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OCR for page 1
Executive Summary
TTIE NEED FOR RELIABLE INFORMATION
Reliable collections of science-based environmental information are
vital for many groups of users and for a number of purposes. For
example, electric utility companies predict demand during heat waves,
structural engineers design buildings to withstand hurricanes and
earthquakes, water managers monitor each winter's snow pack, and
farmers plant and harvest crops based on daily weather predictions.
Understanding the impact of human activities on climate, water,
ecosystems, and species diversity, and assessing how natural systems
may respond in the future are becoming increasingly important for public
policy decisions. Environmental information systems gather factual
information, transform it into information products, and distribute the
products to users. Typical uses of the information require long-term
consistency; hence the operation of the information system requires a
Tong-term commitment from an institution, agency, or corporation. The
need to keep costs down provides a strong motivation for creating multi-
purpose information systems that satisfy scientific, commercial and
operational requirements, rather than systems that address narrow
objectives. This report focuses on such shared systems.
The five stakeholder groups in shared environmental information
systems research scientists, private-sector organizations, government
agencies, policy makers, and the general public have different goals
and modes of operation. In particular, public-sector users (scientists,
government agencies, and policy makers) generally rely on full and open
access to data (i.e., data are made available without restriction for any
use for no more than the marginal cost of filling a user request). On the
other hand, in order to generate a financial return most private-sector
organizations (for-profit producers and distributors of data and products)
must restrict access to data. If the price of data increases without a
1
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The Privatization of Environmental Data
commensurate increase in scientific value, then scientific and technical
progress will decline. Nevertheless, some private-sector entities and
Congress are urging government agencies to increase the involvement of
the private sector in collecting and disseminating data and creating data
products for public purposes. A number of government-developed
satellite technologies are sufficiently mature to permit private-sector
companies to enter the remote-sensing industry. Once established,
however, private-sector organizations often do not want the government
to compete with them by continuing to collect observations or to produce
and disseminate information products. This view has been echoed by
Congress in bills authorizing funding for federal agencies and in
legislation forbidding agencies from competing with the private sector.
These and other stakeholder viewpoints must be reconciled for the
system to work. Underlying such a reconciliation should be the principle
that the public welfare is best served by information systems that
establish the relevant facts and enable the widest distribution to the
public of facts and knowledge derived from them. Establishing the facts
and distributing information are distinct functions that warrant separate
consideration.
Recommendation. Environmental information systems that
are created by the U.S. government to serve a public purpose
should continue to establish facts that are accessible to all. To
facilitate further distribution these facts should be made
available at no more than the marginal cost of reproduction
and should be useable without restriction for all purposes.
This recommendation extends the current practice of supplying most
environmental data free or at marginal cost. U.S. policy (OMB Circular
A-130) specifies that data should be made available at no more than
incremental cost, which is slightly higher.
Given the above recommendation, the question is what roles can
the private sector play effectively in shared-use, public-purpose
environmental information systems?
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Executive Summary
THE ENVIRONMENTAL INFOR1\/IATION SYSTEM TREE
3
Environmental information systems created for public purposes can
be portrayed in terms of a simple analogy an information Bee con-
sisting of four parts:
1. An extensive root system that draws data from many different
sources and organizations.
2. A trunk in which all available information is synthesized into a
limited set of core products.
3. Multiple branches that distribute and enhance the core products
into value-added products, each branch serving a distinct community of
users.
4. Leaves, which represent uses of information products of the
trunk and branches.
Collecting measurements and developing core products are typically
the most expensive parts of the information system. It is not possible for
private-sector organizations to recoup these costs solely by selling infor-
mation products at the marginal cost of reproduction. Because of the cost
structure of public-purpose environmental information systems and the
need for their scientific validity, the public interest is best served by
funding the trunk and roots out of taxpayer resources, and providing full
and open access to a set of reliable core products. However, the value of
distributing information derived from the core products in a convenient
form to as broad a group of users as possible (i.e., through the branches)
has made some privately-driven value-added markets successful.
Recommendation. The practice of public funding for data
collection and synthesis should continue, thereby focusing
contributions of the private sector primarily on value-added
distribution and specific observational systems.
If private-sector organizations are able to provide a stable supply of
high-quality data that fulfills public purposes without compromising the
commercial market, then data collection in public-purpose information
systems can in principle be privatized or managed through public-private
partnerships. Similarly, the marketplace may provide an appropriate
mechanism for deciding what value-added products are developed,
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The Privatization of Environmental Data
although the government may have to provide them if commercial value-
added products are not suitable for public purposes. The decision on
public versus private funding should not be an ideological one. Rather,
the choice of whether to acquire data or value-added products to meet
government missions and mandates by direct funding or to purchase
them through private-sector initiative must be based on sound analysis of
the value of the information to the public good, likely market forces,
revenues, and costs. The government should not expect the commercial
market to supply data or value-added products on a full and open basis.
Thus, commercial data or information products meant specifically to
meet public-sector needs should be purchased and wholly owned by the
government and placed in the public domain.
A PROCESS FOR NEGOTIATING AMONG STAKElIOLDERS
The objectives of the information system broadly constrain the roles
of the five stakeholder groups. However, there is currently no recognized
process for the stakeholders or their representatives to negotiate solutions
that optimize common interests and minimize conflicts. Such a process is
particularly important for information systems created with a mixture of
public and private objectives because virtually every aspect of the system
is negotiable. Issues must be resolved at the policy level (e.g., public
funding of the trunk) and in the implementation details (e.g., the
priorities for core products). Solutions will depend on the particular
circumstances of the information system at hand. Thus, policy makers
cannot expect to write a general rule that will settle conflicts for all
stakeholders in all situations. Yet, finding common ground is imperative
if the nation is to benefit from using environmental resources in a
sustainable fashion and humankind is to face the challenges associated
with their impact on the environment.
Recommendation. U.S. federal agencies with responsibility
for multi-purpose environmental information systems should
establish a clear, visible process by which representatives of
all the stakeholder groups discuss the performance and
negotiate the redesign of such systems with the goal of
reconciling their interests.
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Executive Summary
s
COMMERCIALIZATION AND PRIVATIZATION
The terms "commercialization" and "privatization" are commonly
used interchangeably, yet they mean different things and have different
implications for public-purpose information systems. Commercialization
is defined in this report to mean the financial exploitation of government
data, whereas privatization refers to the transfer of government functions
to the private sector. In the United States, public laws providing for
unrestricted, affordable access to government data permit the coexistence
of corurnercial exploitation of government data with public-sector uses,
such as scientific research. As a result, commercialization maximizes the
use and thus the value of data to all users. The same is not true in
countries that exercise intellectual property rights over government data
and thus limit the extent to which government-collected data can be used,
even in international collaborations. By making it more difficult to
integrate global datasets and share knowledge, such a cornrnercialization
policy will fait to achieve the maximum benefits provided by inter-
national collaboration and the scientific endeavor.
Privatization is not without risk to the public because it involves
discontinuing government functions with proven value in favor of
private-sector services for which benefits may never accrue. The risks
are greatest in data collection because of the potential for price increases
that disrupt scientific practices or gaps in the long-term record of
environmental change. Nevertheless, under certain conditions, the
collection of data and/or generation of data products can be transferred
beneficially from the government to the private sector. In fact, by failing
to do so, the fills public benefit may not be achieved.
Decisions concerning which functions should be public and which
ones should be private must be made case by case. Most decisions will
involve the transfer of government functions to the private sector, but
some will concern re-entry of the government as a supplier.
Recommendation. Before transferring government data
collection and product development to private-sector organ-
izations, the U.S. government should ensure that the
following conditions will be satisfied: (~) avoidance of market
conditions that give any firms significant monopoly power;
(2) preservation of full and open access to core data
products; (3) assurance that a supply of high-quality infor-
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The Privatization of Environmental Data
mation will continue to exist; and (4) minimized disruption to
ongoing uses and applications.
Representative terms from entire chapter:
government data
