RESOURCESWHAT'S NATU R E WORTH?

VALU I NG R ISK TO

CH I LDR E N'S H EALTH

R ETH I N K I NG

F OSSI L FU E LS

R ESOU RCES F OR TH E FUTU R E SU M M E R 2004 · ISSU E N U M B E R 154

RESOURCES FOR THE FUTURE

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OFFICERS

President, Paul R. Portney

Vice President–Finance and Administration,

Edward F. Hand

Vice President–External Affairs,

Lesli A. Creedon

BOARD OF DIRECTORS

Robert E. Grady, Chairman

Frank E. Loy, Vice-Chairman

Catherine G. Abbott, Vicky E. Bailey, Joan Z. Bernstein

Julia Carabias Lillo, Norman L. Christensen, Jr.

Maureen L. Cropper, W. Bowman Cutter

John M. Deutch, E. Linn Draper, Jr., Mohamed T. El-Ashry

Dod A. Fraser, Kathryn S. Fuller, Mary A. Gade

David G. Hawkins, Lawrence H. Linden

Lawrence U. Luchini, Jim Maddy, Michael A. Mantell

James F. O'Grady Jr., Steven W. Percy, Mark A. Pisano

Robert F. X. Sillerman, Robert N. Stavins

Joseph E. Stiglitz, Edward L. Strohbehn Jr.

RESOURCES

Stanley N. Wellborn, Director of CommunicationsFelicia Day, EditorMichele T. Callaghan, Assistant EditorJ. W. Anderson, Sally Atwater, Contributing EditorsMarc Alain Meadows, Art Director

Published quarterly since 1959, Resources (ISSN 0048-

7376) contains news of research and policy analysis

regarding natural resources and the environment. The views

offered are those of the contributors and should not be

attributed to Resources for the Future, its directors, or its

officers.

© 2004 Resources for the Future. All rights reserved. No

part of this publication may be reproduced by any means,

either electronic or mechanical, without permission

from the publisher. Contact Felicia Day at RFF (email:

day@rff.org).

Resources is sent to individuals and institutions without fee. To

subscribe, contact Scott Hase at RFF (hase@rff.org) or

202-328-5006. The publication is also available on the RFF

website, www.rff.org.

Cover illustration by Randy Lyhus

Design and production: Meadows Design Office, Inc.

®r ‰ Printed on 50% recycled (and recyclable) papercontaining 10% post-consumer waste.

Contents

From the PresidentWhy $2/Gallon Gas Is Still a Good Deal, Paul Portney 1

Goings OnLong-time RFF Director Establishes Endowed Chair 2

Environmental Power to the People in Asia, Ruth Greenspan Bell 3

Regulatory Risk Influences Utilities’ Strategy, Cinergy Chief Says 4

Measuring Superfund’s Success 5

Finding a Cost-Effective Policy to Promote Renewable Energy SourcesKaren Palmer and Dallas Burtraw 6

Rethinking Fossil Fuels: The Necessary Step Toward Practical Climate Policy 7 Raymond J. Kopp

Valuing Risk to Health: Children Are Not Little Adults 12Sandra Hoffmann and Alan J. Krupnick

What’s Nature Worth? Using Indicators to Open the Black Box of Ecological Valuation 18 James Boyd

Inside RFFImportant New Grants Won by RFF Researchers 23

U.S. and EU Approaches to Climate Change and Chemical Regulation Focus ofSpring Council Meeting 24

Probst Named New Division Director 26

Book NotesPainting the White House Green: Rationalizing Environmental Policy Inside theExecutive Office of the President, Randall Lutter and Jason F. Shogren,

review by Paul R. Portney 27

RESOURCESSUMMER 2004 · ISSUE NUMBER 154

SUMMER 2004 1

This letter will probably reach you in late July or early Au-gust—often referred to in the United States as “peak driv-ing season.” For this reason, you may be in no mood tohear me say that we shouldn’t be complaining unduly aboutthe recent increases in the price of gasoline. In fact, stopreading right now if you think the country needs gasolineprice controls or, at the very least, a vigorous congressionalinvestigation into prices at the pump. My message here willonly spoil your day.

For at least three reasons, even gasoline at $2.10/gallon(the average retail price in the United States at the time ofthis writing) is not the calamity that the media and manypoliticians make it out to be. First, when adjusted forinflation, gasoline is 25 percent less expensive today than itwas in 1981, when it hit $2.79/gallon. (Over this same pe-riod, real per capita income in the United States rosenearly 60 percent.) In fact, gasoline costs less today in realterms than it did in 1918 (when Henry Ford’s Model Ts hadto be refueled at $3.00/gallon). To put it differently, we stillwork many fewer hours to fill up our cars today than wehave during most of the gasoline era.

Second, as anyone knows who’s ever rented a car in Eu-rope or Japan, gasoline looks positively dirt cheap, even atcurrent prices, when compared to other Western industrialcountries. There motorists pay $4–5/gallon and have for along, long time. (Taxes explain all the difference, inciden-tally.) True, population density is greater in Europe andJapan (so that people drive less far on an average trip thanin the United States), and public transit is much better de-veloped in most European and Japanese cities, thus makingthe impact of higher gasoline prices there less dramatic

than they would be in the United States. That’s one reasonwhy, in fact, the Europeans have elected to tax gasoline soheavily—it’s not as painful, or politically unpopular, as itwould be here.

There’s a third reason why we shouldn’t complain toomuch about the price of gasoline: it probably should behigher than it is now, especially if we factor in the high andgrowing costs of traffic congestion. The current price of$2.10/gallon covers the cost of the crude oil used to makegasoline (about $0.86/gallon), the cost of refining, trans-porting and marketing it (about $0.81/gallon) and the fed-eral, state and local taxes levied on it (which average about$0.43/gallon). But it does not include any of the “external”costs associated with climate change, oil import depend-ence, or traffic congestion. These external costs may beharder to express in dollar terms than the costs of explo-ration, production, refining, and marketing, but they arereal nonetheless. (See Ian Parry’s attempt to value thesecosts in the summer 2002 issue of Resources.) Painful as itmay be to be paying more at the pump, we’re probably stillnot paying the full social costs associated with our use ofthis extraordinary versatile and valuable fuel.

I hope you enjoy this issue of Resources, and thank youfor your interest in RFF. ■

From the President

Why $2/Gallon Gas Is Still a Good Deal paul r. portney

2 RESOURCES

A s a Department of Interiorofficial in the early 1970s,Darius Gaskins first availed

himself of what he calls RFF’s “cre-ative intellectual capital.” His long as-sociation with RFF since that time hasinspired him to provide $2 million tosupport an endowed chair that willbear his name.

“Time after time throughout mycareer, RFF research has expandedmy thinking in useful ways,” Gaskinssaid in an interview with Resources.“RFF sparks innovative thinking aboutthe tradeoffs between developmentand environmental quality, and weneed that today more than ever.”

Gaskins was a member of the RFFBoard from 1990 to 2002, serving aschair during most of that period. Hecurrently is a partner at Norbridge,Inc., a consulting firm in Concord,Massachusetts, and his resume lists anarray of leadership positions in gov-ernment and industry. These includeterms as president and CEO ofBurlington Northern Railroad, chair-man of Leaseway Transportation Cor-poration, chairman of the InterstateCommerce Commission, and appoint-ments within the Department of En-ergy, Civil Aeronautics Board, andFederal Trade Commission.

“Much of RFF’s valuable work hasbecome so ingrained within the aca-demic and policy communities that italmost isn’t given proper credit,”

Gaskins says. He recalls that commod-ity and natural resource issues wereburied within the Department of theInterior when he worked there in theearly 1970s. “It was accepted wisdomamong resource economists that RFFwas the font of seminal work in thisarea, but at that time policymakersdidn’t realize how significant the roleRFF played really was,” he says.

Providing continuity for such workis the impetus behind Gaskins’ cre-ation of the new chair, which will not

be restricted to any particular disci-pline within RFF. He regards a majorimpact of his tenure on the RFF Boardas presiding over a broadening of theresearch agenda to one that today en-compasses a wide spectrum of key pol-icy issues—and without single-sourcefunding.

“It is absolutely vital that RFF havethe wherewithal to soberly confrontthe environmental and energy chal-lenges ahead—without too much de-pendence on government or industrysupport,” he says. “Without independ-ent and credible funding to supportthis kind of objective research, the na-tion and the world will be subject topolitical and emotional pressures thatcan lead in directions that aren’t pru-dent.”

Gaskins’ career—spanning from his days as a West Point graduate andprofessor of economics at the Univer-sity of California, Berkeley—has rein-forced his general optimism about theworld’s ability to meet the resourceand environmental challenges ahead.“You can cite lots of unresolved prob-lems—water policy in the AmericanWest, climate change, energy supplies,fuel standards, growth and sprawl—that the political system seems unableto tackle. But I am convinced thatgood, hard thinking by RFF scholars isprecisely what we need to successfullyconfront the inevitable crises that willarise,” he says. ■

Long-time RFF Director Establishes

Endowed Chair

darius gaskins

Time after time

throughout my career,

RFF research has

expanded my thinking

in useful ways.

RFF sparks innovative

thinking about the

trade-offs between

development and envi-

ronmental quality, and

we need that today

more than ever.

Goings On

Environmental protection islargely stalled in the develop-ing world, especially in Asia.

Numerous sophisticated studies havepointed out the harm inflicted bypersistent air pollution. Donors havecommitted funds and sponsored law-drafting activities. But beyond suchexercises, many of which seem toproduce academic papers but littleelse, good results are few and far be-tween. Most Asian countries haveseemingly adequate environmentallaws, government ministries withofficial responsibility for reducingpollution, and often plans to adoptextremely complex environmental in-struments like emissions trading. Butlasting change seems rare. How canthis logjam be broken?

Perhaps the most encouraging newsis to be found in increasing environ-mental activism. Citizens and NGOsare using tools at hand to bring theseproblems into public view and seekworkable solutions. What is particu-larly interesting is that this activism istaking place in countries that histori-cally haven’t encouraged citizens tospeak out.

With the support of the U.S.Agency for International Development,I was able, in partnership with BarbaraFinamore of the Natural ResourcesDefense Council, to study the growingtrend toward environmental publicparticipation in Asia. Against all odds,

especially traditional attitudes of defer-ence to governments and authority, activists are taking cues from the U.S.experience of the 1960s and 1970s andfinding ways to draw public attentionto festering environmental problems.

How they do this depends verymuch on the circumstances in theirown countries. At times, citizens andNGOs use lawsuits to achieve theirgoals, with varying results. Chineselawyer Wang Canfa sues polluters,seeking damages for the impacts oftheir pollution. He does this in a coun-try that has never been under a rule oflaw and where even today judges havegreat difficulty acting independentlyof the state.

One successful example of thismethod was the court case brought byM.C. Mehta in Delhi, India, that ulti-mately resulted in the switch fromheavily polluting fuels to compressednatural gas in commercial vehicles.This case involved all levels of societyfrom NGOs to the Supreme Court,which mandated the change afteryears of wrangling from the different

Environmental

Power to the

People in Asia

Ruth Greenspan Bell

sides. (For more information on thisproject, see Resources, fall/winter 2004,and www.rff.org/clearingtheair.) As aresult, NGOs have brought lawsuits innumerous Southeast Asian countriesthat mimic M.C. Mehta’s groundbreak-ing Indian litigation.

Not every result has been as happyas the one in Delhi. In some countries,the litigants are learning that even acourt order is not sufficient to changelongstanding practices of polluters.The Lahore, Pakistan, High Court, forexample, has gone back to the draw-ing board, as it were, to develop multi-stakeholder processes that all involvedhope will find solutions that can work.

We also learned about other ap-proaches beside legal proceedings. InIndonesia, an independent researchorganization, Pelangi, undertook astudy to determine why the country’smore than 75 air pollution controlregulations were not more effective inimproving air quality. They used inter-views, panels, and focus groups to bothcollect and spread information and apublic dialogue and radio campaign to

SUMMER 2004 3

Regulatory uncertainty puts apremium on flexibility whenelectric utilities make deci-

sions on fuels and technologies, saidJames E. Rogers, chairman and chiefexecutive officer of Cinergy Corp., atRFF’s most recent Policy LeadershipForum.

The electric utilities, he said, beara greater “stroke-of-the-pen” risk thanany other industry—the risk that asudden change in state or federal reg-ulation can sharply change the eco-nomics of their operations. Cinergyburns 30 million tons of coal a year toprovide power to two million con-sumers in the Midwest.

The company will use coal gasifica-tion technology for its next expansion,Rogers reported. While gasification

presently is somewhat more expensivethan burning pulverized coal, he ex-plained, the technology can beadapted to comply with the more de-manding pollution regulations thatmay be imposed in the future.

In Congress, legislation on utilityemissions is caught in a deadlock overwhether new limits on three pollu-tants—sulfur dioxide, nitrogen ox-ides, and mercury—should be ac-companied by restrictions on carbondioxide, the most important of thegases causing global warming. At leastin the short term, federal regulationof this gas seems unlikely. But to pre-pare for different rules in the longerfuture, Rogers said, Cinergy has set agoal of a five percent reduction incarbon emissions over the next 10years, the equivalent of taking half amillion cars off the road per year.

“I live with the vision we will live ina carbon-constrained world someday,” he observed. With the coal gasi-fication technology it is possible—al-though not inexpensive—to removeand sequester carbon dioxide ratherthan emitting it into the sky. ■

disseminate their findings. The nextphase of their work will try to brokerlegal and practical solutions.

We were able to invite a number ofthese Asian practitioners to Manila inDecember 2003, as part of an annual,600-expert, region-wide gathering,the Better Air Quality meeting. In ad-dition to a rare opportunity to shareexperiences, the purpose of the meet-ing was to start a discussion aboutwhether it was possible to transfer les-sons from those efforts between thesecountries and these experts, each ofwhom come from very different polit-ical and legal cultures. The work-shops featured six case examples,which we grouped into three cate-gories from the 80 examples that wehad collected from 17 countries.

I hope that future such regionalmeetings will continue to pay more at-tention to environmental public par-ticipation and spotlight efforts tomodel good public involvementprocesses and techniques. The audi-ence for these important discussionsshould not be confined to NGOs, butshould also include government, in-dustry, and academics. Each of thesestakeholders needs to learn to work to-gether toward more effective environ-mental regulation.

Asian environmental advocateswould also benefit greatly from a con-tinuing process that would allow themto share experiences and better under-stand the techniques and skills that arebeing used by their neighbors. Sharingcan improve environmental publicparticipation in each of their countriesand perhaps deliver the lasting resultseveryone is seeking. ■

Regulatory Risk

Influences Utilities’

Strategy, Cinergy

Chief Says

James E. Rogers, speaking at the RFF Policy

Leadership Forum.

4 RESOURCES

Type of industrial operation (if applicable)

Risk reduction accomplishments

Groundwater Sediments Surface water Air

Exposure reduced No Not applicable Not applicable Not applicable

Exposure controlled Yes Not applicable Not applicable Not applicable

Exposure eliminated No Not applicable Not applicable Not applicable

Contamination reduced No Not applicable Not applicable Not applicable

Contamination contained No Not applicable Not applicable Not applicable

Contamination eliminated No Not applicable Not applicable Not applicable

Metals (arsenic, lead, chromium); nitrate; Volatile Organic Compounds - VOCs (benzene, toluene, ethyl benzene, xylene), cyanide, Polycyclic Aromatic Hydrocarbons - PAHs, pesticides

Construction complete status: Not construction complete

Previously municipal water supply, but currently bottled water

Information last updated:

7/1/2003

National Priority List (NPL) proposal date: 2/25/1990

Site name: ABC Corporation Landfill

EPA region: 3

ID: XYZ123456789

Mega site? No

NPL final listing date: 1/5/1991

Current status of each Operable Unit (OU)

Construction complete date or estimated date: Estimated 2015

Major contaminants

Current human exposure under control? Yes

Contaminated groundwater migration under control? Insufficient data

OU 01 - Remedial investigation/ feasibility study finished (responsible parties-lead: ABC Corporation Landfill Group, City of XX), Remedial design underway (responsible parties-lead: ABC Corporation Landfill Group, City of XX)

OU 02 - Remedial investigation/ feasibility study finished (EPA-lead), Remedial design underway (responsible parties-lead: ABC Corporation Landfill Group, City of XX)

OU 03 - Remedial investigation/ feasibility study underway (EPA-lead)

Estimated size of population living on-site: 0

Estimated size of population working on-site: 25

Estimated size of population within 1 mile site buffer zone: 1,500

Source of drinking water for population living on-site or within site buffer zone:

Total expected future cleanup costs: $32,259,000

Expected total costs of cleanup: $35,410,000

Is remedy functioning properly? Not applicable

No

No

No

Total cleanup costs to date: $3,151,000

Date of next five-year review: Not applicable

Date of last five-year review: Not applicable

Are institutional controls a component of remedy at site? Yes

Have institutional controls been implemented? Yes

Soils

No

Partial

No

Federal facility? No

Landfill

Site in environmental justice community? Yes

Site sacred to tribal community? No

Sensitive ecoystem? No

SUMMER 2004 5

Superfund cleanup efforts havebeen among the nation’s mostcontroversial and most visible

environmental initiatives since theprogram began in the 1980s. Definingsuccess for the program continues tobe a vexing problem because of thelack of established criteria and up-to-date and dependable data. Even forsites on the National Priorities List(NPL), such information can be scat-tered throughout many places on theInternet or hard to come by at all.

In a new report, RFF Senior FellowKatherine N. Probst and Research As-sistant Diane Sherman address theseissues and outline a systematic ap-proach for organizing and dissemi-nating the critical data to stakehold-ers. The report, Success for Superfund:A New Approach for Keeping Score, wasfunded by the Environmental Protec-tion Agency’s (EPA) Office of SolidWaste & Emergency Response.

To correct the lag in accurate andtimely information, the authors rec-ommend implementation of threeseparate Internet tools that would beeasily available to the public:

■ a one-page report card, summariz-ing key information about a site, suchas status of cleanup activities and ma-jor contaminants present;

■ a standardized six-page Scorecardthat expands on the report card data, with more information on com-

pleted, ongoing, and future actions,drinking water and groundwater, risk-reduction accomplishments, andpost-construction activities; and

■ a Superfund Annual Report thatsummarizes information on progressfor all NPL sites and contains otherindicators of program performance.

The authors conclude that if EPAprovided more reliable, consistent,accessible, and transparent informa-tion about the Superfund program, it

might then be possible to create morerealistic expectations about what canand cannot be achieved. The debateabout Superfund needs to “take placein the context of facts, not a war ofanecdotes,” they say.

For more information on this re-port and to read about Probst’s otherresearch on Superfund, visitwww.rff.org/rff/Superfund.cfm. ■

Measuring

Superfund’s

Success

NPL Site Report Card — Mockup

Electricity generators that burnfossil fuels such as coal are responsible for close to 40 per-

cent of all U.S. carbon dioxide emissions, a pollutant believed to con-tribute to global warming. One way toreduce these emissions would be togenerate more electricity using re-newable energy sources, such as wind-mills or geothermal plants that emitno carbon dioxide. However, despitegrowing popularity in parts of Europe,renewables are not expected to makesubstantial inroads into electricity gen-eration in the United States, largelydue to their relatively high costs.

To help promote renewables, gov-ernments at several levels have pro-posed or enacted various policies.One important federal policy hasbeen the Renewable Energy Produc-tion Credit (REPC), a tax credit forelectricity generated using specifictypes of renewables. This policy ex-pired at the end of 2003 but is likelyto be reauthorized in this session ofCongress.

At the state level, a popular policytool is a renewable portfolio standard(RPS) that requires a minimum per-centage of electricity be produced us-ing renewable technologies. In somestates, the RPS includes a tradablecredit provision, which means thatevery kilowatt of electricity generatedusing an eligible renewable technol-ogy results in the creation of a trad-

able renewable energy credit. With atrading provision, companies cancomply either by generating with re-newables that they own, by purchas-ing electricity directly from renewablegenerators, or by purchasing renew-able energy credits. Currently 16states have renewable portfolio stan-dards, which vary in targets andtimetables, what types of renewablesare included, and whether or nottrading is allowed.

In a new report, Electricity, Renew-ables, and Climate Change: Searching fora Cost-Effective Policy, we evaluate theextent to which these approaches en-courage greater use of renewables.Applying RFF’s simulation model ofregional electricity markets, we ana-lyze how different policies affect tech-nologies and fuels used to produceelectricity, the price of electricity, itssocial cost, and the level of carbondioxide (CO2) emissions.

The results of our study indicatethat an REPC policy is a potent toolfor encouraging renewables genera-tion, but that it is more costly than anRPS and not as effective at reducingCO2 emissions. An RPS policy couldincrease renewables from a three per-cent share to a 15 percent share by2020 without major increases in elec-tricity prices; after that threshold,however, renewables become muchmore expensive. The higher the RPStarget, the greater the carbon emis-

sions reductions ensuing from thepolicy. However, renewables tend toreplace natural gas generation morereadily than coal, leading to less re-duction in CO2 emissions than if onlycoal use was decreased.

In researching this report, we alsolearned that a policy that caps annualemissions of CO2 from electricity gen-erators is a more cost-effective toolfor reducing carbon emissions thaneither an RPS or an REPC. A carboncap also leads to expanded use of re-newables.

Our results suggest that the appro-priate policy depends upon the objec-tive. With a narrowly defined goal oftrying to promote renewables, an RPSmay be the most cost-effective ap-proach, holding carbon emissionsconstant. However, if one is trying toachieve climate policy goals, a carbon-focused policy is preferred. If policy-makers are trying to reach both goals,perhaps the two approaches shouldbe combined.

For more information on our workon renewable energy, see our website,www.rff.org/renewables, where youcan download the report. ■

Finding a Cost-Effective Policy to Promote

Renewable Energy Sources

Karen Palmer and Dallas Burtraw

6 RESOURCES

Rethinking Fossil FuelsTHE NECESSARY STEP TOWARD PRACTICAL

CLIMATE POLICY RAYMOND J. KOPP

If we are to stabilize global greenhouse gas (GHG) emissions, the

world’s largest current emitter—the United States—along with other

industrialized countries must radically curtail the emission of

GHGs, most notably carbon dioxide (CO2). This means that our cur-

rent primary energy sources—which drive both the electricity and

transport sectors in the United States, and are responsible for car-

bon dioxide emissions—must change. But change to what and how?

These two questions, what and how, are at the core of the domestic and, to alarge extent, international policy debate about climate policy. What changesto the electricity and transport sectors are practical, technically feasible, andeconomically and politically viable over the next several decades? Given wecan answer the first question, how do we formulate a constellation of do-mestic and international policies that will provide the proper incentives to

undertake the desired changes?These questions are quite a bit different from the issues surrounding international dis-

cussions of the Kyoto Protocol or domestic debates over tailpipe standards in California andfederal greenhouse gas legislation like that introduced by Senators John McCain and JosephLieberman. While these other discussions concern near-term reductions in greenhouse gasemissions, the questions posed here relate to the fundamental problem of providing the in-centives and resources necessary to transform the global energy system over the next half-century.

Rethinking Coal

For many the answer to the “what” question is obvious. We must dramatically reduce relianceon fossil fuels, especially coal and petroleum, and expend the resources necessary to developand deploy noncarbon energy technologies, namely renewables. As the old saying goes, “eas-ier said than done.” Current reliance on coal and oil is the result of past and present eco-nomics and technology, and the answer to the “what” question requires us to rethink our ap-proach to these fuels.

Rethinking fossil fuels begins with coal and recognition of these facts: there is a lot of coal,it is spread widely around the globe, and it’s cheap. Add to this the political clout that coal

interests have in the United States—and a perception thatthe Chinese are anxious to use their coal reserves and feargrowing dependence on foreign oil—and you have a pic-ture of two very important CO2 emitters that are weddedstrongly to coal. While renewables such as wind, solar, andbiomass will likely be a part of the energy future, the coalreality—its abundance, price, and political power—sug-gests that it is it naïve to think of a world where coal is nota large part of the energy system.

The problem with coal is the harmful by-products re-leased into the atmosphere when it is burned. Of these,CO2 is the most significant global pollutant, but mercury,sulfur dioxide, nitrogen oxides, and particulates cause seri-ous problems as well. A sensible solution exists: avoid burn-ing coal directly and convert it to natural gas instead, usingoxygen and steam, then clean it of impurities such as mer-cury and sulfur. The natural gas can be further processed toincrease its hydrogen content and convert carbon monox-ide to carbon dioxide. This CO2 can then be separated andstored underground while the remaining hydrogen is usedfor carbon-free electricity generation.

At present, there are no actual demonstrations of thisprocess, and it sounds a bit like science fiction. But we doknow how to make this work. What we don’t know is how to

It is the dependence of the world’s

transportation system on petroleum

that causes the greatest local and

global environmental impacts.

8 RESOURCES

do this on a grand scale and do it cheaply. If the technol-ogy—everything from the gasification, to the CO2 separa-tion and storage, to hydrogen production—could be com-mercialized and available at a competitive cost, coal can bean environmentally benign and important part of theworld’s energy future. Of course, simultaneous researchwould have to be done to improve the environmental im-pact and safety of coal mining itself.

Rethinking Petroleum

Transportation and petroleum use poses a number of im-portant public policy questions ranging from local issuessuch as traffic congestion, land use, and highway safety tointernational ones such as foreign policy and of courseglobal climate change. When rethinking petroleum, threefacts must be kept front and center.

First, from the perspective of climate policy, all issuesconcerning transportation revolve around fuels, and, atpresent, that fuel is petroleum. It is the dependence of theworld’s transportation system on petroleum that causes thegreatest local and global environmental impacts.

Second, the transportation sector is growing in virtuallyevery corner of the world and with it, the combustion of pe-troleum and resultant emissions. Without a doubt, thegreatest growth is in the developing world, with China leading the way. In the decade of the1990s, China doubled its petroleum consumption. Even in the developed countries of theEuropean Union, where gasoline is highly taxed, aggressive programs to increase fuel effi-ciency and subsidize public transportation are, at best, flat with respect to petroleum con-sumption during the same decade. In some countries, like France and Germany, consump-tion has in fact increased.

Third, one does not simply switch quickly to another more environmentally friendlytransportation fuel. Both vehicles and the necessary infrastructures are designed solelyaround petroleum and internal combustion engines using gasoline and diesel. From a tech-nical point of view, there is no alternative fuel ready for prime time. The hope that battery-powered electric vehicles would be the wave of the future seems to have faded, along withthe visions of a vehicle fleet powered by compressed natural gas. The jury is still out with re-spect to the feasibility of large-scale transformation of waste products and crops other thancorn into fuels, also called second-generation biomass. Even if vehicles can be created thatuse an alternative fuel in a reasonable amount of time, the petroleum infrastructure (oilfields, pipelines, refineries, and retail outlets) represents an enormous amount of very long-lived capital.

What is on the table are alternatives, like hydrogen, fuel cells, and electric motors. Exist-ing electric motor technology is sufficient for our needs. If we have hydrogen, the missingpiece of technology is the fuel cell that turns hydrogen into electricity to drive the motors,along with a cost-effective way to store hydrogen on vehicles. Fortunately, fuel cell researchis on an upswing. To be sure, there are difficult technical issues to master, but the futureseems bright. It appears the truly difficult technical part will be the development of safe andlow-cost on-board hydrogen storage.

SUMMER 2004 9

If stabilizing greenhouse gas emis-

sions is our goal—and it is a worthy

goal to strive for—we had better be

prepared for the long haul.

10 RESOURCES

The next technological challenge will be bringing hydro-gen to the marketplace. Moving and storing hydrogen is notas easy as petroleum. We may need entirely new pipeline sys-tems (although some portions of the existing natural gastransmission system may work), distribution networks, and ofcourse hydrogen stations. To complicate matters, hydrogenwill displace petroleum as a transport fuel slowly as the in-ternal combustion engine stock (namely, billions of cars andtrucks) rolls over to fuel cell electric motors and as the hy-drogen transportation system develops. So, at the same timewe will have petroleum competing with hydrogen in the mar-ketplace.

There may be as many answers to the “what” question asthere are technologists. For example, there is much talkabout production of hydrogen by electrolysis using nuclearpower as the ultimate hydrogen production method. Simi-larly, second generation biomass liquid fuels hold real po-tential. There are those who argue that conservation com-bined with enhanced end-use efficiency will reduce energyneeds enough that they can be met by wind and solar. All ofthese areas deserve further investigation. But the facts sur-rounding two of the three dominant fossil fuels remain.Coal’s low market cost and abundance make it difficult if notimpossible to ignore, and petroleum’s current preeminentposition as the only viable transport fuel suggests its envi-ronmental problems will remain with us (and perhaps getworse) unless we find a suitable alternative.

The Obstacles Ahead

Moving the U.S. energy system (that is, the electric powerand transport sectors) to a coal-driven hydrogen future facesa series of obstacles. The country has a sizable investment incarbon-based energy technologies. Scrapping that capitalprecipitously and replacing it with something else will cost asignificant amount of money. And, with a few exceptions, agood portion of the hydrogen technology needed is still onthe drawing board. Thus, the dilemma is twofold: how to notonly bring down the price of delivered hydrogen to a pointwhere it is competitive with natural gas in electricity genera-tion and with petroleum in transport, but also how to bringthe cost so low that it will cause a rapid turnover in the ex-isting energy-related capital stock.

To accomplish this feat, a new, integrated energy policymust do the following: hasten the development and com-mercialization of the necessary technologies, reduce theircost, and provide incentives to the private sector to replacethe current carbon-based capital with the new hydrogen cap-ital before the existing stock is fully depreciated. Funds will

have to be directed to research and development (R&D) andspread across a number of different technologies rangingfrom coal gasification to hydrogen generation, among oth-ers. Each technology will have a different pace of develop-ment, so funding policies should be targeted differently toeach technology or class of technologies.

Spurring R&D

While government may in fact undertake some of this re-search (perhaps through the system of National Laboratoriesrun by the Department of Energy), the bulk of the R&D mustbe accomplished by the private sector. One might then askwhy government policies are necessary for the private sectorto undertake this work. The answer is quite straightforward.Absent any government policy, there are simply no incentivesfor the private sector to make the large investments neededto transform the energy system. Environmental problems

A great deal of learning takes place

as a technology moves to the plant

floor and production begins. “Learn-

ing-by-doing” causes the cost of

producing a new technology to fall

as the number of units produced

increases.

SUMMER 2004 11

sources. Lowering the cost of the latter will help “pull” thenascent coal-to-hydrogen technology and all its other com-ponents (carbon separation and storage, fuel cells, and hy-drogen-based transportation infrastructure) into the com-mercial marketplace.

Also, a system in which carbon permits are auctioned bythe government provides the crucial revenues to fund thelikely expensive and long-lived R&D and cost buy-down poli-cies discussed above. The importance of a dedicated revenuestream to the funding of long-term basic research cannot beunderstated.

The pull policy alluded to above can act like an accelera-tor pedal in a car. If new climate science suggests that wemust move to a noncarbon energy system more quickly thananticipated, the number of permits is reduced (causing auc-tion revenues to rise). The rising permit price further ad-vantages the commercial adoption of the noncarbon tech-nology while at the same time generating more revenue thatcan be used to hasten technology development.

If stabilizing greenhouse gas emissions is our goal—andit is a worthy one to strive for—we had better be preparedfor the long haul. New technologies such as electric- andhydrogen-powered motors will eventually be readily available.New techniques for deriving energy from coal and other fos-sil fuels will eventually be standardized and in greater use.Since the transformation of the global energy system to onethat emits zero greenhouse gases can be expected to take halfa century or more, the sooner the transformation begins, thelower the accumulated greenhouse gases in the atmospherewill be. ■

Raymond J. Kopp, a senior fellow, is an expert in techniques of assigningvalue to environmental and natural resources that do not have marketprices, which he uses in cost-benefit analysis and to assess damage to nat-ural resources.

Further Reading

Energy Information Administration. 2003. Annual Energy Out-look 2003, Office of Integrated Analysis and Forecasting, U.S.Department of Energy, Washington, DC .

Environmental Protection Agency. 2002. Inventory of U.S.Greenhouse Gas Emissions and Sinks: 1990–2000, Washington,DC.

National Research Council. 2004. The Hydrogen Economy: Op-portunities, Costs, Barriers, and R&D Needs, National Academyof Engineering, The National Academies, Washington, DC,http://books.nap.edu/catalog/10922.html (last viewed 3-4-04).

aside, from a business perspective the current carbon-basedenergy system functions fairly well, and few firms would makemassive investments to change it without external pressure.

Some would argue that all that is needed is for the gov-ernment to “get the prices right,” that is, set a price on car-bon emissions either through a carbon tax or a cap-and-trade permit system and let the private sector react to theprice signal. This view makes sense and should be part of aportfolio, but if a single, price-based policy had to do all the“heavy lifting” the resulting high price would be politicallyunacceptable.

It is common knowledge that commercial firms underin-vest in R&D because they are never able to appropriate allthe benefits for themselves. This “market failure” is the pri-mary justification for government policy to stimulate R&D inprivate markets through such things as tax incentives, grants,and private–public partnerships, as well as government sup-port of research at universities and other public institutions.While firms would no doubt increase their R&D expendi-tures in carbon-free technologies in response, say, to a $100/ton carbon tax, they would be investing less than the sociallyoptimal amount. Rather than raise the tax to, say, $200 tobring forth more R&D, it is more efficient from a policy per-spective to augment the tax with other policies that inducefirms to invest more in R&D.

Learning by Doing

Once nearly commercialized technologies are available, asecond set of policies is needed to buy down their cost. His-tory has revealed that a great deal of learning takes place asa technology moves to the plant floor and production be-gins, and this learning lowers cost. This phenomenon, calledlearning-by-doing, causes the cost of producing a new tech-nology (say a fuel cell) or the cost of production from a newtechnology (for example, tons of hydrogen from coal gasifi-cation) to fall as the number of units produced increases. Avariety of these buy-down policies can be put in place to ex-pand the production rates for new technologies, therebylowering their cost and hastening the time when they cancompete in the marketplace. These policies usually take theform of government purchase commitments or a subsidy,where the subsidy is used to lower the cost of production inthe future.

Perhaps the most important part of this three-policy tril-ogy in getting the “prices right” is a carbon cap and tradablepermit system. This policy acts to alter the economic playingfield by disadvantaging carbon-emitting energy sources, caus-ing their cost to rise, and thereby promoting carbon-free

12 RESOURCES

hen it comes to environmental health risks, children often have theworst of many worlds. Facing the same concentration of a pollutant,children’s exposure may be greater than that of adults. Because theyhave a higher metabolism rate than adults, children take in more food,water, and air for their body weight. Next, they engage in activities—like crawling on the floor and playing in dirt—that may bring them

into closer contact with toxins. Also, because their bodies are still developing, children canbe more vulnerable to pollutants and less able to detoxify and excrete them. Finally, childrenalso have more years of life ahead of them than adults, so they have longer to develop chronicdiseases from exposure to environmental toxins.

Only in the past 20 years have policymakers faced up to these issues. In the mid-1980s, thescientific community began insisting that environmental regulations designed to protectadults (primarily adult men) were not adequate to protect children. Governments all overthe world, including in the United States, are now recognizing the need to develop standardsthat specifically protect children. For example, the 1996 Food Quality Protection Act (FQPA),which amended federal pesticide law, explicitly required that a tenfold safety factor be usedin setting pesticide tolerances in food because of their uncertainty about the impact on chil-dren. In the mid-1990s, the administrator of the U.S. Environmental Protection Agency(EPA) directed that risk assessments for all environmental regulations consider the specificneeds of children. This summer, environmental ministers from the European Union mem-ber states are meeting to draft an action plan for legislation, research, implementation, andevaluation of new programs to protect children from environmental hazards.

existing approaches don’t quite work

Health benefits valuation plays an important role in enabling environmental agencies andministries to evaluate prospective and current programs. Environmental programs addresshealth risks as different as cancer and asthma. Benefits valuation provides a common meas-ure—based on people’s preferences regarding different diseases and mortality risks—bywhich a wide range of physical outcomes can be compared. Environmental policymakers of-ten want to gain a quantitative understanding of how the benefits of a program compare withits costs. Monetary valuation of health benefits makes this possible.

WSandra Hoffmann andAlan J. Krupnick

valuing riskto health C H I L D R E N A R E N O T L I T T L E A D U L T S

Techniques for determining adults’ preferences for various health improvements and ex-pressing them in monetary terms are reasonably well established, if controversial. However,these techniques cannot be directly applied to children nor can they be adapted simply.

Economists have used two basic approaches to valuing reductions in risk to adults’ health.The human capital approach looks at direct financial costs associated with illness—prima-rily medical expenses and lost wages. This approach is relatively easy to implement, but pro-vides an incomplete measure of the value of protecting health. A theoretically more satisfy-ing measure is willingness to pay (WTP) to reduce health risks. WTP measures are based onthe trade-offs individuals make, or are willing to make, between protecting their health andother things they need or want.

Both approaches have obvious flaws when applied to children. Human capital measurescan be even more incomplete or challenging to use because it can be more difficult to esti-mate the value of the time young children lose to illness because they are not engaged in thelabor market. Estimates of WTP are conventionally based on adults’ actions or statementsreflecting their judgments about the worth of protecting their own health. As anyone whohas chased after a three-year-old running toward a busy street knows, however, children donot have mature judgments about their own health.

SUMMER 2004 13

major questions identified

While these efforts have resolved many questions, several ba-sic ones are still being debated. One of the most basic iswhose benefits should be counted. The goal of any effort tovalue the benefits of a public program is always to reflect itsfull value to all in society who benefit from it. In valuingbenefits from programs that protect adult environmentalhealth, standard practice is to measure only the direct benefitto affected individuals. Counting the preferences of otherswho care about affected individuals’ well-being would lead todouble counting under certain circumstances. In the case ofchildren, some economists argue that what should becounted is not only the direct benefit to children themselves,but also the benefit to others, such as parents or even gen-eral taxpayers, who care about children’s health outcomes.One thing everyone agrees upon is that the value to the childitself of improved health is an important part of total bene-fits. The problem is how to accurately measure these benefits,which is true for both WTP and human capital measures.

At first glance it may seem difficult to apply the humancapital approach to reduction in risk to children’s health, be-cause children don’t work and their life outcomes are highlyuncertain. But at a population level it is possible to projectexpected longevity, income, and disease rates and to estimatehow they change in response to illness induced by environ-mental hazards. Because children’s environmental healthpolicy is often concerned with chronic disease, birth defects,or permanent disabilities over an entire lifetime, there maybe greater uncertainty about these estimates than for anadult population. More attention may also need to be givento economic trends. For example, there is some evidence thatexposure to neurotoxins, like lead, in early childhood is as-sociated with an increased risk of not graduating from highschool. But the economic consequences of not graduatingfrom high school are greater today than they were in 1950and can be expected to be even greater in the future.

With WTP measures, the problem is who should speak forchildren. EPA’s practical solution is that their parents should.On its face, this seems like a commonsense solution. After all,parents bear the emotional, financial, and time costs of car-ing for their ill children. They are personally affected whentheir children are ill. But it is difficult to know what is cap-tured in parents’ valuation of children’s health. Several em-pirical studies have resulted in the consistent finding thatparents’ WTP to reduce children’s health risk is two timesadult WTP to reduce their own health risk. No one yet knowsquite what this result means. Do they perceive children’shealth to be twice as valuable as their own, or are parents

finding better approaches

Government agencies in the United States and other indus-trialized countries have been working with economists to de-velop more appropriate measures of the benefits of envi-ronmental regulation to children’s health. In 1999, EPAbrought together in a workshop leading economists workingon environmental health valuation to identify major prob-lems and research needs. A follow-up conference was held in2003 at which economists presented research on family de-cisionmaking regarding children’s health, valuing protectionof fetal and infant health, variation of health valuation esti-mates by age, and valuation of the benefits of asthma reduc-tion policies. In conjunction with the 2003 conference, EPApublished its Children’s Health Valuation Handbook. Becausevaluation of children’s health is a rapidly developing area ofknowledge, the Handbook is specifically designed to be an eas-ily updateable reference tool, rather than a prescriptiveguide. And in fall 2003, the OECD (Organisation for Eco-nomic Co-operation and Development) Environment Di-rectorate held a workshop to help it design guidance for itsmember countries.

14 RESOURCES

overnments all

over the world,

including in the United States,

are recognizing that specific

attention needs to be given to

whether environmental law and

regulation are doing a good

enough job with respect to

children.

G

counting the impact on their children and the impact onthemselves? One possibility is that adults’ retrospective pref-erences for protecting their own health as children shouldbe used or that it is worth reexamining a bit more deeplywhether, after all is said and done, adults’ WTP to protecttheir own health may not be a reasonable measure of thebenefit of protecting health in childhood.

Even if there were agreement on whose benefits countand whose assessment of those benefits should be measured,serious questions remain about how to get reliable estimatesof those measures. Research is being developed along severallines. A significant amount of work is being done to betterunderstand parents’ WTP to reduce their children’s healthrisk (see sidebar next page). Other work is examining meth-ods of valuing prevention of disease with long latency peri-

SUMMER 2004 15

everal studies have

resulted in the

consistent finding that parents’

WTP to reduce children’s health

risk is two times adult WTP to

reduce their own health risk.

S

Federal agencies, such as theU.S. Environmental ProtectionAgency (EPA), must quantifythe benefits of major regula-tions both for OMB and for

Congress. To do this, EPA frequently relieson studies that estimate how much peoplewould be willing to pay to protect them-selves from environmental health hazards,such as exposure to lead paint. But what doyou do if the person protected is a youngchild? One of EPA’s answers is to turn tothe child’s parents. After all, parents holdthe family purse strings and have legal re-sponsibility for their children’s health.

Most existing studies of parents’ willing-ness to pay to reduce children’s risk fromexposure to environmental hazards assumethe household has one decisionmaker whodetermines how all of the family’s financialand time resources are allocated. This iscalled a unitary model of household deci-sionmaking. But this “Father Knows Best”view of how decisions are made does notseem to fit today’s family—if it ever did.

Research on household economics, pio-

neered by 1992 Nobel Laureate GaryBecker, has led to the development of alter-native models of how families choose tospend money and time. These models ofhousehold decisionmaking treat the familyas a collection of individuals each withinfluence on the family’s decision. The basicpremise is that the adults in a family pooltheir financial resources and think abouttime available to the family as a shared re-source. However, the adults are consideredto have their own ideas of what is best forthe family and bargain to reach a mutuallyagreeable allocation of resources.

Children’s health is of particular concernbecause individual parents may have differ-ent attitudes toward children’s health risks,be affected differently by children’s ill-nesses and have responsibility for differentparts of the household budget. Cognitivepsychology studies show fairly consistentlythat women are more risk averse than menwith regard to health and safety hazards. Ifthis were coupled with women generallyhaving greater responsibility for childcare orexpenditures affecting children’s health,

familydecision-makingaboutrisks tochildren’shealth:does fatherknowbest?

F

16 RESOURCES

ods, such as cancer. The OECD is sponsoring studies in sev-eral member countries to examine how values differ acrosscountries. In the United States, the Department of Healthand Human Services and EPA are planning a major long-termepidemiological effort, the National Children’s Study. Stepsare being taken to assure that this study includes questionsrelevant to understanding the trade-offs parents make to pro-tect their children’s health. ■

for further reading

Environmental Protection Agency, National Center for Envi-ronmental Economics. 2004. Children’s Health Valuation Hand-book. http://yosemite.epa.gov/EE/epa/eed.nsf/pages/HandbookChildrensHealthValuation.html.

European Environment Agency and the World Health Or-ganization, Regional Office for Europe. 2002. Children’s Healthand Environment: A Review of Evidence. http://reports.eea.eu.int/environmental_issue_report_2002_29/en.

National Children’s Study. www.nationalchildrensstudy.gov

Bostrom, A., B. Fischhoff, and M. Granger Morgan. 1992.“Characterizing Mental Models of Hazardous Processes: AMethodology and an Application to Radon,” Journal of SocialIssues. 48(4): 85–100.

Browning, M. and P.A. Chiappori. 1998. “Efficient Intra-Household Allocations: a General Characterization and Em-pirical Tests,” Econometrica, 1241–78.

Finucane, M. L., Slovic, P., Mertz, C. K., Flynn, J., & Sat-terfield, T. A. (2000). Gender, race, perceived risk: The“white male” effect. Health, Risk, & Society, 2, 159–172.

s anyone who has

chased after a three-

year-old running toward a busy

street knows, children do not

have mature judgments about

their own health.

Acurrent valuation methods that do not takethis into account could result in inaccurate(and possibly low) estimates of parentalwillingness to pay (WTP) to protect childrenfrom environmental health hazards.

We are conducting a study to see if thereis a difference in estimates of parents’ WTPto protect children’s health using a unitaryor collective model. The study, conductedwith Ann Bostrom from Georgia Institute ofTechnology and Victor Adamowicz of theUniversity of Alberta, focuses on parentaldecisions to protect children from lead painthazards. It is one of the first to use a surveyof individual’s statements about their pref-erences to estimate a collective householdmodel.

Our goal is to gain a better understand-ing of differences in parents’ perception ofrisks their children face from environmentalhazards and of the role each parent plays infamily decisions about protecting childrenfrom these risks. We focus on lead poison-ing from paint because it remains a seriouspublic health concern for children, eventhough lead paint was banned for residen-tial use in 1978 and because it primarily af-fects children.

Looking at how each member influencesfamily decisionmaking is more complicatedthan looking at the household as an aggre-gate unit. As a result, we are using an innovative multidisciplinary approach thatcombines the theory of “mental models”—meaning the way people perceive the worldand model it in their heads—with morestandard surveys. The first stage of thestudy involves in-depth interviews with asmall number of couples to examine parents’ perception of risk to the child, theirdefinition of prevention alternatives, andtheir priorities as individuals and as a cou-ple. The results of this phase will be usedas the basis for the second phase of the research: developing a survey of parents’willingness to pay to reduce children’s riskfrom lead paint.

Support for this project has been pro-vided by the Environmental ProtectionAgency’s STAR Grant program.

SUMMER 2004 17

W18 RESOURCES

hat is the value of nature? This difficult question has motivated much of the work done atRFF over the last 52 years. If it seems odd that such a question could occupy an institutionfor half a century, consider both the importance and difficulty of the challenge. Nature andthe services it provides are a significant contributor to human well-being, and society makesdecisions every day about whether we will have more or less of it. Knowing nature’s valuehelps us make those decisions. The difficulty is that nature never comes with a convenientprice tag attached. Ecosystems aren’t automobiles, in other words. They are like factories,however. They make beauty, clean air, and clean water, and they feed and house species thatare commercially, recreationally, and aesthetically important.

Over the past decades, economic approaches to the “value of nature” question have be-come ever more sophisticated and accurate. This sophistication has a downside, however:noneconomists rarely understand how estimates are derived and frequently distrust the an-swers given. To noneconomists, environmental economics presents a set of black boxes, outof which emerges “the value of nature,” such as a statement that “beautiful beach provides$1 million in annual recreation benefits” or “wetlands are worth $125 an acre.”

How do economists arrive at such conclusions? For one thing, they examine the choicespeople make in the real world that are related to nature and infer value from those decisions.For instance, how much more do people spend to live in a scenic area as opposed to a lessattractive one? How much time and money do they spend getting to a park or beach? Thetranslation of such real-world choices into a dollar benefit estimate is complicated and re-quires the use of sophisticated statistical techniques and economic theory.

WHAT’S NATURE WORTH?

Using Indicators to

Open the Black Box of

Ecological Valuation

J A M E S B O Y D

Here I will talk about a method designed to make ecologi-cal valuation more intuitive and thereby address some of thecriticisms of economic valuation. Working with colleagues atthe University of Maryland Center for Environmental Science,we are studying environmental benefit indicators (EBIs),which are a quantitative, but not monetary, approach to theassessment of habitats and land uses. EBIs strip environmen-tal valuation of much of its technical content, but do so toreach a much wider audience and convey economic reason-ing as it is applied to nature. Like purely ecological indicators,they summarize and quantify a lot of complex information.And like monetary assessment, they employ the principles ofeconomic analysis. Our argument is that indicators can helpnoneconomists think about trade-offs.

We also believe that indicators can improve the way econ-omists communicate ecological benefits and trade-offs. But itshould be emphasized that we do not see indicators as a wayto simplify assessment. The value of nature is inherently com-plex; rarely is there a clear-cut, “right” answer to questionssuch as which ecosystem is most valuable or which ecosystemservice provided by a given habitat is most important.

SUMMER 2004 19

ProblemsEconomic valuation is met with skepticism in part becauseof the “black boxes” that are used by environmental econo-mists; “black box” being useful shorthand for statistical ortheoretical methods that require math or significant datamanipulation, stock and trade for economists and someecologists.

The technical and opaque nature of economic valuationtechniques creates a gulf between environmental econo-mists and decisionmakers that fosters distrust. Such studiescan also be quite expensive and demand the expertise of arelatively small number of economists trained in ecologicalvaluation. The complexity of the studies undermines theability of economists to contribute—as they should—to theanalysis of priorities, trade-offs, and effective ecologicalmanagement.

Another criticism of economic valuation is that values are“created” through political and other social processes andare not something that can be simply measured or derivedby “objective” experts. Technical analysis—the black box—fosters this criticism because it produces results that can onlybe interpreted and evaluated by an elite cadre of experts.

Opening the black box

RFF’s mission is not only to advance the methodology of en-vironmental economics and other disciplines but also to ensure that its technical research affects policymaking. RFFresearchers continue to push the scientific frontiers of eco-logical valuation and always will. But an additional task isincreasingly necessary: communicating to decisionmakerswhat we as economists and scientists already know andagree upon. As a group, environmental economists need toimprove the ways in which they communicate the value ofnature.

Unfortunately, better communication involves removing(or at least de-emphasizing) much of the technical contentof economic methodology. We economists hate doing this.After all, much of the truth may be lost if the discipline oftechnical economic analysis is removed. But much of thetruth is also lost when economists deliver answers that arenot trusted or understood by the real-world audiences wemust reach.

The higher the level

of government, the

more demand there is

for a bottom-line dollar

figure for the costs and

benefits of regulation.

Such results allow

politicians and

bureaucrats to wrap

themselves in a cloak

of legitimacy and

objectivity.

20 RESOURCES

What matters the most?

Indicators should act as legitimate proxies for what we reallycare about: the value of an ecosystem service. For example,wetlands can improve overall water quality by removing pol-lutants from ground and surface water. This service is valu-able but just how valuable? To answer this question we cancount a variety of things, such as the number of people whodrink from wells attached to the same aquifer as the wetland.The more people who drink the water protected by the wet-land, the greater its value.

But other things matter as well. For example, is the wet-land the only one providing this service or are others con-tributing to the aquifer’s quality? The more scarce the wet-land, the more valuable it will tend to be. There may also besubstitutes for wetland water-quality services provided byother land-cover types such as forests or by man-made filtra-tion systems. Mapping and counting the presence of theseother features can further refine an understanding of thebenefits being provided by a particular wetland. Does map-ping and counting these things give us a dollar-based esti-mate of the wetland’s value? No. But it does lead to a moresophisticated, nuanced appreciation of the wetland’s valuethan we would get if we ignored socioeconomic factors andeconomic principles.

Traditional regulatory and ecological ecosystem assess-ment techniques typically ignore socioeconomic factors, suchas the number of people benefiting from an ecological func-tion. And they never include assessment of concepts like theservice’s economic scarcity or the presence of substitutes.This highlights the second important function of benefit in-dicator systems—they can be used to convey basic economicconcepts that speak to value.

Ecosystem services andeconomic principles

Ecologists and economists have identified a wide variety ofvery important ecological services, including water-quality im-provements, flood protection, pollination for fruit trees,recreation, aesthetic enjoyments, and many others. Indica-tors should be organized around these specific services tohelp convey a deeper understanding of the service itself.

What are indicators?

At the simplest level, indicators can be the number of indi-viduals in a biological community or species present in ahabitat. They may also be a measure of the number of days apiece of land is under water or the presence of nearby inva-sive species that may threaten an ecosystem. These indicatorstell us something about the health of a species or ecosystem.

Organized around basic environmental and economicprinciples, benefit indicators are a way to illustrate the valueof nature. A collection of individual indicators about a givenecosystem can capture the complex relationships amonghabitats, species, land uses, and human activities, resulting ina more comprehensive picture (see the map on page 21).Regulators could use indicators to identify locations for eco-logical restoration that will yield large social benefits, andland trusts could use them to identify socially valuable landsfor protection. Other applications include evaluation of dam-ages from oil spills or environmental impact studies.

The techniques we are developing will be relatively af-fordable and easy to use. Dozens of the indicators we havebeen collecting are readily available in geospatial data for-mats. States, agencies, and regional planning institutions in-creasingly have high-resolution, comprehensive data on landcover and land use, built infrastructure, population and de-mographics, topography, species, and other data useful to theassessment of benefits.

The value of nature

is inherently complex;

rarely is there a

clear-cut, “right” an-

swer to a question

like which ecosystem

is the most valuable.

SUMMER 2004 21

Also, from both an ecological and economic standpoint, serv-ices should be analyzed independently. A typical ecosystemwill generate multiple services, but not all services should beassessed using the same data or at the same scale.

The analysis of a service’s scarcity and the importance ofsubstitutes are important economic concepts that can beconveyed. Another is the role of complementary assets,which is particularly important to the assessment of recre-ational benefits. Access via trails, roads, and docks is often anecessary—or complementary—condition to the enjoymentof recreational and aesthetic services. These things can alsobe counted and relate intuitively to value.

Finally, an indicator system can also feature proxies forrisk to an ecosystem service. For example, an ecosystem serv-ice may be threatened by an invasive species that can over-whelm more valuable native species, by a rise in sea level ifthe habitat is in a low-lying area, or by human encroachmentif the ecosystem is sensitive to the human footprint. To fos-ter a disciplined communication of results, we are develop-ing indicators for demand, scarcity, substitutes, complemen-tary assets, and risk that are specific to particular services.

This map illustrates how a wetland can contribute to drinking water quality. The wetland in question

is hydrologically connected to nearby drinking wells. It is also in an area where wetlands are scarce

and where water quality may be impaired by agricultural activity.

Impervious

Agriculture

Forest

Water

Wetlands

Aquifer Boundary

Study Area Boundary

WellHow Do Environmental Benefit Indicators Work? Environmental benefit indicators (EBIs) are a way to illus-

trate the value of nature in a specific setting. An individual

EBI might be the presence of invasive species or the num-

ber of acres under active cultivation. A collection of indica-

tors about a given area can portray the complex relation-

ships among habitats, species, land uses, and human

activities. EBIs are drawn mainly from geospatial data, in-

cluding satellite imagery. Data can come from state, county,

and regional growth, land-use, or transportation plans; fed-

eral and state environmental agencies; private conservan-

cies and nonprofits; and the U.S. Census.

Regulators and planners can use EBIs to address spe-

cific questions, such as which wetland site, among many, is

the most valuable? Coming up with an effective answer re-

quires looking at many factors: on-site characteristics,

such as the type of wetland; off-site characteristics, includ-

ing the presence of wetlands in the larger area; and socioe-

conomic indicators, such as the number of people depend-

ent on wells in the area for their drinking water.

The map above graphically portrays how a set of these

factors relate to one another in the target area. One of the

great virtues of this approach is that unforeseen relation-

ships—such as the amount of A in relation to B— is quickly

made apparent.

22 RESOURCES

The importance oflandscape and scale

Ecology emphasizes the importance of habitat connectivityand contiguity (or proximity) to the productivity and qualityof that habitat. Terms like connectivity and contiguity are in-herently spatial and refer to the overall pattern of land uses,surface waters, and topographic characteristics in a given re-gion. Species interdependence and the need for migratorypathways are additional sources of “spatial” phenomena inecology. The health of an ecosystem cannot be assessed with-out an understanding of its surroundings.

From an economic standpoint, ecosystem benefits dependon the landscape for an additional reason: because the socialand economic landscape affects the value of nature. Whereyou live, work, travel, and play all affects the value of a par-ticular natural setting. And the consumption of services oftenoccurs over a large scale; examples include recreation andcommercial harvests of fish or game, water purification, flooddamage reduction, crop pollination, and aesthetic enjoyment.

To ignore, or minimize, the importance of off-site factorsmisses much that is central to a complete valuation ofbenefits. How scarce is the service? What complementary as-sets, such as trails or docks, exist in the surrounding land-scape that enhance the value of a service? These questions re-late to the overall landscape setting and are, accordingly,spatial in nature.

What the audience wants

Some audiences interested in the value of ecosystems cravethe answer typically provided by economists: a dollar value.Government agencies are regularly called upon to demon-strate the social value of programs, plans, and rules they over-see. Generally speaking, the higher the level of government,the more demand there is for a bottom-line dollar figure forthe costs and benefits of regulation. Such results allow politi-cians and high-level bureaucrats to wrap themselves in a cloakof legitimacy and objectivity.

Less cynically, putting things in dollar terms makes it eas-ier to analyze trade-offs. The dollar benefit of program A canbe directly compared to the dollar benefit of program B. As-suming the dollar figures are correct, we know which pro-

gram is better, and this is why economists prefer this ap-proach. Only by expressing benefits in a consistent frame-work can the apples of ecological protection be compared tothe oranges of alternative actions.

ConclusionEnvironmental economists need to better communicatetrade-offs and the value of nature in a way that educates andconfers legitimacy on their own economic arguments. EBIsare an underutilized way to do this. Because indicators avoidtechnical complexity and the expression of value in dollarterms, however, too many economists reflexively dismiss theirvalue. But the alternative—formal econometric benefit analy-sis—is unlikely to ever generate results that are holisticenough, transparent enough, credible enough, and cheapenough to get widespread practical use. Scientifically sound,econometric analysis should continue to be conducted, ofcourse. But agencies and planners should know that there arealternatives.

Instead of burying the principles of economics in theirmethodology, economists need to better communicate thoseprinciples in ways that resonate with “normal” people. Benefitindicators can help do this by concretely and quantitativelyillustrating the relationships that are important to economicanalysis. Communicating even a qualitative understanding ofeconomic principles and relationships would be a huge ad-vance for economic thinking in regulatory decision contexts.

Indicators can also be used to track the performance ofenvironmental programs, regulations, and agencies overtime—something that gets surprisingly little attention fromenvironmental agencies or economists. To do so would re-quire consistent and large expenditures of time, money, andexpertise. But instead of trying to calculate the dollar benefitof a regulatory program over time, agencies could more eas-ily measure things like the number of people benefiting fromecosystem services protected by their programs. This doesn’tyield a dollar benefit, but does yield an intuitive number thatconveys valuable information.

Given these benefits, indicators are underutilized in local,regional, and executive-level environmental decisionmaking.We are helping develop tools that are both ecologically andeconomically sound to address this gap. ■

James Boyd is a senior fellow, whose research interests center on ecologicalbenefit assessment, water quality regulation, and the design of practicalregulatory decision tools.

SUMMER 2004 23

Inside RFF

Major foundations and gov-ernment agencies haverecognized the high cal-

iber of RFF’s research by recentlyawarding significant grants to ourscholars. Winston Harrington’s analy-sis of transportation and its effect onthe environment, Ramanan Laxmina-rayan’s in-depth studies of health carepolices in developing countries, andKris Wernstedt’s research into the en-vironmental impact of hardrock min-ing have all attracted grant support.

Winston Harrington has done severalstudies on how land use, vehicle own-ership, and traffic congestion inter-connect in the Washington, DC, area,working with colleagues ElenaSafirova, Peter Nelson, and KennethGillingham. No complete model existsthat integrates these three elementsand takes into account their con-stantly changing nature. The Environ-mental Protection Agency’s Science toAchieve Results (STAR) program hasawarded the team a grant to createsuch a model. The researchers hopetheir work will lead to improved poli-cies regarding traffic congestion, airpollution, and the protection of openspace.

Ramanan Laxminarayan was chosen asthe lead author for the section of theWorld Bank book Disease Control Priori-ties in Developing Countries that deals

with cost-effectiveness in health care.His research examines the majorcauses of death and disability in de-veloping countries, region by region,and outlines a $10 million healthpackage that will maximize results foreach region. This novel approach alsohighlights current expenditures thatare “bad buys” and suggests a modelpackage of interventions for a popula-tion of one million. Support for thisproject came, in part, from the Na-tional Institutes of Health, with fundsprovided by the Bill and MelindaGates Foundation.

Kris Wernstedt turns to hardrock min-ing in new research to be conductedwith Robert Hersh of the Center forPublic Environmental Oversight. Ex-tensive mining for valuable metals—including gold, platinum, and silver—and the abandonment of these mines

has resulted in the pollution of somewestern U.S. rivers and threats todrinking water supplies, aquatic organ-isms, and livestock. Yet, the countrylacks a coherent nationwide programto identify abandoned mines, let alonewell-coordinated policies and funds totackle the problems they pose. Wern-stedt and Hersh have received an RFFFellowship in Environmental Regula-tory Implementation, which is sup-ported by a grant from the Andrew W.Mellon Foundation, to put together an account of the various federal andstate efforts that address the environ-mental effects of these abandonedmines. ■

ramanan laxminarayan winston harrington kris wernstedt

Important New Grants Won by

RFF Researchers

24 RESOURCES

R FF researchers, policymakersfrom the federal governmentand European Union (EU),

and representatives from industryand environmental organizations de-bated two major EU environmentalregulatory initiatives at the springRFF Council meeting. Both policiesdirectly address climate change andchemical safety—and could indirectlyinfluence the behavior of U.S. firms.

Composed of corporate represen-tatives and concerned individuals, theCouncil provides much of RFF’s gen-eral support. Members come togethertwice a year for a forum on importantenvironmental, energy, and naturalresource issues.

EU Carbon Cap and Trade

Europe’s ambitious plan to reduce itscarbon dioxide emissions confronts awide range of political and adminis-trative challenges. The EU program’ssuccesses and setbacks will stronglyinfluence future policies to combatglobal climate change worldwide, es-pecially in the United States, saidWilliam Pizer, a fellow at RFF and amoderator of the first panel. Globalclimate change is a problem thateventually requires a global solution.

On January 1, 2005, the EuropeanUnion will impose carbon emissionscaps on some 12,000 industrial plantsand utilities as part of a plan to meettheir collective commitments under

the Kyoto Protocol. To provide flexibil-ity in the system and cut costs, plantswill be allowed to trade emissions per-mits in a market modeled after theAmerican sulfur dioxide emissionstrading program. But, Pizer pointedout, the European trading market willbe 10 times the size of its Americanprototype and far more complex. The panel agreed that the mostdifficult challenge will be the alloca-tion of emissions quotas to the firms.

Joseph Kruger—a visiting scholarat RFF, who is on leave from the Envi-ronmental Protection Agency wherehe last served as head of the MarketPolicy Branch, Clean Air Markets Divi-sion—explained that each of the 25EU countries has a national emissionsquota under the Kyoto Protocol. Indi-vidual countries must decide howmuch of that quota to assign to indus-

tries that will be under the cap-and-trade program and how much to othersectors—notably automobiles—thatwill remain outside it at least in theearly stages. Once each sector has aquota, it must then be subdivided foreach company.

One immediate question, Krugersaid, is whether the European Unioncan get the administrative structure upand running by early next year.

Another issue for the EuropeanUnion is the possibility that membercountries will attempt to manipulatethe quotas to give advantages to someof their own companies, in respect totheir competitors in other countries,which may be under tighter caps.Robert Youngman of Natsource LLP, aconsulting and brokerage firm, pointedout that the initial proposal for quotason British industry are tight, while the

U.S. and EU Approaches to

Environmental Regulation Focus of

Spring Council Meeting

Top, from left: Stephen Harper, manager of environmental health and safety, Intel Corp.; and Robert

Donkers, counselor for environmental affairs, EU Commission to the United States. Bottom, from

left: Daryl Ditz, senior program officer for toxics, World Wildlife Federation; Peter Molinaro, direc-

tor of government affairs, Dow Chemical; and, Karlyn H. Bowman, resident fellow, American En-

terprise Institute, who gave the keynote speech on polling and the upcoming election.

SUMMER 2004 25

German government has given muchlooser quotas to its firms.

Chris Leigh, deputy head of theglobal affairs division of the UnitedKingdom’s Department for Environ-ment, noted that in addition to alloca-tion, difficult decisions have to bemade on the processes of reportingand verification of emissions.

Some EU member countries havethe administrative strength to handlethese requirements, Kruger com-mented, but some—especially the newmembers, mostly in Eastern Europe—will find them difficult to meet.

Many member countries missed thedeadline, at the end of March, for theirallocation plans. At this point muchuncertainty surrounds the emergingmarket, Youngman reported.

Chemical Regulation in Europe

Late last year, the European Commis-sion approved a new chemical regula-tion scheme for the European Union,the Registration, Evaluation and Au-thorization of Chemicals (REACH)proposal, which has now gone to theEuropean Parliament for further re-view. Under the proposal, chemicalproducers would be obliged to regis-ter substances with a new central Eu-ropean chemicals agency and providesafety data on substances imported inamounts over one metric ton.

The RFF panelists had divergingpoints of view about the need for sucha system and the burden it wouldplace on U.S. manufacturers, espe-cially with regard to trade issues.

Robert Donkers, counselor for envi-ronmental affairs of the EU Commis-sion to the United States, explainedthe value of the REACH program, say-ing the existing EU approach for regu-lating chemicals is inefficient andlacks any incentives for manufacturersto change. Given the lack of publiclyavailable safety data on many basic

chemicals, “We can’t manage what wedon’t know.” The burden of proof re-garding a chemical’s safety rightly be-longs with the manufacturer, he said.

But under REACH, good chemicalstewardship—in the form of researchinto controlling factors such as toxic-ity—would go unrewarded, saidStephen Harper, manager of environ-mental, health, and safety policy at Intel Corporation. Given that about20% of the chemicals cause about80% of the problems, he said, taking aprecautionary approach and focusingmore on the actual risks from certainchemicals would be far more efficientthan issuing a call for extensive safetydata about a broad range of chemicals.

Daryl Ditz, senior program officerfor toxics at the World Wildlife Federa-tion, said the drivers for chemical pol-icy reform are coming from increasingconsumer demand and the growingbody of evidence regarding the risks ofdirect exposure and the more subtleeffects of certain chemicals on the en-docrine systems of animals.

U.S. chemical producers mightface a 10% increase in compliancecosts should REACH go into effect,Ditz said, but that could be more thanoffset by the access to new EU mar-kets. The policy paradigm needs toshift, he said, from “no data, no prob-lem” to “no data, no markets.”

Penelope Naas, director, Office ofEU and Regional Affairs, Interna-tional Trade Administration, Depart-ment of Commerce, had a differenttake on the market access question.

Real questions remain about the pro-gram’s workability and the impact itwill have on innovation and the globaleconomy, she said. For example, theUnited States and the EuropeanUnion are the two largest export mar-kets for developing countries, whichwould face formidable compliancechallenges, she said.

REACH is the archetype of what’s tocome in the world of chemical manage-ment and control, said Ernie Rosen-berg, president and CEO of the Soap &Detergent Association. The focus isshifting from chemicals to processesand there are new sources of regula-tion in the broad sense, with NGOsboth here and abroad coming to playan increasingly influential role in “de-selecting” chemicals. In the EuropeanUnion, environmental regulations aremore nominal in nature, he said, withgovernments and companies having alot of latitude regarding how they areimplemented. However, U.S. firms willface greater challenges in effectivelycompeting overseas, he said, because ofour stiff product liability laws and theability of NGOs to seek legal remedies.Nobody in the system—government orindustry—is empowered “to do any-thing but carry out the letter of the lawor risk being sued,” he said.

Panelists agreed that Europe clearlyis positioning itself in the vanguard of aggressive environmental policy.Other nations—particularly the UnitedStates—will closely monitor theprogress of EU actions in decidingwhether they should follow suit. ■

The RFF Council The RFF Council was created in 1991 to recognize organizations and individu-

als for their generous support of our efforts to improve energy, environmental, and natural resource

policymaking worldwide. Benefits extended to Council members include invitations to two special

annual meetings (each focused on a current important policy issue), participation in off-the-record

conferences at RFF, and complimentary copies of all RFF publications. Members are also en-

couraged to meet with researchers one-on-one to ask questions about their work or provide sug-

gestions for topics and issues they should examine. For more information on the Council, please

contact Lesli A. Creedon, vice president of external affairs, at 202-328 5016 or creedon@rff.org.

Senior Fellow Katherine N.Probst has been promoted tohead RFF’s Risk, Resource, and

Environmental Management Division,making her the first female divisiondirector in the organization’s history.Probst, who has been a senior fellowat RFF since 1994, has worked in thefield of environmental policy for al-most 25 years.

Her work has centered on improv-ing the implementation of Super-fund and other hazardous waste man-agement programs. She is the leadauthor of Superfund’s Future: WhatWill It Cost?, a report commissioned

RFF sponsors a summer internship program

to allow students to work directly withresearchers on ongoing projects or toassist them in developing new areas ofresearch and policy analysis. RFF alsooffers an internship in the name of Dr. Walter O. Spofford, Jr., who helpedestablish RFF's China Program, and aninternship with RFF Press, our book-publishing arm. Pictured here aresome of this year’s interns. ■

Bottom row, from left: Graham Bullock, Russell

Toth, Francisco Aguilar, RFF President Paul

Portney, and Caleb O’Kray. Top row, from left:

Maria Schriver, Robyn Meeks, and Susan Kur-

kowski. Not pictured: Anita Chaudry, Darren

Greve, Lauren Rauch (RFF Press), Juliana

Qiong Wang (Spofford), and Fan Zhang.

by Congress (RFF Press, 2001). In her latest report, Success for Su-

perfund: A New Approach for KeepingScore, Probst says the Superfund pro-gram is being hampered by a lack ofup-to-date and reliable data andmeasures of success. To correct thatsituation, she and co-author DianeSherman of RFF recommend that theEnvironmental Protection Agency(EPA) create standardized sets ofdata and information that will helppolicymakers gauge progress at Superfund sites and inform the pub-lic about whether cleanup goals arebeing met. (For more details, see

related story on page 5).Probst also has investigated issues

related to the cleanup of sites in thenuclear weapons complex, includingthe federal government’s long-term re-sponsibility to ensure that these sitesremain protected over time.

She frequently speaks on issues re-lated to Superfund, land use and institutional controls, cleanup of thenuclear weapons complex, and implementation of hazardous wasteprograms.

Before joining RFF, Probst had avaried career, working as a projectmanager at EPA and the New York CityDepartment of Environmental Protec-tion, and as a program director for theEnvironmental and Energy Study Insti-tute. She also was a senior policy ana-lyst at Clean Sites, an organization thatworked to accelerate the cleanup ofcontaminated sites. She holds a mas-ter’s degree in city and regional plan-ning from Harvard University. ■

Probst Named

Division Director

katherine n. probst

26 RESOURCES

SUMMER 2004 27

This book is about environmen-tal policymaking in Washing-ton, a process in which con-

flicts of interest are. . . well. . . not rare,let us say. That being the case, I’vegot two such conflicts of interest ofmy own. First, I’m president of Re-sources for the Future, so you needto weigh my favorable reaction to thisbook accordingly. Second, I myselfspent the better part of two yearsworking in the Executive Office ofthe President. Though I was at theCouncil on Environmental Quality,rather than the Council of EconomicAdvisers, where the chapter authorsserved as senior staff economists un-der three administrations. So I ad-mire economists who ply their tradein government service from time totime.

Having laid my cards on the table,I can say that Lutter and Shogren’sedited volume is both interesting andinformative. Especially for those whohave spent some time in governmentpracticing the dismal science, it’s oc-casionally even fun! The chapter au-thors provide firsthand accounts ofwhat went on behind the scenes askey decisions were made about newstandards for ozone and particulates,proposed federal legislation on elec-tricity restructuring, the Kyoto Proto-col, and so on. Although environmen-tal policy “wonks” will dwell on thetechnical details, most of the material

is quite accessible tononeconomists (andeven non-academics!).

Of much greater in-terest to me, and I sus-pect to most otherreaders, will be the de-scriptions of the limits,as well as the power, ofeconomics in environmental policy-making. For example, almost all ofthe chapters show how easily redis-tributive politics (and what, in a fewcases, might be called “retributionalpolitics”) trumps economists’ tradi-tional interest in the efficient alloca-tion of resources. Commendably,none of the chapter authors believesthat economics should be anything

more than one inputto environmental deci-sionmaking, but eachtalks about how hard itis for economics toplay even that circum-scribed role. In severalof the chapters, partic-ularly Lutter’s dealing

with the establishment of an air qual-ity standard for smog, the frustrationis palpable.

In his quite interesting chapter,Shogren describes economics as a“speed bump on the road of badideas.” Great imagery—and maybewe should be content that that speedbump has prevented the road frombecoming a superhighway. ■

The president’s most important tasks include

preservation of the environment and protection of the

economy. This book offers state-of-the-art analysis of

how the White House has attempted to carry out these

tasks. Filled with valuable insights and provocative

discussions, Painting the White House Green should be

indispensable reading for everyone interested in the real

world of environmental protection.

—Cass R. Sunstein,

Karl N. Llewellyn Distinguished Service Professor, University of Chicago Law School

Book Notes

Painting the White House Green: Rationalizing Environmental Policy Inside the Executive Office of the PresidentRandall Lutter and Jason F. Shogren, RFF Press

Paul R. Portney

Common Waters, Diverging StreamsLinking Institutions and WaterManagement in Arizona, California,and Colorado

William Blomquist, Edella Schlager, andTanya Heikkila

Case studies in conjunctivemanagement of surface and groundwater from the arid American West.

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Pricing Irrigation WaterPrinciples and Cases fromDeveloping Countries

Yacov Tsur, Terry Roe, Rachid Doukkali,and Ariel Dinar

An analysis of water pricing policieswith examples from China, Mexico,Morocco, South Africa, and Turkey.

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Siren SongChilean Water Law as a Model forInternational Reform

Carl J. Bauer

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COMING SOON

Determining the Economic Value of WaterConcepts and Methods

Robert A. Young

A comprehensive overview ofvaluation methods for commodityand public water use.

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The Equitable ForestDiversity, Community, and ResourceManagement

Carol J. Pierce Colfer, editor

A vivid illustration of the potential ofcommunity and participatory forestmanagement.

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The Bioengineered ForestChallenges for Science and Society

Steven H. Strauss and H.D. Bradshaw,editors

A reasoned look at the economic and environmental rationales as wellas the ecological risks of geneticengineering.

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China’s ForestsGlobal Lessons from Market Reforms

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A Vision for the U.S. Forest ServiceGoals for Its Next Century

In Memory of Marion ClawsonRoger A. Sedjo, editor

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Which Way Forward?People, Forests, and Policymaking in Indonesia

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Private Rights in Public ResourcesEquity and Property Allocation inMarket-Based Environmental Policy

Leigh Raymond

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Natural StatesThe Environmental Imagination inMaine, Oregon, and the Nation

Richard W. Judd and Christopher S. Beach

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On Borrowed Time?Assessing the Threat of MineralDepletion

John E. Tilton

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Voices from the ForestIntegrating Indigenous Knowledgeinto Sustainable Upland Farming

Malcolm Cairns, editor

A handbook bringing together thebest of scientific and indigenouspractices for economically,environmentally, and culturallysustainable agriculture.

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Northern LandscapesThe Struggle for Wilderness Alaska

Daniel NelsonThe dramatic story of the cam-paign to save wild Alaska, culmi-nating in one of the greatest triumphs of the environmentalmovement, the Alaska NationalInterest Lands Conservation Act.

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Choosing Environmental Policy Comparing Instruments and Outcomes in the United States and EuropeWinston Harrington, Richard D. Morgenstern, andThomas Sterner, editorsParallel case studies from the U.S. and Europe compare com-mand-and-control policies witheconomic incentives.

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Painting the White House GreenRationalizing Environmental Policy

Inside the Executive Office of the PresidentRandall Lutter and Jason F. Shogren, editorsA behind-the-scenes lookat environmental policy-making in the WhiteHouse.

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True Warnings and False AlarmsEvaluating Fears about theHealth Risks of Technology,

1948–1971Allan MazurApplying hindsight to historiccases of alleged hazards, the au-thor identifies hallmarks of “truewarnings” as opposed to “falsealarms.”

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Managing Natural WealthEnvironment and Development inMalaysiaJeffrey R. Vincent and Rozali Mohamed Ali

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Collaborative Environmental ManagementWhat Roles for Government?Tomas M. Koontz, Toddi A.Steelman, JoAnn Carmin, Katrina Smith Korfmacher,Cassandra Moseley, and Craig W. Thomas

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Toward Safer FoodPerspectives on Risk and Priority SettingSandra Hoffmann and Michael R. Taylor, editors

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New from RFF PressNew from RFF Press