Issue 119: Theory and Practice

For years, RFF has conducted high-quality research on environmental and natural resource issues and made our results available to decisionmakers across the board—from federal, state, and local policymakers to environmentalists and members of the business and legal communities. We have learned a great deal about turning theoretically attractive concepts into practical tools.

As this Resources shows, our scholars continue to extend the frontier of knowledge about economic aspects of environmental issues and to apply this essential know-how to pressing problems in the real world. For example, given that new technologies have often helped us find alternatives for scarce resources, David Austin explains how economists can use patents as indicators of innovation in market economies. He also considers how investment in research, as measured by patents, can be optimized to create value and efficiency in resource use.

Robert Stavins, an RFF university fellow from the John F. Kennedy School of Government at Harvard University, delves into the problem of how transaction costs—the costs of buying and selling—can affect the success of emission-permit trading programs. These programs, which were welcomed as a market-based means of reducing polluting emissions, have not been as successful as economists predicted, and transaction costs may be one reason for this.

Vito Stagliano, an RFF visiting scholar, served in the Department of Energy and helped develop Bush's "National Energy Strategy." He traces the history of national concern about energy security and argues that energy security has been overemphasized as a problem. OPEC is far from being a serious threat to U.S. energy security, he says, even though energy policy continues to be haunted by OPEC's ghost.

Walter Spofford's article on RFF's work on environment and development issues in the People's Republic of China is less about pure research than about how RFF's research storehouse is being put to practical use. He reviews RFF's collaboration with Chinese universities and municipalities, beginning with a project to translate fifteen RFF books into Chinese through RFF's efforts to train Chinese economists to carry on this important work.

"Inside RFF" is packed with examples of our research being put into the hands of decisionmakers. For example, Congress invited three of our researchers to testify on issues related to benefit-cost analysis and Superfund. In addition, RFF is publishing two books on Superfund this year, one of which was the subject of a book briefing.

We are especially pleased that Ma Zhong, an eminent Chinese scholar, completed his third working visit to RFF, and that two notable practitioners—Dick Morgenstern, former director of EPA's Office of Policy Analysis, and George Eads, former vice president and chief economist at General Motors—have arrived for long-term residences at RFF.

Such activities are a crucial part of RFF's mission. We are grateful to the generous support of our contributors, who make our research possible both in theory and in practice.

— Robert W. Fri, President