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This paper applies the replacement cost method for calculating the value of stochastic carbon sink in the EU climate policy for mitigating carbon dioxide emissions. Minimum costs with and without carbon sinks are then derived with a safety-first approach in a chance constrained framework for current system with an emission trading system and national allocation plans and a hypothetical system where all sectors trade. The theoretical results show that i) the value of carbon sink approaches zero for high enough risk discount, ii) relatively low abatement cost in the trading sector curbs supply of permits on the ETS market, and iii) large abatement costs in the trading sector create values from carbon sink for meeting national targets. The empirical application to the EU commitment of 20% reduction in carbon dioxides shows large variation in carbon sink value depending on risk discount and on institutional set up. Under no uncertainty, the value can correspond to approximately 0.45% of total GDP in EU under current policy system, but it is reduced to one third if all sectors are allowed to trade. The values are unevenly allocated among countries, but in different ways depending on EU policy; under current system countries make gains from reduced costs of meeting national targets, under a sector wide trading scheme buyers of permits gain from reductions in permit price and sellers make associated losses.

The paper analyses the role of ideas, past experience and crises in the process leading to theoretical and political disputes and the changes of monetary and banking policy in Sweden in 1844/45. It also analyses the role of institutional settings and types of actors involved in the decision-making process. A comparative approach is deployed. Policy changes at the time in the poor and peripheral Sweden is contrasted with the well-known developments in England. The results suggest that current events and past experience were important factors. Purely theoretical considerations played a somewhat lesser role in determining the policy-change. Institutional peculiarities and country characteristics did not significantly alter the core outcomes, but certain specific features. Probably an influx of ideas, policies and experiences from England also influenced policy choices in the case of Sweden.

Lithuania and Southern Sweden share similar natural conditions, but differ considerably in forest policies and management; thereby providing an opportune basis for comparative studies. Since the 1990s, Sweden has attempted to reduce the negative impact of its forest management on biodiversity, after decades of intensive production forestry. In contrast, Lithuania has been intensifying forestry practices associated with the post-soviet socio-economic transition. Here we assess the actual outcomes by comparing selected forest structure and composition variables known to be indicators for forest biodiversity; and estimate the prospective trends by scrutinising current forest policies and management. Our results indicate that Lithuanian forests consistently possessed higher rankings in six indices related to tree species composition, stand age, and deadwood quantities that are positively associated with forest biodiversity. The reverse is indicated by those data on stand age and tree diameter that are associated with centennial dynamics in forest utilisation intensity. With respect to policy instruments, Lithuania designates a substantially greater share of forest area to non-timber functions and legislates more severe management restrictions in forests targeting timber production. Concurrently, all estimates of forestry activities indicate more intensive forest management in Southern Sweden, including a higher share of artificial regeneration and shorter rotations. This allows concluding that, if current forest management practices persist, then an increased "biodiversity gap" may be expected between the two countries. The study concludes with discussing to what degree the identified trends are the direct product of targeted policies versus merely by-products of other factors.