studies generated in response to this wave of concern. The primary response to this first wave of concern was technical change. In retrospect it appears that a stretch of high prices has not yet failed to induce the new knowledge and new technologies needed to locate new deposits of natural resources, promote substitution, and enhance productivity. If the Materials Policy Commission were writing today, it would have to conclude that there has been abundant evidence of the nonevident becoming evident; the expensive cheap; and the inaccessible accessible (Barnett and Morse, 1963; Ausubel and Sladovich, 1989).

The second wave of concern occurred in the late 1960s and early 1970s. The earlier concern with the potential ''limits to growth'' imposed by natural resource scarcity was supplemented by concern about the capacity of the environment to assimilate the multiple forms of pollution generated by growth. An intense conflict was emerging between the two major sources of demand for environmental services. One was the rising demand for environmental assimilations of residuals derived from growth in commodity production and consumption—asbestos in our insulation, pesticides in our food, smog in the air, and radioactive wastes in the biosphere. The second was the rapid growth in consumer demand for environmental amenities—for direct consumption of environmental services—arising out of rapid growth in per capita income and high-income elasticity of demand for such environmental services as access to natural environments and freedom from pollution and congestion (Ruttan, 1971). The response to these concerns, still incomplete, was the creation of local and regional institutions designed to force individual firms and other organizations to bear the costs arising from the externalities generated by commodity production.

Since the mid-1980s these two earlier concerns have been supplemented by a third. These newer concerns center around the implications for environmental quality, food production, and human health of a series of environmental changes that are occurring on a transnational scale—issues such as global warming, ozone depletion, acid rain, and others (National Research Council, 1990, 1991). The institutional innovations needed to respond to these concerns will be more difficult to design. They will, like the sources of change, need to be transnational or international. Experience with attempts to design incentive-compatible transnational regimes, such as the Law of the Sea Convention, or even the somewhat more successful Montreal Protocol on reduction of CFC emissions, suggests that the difficulty of resolving free rider and distributional equity issues imposes a severe constraint on how rapidly effective transnational regimes to overcome these new environmental concerns can be put in place.

It is of interest that, with each new wave of concern, the issues that dominated the earlier wave were recycled. The result is that while the intensity of earlier concerns has receded, in part due to the induced technical and institutional changes, the concerns about the relationships between