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5 War and Peace Among Stakeholders Environmental information systems created for public purposes have many uses, including commercial uses (see Box 3.1~. A notable example is the $500 million U.S. commercial weather industry, which uses inexpensive government-collected weather data and core products to produce commercial weather forecasts and weather derivative so. The public is well served by having access to such data and services, which would not otherwise be provided by the information system. If arrangements can be made that satisfy the needs of the public sector, then commercial data are a welcome addition to the system. The same is true of government data that are restricted because of confidentiality or national security concerns or because of their commercial potential. The latter is particularly relevant in Europe. On the other hand, if restrictions prevent the data Mom being used in the Wok, then the data cannot be viewed as contributing to a public-sector information system. iR.A. Guth, 2000, Japan's weather mogul to storm U.S., Wall Street Journal, October 30, p. B-1. Given the number of companies (more than 240) and their revenues (few millions to tens of millions each), it is likely that the $500 million figure does not include television and radio broadcasting. Weather derivatives allow businesses sensitive to the vagaries of weather to protect themselves against changes in costs and sales linked to variations in climate. These financial instruments can be designed for almost any weather variable (e.g., rain, snow, wind), although most focus on long-range (seasonal) temperature forecasts. Weather Risk Management Association, chttp://www. wrma.org>. In 2000 weather-derivatives contracts with a total value of $2.5 billion were issued in the United States. PricewaterhouseCoopers, 2001, The weather risk management industry: Survey findings for November, 1997 to March, 2001. A report to the Weather Risk Management Association, . 53

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54 The Privatization of Environmental Data Examples of successes and failures in the use of commercial data in public-sector environmental information systems are given below. INFORMATION SYSTEMS CREATED PURELY FOR PUBLIC PURPOSES Potential Conflicts in the Roots The need for credibility of public-sector information products requires the input data to be available on a full and open basis or at least be subject to a scientific audit with minimal restrictions (see Box 4.~. The rigor of the scientific audit needed depends on the nature of the data and how they will be used. Restricted data that improve the efficiency of core product development but do not affect their scientific validity (e.g., base maps) may require only limited scientific scrutiny. On the other hand, when restricted data are essential to the creation of the core product, the data must be made available on a full and open basis or they cannot be used in public-sector information systems (see Example 5.1~. in some cases, unacceptable restrictions on commercial data are lifted after an initial proprietary period, when the economic value has declined (see Examples 5.2 and 5.3~. Such data can be an important asset to the environmental sciences, which gain a valuable new resource at a fraction of the original cost.

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War and Peace Among Stakeholders 55

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56 The Privatization of Environmental Data

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War and Peace Among Stakeholders

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58 The Privatization of Environmental Data The Commercial Space Act directs NASA to purchase Earth remote- sensing data from a commercial provider to the extent possible (see Box 2.1~. The intention of the legislation was to prevent government agencies from competing with private-sector organizations. At the same time, unfounded complaints about competition can stifle innovation in the government (see Example 5.41.

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War and Peace Among Stakeholders 59 Potential Connicts in the Trunk Confidence in the output of the trunk requires many creative minds to critique and verify each step of the transformation from raw data to finished products. Computer programs or algorithms with undetected errors are notorious for promulgating misinformation to the entire user community. Anything that makes scientific scrutiny more cumbersome or expensive increases the chances that errors will not be detected in a timely manner. For the shared-use information systems under discussion, such misinformation would be an intolerable outcome. Validating data through repeated measurements or cross-checking with other independent sources turns scientific data into information (see Box 1.1~. The calibration and validation steps are also necessary for detecting errors in the algorithms for processing data (see Example 5.5) or for improving the efficiency of algorithm development. Once the instrument is deployed, routine cross-checks with other instruments are essential for discovering errors, changes in instrument behavior, or scientific surprises (see Example 5.6~.

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60 The Privatization of Environmental Data

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War and Peace Among Shareholders 61 Policies of full and open access maximize the quantity and credibility of data flowing to the trunk. However, under some circumstances, restricted data that have undergone a scientific audit offer a second best source of information (see Box 4.1~. For this information to

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62 The Privatization of Environmental Data be useful in scientific core products, commercial vendors must be willing to disclose enough details to establish the credibility of their sources, quality assurance, and algorithms, without permitting a competitor from replicating their commercially valuable products. As long as the data are subject to scientific audit, limited disclosure may be good enough for public purposes (see Example 5.7), though limitations of any kind reduce the opportunities for independent innovative exploitation of the data or improvement in observing technique.

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War and Peace Among Stakeholders 63 Potential Connicts in the Branches Many user groups want value-added products or services that make the core products more convenient to use (see Example 5.~. Such services may be provided by a wide variety of public and private-sector entities, including scientists, data centers, government project offices, nongovernmental organizations, and commercial vendors. Nevertheless, many private-sector organizations regard the creation of value-added products and services by publicly funded entities as unfair competition because they are subsidized by tax dollars (see Example 5.9~.

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64 The Privatization of Environmental Data

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War and Peace Among Stakeholders 65 Confidential Government Data Data that are confidential because of national security or privacy concerns pose many of the same challenges as proprietary data. To be useful in public-purpose environmental information systems, the data must undergo a scientific audit (see Example 5.10), and be produced or

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66 The Privatization of Environmental Data "ridded by trusted brokers to remove the confidential elements (see Examples 5.10 and 5. ~ 1~.

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War and Peace Among Stakeholders 67

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68 The Privatization of Environmental Data INFORMATION SYSTEMS AND PUBLIC-PRIVATE PARTNERSHIPS Environmental information systems are not always created solely for public purposes; many are created with a mixture of public and com- mercial goals. In such cases, public-private partnerships are commonly established to collect data, create products, or distribute data. A common mechanism for obtaining data through public-private partnerships is the "data buy," in which a commercial organization builds and deploys an instrument and the government agrees in advance to buy the data. Federal agencies that operate satellites are increasingly looking to data buys to cut costs, reduce financial risks, and comply with legislation prohibiting competition with the private sector. For example, NASA is currently purchasing data on ocean color (see Example 5.12), and has negotiated agreements to purchase data related to land use and land cover, climate variability, and natural hazards from five commercial remote sensing companies.2 NASA is also considering a data purchase gov/>. 2See NASA's Scientific Data Purchase program, OCR for page 53
War and Peace Among Stakeholders 69 for Landsat-S, although previous attempts to privatize Landsat missions have not been successful.3 One of the most difficult issues to resolve in public-private partnerships is the terms of access to the data. Tn some cases the needs of both sectors can be met, such as when time sensitivity distinguishes the public sector and commercial markets (see Example 5.12) or when short- term commercial gain is less important than building market share in the long term (see Example 5.13~. In other cases the inability to reconcile commercial and noncommercial objectives may prevent new observing systems from being built (see Example 5.14~. 3Will the U.S. bring down the curtain on Landsat? Science, v. 288, p. 2309 23 1 1, 2000.

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70 The Privatization of Environmental Data

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War and Peace Among Stakeholders 71

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72 The Privatization of Environmental Data OVERALL LESSONS LEARNED Tn public-purpose environmental information systems a full and open data policy is optimal for collecting and synthesizing a wide range of observations, detecting scientific surprises, and avoiding or discovering processing or calibration errors. Commercial data that are provided without restriction and at reasonable prices are a valuable addition to public-purpose information systems. Providing unrestricted access can be compatible with commercial goals, either because the commercial market will not be adversely affected by open use and publication of the data, services are of greater value than the underlying data, the priorities of the cornrnercial vendor have changed, or because the potential Tong- terrn gain far outweighs any lost short-term profit. Restricted data can sometimes be used for public purposes, such as when a scientific audit or

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War arid Peace Among Stakeholders 73 a trusted broker certifies the reliability of the information for the purpose at hand. However, such workarounds reduce the efficiency of information systems and have scientific and monetary costs that must be taken into account when making decisions about acquiring and using restricted data. Privatizing government functions or creating public-private partnerships is not always the best solution for meeting the needs of all environmental stakeholder groups, particularly if the net result is a reduction of information that resides in the public domain. THE NEED FOR A PROCESS OF NEGOTIATING AMONG STAKEHOLDERS The requirement that the information system serve multiple uses leads to the involvement of groups of stakeholders- research scientists, private-sector organizations, government agencies, policy makers, and the general public whose interests may not entirely coincide. Typically missing in existing management structures is a clear, identifiable process for stakeholders or their representatives to negotiate the details of solutions that optimize common interests and minimize conflicts, both at the policy level and in the details of implementation.4 Of particular concern is the need to reconcile the requirement that sufficient high- quality data be available in the public domain (i.e., unrestricted access) with other requirements such as the need for (1) private-sector revenue; (2) protection of national security or personal privacy; or (3) demon- stration of the value of investments of public funds. Solutions to these conflicts will depend on the particular circumstances of the information system at hand. Environmental information systems frequently nucleate around informal collaborations (including volunteers) that demonstrate useful partnerships. Such collaborations have a manageable number of stakeholder groups that share enough common interests and requirements to be able to negotiate reasonable agreements. The system then evolves incrementally, limited by the ability to demonstrate real value for the costs that must be incurred and by the ability to secure necessary 4Advisory committees and workshops are good mechanisms for securing input from stakeholder groups, but they lack authority to negotiate on the stakeholders' behalf.

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74 The Privatization of Environmental Data resources (dollars and people) to implement those improvements on an ongoing basis in order to address evolving, long-term environmental issues (see Chapter 3, "The Cycle for Updating Environmental Information Systems". Negotiating agreements across the entire environmental enterprise is a daunting process. As the nuclei develop into long-term commitments, more formal arrangements, such as international negotiations carried out at the level of governments (e.g., Kyoto Protocol) become necessary. On a formal basis there are two foci for negotiations, both of which are part of the cyclic process for updating the information system. One nexus is the selection of core products to be made available for public distribution, and hence of priorities for the underlying observations. The other nexus is the determination of detailed requirements for data from the individual observation systems that comprise the roots. Negotiations must address both technical issues (i.e., what data are needed to achieve stated objectives) and operational issues (i.e., who would do what and how much it would cost). The results of these negotiations provide the basis for policy decisions. The public interest favors finding compromise solutions that are recognized by the parties concerned as reasonably satisfactory, but satisfactory agreements depend on who is at the negotiating table. For example, scientific needs (e.g., full and open access) are not always understood or taken into account because intergovernmental agreements or public-private partnerships are typically handled by government lawyers and business offices. If scientists were at the table, they would be more confident that their interests were being represented effectively. As part of the negotiations, government agencies should be prepared to provide an independent analysis of social benefits and costs using, for example, guidelines described in the following chapter. Reconciliation of the stakeholders' viewpoints is needed to produce a system that is vital and ensures environmental understanding and communal governance of the resources upon which we all depend. Recommendation. U.S. federal agencies with responsibility for multi-purpose environmental information systems should establish a clear, visible process through which represen- tatives of all the stakeholder groups discuss the performance and negotiate the redesign of such systems with the goal of reconciling their interests.