    Measuring Our Nation's Natural Resources and Environmental
    Sustainability: Highlights of a Forum Jointly Convened by the
    Comptroller General of the United States and the National Academy
    of Science (24-OCT-07, GAO-08-127SP).

    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.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-08-127SP
        ACCNO:   A77550
      TITLE:     Measuring Our Nation's Natural Resources and
    Environmental Sustainability: Highlights of a Forum Jointly
    Convened by the Comptroller General of the United States and the
    National Academy of Science
         DATE:   10/24/2007
      SUBJECT:   Accounting standards
    	     Data collection
    	     Economic analysis
    	     Economic development
    	     Economic indicators
    	     Economic policies
    	     Economic research
    	     Environmental policies
    	     Environmental protection
    	     International cooperation
    	     Lessons learned
    	     Natural resources
    	     Strategic planning
    	     CG Forum

    ******************************************************************
    ** This file contains an ASCII representation of the text of a  **
    ** GAO Product.                                                 **
    **                                                              **
    ** No attempt has been made to display graphic images, although **
    ** figure captions are reproduced.  Tables are included, but    **
    ** may not resemble those in the printed version.               **
    **                                                              **
    ** Please see the PDF (Portable Document Format) file, when     **
    ** available, for a complete electronic file of the printed     **
    ** document's contents.                                         **
    **                                                              **
    ******************************************************************
    GAO-08-127SP

         * [1]Introduction from the Comptroller General of the United Stat
         * [2]Introduction from the National Academy of Sciences
         * [3]Criteria to Help in Developing Environmental Accounts in the

              * [4]Criteria for Focusing U.S. Efforts to Develop Environmental

                   * [5]Relevance to the Objective
                   * [6]Data Availability and Quality
                   * [7]Ability to Provide Information on Current Natural Wealth
                   * [8]Timeliness

              * [9]Most Critical Components of Environmental Accounting for the

         * [10]Perspectives and Lessons Learned from the International Comm

              * [11]International Perspectives on Environmental Accounting

                   * [12]International Efforts to Standardize Environmental
                     Accountin
                   * [13]Environmental Accounting as a Tool for Informing
                     Sustainable
                   * [14]U.S. Absence in International Environmental Accounting
                     Effor
                   * [15]Cautioning Against Adjusting GDP to Account for
                     Environmenta

              * [16]Key Lessons Learned from Other Countries

         * [17]Key Challenges and Strategies for Developing Environmental A

              * [18]Key Challenges to Developing Environmental Accounts
              * [19]Strategies for Developing Environmental Accounts

         * [20]General Observations and Next Steps
         * [21]Appendix I: Agenda
         * [22]Appendix II: List of Participants

              * [23]Moderators

                   * [24]Participants

         * [25]Appendix III: Background on Components of Environmental Acco

              * [26]Background

         * [27]Appendix IV: Background on Selected Other Countries' Experie

              * [28]Background

                   * [29]Canada

                        * [30]Australia
                        * [31]Netherlands

         * [32]Appendix V: Background on Key Challenges

              * [33]Background

         * [34]Appendix VI: Presentation Given by the Comptroller General o
         * [35]Appendix VII: Contacts and Acknowledgments

              * [36]Contacts
              * [37]Acknowledgments

         * [38]Related Products

              * [39]Related NAS Products
              * [40]Related GAO Products
              * [41]GAO's Mission

                   * [42]Order by Mail or Phone

         * [43]PDF6-Ordering Information.pdf

              * [44]Order by Mail or Phone

    Contents

    Letter 1

    Introduction from the Comptroller General of the United States 1
    Introduction from the National Academy of Sciences 5
    Criteria to Help in Developing Environmental Accounts in the United States
    6
    Perspectives and Lessons Learned from the International Community 8
    Key Challenges and Strategies for Developing Environmental Accounts 12
    General Observations and Next Steps 15
    Appendix I Agenda 17
    Appendix II List of Participants 19
    Appendix III Background on Components of Environmental Accounting 21
    Appendix IV Background on Selected Other Countries' Experiences 23
    Appendix V Background on Key Challenges 25
    Appendix VI Presentation Given by the Comptroller General of the United
    States 27
    Appendix VII Contacts and Acknowledgments 32
    Related Products 33
    Related NAS Products 33
    Related GAO Products 33

    This is a work of the U.S. government and is not subject to copyright
    protection in the United States. The published product may be reproduced
    and distributed in its entirety without further permission from GAO.
    However, because this work may contain copyrighted images or other
    material, permission from the copyright holder may be necessary if you
    wish to reproduce this material separately.

    Abbreviations

    EA Bureau of Economic Analysis
    GDP gross domestic product
    NAMEA National Accounting Matrix including Environmental Accounts
    NAS National Academy of Sciences
    OECD Organisation for Economic Co-operation and Development
    SEEA 2003 Handbook of National Accounting: Integrated Environmental and
      Economic Accounting 2003
    UN United Nations
    UNCEEA United Nations Committee of Experts on Environmental-Economic
      Accounting

    United States Government Accountability Office
    Washington, DC 20548

    Introduction from the Comptroller General of the United States

    The United States faces a range of challenges to its continued security
    and prosperity in the 21st century. Widely discussed examples of these
    challenges include a growing fiscal imbalance driven by ballooning
    entitlement expenditures for Social Security, Medicare, and Medicaid and a
    health care system that many experts believe is already in crisis. Another
    important 21st century challenge is sustaining our natural resources and
    safeguarding our environmental assets for future generations while
    promoting economic growth and maintaining a high relative quality of life.
    A critical first step to addressing this challenge is to ensure that
    sufficient and reliable information exists to take stock of current
    conditions, set goals, and measure progress. The United States faces a
    range of challenges to its continued security and prosperity in the 21st
    century. Widely discussed examples of these challenges include a growing
    fiscal imbalance driven by ballooning entitlement expenditures for Social
    Security, Medicare, and Medicaid and a health care system that many
    experts believe is already in crisis. Another important 21st century
    challenge is sustaining our natural resources and safeguarding our
    environmental assets for future generations while promoting economic
    growth and maintaining a high relative quality of life. A critical first
    step to addressing this challenge is to ensure that sufficient and
    reliable information exists to take stock of current conditions, set
    goals, and measure progress.

    Currently, policymakers lack the information needed to understand the
    potential environmental impacts of their decisions and the economic
    implications of changes to the environment and our natural resources. In
    contrast, based on decades of development and refinement, a wealth of
    information is available about production and income in the national
    economic accounts. These accounts provide policymakers with key national
    economic indicators, such as growth in health care spending and the change
    in economic investment, that help policymakers understand the state of the
    economy, monitor trends, and make projections that inform policy debates.
    Based in part on the data in the national economic accounts, policymakers
    can choose whether and how to take action to influence economic
    conditions. However, there are no comparable national environmental
    accounts even though the environment and our natural assets influence our
    economic condition and collective well-being. While environmental data are
    collected at various national and subnational levels, limitations in the
    data diminish its value to policymakers. The data are incomplete, vary in
    quality, and often are not comparable, resulting in a lack of key national
    environmental indicators to comprehensively understand the state of the
    environment or how it is changing over time. Currently, policymakers lack
    the information needed to understand the potential environmental impacts
    of their decisions and the economic implications of changes to the
    environment and our natural resources. In contrast, based on decades of
    development and refinement, a wealth of information is available about
    production and income in the national economic accounts. These accounts
    provide policymakers with key national economic indicators, such as growth
    in health care spending and the change in economic investment, that help
    policymakers understand the state of the economy, monitor trends, and make
    projections that inform policy debates. Based in part on the data in the
    national economic accounts, policymakers can choose whether and how to
    take action to influence economic conditions. However, there are no
    comparable national environmental accounts even though the environment and
    our natural assets influence our economic condition and collective
    well-being. While environmental data are collected at various national and
    subnational levels, limitations in the data diminish its value to
    policymakers. The data are incomplete, vary in quality, and often are not
    comparable, resulting in a lack of key national environmental indicators
    to comprehensively understand the state of the environment or how it is
    changing over time.

    Consequently, decisions are made with inadequate information about
    potential environmental impacts and economic or social consequences. For
    example, Hurricane Katrina caused massive devastation, including the loss
    of over 1,300 lives and billions of dollars in property damage, in part,
    because the wetlands that would have served as natural buffers to the
    storm had been lost to development. Better information on the wetlands'
    value to the economy could potentially have resulted in decisions that
    would have reduced the damage caused by the hurricane. Consequently,
    decisions are made with inadequate information about potential
    environmental impacts and economic or social consequences. For example,
    Hurricane Katrina caused massive devastation, including the loss of over
    1,300 lives and billions of dollars in property damage, in part, because
    the wetlands that would have served as natural buffers to the storm had
    been lost to development. Better information on the wetlands' value to the
    economy could potentially have resulted in decisions that would have
    reduced the damage caused by the hurricane.

    The United Nations (UN), the Organisation for Economic Co-operation and
    Development (OECD), and other international institutions have recommended
    that countries develop environmental accounts. Environmental accounts
    provide a framework for collecting and organizing information on the
    status, use, and value of the nation's natural resources and environmental
    assets, as well as on expenditures on environmental protection and
    resource management. To support the development of such accounts, the UN,
    European Commission, International Monetary Fund, OECD, and the World Bank
    issued a handbook in 2003 for use by both national and international
    agencies for compiling environmental accounts reflecting their information
    needs and priorities.^1 This handbook describes the following four
    components of environmental accounting:

               o Natural resource asset accounts, which primarily include
               information on stocks of natural resources.
               o Pollution and material flow accounts, which provide information
               at the industry level about the use of energy and materials and
               the generation of pollutants and solid waste.
               o Environmental protection and resource management expenditure
               accounts, which identify expenditures made by industry,
               government, and households to protect the environment or manage
               resources.

               o Environmentally adjusted macroeconomic aggregates, which include
               indicators of sustainability, such as an environmentally adjusted
               net domestic product.

               Many industrialized countries, such as Australia, Canada, and
               France, and some developing countries, including Namibia and the
               Philippines, have developed some components of environmental
               accounting and continue to refine their accounts. For example, to
               better understand how to make the most of Australia's limited
               water resources, the Australian Bureau of Statistics and the
               National Water Commission have produced three water accounts since
               2000 that track the supply and use of water in the Australian
               economy. In addition, since the early 1990s, Canada has annually
               produced environmental accounts, which have been used, among other
               things, to develop environment-economy indicators such as
               urban-rural land use change and annual stock estimates for timber,
               energy, and mineral resources. The United States, however, lags
               behind these and other countries.

    ^1United Nations, Handbook of National Accounting: Integrated
    Environmental and Economic Accounting 2003 (New York, N.Y.: 2003).

               In the United States, in 1992, the Department of Commerce's Bureau
               of Economic Analysis (BEA) began developing a set of environmental
               accounts called the Integrated Economic and Environmental
               Satellite Accounts. BEA created prototype accounts for the mineral
               resources sector and planned to continue its work by developing
               accounts for other sectors. However, from fiscal year 1995 through
               fiscal year 2002, congressional appropriations committees directed
               BEA not to pursue this initiative. Although this restriction has
               now been lifted, to date no funding has been appropriated for BEA
               to resume its work.

               In 1999 and again in 2005, two independent National Academy of
               Sciences (NAS) panels, the first commissioned by the Department of
               Commerce and the second by the Glaser Progress Foundation, found
               that developing a set of comprehensive environmental accounts
               should be a high priority for the nation. The panels concluded
               that these accounts can have many benefits. Environmental accounts
               can provide policymakers with ecological indicators and
               descriptive statistics to monitor the environment's contribution
               to the economy and the economy's impact on the environment. In
               addition, environmental accounting can potentially serve as a tool
               for strategic planning and policy analysis to identify the
               implications of different regulations, taxes, and consumption
               patterns on environmental sustainability and paths to sustainable
               development of specific economic activities. For example, the
               United States currently lacks reliable, comprehensive information
               on fish stocks and the extent to which certain fish stocks are
               being depleted. More comprehensive data could help federal fishery
               managers better identify appropriate harvest limits and provide
               policymakers with better information to use in negotiating
               international fishing treaties.

               BEA officials recently indicated that they will participate in any
               cross-cutting Administration initiative to develop environmental
               accounts as long as Congress supports the effort and the
               initiative is led by the agencies that gather and analyze the
               data. Initial steps toward developing environmental accounts
               include raising awareness of the importance of such accounts,
               obtaining support for such accounts, and prioritizing
               developmental efforts by identifying features and characteristics
               needed to make the accounts as useful as possible. Developing
               environmental accounts will require a long-term commitment.
               Despite some challenges, the effort could produce substantial
               public benefits for the nation.

               Building on a prior collaborative effort on key national indicator
               systems,^2 GAO and NAS jointly convened a forum on June 19, 2007,
               to discuss (1) criteria to help in developing environmental
               accounts in the United States, (2) lessons learned from the
               international community, and (3) strategies for overcoming
               challenges to developing environmental accounts in the United
               States. (See app. I for the agenda.) In addition, participants
               spoke generally about some of the benefits of environmental
               accounting and potential next steps to developing environmental
               accounts in the United States. The forum brought together a
               diverse array of experts, including representatives from
               government, the international community, nonprofit organizations,
               industry, and academia. (See app. II for a list of participants.)
               This forum was designed so participants could comment on these
               issues openly, without individual attribution, in order to
               facilitate a rich, frank, and substantive discussion.

               This report summarizes the ideas and themes that emerged at the
               forum, the collective discussion of participants, and comments
               received from participants based on a draft of this report. The
               highlights summarized in this report do not necessarily represent
               the views of any individual participant or the organizations that
               these participants represent, including GAO and NAS.

               We want to thank all the forum participants for taking the time to
               share their knowledge, insights, and perspectives. We will benefit
               from these insights as we carry out our work, and we look forward
               to working with the forum's participants on this and other issues
               of mutual interest and concern in the future.

               David M. Walker
    			  Comptroller General of the United States

    ^2GAO, Forum on Key National Indicators: Assessing the Nation's Position
    and Progress, [56]GAO-03-672SP (Washington, D.C.: May 1, 2003).

               Introduction from the National Academy of Sciences

               The National Academy of Sciences appreciated the opportunity to
               jointly convene the GAO/NAS Forum on Measuring Our Nation's
               Natural Wealth and Environmental Sustainability. The NAS
               recognizes the importance of the topic, and, indeed, issues in
               environmental accounting have been the subject of major reports by
               panels convened under NAS's Committee on National Statistics (see
               the 1999 report Nature's Numbers--Expanding the National Economic
               Accounts to Include the Environment and the 2005 report Beyond the
               Market--Designing Nonmarket Accounts for the United States).

               I and the other NAS staff who worked with GAO staff to convene the
               forum valued the collegial relationship that characterized every
               aspect of the project. The discussions at the forum were
               illuminating of issues and concerns that merit attention in the
               development of environmental accounts. The NAS is pleased to have
               contributed to this effort.

               Constance F. Citro
    			  Director, Committee on National Statistics
               National Academy of Sciences

               October 24, 2007

    			  Criteria to Help in Developing Environmental Accounts in the United States

               Participants suggested several criteria for the United States to
               use in determining what components of environmental accounting to
               develop. In addition, participants identified which components are
               most critical to develop first. To ensure a common framework from
               which to discuss environmental accounting, we provided
               participants with background information on the four components of
               environmental accounting prior to the forum (see app. III).

    			  Criteria for Focusing U.S. Efforts to Develop Environmental Accounts

               Participants suggested four broad criteria to use in focusing U.S.
               efforts to develop environmental accounts. These criteria included
               relevance to the main policy objective, availability and quality
               of data, ability to provide information on both current and future
               natural wealth, and timeliness.

    			    Relevance to the Objective

               Participants generally agreed that the first step in identifying
               what components of environmental accounting to develop is
               determining the overall policy objective for the accounts.
               Participants made the following suggestions in this regard:

               o Identify all possible objectives and then prioritize the
               objectives to determine what components of environmental
               accounting to develop.
               o Determine which policy questions are most pressing and design
               accounts to answer those questions. History has shown that
               progress is made more easily when problems are more urgent in
               nature. Some participants cited climate change as a pressing
               concern, and suggested environmental accounts as a way to help
               inform decision making as climate change policies are developed.
               o Focus on areas where environmental accounts will provide new
               information to enhance policy decision making. The most useful
               accounts will provide data that policymakers need but would
               otherwise lack to inform their actions.
               o Do not dedicate funds to developing environmental accounts until
               a clear objective is established. To emphasize this point, one
               participant explained that because Norway and Sweden did not
               sufficiently develop their accounts to inform policy, the accounts
               have ultimately been underutilized. Additionally, one participant
               explained that, at times, agencies start initiatives by doing
               whatever is easiest instead of identifying and beginning work on
               the most critical or beneficial areas. This participant warned to
               resist such a tendency when developing environmental accounts.

    			    Data Availability and Quality

               Participants generally agreed that data availability, gaps, and
               quality need to be considered when determining what components of
               environmental accounting to develop. Participants made the
               following suggestions in this regard:

               o Identify sources of available, reliable, and consistent data.
               Data used in environmental accounts must be of good quality.
               o Ensure, to the extent possible, that the data collected at the
               national level are useful at the regional and state levels so that
               local managers can also use the information for decision making.
               o Pursue data consistency for comparability purposes across
               jurisdictional boundaries, both within the United States and
               internationally. Consistent measures will allow analysts to value
               resources and assess sustainability throughout political and
               environmental systems and at varying levels within those systems.

    			    Ability to Provide Information on Current Natural Wealth

               Participants generally agreed that environmental accounts
               developed by the United States should provide information on the
               nation's current natural wealth. In addition, this data could be
               collected in such a way to allow analysts to make projections of
               future natural wealth. These projections would enable policymakers
               to better understand the implications of current consumption on
               future natural wealth. Participants made the following comments in
               this regard:

               o Our nation has an obligation not to unfairly disadvantage future
               generations by overconsumption of resources today. Environmental
               accounting can provide data needed to ensure sustainable patterns
               of natural resource use.
               o To determine natural wealth, it is important to include monetary
               values for the natural resources and environmental assets that are
               included in our nation's environmental accounts. Some participants
               noted that, while it is difficult, appropriate and accepted
               methodologies need to be developed to value our natural resources
               and environmental assets.

    			    Timeliness

               Some participants noted that accounts produced on a regular basis
               are generally more useful than irregularly or occasionally
               published accounts. Several participants explained that
               identifying an appropriate time period for updating accounts is
               important for obtaining trend data. The trend data derived from
               accounts over time can be used to predict the status of the
               nation's natural resources and environmental assets, understand
               how changes in the quality and quantity of these resources and
               assets will affect the economy, and evaluate trade-offs of policy
               options.

    			  Most Critical Components of Environmental Accounting for the United States

               Participants generally agreed that pollution and material flow
               accounts, which provide information at the industry level about
               the generation of pollutants and solid waste and the use of energy
               and materials, are the most critical accounts for the United
               States to develop first. In addition to pollution and material
               flow accounts, participants identified natural resource asset
               accounts and environmental protection and resource management
               expenditure accounts as high priorities for the nation. Some
               participants noted that the United States does not have nationwide
               inventories of natural resources. One participant cited the lack
               of data on mineral reserves as a prominent example.

               As a long-term goal, one participant noted that, in 1999, NAS
               recommended a comprehensive set of environmental accounts for the
               nation.^3 Participants generally agreed that building a
               comprehensive set of accounts will be technically challenging and
               will take place incrementally over a long period of time. One
               participant likened the building of a comprehensive set of
               environmental accounts to the slow and gradual development of the
               national income and product accounts that took place during the
               1920s and 1930s.

    			  Perspectives and Lessons Learned from the International Community

               Participants from the international community described their
               perspectives on environmental accounting and some key lessons
               learned from other countries' experiences. We provided
               participants with general information about select foreign
               countries' experiences prior to the forum (see app. IV).

    			  International Perspectives on Environmental Accounting

               Common themes expressed by participants from the international
               community included the need to standardize environmental
               accounting concepts and practices internationally, the potential
               for environmental accounting to inform sustainable development,
               and the noticeable absence of the United States in the
               international advancement of environmental accounting. Some
               participants also expressed concern about using environmental
               accounts to produce official measures of gross domestic product
               (GDP) adjusted to account for environmental goods and
               services--also known as "green" GDP--because this approach faces
               significant methodological challenges.

    ^3National Academy of Sciences, Nature's Numbers: Expanding the National
    Economic Accounts to Include the Environment (Washington, D.C.: 1999).

                 International Efforts to Standardize Environmental Accounting
    				 Concepts and Practices

               Several participants described efforts by the United Nations,
               Eurostat, and other international organizations to standardize
               environmental accounting concepts and practices, such as water
               accounting practices. According to these participants,
               standardizing environmental accounting concepts and practices can
               yield important benefits. For example, standardization would allow
               for comparability across different nations' environmental
               accounting data, such as for energy and water. According to one
               participant, standardization and comparability of environmental
               accounting data would enhance efforts to mitigate climate change,
               as well as other leading environmental and natural resources
               challenges facing the international community.

               One participant sketched the development of environmental
               accounting at the UN, focusing on the following two salient
               events: (1) joint publication of the Handbook of National
               Accounting: Integrated Environmental and Economic Accounting 2003
               (SEEA 2003) and (2) formation of the United Nations Committee of
               Experts on Environmental-Economic Accounting (UNCEEA). According
               to this participant, a major objective of the UN and UNCEEA is to
               further elaborate and refine the SEEA 2003 and elevate it to an
               internationally recognized formal accounting standard, with
               standardized and formalized reporting requirements. Another
               participant questioned this publication's suitability as a
               universal standard for environmental accounting. According to this
               participant, SEEA 2003 has too much of a "green tilt," is not
               sufficiently grounded in rigorous economic principles, and has not
               generated professional consensus. Another participant pointed out
               that SEEA 2003 is a starting point for developing consensus among
               all stakeholders and suggested that achieving consensus on the
               concepts and practices will require more time.

               Another participant explained that 36 countries have already
               standardized their water accounting practices per SEEA 2003, and
               approximately 36 additional countries are currently in the process
               of standardizing theirs. According to this participant, the
               international environmental accounting community could continue to
               gradually standardize concepts and practices for natural resource
               categories, eventually constructing a comprehensive environmental
               accounting system. One participant also noted that, for countries
               to adopt meaningful environmental accounting practices, there
               needs to be a credible, unified voice that articulates standard
               concepts and practices. Another participant cited an example of
               varying definitions of what constitutes a natural resource "stock"
               and noted that a commonly agreed upon definition would increase
               consistency among countries.

    			    Environmental Accounting as a Tool for Informing Sustainable
    				 Development

               Several participants stated that environmental accounting could
               serve as a tool for informing policies attempting to foster
               sustainable development in both developed and developing
               countries. One participant noted that the European Union's
               explicit environmental policy goal is sustainable
               development--characterized by the participant as development that
               breaks the link between economic growth and environmental
               degradation. Under the goal of sustainable development,
               environmental accounting is a useful analytical tool for gathering
               and organizing relevant data, the participant explained.

               Another participant observed that development agencies often lack
               a common metric and even a common language for describing the
               environmental ramifications of development projects. To ameliorate
               this situation, the participant suggested that environmental
               accounting--because it ascribes values to environmental goods and
               services, tracks those values across time, and provides
               information on the relative costs and benefits of economic
               development and environmental trade-offs--could serve as a
               valuable common language for communicating about environmental
               issues with constituents in developing countries.

    			    U.S. Absence in International Environmental Accounting Efforts

               Several participants indicated that, although the United States
               discontinued its environmental accounting work in the mid-1990s,
               many other countries and major international organizations have
               continued to develop environmental accounting. Several
               participants noted the conspicuous absence of the United States
               from international efforts to develop a standardized framework for
               environmental accounting. Participants pointed out that, given its
               global economic significance, U.S. involvement is essential for
               further elaboration and eventual standardization of environmental
               accounting concepts and practices. One participant noted that the
               lack of a role by the United States in developing internationally
               comparable databases of common environmental information is
               glaring because the country produces and consumes natural
               resources and generates pollution in proportionally large
               quantities compared with other countries.

               Another participant acknowledged that while there is no consensus
               on the concepts and practices used by countries to develop
               environmental accounts, those countries are nonetheless actively
               collaborating in developing accounts through international
               organizations like the UN, Eurostat, and OECD. Continued U.S.
               absence in international environmental accounting efforts only
               delays this process and hinders international efforts to develop
               more informed environmental and natural resource policies.

    			    Cautioning Against Adjusting GDP to Account for Environmental
    				 Goods and Services

               Some participants warned against developing a "green" GDP that
               would incorporate the costs to and contributions of the
               environment within traditional national economic accounts. One
               participant characterized developing a green GDP as a risky
               endeavor because of significant methodological uncertainties. This
               participant described a foreign government's 2-year effort to
               calculate such a measure and noted that, in the end, the national
               statistical agency determined that it was not able to produce such
               a measure. One participant asserted that some types of
               environmentally adjusted macroeconomic aggregates are biased
               toward including environmental costs and ignoring some
               environmental benefits, and for this reason should not be pursued
               by countries developing environmental accounts. Instead of such a
               measure, some participants advised an environmental accounting
               approach focused on natural wealth.

               One participant defended the practice of calculating a green GDP.
               According to this participant, developing a green GDP is a
               worthwhile endeavor for countries to undertake in order to better
               understand, at an aggregate level and in proportion to economic
               activity, the influence of economic decisions on the environment
               and vice versa.

    			  Key Lessons Learned from Other Countries

               Participants shared the following lessons learned from other
               countries' experiences in developing environmental accounts:

               o Provide data in a timely manner. Two participants stressed the
               importance of providing environmental accounting information to
               policymakers in a timely manner. They illustrated this point with
               examples of information derived from environmental accounts that
               reached decision makers and policy analysts too late to be of any
               influence. To prevent such situations, one participant recommended
               that certain aspects of environmental accounts--depending upon a
               country's most pressing environmental-economic concerns--be made
               available to decision makers on a quarterly basis. The participant
               explained that quarterly reporting would ensure that relevant
               information about interactions between the economy and the
               environment reach decision makers within a reasonable time frame
               for action.
               o Political interest can wax and wane. Another participant pointed
               out that interest in environmental accounting among a country's
               political leadership waxes and wanes according to shifting
               political agendas. In light of the varying receptivity to
               environmental accounting information, the participant warned that
               practitioners should be cognizant of differing attitudes toward
               information derived from environmental accounts.
               o Environmental accounting is a long-term investment. One
               participant noted that developing environmental accounts is a
               long-term, gradual process. It must be acceptable to gradually
               develop a system of environmental accounts, rather than
               implementing a comprehensive environmental accounting system all
               at once. The participant also noted, however, that while the
               ultimate benefits of environmental accounting can only be realized
               in the long-term, short-term benefits can also be achieved,
               including improved data collection across a range of government
               statistics and more rigorous, contextually sophisticated
               environmental indicators.

    			  Key Challenges and Strategies for Developing Environmental Accounts

               Participants discussed several key challenges to developing
               environmental accounts in the United States. Participants also
               suggested numerous strategies, a number of which were applicable
               to several of the challenges. To ensure a common framework from
               which to discuss the key challenges, we provided participants with
               a list of challenges prior to the forum (see app. V). These
               challenges included institutional differences based on agencies'
               varying missions, a need for support from policymakers and others,
               a need for financial resources, methodological uncertainty, and
               data availability, compatibility, and reliability.

               Key Challenges to Developing Environmental Accounts

               Participants broadly agreed that the greatest challenge to
               developing environmental accounts in the United States is the need
               to generate support from policymakers and others. Some
               participants expressed concern that Congress might halt any new
               efforts to develop accounts, as happened with BEA's previous
               effort in the 1990s when congressional members from coal-producing
               states raised methodological and other concerns. Therefore,
               participants emphasized the need for building and sustaining
               support among policymakers and the public to develop environmental
               accounts.

               After the need for political support, participants generally
               agreed that institutional differences were the next greatest
               challenge to developing environmental accounts in the United
               States. Some participants explained that differences in agencies'
               individual missions can hinder collaborative efforts because data
               are collected specifically to meet the agencies' needs, and there
               is resistance to change the way the data has been collected over
               time. In addition, agencies are under pressure to reduce costs and
               produce only the most pertinent high-priority information that
               programs require. One participant pointed out that the National
               Academy of Public Administration is currently working on
               identifying ways to improve institutional capabilities and is
               developing a set of options for improving coordination of data
               collection. The results of this effort might help inform
               appropriate institutional arrangements for developing
               environmental accounts.

               Participants found the other key challenges--the need for funding;
               data availability, compatibility, and reliability; and
               methodological uncertainty--to be considerable and noted that they
               must be confronted in any attempt to develop environmental
               accounts. Some participants emphasized the need for appropriate
               and accepted methodologies for valuing our natural resources and
               environmental assets. One participant explained, for example, that
               some natural resource goods and services, such as clean air and
               water, are not traded in the market and are, therefore,
               methodologically difficult to value. Estimating nonmarket value is
               inherently uncertain, raising concerns that including such
               estimates in environmental accounts would diminish the usefulness
               of existing GDP measures.

    			  Strategies for Developing Environmental Accounts

               Participants generally agreed that, while it is important for the
               United States to develop environmental accounts, the key
               challenges make it a difficult endeavor. Participants also
               generally agreed that if developing environmental accounts was
               simple, the United States would most likely already have done so,
               noting that a general consensus on the need for environmental
               accounts dates back to the 1930s. At the same time, one
               participant stated that success in developing environmental
               accounts is inevitable, although it will be measured in decades
               rather than years.

               Participants generally agreed that it is possible for the U.S. to
               overcome its key challenges to environmental accounting.
               Participants provided the following strategies, some of which cut
               across several of the identified challenges, to policymakers and
               other individuals who seek to develop environmental accounts:

               o Understand other countries' experiences with developing
               environmental accounts in more depth. Participants broadly agreed
               that a GAO report that details other countries' experiences with
               establishing environmental accounts would be useful for informing
               a U.S. effort to develop accounts.
               o Develop an economic case for environmental accounting.
               Participants generally agreed that the economic case for
               environmental accounting needs to be intergenerational because
               environmental accounting is about ensuring that our children and
               grandchildren experience a comparable standard of living. One
               participant explained that the United States is a wealthy nation
               in part because it has a healthy environment. The participant
               suggested that it would be helpful for advocates of environmental
               accounting to develop narratives that explain how the health of
               the environment is changing and reveal the potential economic and
               social consequences that can result from those changes.
               Participants generally advised against using the concept of
               sustainability to justify developing environmental accounts
               because the term is sometimes viewed negatively. Instead,
               participants suggested possible alternatives, such as using
               natural capital and natural resource stewardship as the principal
               rationale behind developing environmental accounts.
               o Focus on accountability and performance. One participant
               suggested that when making the case for environmental accounting,
               advocates should move from discussing "accounting" to emphasizing
               "accountability and performance." This participant noted that such
               a change in language would help focus attention on the federal
               government's poor job of assessing the performance of
               environmental programs and help inform the public that while the
               United States has well-established environmental laws, it does not
               have effective ways of measuring their performance. Another
               participant disagreed with the notion that the government does not
               measure the performance of environmental programs. The participant
               speculated that most programs have metrics for measuring
               performance, while also acknowledging that those metrics may not
               be the best quality.
               o Identify policymakers, technical experts, and others who support
               the effort. Participants noted that continued support is critical
               for initiating and sustaining efforts to develop environmental
               accounts.
               o Identify and solicit the help of environmental experts.
               Specialists in environmental accounting and related technical
               fields can be instrumental in assisting these efforts.
               o Use an incremental approach. Participants generally agreed that
               an incremental approach must be used because the combination of
               challenges--questions about how the data will be used, broad
               apathy from policymakers and others, and technical
               difficulties--can appear insurmountable and thereby derail the
               effort. Interim measures must be developed if the United States is
               to successfully implement national environmental accounting.
               o Take the time necessary to develop quality accounts. One
               participant compared the effort to develop environmental accounts
               with the effort to create national economic accounts that started
               in the 1920s. The effort to establish our national economic
               accounts took decades to complete, while the data improved over
               time. Participants generally agreed that creating environmental
               accounts should be taken seriously but slowly.

    			  General Observations and Next Steps

               Participants provided general observations on the overall value of
               environmental accounting to the United States and sustaining an
               effort to develop environmental accounts. Participants broadly
               agreed that the United States should develop environmental
               accounts and that environmental accounting can serve as a valuable
               tool to better account for the nation's natural resources and
               environmental assets. In addition, participants generally agreed
               that developing environmental accounts is important for both U.S.
               environmental and economic sustainability.

               Some participants discussed comparisons between environmental
               accounting and environmental indicators, noting that, unlike
               indicators, environmental accounts can help evaluate trade-offs
               between policy options, and thereby help inform policymakers'
               decisions. They noted that data in environmental accounts can also
               be used to develop environmental indicators. Some participants
               noted that indicators that are based in environmental accounts are
               higher quality indicators.

               Several participants offered to be partners in an effort to
               develop environmental accounts in the United States but also noted
               that they would need support and a designated lead agency to
               spearhead the effort. Participants disagreed about which agency
               should lead a national effort to develop environmental accounts
               but agreed that it will need to be directed and supported by the
               Administration and Congress. Some participants believed that BEA
               should lead the effort to develop environmental accounts. Other
               participants thought that the three agencies that spend the
               greatest amount of funding to collect environmental
               data--specifically the Departments of Agriculture and the
               Interior, and the Environmental Protection Agency--should play
               leading roles in the effort. In this regard, one participant noted
               the NAS recommendation for cross-agency collaboration with a
               policy agency leading the effort. Other participants thought that
               a separate entity to collect and analyze data, establish
               environmental accounts, and disseminate environmental information
               would be a better vehicle than interagency cooperation within the
               current federal structure. One participant observed that much work
               can be done in the interim, before getting everyone's cooperation.

               Finally, participants suggested continuing the discussion on
               environmental accounting to build momentum for the effort. Several
               participants observed that this forum was a good venue in which to
               further the discussion on environmental accounting and noted the
               importance of continuing the dialogue among key experts.

    			  Appendix I: Agenda

               8:00 a.m. Check-in

               8:30 a.m. Opening session

               Welcome and introductions

               Setting the stage--presentation by the Comptroller General

               9:00 a.m. Session I: What components of national environmental
               accounts should the United States develop and why?

               Presentation on history of environmental accounting in the United
               States and components of national environmental accounts

               Presenter: Steve Landefeld, Bureau of Economic Analysis

               9:15 a.m. Group discussion

                            o What criteria should be used to determine which
                            components of environmental accounts should be
                            developed?
                            o What specific components of environmental accounts
                            should the United States develop in the short and
                            long term?

               10:15 a.m. Coffee break

               10:30 a.m. Session II: What are the lessons learned from other
               countries' experiences in developing environmental accounts?

               Presentation on other countries' experiences Presenter:
               Glenn-Marie Lange, Columbia University

               10:45 a.m. International perspective from select participants

               Featured speakers: Ivo Havinga--U.N. Statistical Division Brennan
               Van Dyke--U.N. Environment Programme Enrico
               Giovannini--Organisation for Economic Co-operation and Development
               Pieter Everaers--Eurostat Walter Radermacher--German Federal
               Statistical Office Rob Smith--Statistics Canada

               11:15 a.m. Group discussion

               11:45 a.m. Lunch is distributed

               12:00 p.m. Session III: How should the United States address key
               challenges in developing environmental accounts?

               Presentation on key challenges Presenter: Ted Heintz, White House
               Council on Environmental Quality

               12:15 p.m. Group discussion

               1:15 p.m. Wrap-up

               2:00 p.m. Adjournment

    			  Appendix II: List of Participants

    			  Moderators

               David M. Walker Comptroller General of the United States U.S.
               Government Accountability Office

               Glenn-Marie Lange Senior Research Scholar, The Center for Economy,
               Environment, and Society Columbia University

    			  Participants

               James Boyd Senior Fellow and Director, Energy and Natural
               Resources Resources for the Future

               Pieter Everaers Director, Agriculture and Environment Statistics
               and International Cooperation Eurostat

               Ronald S. Fecso Chief Statistician U.S. Government Accountability
               Office

               John Felmy Chief Economist American Petroleum Institute

               Enrico Giovannini Director of Statistics and Chief Statistician
               Organisation for Economic Co-operation and Development

               Howard Gruenspecht Deputy Administrator Energy Information
               Administration

               Ivo C. Havinga Chief of Branch, Economic Statistics Branch United
               Nations Statistics Division

               H. Theodore Heintz, Jr. Indicator Coordinator White House Council
               on Environmental Quality

               Christopher Hoenig Chair, Executive Committee Key National
               Indicators Initiative

               Christopher B. Kearney Deputy Assistant Secretary for Policy and
               International Affairs U.S. Department of the Interior

               Steve Landefeld Director U.S. Bureau of Economic Analysis

               William J. Mates Economist/Research Scientist New Jersey
               Department of Environmental Protection

               Gary W. Mast Deputy Undersecretary for Natural Resources and the
               Environment U.S. Department of Agriculture

               Steven Murawski Director of Scientific Programs National Oceanic
               and Atmospheric Administration

               Susan E. Offutt Chief Economist U.S. Government Accountability
               Office

               Marcus C. Peacock Deputy Administrator U.S. Environmental
               Protection Agency

               Walter Radermacher President German Federal Statistical Office

               Carol Raulston Senior Vice President, Communications National
               Mining Association

               Robert Repetto Professor Yale School of Forestry and Environmental
               Studies

               Robert A. Robinson Managing Director, Natural Resources and
               Environment U.S. Government Accountability Office

               Robert Smith Division Director, Environment Accounts and
               Statistics Statistics Canada

               Brennan Van Dyke Director, Regional Office for North America
               United Nations Environment Programme

    			  Appendix III: Background on Components of Environmental Accounting

               To ensure a common framework from which to discuss environmental
               accounting, we provided participants with information on the four
               components of environmental accounting prior to the forum. We
               identified these components through literature reviews and
               discussions with a range of subject matter experts. The
               information provided to forum participants is reproduced below.

    			  Background

               As described below, there are four primary components of
               environmental accounts. These accounts provide data for varying
               purposes and include physical information on resources and
               pollution, as well as monetary values.

                            1. Natural resource asset accounts primarily deal
                            with stocks of natural resources. These accounts
                            provide indicators that help monitor the
                            sustainability of a resource.

                            a. Physical asset accounts help monitor ecological
                            sustainability by tracking the physical amount of a
                            resource.

                            b. Monetary asset accounts establish a monetary value
                            for the total national wealth of a resource.

               Examples of natural resource accounts include land accounts that
               track the conversion of agricultural land to urban settlements and
               the value of native forests.

                            2. Pollution and material flow accounts provide
                            information at the industry level about the use of
                            energy and materials and the generation of pollutants
                            and solid waste. These accounts provide indicators of
                            sustainability, information on the sources of
                            environmental pressure, and options for change.

                            a. Physical flow accounts help set priorities for
                            policy based on the volume of material use and
                            pollution.

                            b. Monetary flow accounts identify relative costs and
                            benefits of reducing pollution.

               Examples of pollution and material flow accounts include time
               series accounts for pollution emissions and energy use and an
               index of water use, gross domestic product growth, and population
               growth.

    			  Appendix IV: Background on Selected Other Countries' Experiences

               Prior to the forum, we provided participants with information
               about select foreign countries' experiences. We identified key
               research and programs through literature reviews and discussions
               with international experts and country representatives. The
               information provided to forum participants is reproduced below.

    			  Background

               Up until the mid-1990s, the United States was on par with other
               industrialized nations in developing environmental accounts.
               However, since Congress prohibited BEA's work in this area in
               fiscal year 1995, many nations' statistical offices and ministries
               of environment have developed and implemented sophisticated
               natural resource and environmental accounts. In doing so, they
               have experienced important lessons that could benefit the U.S.
               federal government's implementation of environmental accounting.
               Three such countries are Canada, Australia, and the Netherlands.

    			    Canada

               Since the early 1990s, Statistics Canada has annually produced
               asset, material and energy flow, and environmental protection
               expenditure accounts, which together comprise the Canadian System
               of Environmental & Resource Accounts. A set of 10
               environment-economy indicators has twice been published based on
               these accounts. As Canada is perhaps closest to the United States
               in size, resource composition, and environmental policies, it
               could serve as a useful study in how the United States might
               develop a comprehensive system of environmental accounts.

    			    Australia

               Much of Australia is arid, and there is extreme year-to-year
               variation in the amount of rainfall. To better understand how to
               make the most of Australia's limited water resources, the
               Australian Bureau of Statistics and the National Water Commission
               have tracked and documented the supply and use of water in the
               Australian economy since 2000. So far, three water accounts have
               been produced. Australia's experience with water accounting could
               be particularly relevant for regional water management in the arid
               U.S. Southwest and other areas with competing water needs. In
               addition to water accounts, Australia produces annual
               environmental accounts for subsoil, timber, and land assets.
               Australia also produces occasional accounts for energy flows,
               greenhouse gas emissions, fish assets, waste flows, and
               environmental protection expenditures.

    			    Netherlands

               Although the Netherlands is a geographically small, homogenous,
               and natural resource-poor country, Statistics Netherlands compiles
               rigorous accounts on pollution and material flows. Indeed,
               statisticians from the Netherlands developed a widely influential
               material flows accounting system--the NAMEA, National Accounting
               Matrix including Environmental Accounts. NAMEA functions as an
               instrument for a variety of analyses, including the identification
               of the economic and environmental effects of consumption of
               certain products. In addition, Statistics Netherlands and the
               Netherlands Environmental Assessment Agency have developed an
               Environmental Data Compendium, based in large measure upon these
               accounts. The Netherlands' overall experience with the NAMEA
               approach may be useful to any country contemplating environmental
               accounting.

    			  Appendix V: Background on Key Challenges

               To ensure a common framework from which to discuss the key
               challenges, we provided participants with a list of challenges
               prior to the forum. We identified these challenges through
               literature reviews and discussions with experts. The information
               provided to forum participants is reproduced below.

    			  Background

               The Bureau of Economic Analysis's (BEA) effort to develop
               environmental accounts in the early 1990s--as well as other
               multilateral and mulitstakeholder efforts such as environmental
               indicators--provides policymakers with insight into challenges
               that the United States will face in developing national
               environmental accounts. To be successful, the U.S. approach will
               need to strategically address the following five challenges:

                            3. Environmental protection and resource management
                            expenditure accounts identify expenditures made by
                            industry, government, and households to protect the
                            environment or manage resources. These accounts help
                            address questions about regulation, i.e., the cost of
                            environmental regulation over time; the effectiveness
                            of environmental protection expenditures and
                            eco-taxes; and the impact of such expenditures on
                            prices, productivity, and international
                            competitiveness. Examples of environmental protection
                            and resource management expenditure accounts include
                            fees collected by government for resource use, such
                            as levies on minerals, forestry, or fisheries, and
                            funds spent on water treatment and solid waste
                            management.
                            4. Environmentally adjusted macroeconomic aggregates
                            include indicators of sustainability such as an
                            environmentally adjusted net domestic product. These
                            aggregates can be physical or monetary and help
                            assess overall environmental health and economic
                            progress. Examples of environmentally adjusted
                            macroeconomic aggregates include theme indicators for
                            greenhouse gas emissions, acidification, and solid
                            waste and environmentally adjusted product and income
                            accounts.

                            1. Institutional differences--What agencies should be
                            involved in developing and producing these accounts
                            and how should their work be coordinated? What new
                            institutional capabilities or arrangements are
                            needed?

                            BEA was the lead agency in past efforts, but
                            developing environmental accounts will draw upon
                            expertise, resources, and data held by a diverse
                            range of federal agencies. For example, to develop a
                            national forest account, the BEA would need to
                            aggregate data from the Forest Service, Park Service,
                            Bureau of Land Management, state forestry agencies,
                            and others.

                            2. Need for support--Will agencies have the broad
                            support needed to devote time and resources to
                            designing environmental accounts?

                            The federal government's previous effort to develop
                            environmental accounts was halted by Congress.
                            Renewed efforts need the support of the
                            administration, Congress, and the public.

                            3. Need for resources--How will the United States
                            fund the development of environmental accounts?

                            A new institutional arrangement designed to allow
                            disparate agencies to collaboratively develop
                            environmental accounts would require additional
                            funding. Securing such funding in the present era of
                            tightly constrained budgets could pose a significant
                            challenge.

                            4. Methodological uncertainty--How should the United
                            States address uncertainties, for example in
                            measuring and valuing our natural resources and
                            environmental assets?

               In the past, resistance to environmental accounting has stemmed
               from questions about the methodological soundness for measuring
               stocks and flows of natural resources and quantities of
               environmental services and procedures for valuing nonmarket goods
               and services. Developing national environmental accounts requires
               consensus on methodological approach and implementation
               techniques.

                            5. Data availability, compatibility, and
                            reliability--What actions are needed to ensure that
                            the essential data are produced?

                            Sufficient, compatible, and reliable data must be
                            available to develop and populate environmental
                            accounts. While many entities collect relevant data,
                            it may or may not be available, compatible, and/or
                            reliable.

               Appendix VI: Presentation Given by the Comptroller General of the
    			  United States

    			  Appendix VII: Contacts and Acknowledgments

    			  Contacts

               Robert A. Robinson, (202) 512-3841, [45]robinsonr@gao.gov
               Constance F. Citro, (202) 334-2000, [46]ccitro@nas.edu

    			  Acknowledgments

               In addition to the contacts above, James Cosgrove, Acting
               Director; Jose Alfredo Gomez, Assistant Director; Richard
               Bakewell; John Delicath; and Barbara Patterson, all of GAO; and
               Jane Ross, Director, and Christopher Mackie, Study Director, both
               of NAS; managed all aspects of the work.

    			  Related Products

    			  Related NAS Products

               Beyond the Market: Designing Nonmarket Accounts for the United
               States. Washington, D.C.: National Research Council, 2005.

               Nature's Numbers: Expanding the National Economic Accounts to
               Include the Environment. Washington, D.C.: National Research
               Council, 1999.

    			  Related GAO Products

               Environmental Information: Status of Federal Data Programs That
               Support Ecological Indicators. [47]GAO-05-376 . Washington, D.C.:
               September 2, 2005.

               Environmental Indicators: Better Coordination Is Needed to Develop
               Environmental Indicator Sets That Inform Decisions. [48]GAO-05-52
               . Washington, D.C.: November 17, 2004.

               Watershed Management: Better Coordination of Data Collection
               Efforts Needed to Support Key Decisions. [49]GAO-04-382 .
               Washington, D.C.: June 7, 2004.

               Geographic Information Systems: Challenges to Effective Data
               Sharing. [50]GAO-03-874T . Washington, D.C.: June 10, 2003.

               Forum on Key National Indicators: Assessing the Nation's Position
               and Progress. [51]GAO-03-672SP . Washington, D.C.: May 1, 2003.

               Great Lakes: An Overall Strategy and Indicators for Measuring
               Progress Are Needed to Better Achieve Restoration Goals.
               [52]GAO-03-515 . Washington, D.C.: April 30, 2003.

               Major Management Challenges and Program Risks: Environmental
               Protection Agency. [53]GAO-03-112 . Washington, D.C.: January 1,
               2003.

               Results-Oriented Management: Agency Crosscutting Actions and Plans
               in Border Control, Flood Mitigation and Insurance, Wetlands, and
               Wildland Fire Management. [54]GAO-03-321 . Washington, D.C.:
               December 20, 2002.

               Environmental Protection: Observations on Elevating the
               Environmental Protection Agency to Cabinet Status. [55]GAO-02-552T
               . Washington, D.C.: March 21, 2002.

    (360872)

    United States Government Accountability Office
    Washington, D.C. 20548-0001

    Official Business

    Penalty for Private Use $300

    Address Service Requested

    MEASURING OUR NATION'S NATURAL RESOURCES AND ENVIRONMENTAL SUSTAINABILITY

    October 2007

    GAO-08-127SP

    [57]www.gao.gov/cgi-bin/getrpt?GAO-08-127SP .

    To view the full product, including the scope
    and methodology, click on the link above.

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

    Highlights of [58]GAO-08-127SP , a GAO and NAS forum

    October 2007

    HIGHLIGHTS OF A GAO/NAS FORUM

    Measuring Our Nation's Natural Resources and Environmental Sustainability

    One of the greatest challenges facing the United States in the 21^st
    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:

               o Provide data in a timely manner. To be useful to decision
               makers, environmental accounting data must be timely.
               o Political interest can wax and wane. Shifting political agendas
               can affect policymakers' interest in environmental accounting.
               o 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:

               o Identify policymakers, experts, and others who support the
               effort.
               o Build an economic business case for environmental accounting.
               o Use an incremental approach.
               o 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.

    GAO's Mission

    The Government Accountability Office, the audit, evaluation, and
    investigative arm of Congress, exists to support Congress in meeting its
    constitutional responsibilities and to help improve the performance and
    accountability of the federal government for the American people. GAO
    examines the use of public funds; evaluates federal programs and policies;
    and provides analyses, recommendations, and other assistance to help
    Congress make informed oversight, policy, and funding decisions. GAO's
    commitment to good government is reflected in its core values of
    accountability, integrity, and reliability.

    Obtaining Copies of GAO Reports and Testimony

    The fastest and easiest way to obtain copies of GAO documents at no cost
    is through GAO's Web site ( [59]www.gao.gov ). Each weekday, GAO posts
    newly released reports, testimony, and correspondence on its Web site. To
    have GAO e-mail you a list of newly posted products every afternoon, go to
    [60]www.gao.gov and select "E-mail Updates."

    Order by Mail or Phone

    The first copy of each printed report is free. Additional copies are $2
    each. A check or money order should be made out to the Superintendent of
    Documents. GAO also accepts VISA and Mastercard. Orders for 100 or more
    copies mailed to a single address are discounted 25 percent. Orders should
    be sent to:

    U.S. Government Accountability Office 441 G Street NW, Room LM Washington,
    DC 20548

    To order by Phone: Voice: (202) 512-6000
    TDD: (202) 512-2537 Fax: (202) 512-6061

    To Report Fraud, Waste, and Abuse in Federal Programs

    Contact:

    Web site: [61]www.gao.gov/fraudnet/fraudnet.htm
    E-mail: [62]fraudnet@gao.gov
    Automated answering system: (800) 424-5454 or (202) 512-7470

    Congressional Relations

    Gloria Jarmon, Managing Director, [63]JarmonG@gao.gov , (202) 512-4400
    U.S. Government Accountability Office, 441 G Street NW, Room 7125
    Washington, DC 20548

    Public Affairs

    Susan Becker, Acting Manager, [64]BeckerS@gao.gov , (202) 512-4800 U.S.
    Government Accountability Office, 441 G Street NW, Room 7149 Washington,
    DC 20548

    References

    Visible links
      45.mailto:robinsonr@gao.gov
      46.mailto:ccitro@nas.edu
      47. http://www.gao.gov/cgi-bin/getrpt?GAO-05-376
      48. http://www.gao.gov/cgi-bin/getrpt?GAO-05-52
      49. http://www.gao.gov/cgi-bin/getrpt?GAO-04-382
      50. http://www.gao.gov/cgi-bin/getrpt?GAO-03-874T
      51. http://www.gao.gov/cgi-bin/getrpt?GAO-03-672SP
      52. http://www.gao.gov/cgi-bin/getrpt?GAO-03-515
      53. http://www.gao.gov/cgi-bin/getrpt?GAO-03-112
      54. http://www.gao.gov/cgi-bin/getrpt?GAO-03-321
      55. http://www.gao.gov/cgi-bin/getrpt?GAO-02-552T
      56. http://www.gao.gov/cgi-bin/getrpt?GAO-03-672SP
      57. http://www.gao.gov/cgi-bin/getrpt?GAO-08-127SP
      58. http://www.gao.gov/cgi-bin/getrpt?GAO-08-127SP
      59. http://www.gao.gov/
      60. http://www.gao.gov/
      61. http://www.gao.gov/fraudnet/fraudnet.htm
      62.mailto:fraudnet@gao.gov
      63.mailto:JarmonG@gao.gov
      64.mailto:BeckerS@gao.gov
    *** End of document. ***