larger task of developing comprehensive nonmarket economic accounts. As noted earlier, the panel does not underestimate the awesome challenges involved in developing nonmarket accounts. Development of a set of accounts in this area involves major conceptual issues, the development of appropriate physical measures and valuation of flows and stocks, and constitutes a major scientific undertaking. As suggested above, the task of developing a comprehensive set of nonmarket accounts transcends the current scope and budget of BEA. Developing such accounts will require continued basic research on the underlying science and economics involved in estimating the benefits of public goods such as clean air, as well as applied research on accounting tools and valuation of nonmarket activities and assets.
5.8a If a phased approach is undertaken, the panel recommends that work to extend natural-resource and environmental accounting resume as soon as possible. Incremental improvements should focus primarily on developing those interactions between the economy and the environment that have market consequences. A useful step would be to refine estimates of subsoil mineral and timber accounts. Other incremental extensions should incorporate additional marketable assets and near-market goods and services—those that have close counterparts in marketed goods and services. There is a clear basis here for measuring quantities and establishing values for these market and near-market activities in a manner comparable to that used for the core accounts.
5.8b Construction of a set of forest accounts, focused initially on timber, is a natural extension for integrated economic-environmental accounts. The United States has much of the data needed for such accounts, and the analytical techniques are well researched. Other sectors that should be high on the priority list are those associated with agricultural assets, fisheries, and water resources.
5.8c While a phased approach to the development of environmental accounts is useful, a comprehensive set of natural-resource and environmental accounts will be critical to measuring the full impact of natural and environmental resources on long-term economic growth. Construction of a comprehensive set of economic accounts will require extensive research on the basic science and economics involved, as well as development of the appropriate tools for accounting and valuing nonmarket activities and assets.