Any comparison of the costs and benefits of climate change is dominated by the chosen discount rate. But, although the Stern Review emphasises the ethical nature of the parameters entering into its choice of a relatively low discount rate, its discussion of the ‘pure time preference’ parameter is unbalanced. In particular, no consideration is given to the role of ‘agent-relative ethics’, which (i) has a wellestablished philosophical pedigree going back to David Hume; (ii) is likely to correspond closely to world-wide public attitudes towards intergenerational welfare; and (iii) would entail discounting a unit of welfare accruing to future generations compared to an equal unit accruing to people alive today at a positive rate. The authors also discuss the other ethical parameter upon which the discount rate depends, namely the elasticity of marginal utility with respect to consumption. In the conventional model, this simultaneously reflects different aspects of inequality aversion as well as risk aversion, which complicates its interpretation. Finally, they discuss the divergence between market rates of discount and the low rate chosen in the Review, and the limitations—on the one hand—on the normative significance of market rates, as well as the danger—on the other hand—of relying on rates chosen by elites or philosopher kings.

Biodiversity is important for human wellbeing, but it is declining. Measures to conserve biodiversity are essential but may be a waste of effort if several paradoxes are not addressed. The highest levels of diversity are in nations least able to practise effective conservation. The flow of funds to international biodiversity conservation appears trivial when compared to the scale of biodiversity loss. International agreements may not actually protect or conserve more than what would have been conserved anyway. Protected Areas may be ‘paper parks’, protected in name but not in practice. The very act of protection may contain self-destructive features because local communities can easily suffer loss of income and assets, making them unwilling partners in the act of protection. In turn, this places the protected area at risk and may also divert unsustainable harvesting activities to non-protected but equally diverse ecosystems. In tackling these issues the real biodiversity challenge is redesigning conservation effort, making it truly additional and making it compatible with poverty reduction.

Most European Union countries are committed to some form of regulatory impact assessment, and in some cases these assessments involve the formal use of cost–benefit analysis. The European Treaty of Union also calls for a comparison of costs and benefits for all European regulations. Despite this, only a limited number of regulations have been subject to cost–benefit analysis. Using a variety of sources, this paper investigates whether or not a selection of major environmental regulations would pass a cost–benefit test. The general answer is that, while some do, most do not. This finding has major implications for the efficiency of European environmental legislation, and reflects on the willingness of Member States to sign up to inefficient regulation.

This article examines the political economy of agreements on global greenhouse emissions reduction. The author explains the complex emissions trading mechanisms set up under the 1997 Kyoto Protocol and considers the likely size and structure of a future market for emissions credits.