At the start of the 1950s, questions about the supply and adequacy of natural resources had moved to the forefront of public concern. A number of books had recently been published on the theme of “resource scarcity,” and the heavy and unforeseen demands of the Korean War were rapidly heightening old fears about the future availability of materials critical to human survival.
Thus, in 1951, President Harry Truman established the Materials Policy Commission (also known as the Paley Commission, after Chairman William Paley) to study the country's natural resource needs. The mandate of the commission was to look into the long-range outlook for requirements and supplies, helping to guard against shortages in the event of another widespread war. The report it produced, Resources for Freedom: Foundations for Growth and Security, recommended the formation of an independent organization to analyze the supply of the country’s natural resources. Resources for the Future (RFF) was created to serve that need.
Founded in 1952 with initial grants from the Ford Foundation, RFF became the first think tank devoted exclusively to natural resource and environmental issues. In its early years, RFF focused on natural resource scarcity and import dependence, helping to pioneer the field of environmental and natural resource economics.
RFF was instrumental in founding the Association of Environmental and Resource Economists (AERE) in 1979, which was established as a means of exchanging ideas, stimulating research, and promoting graduate training in resource and environmental economics. AERE currently has nearly 900 members from more than 30 nations, drawn from academic institutions, the public sector, and private industry.
John Krutilla is considered to be one of the creators of the modern theory of resource conservation. In his 1967 paper "Conservation Reconsidered," he identified the economic value of undisturbed natural environments such as rivers and forests. Published in the American Economic Review, the paper became a benchmark in the economics of conservation and provided a basis for including preservation benefits in policy analysis.
Allen Kneese’s work on water quality management led him to argue that market-based incentives such as pollution taxes were more efficient than conventional regulation. His ideas laid the groundwork for the sulfur dioxide emissions trading program established by Congress in 1990. Kneese demonstrated that market mechanisms could reduce both pollution and costs to the economy by leaving it up to each polluter to find the cheapest and easiest way to comply.
Hans Landsberg’s contributions included lead authorship in 1963 of Resources in America's Future, a thousand-page volume examining the role of natural resources in the US economy and projecting their long-term availability. Both this and another 1963 RFF publication, Scarcity and Growth, put forth the fundamental idea that the impact of growth on environmental quality was a much more significant problem than any threat of natural resource shortages.
Harvey J. Levin
Harvey Levin’s work in the field of communications economics laid the foundation for many of today’s most important regulatory policies. His 1971 book, The Invisible Resource: Use and Regulation of the Radio Spectrum (RFF Press), proposed a revolutionary market-based approach to utilizing the electromagnetic spectrum. Twenty years later, the Federal Communications Commission (FCC) recognized his approach and began licensing and auctioning airwaves.
RFF: The First 40 Years
As a “sentinel” for America’s natural resources, Resources for the Future (RFF) receives initial funding from the Ford Foundation “to support the conservation, development, and use of natural resources.”
The Mid-Century Conference, echoing the Governors’ Conference organized in 1908 by President Theodore Roosevelt, provides President Dwight Eisenhower and leading conservationists, businesspeople, and policymakers “an open forum on resource issues of continuing significance for at least the next generation.”
In a landmark book, John Krutilla and Otto Eckstein recognize the need to identify all the consequences of dam construction and stream channelization, including effects on recreation and habitat.
Marion Clawson (and later Jack Knetsch) uses costs incurred in getting to recreation sites as a partial measure of the benefits of outdoor recreation, thus launching a new era in environmental valuation.
Resources magazine, RFF’s flagship publication, is launched
Harvey Perloff, Lowdon Wingo, and Wilbur Thompson begin work at RFF that leads to the creation of the field of urban economics.
With three landmark publications (building on years of original data collection and analysis by Neal Potter and Francis Christy), Hans Landsberg, Leonard Fischman, and Joseph Fisher, as well as Harold Barnett and Chandler Morse, recast the debate about resources, alleviating concerns about looming scarcity by pointing out that higher prices for scarce resources dampen demand and stimulate the search for substitute materials, thus stretching available supplies.
Francis Christy and Anthony Scott’s trailblazing work applies the principles of resource economics to the world’s fishing stocks, calling attention to the risk of over-fishing and foreshadowing complex regulatory, economic, and conservation linkages.
John Krutilla’s classic article “Conservation Reconsidered” anticipates in nine pages what later came to be known as the pillars of resource economics: the “existence value” of a wilderness area, the “option value” of preservation, and the irreversible nature of some economic development.
A pathbreaking study by Allen Kneese (with Robert Ayers and Ralph d’Arge) recasts economic thinking about the environment by linking together engineering, economic, and ecological models to treat industrial production as a closed loop.
Further applying the core principles of resource economics to an “invisible resource,” Harvey Levin identifies the radio spectrum as a public good requiring careful regulation, anticipating by 25 years the auctioning of spectrum rights.
RFF Board Member and Secretary General of the UN Conference on the Human Environment Maurice Strong organizes the first international conference focused on balancing development and environmental needs, advised throughout by RFF’s Hans Landsberg.
Allen Kneese (with Clifford Russell and Walter Spofford, Jr.) calls attention to the unique problems of coastal zones and river basins, setting forth research approaches to protection and management. Russell (with Spofford, Edwin Haefele, and Robert Kelley) then applies these methods in assessing the lower Delaware Valley and provides policy recommendations, using a model of 8,000 variables looking across 300 human activities.
In a classic set of wilderness valuation case studies, John Krutilla and Anthony Fisher demonstrate the importance and difficulty of fully quantifying the environmental benefits of an undeveloped wilderness area, so that these values can be more accurately compared with those of commercial development.
In a pathbreaking study of the effects of air pollution on human health and premature death, Lester Lave and Eugene Seskin complete the most statistically sophisticated epidemiological study conducted to date.
In a series of major studies in the midst of the energy crisis, Sam Schurr, Joel Darmstadter, Douglas Bohi, and Milton Russell define energy policy options that more fully account for economic and environmental constraints and consequences.
Addressing the technically complex problem of comparing the effects of policy changes today with those in the future, Robert Lind proposes a solution to competing views of this discounting issue that holds for decades, making cost-benefit assessments of energy and environmental policies much more tractable.
Paul Portney, John Mullahy, Alan Krupnick, and Winston Harrington begin a sustained program of research on the effects of air pollution on human health and the way individuals value reduced risks of illness and death.
Michael Hazilla and Raymond Kopp use their large-scale dynamic model of the US economy to evaluate the economic implications of the Clean Air and Clean Water Acts, changing the paradigm for all future economic analyses of environmental regulation.
RFF creates the Center for Risk Management to help regulatory authorities identify, rank, and reduce threats to human health and the environment.
Robert Mitchell and Richard Carson synthesize and systematically present for the first time core approaches underlying the contingent-valuation and stated-preference methods for determining what value citizens apply to environmental improvements.
Initiating a major effort to export the tools of environmental quality management and cost-benefit analysis, Walter Spofford, Jr. expands RFF’s decades-long work in China, leading to the establishment of China’s first environmental think tank, an organization modeled on RFF. Meanwhile, work is initiated to encompass environmental and development challenges in Eastern Europe and the former Soviet Union.