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Introcluction This report attempts to estimate some of the future economic benefits that could result from oceanographic research, and to compare them with the cost of doing the research. These benefits are of two kinds: annual savings in costs of goods and services, and increases in production. The estimates are crude and the future times when the benefits may be realized are uncertain; we have confined ourselves to those areas where we believe significant economic improvements can be attained within the next fifteen years. Such public investments as dams and aqueducts can be clearly related to calculable monetary returns. The decision to make the investment can be based on relatively accurate estimates of benefit-cost ratios. This is not true for research expenditures planned over a period in the future of 10 to 20 years. Experience shows that research does produce very large returns, but these are usually not predictable in any detail. On the other hand, it is possible to foresee the kinds of changes that could be brought about by research in a particular held, and the value of these changes. We believe that such an attempt at forecasting may be useful, even though the forecasts are based only on necessarily subjective judgments rather than on quantitive, objective data. Decisions about research expenditures cannot be avoided, either by the Congress or by officials at many levels in the Executive Branch of the Government. These decisions will be more soundly based if results from the proposed expenditures can be compared, even approximately, with the results from other uses of the same funds. Our purpose is three-fold: (1) to obtain some idea of how much the expenditures planned for the national oceanographic program can con- tribute to the economic well-being of the United States; (~) to provide a very rough basis for comparing the anticipated economic results from oceanographic research with those that might be attained through other expenditures of the same funds; and (3) to suggest a conceptual and computational framework for estimating the usefulness of investment of public funds in this held, which could be employed by other interested persons who may make quite different judgments about the numerical values we have used. Our estimates indicate that a continuing national investment in oceanography of approximately $165 million a year (not counting the part for national defense) will be an essential component in bringing about savings of nearly three billion dollars a year, plus added annual production

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worth almost as much. Ten to 15 years will be needed to achieve these gains, and other expenditures in addition to those for marine research will be required if they are to be realized. In order to assess the desirability of an investment at the present time to secure these future gains, both the benefits and costs must be reduced to their "present worth," that is, the amount of money today that is equivalent to a larger sum in the future. As shown in the Appendix, this discounting can be accomplished in two days, depending on the time when a decision about a program of research expenditures must be made. The value at the present time of the estimated total benefits directly attributable to oceanographic research during the next twenty years, is 4.4 times the estimated total research expenditures, also discounted to the present. The estimates are summarized in Table 1, which shows the increases in production that might result from the use of new oceanographic knowl- ed~e in development of orenn fisheries marine mineral Anacin once 1 ~ 7 _ _ ~ _ r V A ~ V ~ ~ marine recreational facilities, and the annual savings that might come from improvements in shipborne transportation, long-range weather fore- casting, and near-shore sewage disposal. These estimates are based only on tangible and foreseeable economic results of federally supported oceanographic research. We have not attempted to forecast "break-throughs," or to include any revolutionary technical innovations. We have not tried to put dollar values on the oceanographic requirements for national defense, or on the human satisfactions that will come from greater understanding of the oceans and of life in the sea. Nor have we included the benefits to national prestige and international understanding, and to international economic develop- ment, that may be expected from international cooperation in oceanography. Several kinds of direct economic benefits have been omitted. For example, marine research is essential to maintaining the production of U.S. fisheries at its present level, but we have limited ourselves to estimates of future increases in production. The petroleum resources of the continental shelves have a large potential, but most of the required oceanic research is carried out by the oil companies with their own funds. Marine disposal of industrial wastes, including radioactive wastes, and the use of sea water for cooling produce economic benefits that we have not attempted to esti- mate. Considerable savings can result from better forecast and warning systems for tsunamis and storm surges, and these too are omitted, as are the benefits to petroleum and mineral exploration on land that can come from greater understanding of the geologic history of the oceans and of . . . marine sec lmentary processes. 2