values less BEA's estimates for the value of structures" (p. 45). BEA has not attempted to estimate the value of recreational land, but has entered federal maintenance and repair expenditures as an investment (see Table 4-1) and "assumed that these expenditures exactly offset the degradation/depletion of recreational land" (p. 45). BEA indicates that this assumption is made only for purposes of illustration and is "not to imply any judgment about the true value of degradation/depletion" (p. 45). A more detailed discussion of BEA estimates for timber and land in forests is presented later in this chapter.

For Phase III assets, BEA has entered "n.a." for most of the items, indicating that these estimates have not yet been developed. Entries for investment in and degradation of water, air, and undeveloped land are included, however. As in the case of developed recreational land, BEA has assumed that maintenance exactly offsets degradation, noting that this assumption provides entries that "are simply place markers" (p. 46). In the panel's view, the use of maintenance expenditures as degradation costs is highly misleading, and this procedure should not be followed in the future. Entering "n.a." would be more accurate. The panel notes, however, that these estimates do not necessarily reflect BEA's planned approaches, but were included by BEA to show the current state of data and research.

Regarding future plans, the United Nations System of Integrated Environmental and Economic Accounting (SEEA) "does not recommend that the stock of air—which is truly a global common—or water be valued; instead it recommends that valuation be limited to changes in these assets—their degradation and investments in their restoration" (p. 46). It should be emphasized that the entries for environmental assets in Table 4-1 are highly oversimplified. Some components of air quality, such as greenhouse gases and stratospheric ozone, are truly global assets and services; others, such as reductions in urban smog, are local and regional public goods. Additional dimensions that need to be incorporated are relations to external events, spatial resolution, and nonlinearities in damages. The discussion of air quality later in this chapter illustrates its multiple dimensions. Similarly, water quality and quantity, undeveloped land, and uncultivated biological resources are composites of many different assets and quality characteristics that provide multiple goods and services.

BEA's efforts have focused on the asset accounts. A preliminary table for a production account without entries is included in BEA's report on its development of the IEESA (Bureau of Economic Analysis, 1994a, 1994b). Production of market goods and services from these natural assets—e.g., timber, agricultural crops, fish—is already in the core production accounts. Greater attention is needed to identifying, measuring, and valu-

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