Environmental Valuation & Cost-Benefit News

One of the greatest challenges facing the United States in the 21st century is sustaining our natural resources and safeguarding our environmental assets for future generations while promoting economic growth and maintaining our quality of life. To manage natural resources effectively and efficiently, policymakers need information and methods to analyze the dynamic interplay between the economy and the environment.

Enhancing the information to make sound decisions can be facilitated by developing national environmental accounts. These accounts provide a framework for organizing information on the status, use, and value of natural resources and environmental assets, as well as on expenditures on environmental protection and resource management. While many countries have developed and are using environmental accounts, the United States lags behind.

GAO and the National Academy of Sciences (NAS) convened this forum to discuss developing accounts in the United States. Participants included U.S. federal agency officials and national and international statistical, energy, environment, and natural resource experts. Comments expressed do not necessarily represent the views of any one participant or the organizations that these participants represent, including GAO and NAS.

Forum participants discussed potential criteria to help in developing environmental accounts, lessons learned from the international community, and strategies for overcoming challenges. Participants also made general observations about developing these accounts and discussed next steps.

Suggested Criteria to Help in Developing Environmental Accounts
Participants suggested four broad criteria to use in determining what components of environmental accounting should be developed. These criteria were identifying the objective of the accounts, considering the availability and quality of data, ensuring that accounts provide information on current natural wealth, and considering the timeliness and regularity with which accounts can be produced. Participants generally agreed that pollution and material flow accounts, which provide industry-level information about the generation of pollutants and solid waste and energy and material use, are most critical for the United States to develop first.

Lessons Learned from the International Community
Participants shared the following lessons learned from other countries’ experiences in developing environmental accounts:
• Provide data in a timely manner. To be useful to decision makers, environmental accounting data must be timely.
• Political interest can wax and wane. Shifting political agendas can affect policymakers’ interest in environmental accounting.
• Environmental accounting is a long-term investment. Developing accounts requires a sustained effort over an extended period.

Strategies for Overcoming Key Challenges

Participants broadly agreed that the greatest challenge to developing environmental accounts in the United States is the need for support from policymakers and others. Other key challenges include institutional differences based on agencies’ varying missions; the need for funding; data availability, compatibility, and reliability; and methodological uncertainty. Participants suggested the following strategies, among others, for overcoming these challenges:
• Identify policymakers, experts, and others who support the effort.
• Build an economic business case for environmental accounting.
• Use an incremental approach.
• Take the time necessary to develop high quality accounts.

General Observations and Next Steps
Participants generally agreed that developing environmental accounts is important for both our nation’s environmental and economic sustainability. Several participants offered to be partners in an effort to develop U.S. environmental accounts but noted that they would need congressional support and a designated lead agency to spearhead the effort.

For more information, contact Robert Robinson at (202) 512-3841 or robinsonr@gao.gov.

United States Government Accountability Office (GAO) www.GAO.gov
October 2007
http://www.gao.gov/cgi-bin/getrpt?GAO-08-127SP