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						 

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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

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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][email protected]
           Constance F. Citro, (202) 334-2000, [46][email protected]
			  
			  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)

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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
[email protected].

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.

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References

Visible links
  45.mailto:[email protected]
  46.mailto:[email protected]
  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:[email protected]
  63.mailto:[email protected]
  64.mailto:[email protected]
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