cow-herd costs, production, and profitability. Total cost was defined as the financial cost associated with raising a calf through the weaning stage; production, as pounds weaned per exposed female; and profits, as rate of return on assets. Variables affecting one or more performance measures included herd size; pounds of feed fed; real estate, machinery, and breeding-stock investments; calving percentage; death loss; and breeding-season length. Management variables were especially important for financial costs and profitability of the cow-herd operation.

This study combines hydrological modeling with applied micro-econometric techniques to value a complex ecosystem service: drought mitigation provided by tropical forested watersheds to agrarian communities. Spatial variation in current baseflow allows estimation of drought mitigation values as the marginal profit accruing to agricultural households. The paper shows that this uncommon focus on producer (not consumer) surplus measures is appropriate for valuation as long as markets for commodities related to the environmental services are complete. For the typical household, the estimated marginal profit is positive, validating the central hypothesis that baseflow makes positive contributions to agricultural profits. There is some evidence, however, that increased watershed protection will increase profits through greater baseflow only in watersheds with a unique mix of physio-graphic and climatic features. The paper evaluates and provides some support for the hypothesis, put forward by hydrological science and the Indonesian Government, that protected watersheds can supply latent and unrecognized ecosystem services to local people.

According to animal breeding theory, profit after, say, 10 generations of selection is maximized when the usually non-linear profit function is approximated by a linear breeding goal where the linearization is at the population mean in generation 10 and the linear breeding goal is subsequently predicted by a linear index for which the animals are selected. The prediction of the population mean at generation 10 requires linear relationships among the traits that constitute the non-linear profit, because otherwise this prediction becomes very complicated.

A non-linear index is proposed that simply estimates the non-linear goal H =f(u) by Ĥ =f(û), where u = vector of genetic values for the traits and u is its (BLUP) estimate. This non-linear index does not require predictions of (future) population means and does not require linearly related traits.

To test these indices a simple meat production example was constructed where the non-linearity between the traits was due to the competition between weight and probability of survival for the same resources from food intake. In the model selection for weight and, in particular, for weight over costs (mainly food) led to reduced profits due to large reductions of survival rates. Although, the example was oversimplified, this should provide a warning for the use of oversimplified breeding goals, e.g. fitness traits may reduce by more than expected from base population genetic parameters.

When probability of survival and weight were measured, a non-linear index of these non-linear traits gave the greatest genetic gains. Failure to update genetic parameters each generation severely reduced genetic gain and, if linear indices were used, it was also important to update the economic weights. When probability of survival was measured, profit could be calculated on each animal and included as a trait in the calculation of estimated breeding value. This yielded high genetic gain and did not require updating of genetic parameters or economic weights.