International
Journal of Regulation and Governance
The
Kyoto Protocol after Marrakesh The accords reached at Bonn and Marrakesh resolved important operational questions left open at Kyoto and gave final shape to the Kyoto Protocol. This achievement came at a considerable price in terms of defining the Kyoto targets as well as procedural transparency. The accords have drained ‘supplementarity’ of all operational significance. It imposes no ceiling on the extent to which an Annex I Party may take recourse to the ‘flexibility mechanisms’. Thus over 50% of the notional reduction in emissions is likely to be accounted for by trading in ‘hot air’—a mere accounting device. This figure could be even larger unless steps are taken to ensure that the entry of Kazakhstan (and any other country) into Annex I for the purposes of the protocol does not lead to a further expansion in the supply of ‘hot air’. The agreed ceilings for additions to and subtractions from the assigned amounts of Parties for forest management activities will enable the Annex I Parties to account for another 38.31% of their notional emission reduction commitments. There was a certain lack of transparency in the manner in which the ceilings were calculated. Thus the actual reduction in emissions required of the Annex I Parties will be very modest—just over 11% of the notional figure. This includes credits for joint implementation and clean development mechanism projects besides domestic actions. Only a very small part of the Kyoto targets is likely to be met through domestic actions in Annex I countries. The Kyoto Protocol, as given final shape in Marrakesh, will at best lead to a marginal reduction in the actual GHG emissions of ratifying Annex I countries.
Criterion for a fares policy and fares
index for bus transport in Sri Lanka The public transport sector in Sri Lanka faces many problems. Most of these problems seem to be related to the absence of a fares policy. Implicit fare policies, which have been followed in the past, have given rise to many problems of a serious nature, which have continued to undermine the quality of bus transport and threaten its continuity as a viable mode of transport. It is evident that even the numerous management changes from time to time have not made much of a difference. The paper sets out to analyse past fares policies and the consequent impacts that such policies have had on the bus industry both during the period of state monopoly in bus operations as well as during the period of mixed competition. It will be shown how the lack of a well-formulated, explicit fares policy has been a primary reason for the deterioration of the bus industry in Sri Lanka. The paper then proceeds to set out a criterion for a fares policy and develops a methodology for computing bus fares based on such a policy. Fares under the proposed policy are based on costs, quality of service, and subsidy payment, if warranted. A method for calculating costs and updating them regularly will be developed. Computation of fares is also given in a methodologically, wherein fare stages have been computed together with steps that should be taken to adjust fare anomalies that may contribute to varying and different benefit–costs ratios that presently exist between routes.
Bond finance: a growing source of
funds for utility and infrastructure companies? The reform of the infrastructure and utility service industries that has seen liberalization and increased private sector participation can be expected to have led to an increased usage of external finance. One of the key markets that should have become available for these operators is that of the international bond market. Using a database of infrastructure and utility bond issues made over the period 1996 to 2001, the authors investigate whether there has been a growing usage of the international bond market. While the raw data would suggest that the expectation of greater usage is borne out, a more detailed investigation shows that the story is more complex. Much of the increased usage, especially in the telecommunications industry, is made by companies that have been accessing the markets for longer than the period covered by this sample and that while new companies are gaining access to the market their issuance is small. An increasing usage of the international bond markets provides useful information for regulatory agencies. When determining allowed revenues, the return on capital is a key input. Within the return on capital, the cost of debt is normally measured as a margin on bonds. The dataset shows that there is an increasing pool of potential comparator companies that can be used to determine these margins. However, the analysis of this data provided in the paper also shows that great care needs to be taken when choosing comparators, many factors have an impact with respect to the determination of the margin and these need to be correctly controlled.
Independent regulation of
infrastructure services in India: a review Economic liberalization policies in India, since 1991, have recognized market as an institution to achieve efficient resource allocation and appropriate pricing structures. The need for distancing the government from investment and consumption decisions has also been felt in infrastructure sectors. Demand–supply mismatch, natural monopoly segments, and social considerations in these sectors have, however, necessitated the need for regulatory institutions within a deregulated environment. Independent regulation was conceived as a second-best option capable of delivering results, which the market would have otherwise produced. This paper reviews macro trends in the performance of regulatory institutions in electricity and telecommunications sectors in India and evaluates the direction and pace of their work. It is felt that a perceptible change in several areas such as transparency and participatory approach in decision-making, availability of hitherto unavailable information, etc. has been brought about through functioning of these institutions. The contours of regulatory landscape are, however, in formative stages and much remains to be done. The paper discusses steps and mechanisms for further strengthening the regulatory institutions and processes. It is also opportune to initiate the process of benchmarking relative performance for evolving best practices and as a mechanism for applying corrective pressure on those lagging behind.
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