Assessment of the U.S. Outer Continental Shelf Environmental Studies Program: III. Social and Economic Studies (1992)

The Minerals Management Service (MMS) and other federal agencies charged with managing the natural resources of the United States increasingly are required by legislation to assess the social, economic, and cultural effects of development and regulation. As a result, some agencies are developing research agendas to address these responsibilities and to determine what socioeconomic data are needed to discharge them. These agencies also are developing methods for collecting data and for devising ways to interpret and integrate the data into the decision-making process.

These are new tasks, and because MMS's scientific staff (outside of Alaska) is made up primarily of engineers, biologists, and physical scientists, developing a socioeconomics research program outside of Alaska has been difficult. But the charge to MMS is clear: The Outer Continental Shelf Lands Act of 1953 as amended in 1978 (43 U.S.C. §§1331-1356, §§1801-1866) mandates consideration of the human environment in all decisions concerning the leasing and development of offshore tracts. The term "human environment" as defined by the act includes not only the features of ecosystems as perceived by, related to, or modified by human populations, but the human populations themselves and their social, cultural, and economic systems. This simple characterization masks enormous complexity and requires some clarification before it can be used as the basis for designing or evaluating a research program. (Appendix B is a more extensive treatment of this topic.)

The concept of the human environment is essential in theory and in the practical requirements of the law governing activities in the outer continental shelf (OCS). There are no fundamental differences to separate the physical, natural, and social sciences. Where differences do occur, they usually are linked to the complexities characteristic of human systems (Baerwald, 1991).

The Minerals Management Service has access to nearly 50 years of experience drilling for oil and gas in coastal and offshore areas. These "data" about human decisions and behavior are important: They can shed much light on ways to resolve future conflicts. The problems that confront MMS are difficult and complex. Ranked high on the list must be the requirements to define the human environment as it interfaces with OCS activities. The difficulty is reflected in a general comment from Holden, published in Science magazine as "The Ecosystem and Human Behavior" (Holden, 1988):

Much basic, defining, and characterizing research needs to be done in the general realm of the human environment. Evidence here is contained in the various substantial recommendations for research into the nature of the human environment recently offered by the National Research Council's Committee on the Human Dimensions of Global Change (NRC, 1992). These recommendations are germane to MMS experience in anthropogenic changes to the natural environment and are similar to several recommendations made by this panel in earlier reports to MMS (NRC, 1989a, 1991a). For instance, the global change committee's report asks the following basic questions (NRC, 1991b):

• How do individuals, communities, businesses, and governments come to perceive changes in the environment as requiring action? How do they identify possible responses and assess the probable consequences of the responses? Are there cultural differences in the way different communities deal with the issues?

• Given the current need for national, regional, and local comparative studies, how do global studies fit in?

• Valuing consequences of environmental change: Valuation research should explicitly address the subjective nature of valuation and the phenomenon of differences in valuation, for instance, by exploring ways of soliciting valuations from different actors as part of the social decision process.

• Environmental decision making. To what degree are proposals likely to enhance understanding of processes of decision making and conflict management in response to global environmental changes?

• What techniques of conflict resolution or conflict management are likely to prove effective in coming to terms with environmental conflicts?

Two areas of complexity in human systems are particularly relevant to this discussion. First, humans have a dual nature with respect to the environment: We are both "a biological species in an ecosystem," subject to ecological limits and dependencies, and "distinctly social" (Buttel and Humphrey, 1992). Like other species, humans depend on and affect nonhuman ecosystems (Hawley, 1950). Beyond such biological and physical connections, however, humans share at least four systems not fully developed in other species: the cultural, social, economic, and psychological systems.

Complexity also comes from what many observers see as the most distinctly human characteristic: the capacity to interpret the world—to develop, discern, and communicate meanings. For OCS projects—as for nearly everything humans experience—this means that from the moment a project is announced, or even rumored, the project affects the human environment. Although the disruption is not physical at first, its effects often are found in the opportunities and threats a project presents—or appears to present—to potentially affected groups.

Another predictable consequence is that in many cases the potentially affected groups begin to make politically charged claims about one another. Federal agency officials tend not to be passive

observers in this; they are among the most active participants in the process. In particular, agency staff members often are tempted to argue that the critics of agency policies are ''emotional'' or "misinformed" (Hance et al., 1988). These characterizations fail to acknowledge salient socioeconomic effects—and create new ones as well. They are "guaranteed to raise the level of hostility between community members and agency representatives and ultimately stand in the way of a successful resolution of the problem" (Hance et al., 1988). Such challenges can lead people to be resistant in principle to matters they might otherwise be willing to consider more dispassionately. This is all the more acute because the federal agencies' apparent failure to understand the public's concerns challenges communities' fundamental perceptions of reality. Furthermore, it is possible that for a community to have its reality disregarded by a powerful authority is profoundly alienating; it leaves no common ground on which the community and the authority can stand. The public often believes that the federal government fails to take its concerns seriously or even to understand them. Perceptions of the government's failure to pay attention and subsequent loss of popular trust in the government are common themes in public discussions of OCS development (and other activities, such as the development of nuclear power plants or hazardous-waste facilities) and are themselves socioeconomic effects. The human environment embraces the perceptions and behavior of individuals and groups: Studying it requires, in addition to economics and sociology, the disciplines of psychology, anthropology, and political science.

The human environment includes a range of demographic, economic, physical, and social features and activities that are no less important for being relatively obvious, straightforward, and easily quantified. Examples include population size and distribution; birth, death, and morbidity rates and general conditions of health; patterns and rates of immigration and emigration; dominant economic activities; economic diversity; employment and unemployment patterns and rates; traffic patterns and capacities; tax bases; government services, including education, infrastructure maintenance, police protection, and recreational facilities; and tourism and recreation. In the main, MMS's research on the human environment outside Alaska has been confined to such features.

But any adequate description of the human environment also must account for its social, symbolic, and conceptual elements, which are established by convention rather than being "naturally" constituted. The conventional rules and practices of society are founded not only on narrowly focused, specific aspects of human affairs but also on the more general and, from the point of view of the actors, the more fundamental aspects of the social contract: morality, equity, justice, and honor; religious doctrine; ideas about sovereignty, property, rights, and duties; and aesthetic values and conceptions of what constitutes quality of life.¹ Added to this is the idea of the nature of nature, of the place of humans in it, of proper behavior with respect to it, and of the equitable distribution of its fruits and its dangers, and the costs of its stewardship. Assumptions about the nature of reality and of how knowledge is gained (or created) are also included. Indeed, a long tradition of research has examined the ways in which knowledge is socially produced and legitimated both in science (Kuhn, 1970) and in everyday life (Mannheim, 1936). Inasmuch as the development of an understanding of

the symbolic nature of the human environment requires fundamental research, it could be argued that MMS should not be held responsible for it. However, some research has been done, and its application to the prediction and management of the effects of OCS activities on the human environment is properly MMS's responsibility.

The conception of the human environment upon which MMS studies have been based outside Alaska needs expansion. It seems to have been conceived only in financial, demographic, and government terms. But adequate consideration of the human environment and its complex human systems, constituted as they are of conventions, rules, and practices, as well as physical structures and features of the landscape, must rely on sociological, cultural (anthropological) and even psychological analyses. Even in Alaska, where the socioeconomics program has surpassed those of other regions by a large margin, there is a need for a more comprehensive and integrated view of the human environment.

The conception of the human environment must be sufficiently comprehensive to allow the full range of phenomena constituting human systems to enter into the analyses and to take into consideration the concerns of all interested parties, especially those who are likely to experience the social and economic effects of OCS activities most directly. It should, furthermore, be sufficiently consistent to make for reasonable commensurability between studies, thus facilitating extrapolation, comparison, and generalization, in short, encouraging learning from experience.

Although some of these considerations have in the past been ignored as esoteric, they have real implications for the way in which MMS does its business. Considerations of equity, justice, and honor were clearly evident in all the regions the panel visited, and were perhaps the major issues in northern California and Bristol Bay, Alaska. The aesthetics of offshore platforms and of onshore support facilities and structures is a major issue everywhere, but particularly in California and Florida. Debates over what constitutes "knowledge" and how it is produced in the agency were issues everywhere.

Decisions about the use and allocation of public resources and risks seldom satisfy all members of the public. In some cases, dissatisfied members resort to conflict of various types. The panel does not suggest that everyone can be satisfied with every decision about OCS activities. It does suggest that the public's reactions to government decisions are socioeconomic effects of the decisions and are a legitimate—indeed, essential—subject of socioeconomic study. In addition, a better understanding of these effects could lead MMS to develop a decision-making process that results in fewer and smaller effects than does the current process.

Risk is a central socioeconomic concept that runs through a variety of environmental problems and challenges. Why are individuals able and willing to accept risks in one circumstance when they are not in another, even objectively less threatening, circumstance?

The exciting intellectual and practical field of risk, taken to include a diversity of concepts and aspects, offers insight about how to come to terms with the stalemate in the OCS program. It is also one of the main ways in which the Environmental Protection Agency and other federal institutions are trying to come to terms and grips with difficult environmental decision making.

What are the greatest risks to humans as a consequence of environmental changes, including natural ones we really cannot control and those for which responsibility can be assigned? This basic question is far from simple, either in its definitional complexities or in its operational implications.

Risk often is defined in terms of the probability of specific events occurring—based primarily on experiences with similar events, including their occurrence and consequences. Recent conferences and workshops organized by the National Research Council Committee on Risk Assessment Methodology can offer much help in providing intellectual clarification and practical application of risk assessment to a variety of circumstances and problems of the human environment. This important work bears clearly on the activities of MMS in its OCS program, where the consistent matter at issue is and always will be disputes about the kind and amount of risk that attends oil and gas exploration, development, and production.

To the extent that concerns and fears about human health and environmental matters are growing in importance, added political support can be marshaled to pursue scientific ends. Notice, however, the important distinction between "concern and fear" and rational assessment of probabilities. The difference between "real" and ''perceived" risk is not as great as it might first appear (Freudenburg, 1988). Indeed, the formidable difficulties presented by perceptions of risk to managers in all segments of modern society are themselves an additional argument to link the human environment directly to the physical one.

The Minerals Management Service does not operate in isolation when it comes to the strong reactions it stimulates in the public at large and in the specific places where it works. Strong local opposition occurs in many different environmental realms, some of them as deadlocked as the OCS program seems to be.

The longer term consequences of environmental gridlock are notable. They include erosion of public trust in national and local institutions (O'Hare et al., 1983; Baldassare, 1985), alleged economic losses (Cook, 1988), incidents of destructive and criminal behavior (Marshall, 1989), and even large-scale social pathology (Schwartz et al., 1985; Hickman, 1988).

Although this gridlock is difficult to deal with, practical lessons from it can be adapted to the OCS situation. The approaches to breaking down the impasse fall roughly into three sometimes overlapping categories: incentives, information, and involvement. No matter the approach, there is no simple or direct solution. Furthermore, all successful approaches appreciate a community's perceptions and fears, including those associated with risk.

The incentive approach is grounded in economic concepts of human behavior (Baumol and Oates, 1975) and is displayed in common economic realities (Shuff, 1988). Human attitudes and behavioral incentives have been linked to useful effect in economic and psychological theory (Francis, 1983) and in practical application in siting waste facilities (EPA, 1982).

The information-based approach typically emphasizes processes meant to reduce the gap between risk assessment and risk perception in the same or comparable circumstances (Krimsky and Plough, 1988). Some have even attempted to link economic costs and benefits to information programs designed to close the assessment-perception gap, and in so doing provide another illustration of socioeconomic concepts in constructive use for practical purposes of interest to MMS (Smith and Desvousges, 1990). The approach has even been rendered into "seven cardinal rules" rooted in the powerful concept of risk that, when taken together, comprise a good first approximation to a management strategy (EPA, 1988).

Management means involvement, and this active mode has theoreticians and practitioners. On the theoretical side there is a large and growing body of literature on negotiations and other alternatives to usual and costly litigation (Amy, 1983, 1987; Bingham, 1986). Economic and political theory, often combined, can be discerned in many of the practical efforts to involve disputants outside of a courtroom. Local successes (Elliott, 1984), statewide involvement and solutions (Chertow, 1989), regional illustrations from the Pacific Northwest (Fraidenburg, 1989; Lee and Halbert, 1990), and concerted national efforts, as in Japan, exist and serve as suggestive management models for those in MMS (Hershkowitz and Salerni, 1987). This powerful concept even extends to the international arena (Shubik, 1986).

Social theory illuminates basic conditions under which people will accept risk. One simple scheme emphasizes nine dimensions that are associated with the acceptability of risks to the public (Table 2-1).

Even cursory examination of this simple table helps one understand a few of MMS's fundamental challenges. Most perceptual cues are in the "Less Acceptable" column. The interpretation here is that more careful examination of the evidence might help to move perceptions from the less to the more acceptable categories. Lacking careful analysis and faithful presentation of the historical facts, however, there is little reason to expect those without first-hand and direct experience to substitute realistic assessment for fearful perceptions. And generally, they do not.

This discussion of risk leads to four main conclusions:

• Socioeconomic theories exist relevant to a general class of problem facing MMS—its difficulty in proceeding with its OCS oil and gas leasing program.

• "Success," considered as any improvement over gridlock in decision making, exists in several fields comparable to offshore oil and gas activities.

• Such successes as there are occur only when those responsible realize that risk perception and communication are as important as the objective assessment of risk.

• The human environment is essential and central, not discretionary and incidental, in all matters related to the "not in my back yard," or NIMBY, syndrome, which clearly applies in part to the OCS.