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Suggested Citation:"2 Certification's Place in the Toolbelt." National Research Council. 2010. Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/12805.
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2
Certification’s Place in the Toolbelt

Societies have promoted control of the negative impacts of resource consumption in a variety of ways influenced by tradition, political values, and the relative efficiency and practicality of using alternative tools. This chapter considers where product and process certification strategies fall in the spectrum of tools, and in particular, how such strategies compare to direct government regulation. For those inclined to analogies, certification could be thought of as a few distinct tools in one’s toolbox. It can serve as a level, communicating whether or not something is on the mark, and providing some indication of the direction to move, but less guidance on how best to accomplish this. Certification can also serve as a tape measure. It helps quantify and assess certain attributes, but communities have their own standard units of measure and tend to resist a movement to unify these. Finally, considering that certification provides a way to make that first bit of progress in a field, it can be thought of as a pry bar offering leverage. It is critical in channeling efforts into opening that small gap, but it relies on additional hands to keep up the momentum.

By the same token, there are certain tools that certification is not. One workshop participant cautioned that it is not a hammer—because it is a voluntary mechanism that appeals primarily to the top performers in the market, it tends not to be effective at forcing producers and firms to comply. It is not a saw, either, because it cannot cut out the weak performers. And despite its potential benefits and spillover effects, certification is not a Swiss Army knife. It might stand in for any number of tools, but it will not stand alone in solving complex sustainability challenges. Instead, it seems

Suggested Citation:"2 Certification's Place in the Toolbelt." National Research Council. 2010. Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/12805.
×

to be most effective when it is complemented by other tools, including the traditional hammer and saw of regulation.

Workshop participants identified the following tools to affect consumer behavior:

  • Consumer education (general)

  • Disclosure (voluntary)

  • Self-certification to industry or NGO standards by producer

  • Certification to standards by third party

  • Accredited certification to standards by a third party

  • Disclosure/labeling (government mandated)

  • Government procurement standards/programs

  • Market mechanisms (incentives or charges)

  • Direct government regulation prescribing practices or performance

COMPARISON OF REGULATION AND CERTIFICATION TOOLS TO INFLUENCE BEHAVIOR

National and international law, where it exists, has failed to control wasteful and harmful effects of production of products and services. Certification programs have emerged as a new tool to engage market forces in promoting environmental and social sustainability objectives. These systems “can also increase transparency, accountability, public participation in decision making, legal use of natural resources, and investment in economic and human development.” (Parikh, 2003)

The rise of product and process certification programs has coincided with trends toward greater reliance on voluntary and market mechanisms to improve performance. This trend reflects both a lack of confidence in the public sector’s willingness or capacity to require and enforce higher standards and a belief, as some participants emphasized, that voluntary and market-based methods promote innovation, cost less, and protect free enterprise from unwarranted intrusion. In the United States., the emphasis on disclosure (e.g., Toxic Release Inventory) and market mechanisms for pollution control (e.g., acid rain controls) in the 1980s and 1990s reflect efforts to influence corporate behavior by mobilizing public pressure in the case of disclosure or facilitating least cost pollution reduction actions to meet performance goals in the case of emission trading. This trend also was a distinction from other industrialized countries’ approaches, many of which favored government involvement to set industry standards (USC-OTA, 1992).

Suggested Citation:"2 Certification's Place in the Toolbelt." National Research Council. 2010. Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/12805.
×

STRENGTHS AND WEAKNESSES OF GOVERNMENT REGULATION

Direct government regulation of production processes and some products is the strongest form of control of behavior. Standards are normally focused on problems of public concern, and are set within a framework of legislative policies and goals (see Box 1). The process of setting standards involves public participation. Standards are mandatory and noncompliance is subject to a variety of legal sanctions. This form of governmental action is likely to have the maximum saliency, legitimacy, and credibility (see Standards in the Matus paper in this volume).

However, legal tradition, as well as efficiency, have tended to limit the scope of regulation as much as preferences for voluntary or market-based tools. Environmental regulation in the United States and to a slightly lesser degree in Europe mainly focuses on control of the externalities of production, specifically the offsite impacts of polluting processes or the marketing of food, drugs, or pesticides whose consumption and use by people can cause health or safety risks. In the areas of natural resource extraction or harvesting, the U.S. government has been less likely to mandate specific methods of production unless the government acts as a property owner and not solely as a regulator.

This tradition in regulation of focusing on pollution beyond property lines and setting performance-testing rules for sensitive products like food and drugs is supported by considerations of efficiency in regulating production and, indirectly, consumption. Many participants contended that government generally lacks the information and know-how to set detailed standards for all resource extraction or agricultural and manufacturing production. Certain product constituents (mercury) or production processes (clear-cutting) can be banned by regulation, but a regulatory approach is not easily used to codify best practices or product formulas that are likely to need relatively frequent revision to remain up to date.

Finally, several participants emphasized that the process of developing or amending a regulation is cumbersome and very time consuming. Public participation and the opportunity to challenge regulatory decisions strengthen legitimacy but they can add years to the time it takes to promulgate a rule. There are few examples of rules with sufficient flexibility to adapt to advances in production practices without burdensome amendment procedures.

The international legal framework for control of products and production processes has similar features. However, international treaties are very difficult to negotiate, nation states must consent to their prescriptions, and the record of enforcement is spotty in securing compliance with environmental and social standards (Speth, 2004). As many participants remarked, certification programs represent an attempt to compensate for these weaknesses in certain areas and to raise standards beyond legal requirements in others.

Suggested Citation:"2 Certification's Place in the Toolbelt." National Research Council. 2010. Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/12805.
×

BOX 1

Health and Nutrition Labels: Insights from the Past

Although certification of sustainable products is a relatively recent field, it does appear to have many traits in common with an issue with a longer history, that of health and nutrition labeling on food products. The U.S. Food and Drug Administration (FDA) first required nutrition information as part of food labeling in 1941. Beginning in the 1950s, reports emerged which informed consumers about links between diet and health, and by 1973 the FDA had taken the first steps toward establishing a U.S. framework for nutrition labeling of foods. For the most part, labeling was a voluntary effort undertaken by producers, but the framework prescribed a standard format. The one exception was for foods which contained added nutrients, or which made a specific nutrition claim—nutrition labeling was made mandatory for these types of products. By 1990, however, even given the fundamental shift that had taken place in regulatory philosophy and the advances in consumer information, the existing guidelines and framework seemed modest, incomplete, and outdated.

Criticism of food labels grew in the 1980s, as increasing scientific evidence demonstrated important linkages between dietary habits and chronic disease. Evidence also showed that Americans’ diets contained excessive amounts of calories, fat, cholesterol, and sodium. This evidence led to American consumers paying more attention to food choices, and producers, manufacturers, and marketers naturally responded to this interest by tailoring their products to reflect these contemporary public health issues. Two landmark reports at the end of the decade, The Surgeon General’s Report on Nutrition and Health, and Diet and Health: Implications for Reducing Chronic Disease Risk, spurred renewed efforts to reform nutrition labeling. Criticisms included concerns that the government was ignoring major segments of the food supply, was focusing on the wrong nutrients, and had tolerated claims in advertising and labeling that were confusing, deceptive economically, and potentially harmful. The U.S. Department of Health and Human Services (DHHS), motivated by a judgment that changes in eating habits can improve the health of Americans, and a conviction that food labeling can materially aid wise dietary choices, took action to improve the system of labeling.

One fundamental challenge at the time was that regulation of labels involved two different federal agencies, the U.S. Department of Agriculture (USDA) and FDA. The agencies regulated labels in very different ways—USDA required manufacturers to obtain prior approval before including any label on meat or poultry, while FDA did not have such legal authority and instead relied on providing detailed, formal regulations and informal advice to producers. The latter approach required attentive monitoring of regulations. FDA chose a numeric format over alternatives, though there is no evidence that is was informed by extensive testing of different approaches. The FDA also tended to encourage manufacturers to provide information even when it was not mandated, whereas USDA’s concern was primarily with ensuring the accuracy of information that did appear on products.

Other criticisms of nutrition labeling included a failure to keep pace with current knowledge, lack of uniformity, and inadequate consumer education efforts. By 1990, an average of 12,000 new food products were being introduced annually in the United States (doubling the output from 1980), and products

Suggested Citation:"2 Certification's Place in the Toolbelt." National Research Council. 2010. Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/12805.
×

were increasingly being marketed to a health-conscious public. Marketers view the principal display panel on food packages as “real estate” and thus reserved for sales promotion. Nutrition is recognized as a selling point, but marketers tended to resist government intervention which might disturb consumer perception of product value. While there have been repeated calls for better studies of consumer behavior, dietary patterns, and the influence of nutrition labeling (e.g., NRC, 2003), it has been shown that familiarity is a particularly important factor in choosing foods, and education and income levels have a significant influence on these choices as well. Moreover, increased knowledge is not a guarantor of consumers making dietary changes. Some studies even suggest that consumers often do not comprehend the terms and definitions used on nutrition labels, limiting the influence of this information to inform choices (NRC, 1990).

When the National Research Council reviewed the current state of nutrition labels in 1990, it drew conclusions and provided recommendations that led to further improvements in the system and also have parallels to the current state of environmental and sustainability labels. Among other things the committee concluded that:

  • Regulating agencies themselves cannot expect to establish formal definitions for all the terms that inventive marketers are likely to adapt or invent, but should define a core set of terms for the most important components;

  • Consumers will not make long-term dietary changes based on information alone, and so educational resources will be required to effect behavioral change, and;

  • Public- and private-sector initiatives should be established to help consumers understand and apply information on the nutrition label.

Incidentally, the committee also made forward-looking recommendations, such as suggesting research into the effects of trans fatty acids, which have recently become regulated in many areas.

In late 1990, the Nutrition Labeling and Education Act (NLEA) was signed into law, which mandated that nutrition labels be placed on most food products and provided a nationally uniform food labeling regulatory system. It was also partly a response to the complex national and international systems for food manufacturing and merchandising, which prompted some form of national control. The food industry in fact was particularly concerned about national uniformity in food regulation, and stressed that nonuniformity had an adverse impact on costs. The NLEA provided a national framework, however, state regulation was not preempted, so long as it satisfied one of two conditions: (1) the state requirement provided an avenue for innovative regulatory approaches and testing prior to federal adoption, or (2) in the absence of federal leadership, a state finds it necessary to regulate in the name of consumer protection.

Nutrition labels have continued to evolve since the 1990s, and subsequent efforts to improve the system have included updating standards as the science improves, providing information in terms of percentages of daily values or recommended allowances, and perhaps most significantly, an increasing emphasis on understanding consumer behavior and improving consumer education.

Suggested Citation:"2 Certification's Place in the Toolbelt." National Research Council. 2010. Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/12805.
×

ROLE OF CERTIFICATION STRATEGIES

The virtue of certification programs compared to direct government regulation is that nongovernmental organizations and major producers undertake the task of developing standards and communicating the benefits of buying certified products to purchasers. This is likely to result in a set of requirements based on best-producer practices or a tiered set of standards that should be easier to revise as the state of the art advances. The standards are enforced through supply chain relationships in broad markets, and are not subject to the geographic limitations of national standards.

Cashore and colleagues (2004) define certification schemes as implementing “nonstate market driven” standards characterized as “hard law” because the market provides compliance incentives even though participation in certification of products and services is voluntary. How exactly does this market work?

There was extensive discussion at the workshop of the motivations for companies selling products or services to participate in certification programs. In some cases, participation is believed to have increased revenues (e.g., Chiquita and bananas, as one participant noted). But many significant systems, such as forestry and marine fish certification, do not offer an advantage in selling to the ultimate consumer likely to command a price premium. When the wood or fish product is not inherently better than wood or fish cut or caught in an unsustainable manner, the number of customers willing to pay more for sustainable production or services solely on ethical grounds is small.

The “market demand” in these systems has mainly been the pressure from nongovernmental organizations applied to large corporate producers and purchasers in the supply chain. These entities are businesses who sign on to certification programs and their environmental or social objectives to secure economic advantage but also to demonstrate corporate social responsibility, burnish their reputation or brand, and possibly get ahead of the regulatory curve. Some contend that businesses tend to support certification in areas where government regulations are most prescriptive and the certification rules are an incremental improvement over requirement practices (see Dimensions and Sectors Being Certified in this volume).

Since the commitment is voluntary and often is not rewarded by economic benefits or a clear competitive advantage, it is questionable whether the market forces are strong enough to classify many of the current programs as “hard law1.” If, however, the reputational benefits are perceived as

1

“Hard law” in this case is referring to “coercive” action within the private sector, based on the authority of the marketplace.

Suggested Citation:"2 Certification's Place in the Toolbelt." National Research Council. 2010. Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/12805.
×

valuable, it may not be easy for a “volunteer” participant in a certification to discontinue participation. Some participants remarked that it would be useful to know the extent to which producers and purchasers believe they are able to end their participation. If in fact, most of them stay the course even where financial economic benefits are not forthcoming, there would seem to be some basis for considering these systems to be comparable to hard law.

Certification programs offer “salience, legitimacy, and credibility” through the choice of the environmental and social goals they want to achieve, the methods of involving stakeholders in setting goals and standards, the scientific and policy content of the standards, and the methods of verifying compliance. The quality and rigor of these goals and processes varies among programs. The test is whether the certification process is “able to relate otherwise unknown information to the consumers, in order to influence their purchasing decisions and create a market for the labeled products.” (See Labeling in Matus in this volume).

OTHER POINTS OF COMPARISON

Regulatory and certification systems are likely to differ in terms of clarity of goals and measures of effectiveness. Governmental goal setting and metrics are often weak, to be sure; but most binding regulations are based on legislation that defines at least broad goals. Implementing agencies are generally the source of whatever metrics and monitoring processes are adopted.

There was a high degree of agreement that defining goals and measures of success is often difficult for certification programs. Workshop participants noted that some data on market penetration of certified products like coffee or wood are available (Ellis and Keane, 2008). The larger problem is measuring the environmental or social benefits that are the target of these programs. It was noted that in the natural resource conservation area, measuring effectiveness is especially difficult; for example, fish potentially conserved by marine certification standards are hard to count. Many expressed the opinion that defining scientifically sound and persuasive measures of biodiversity protection was an important need for many certification programs.

Considerations in defining the scope of coverage of regulatory and certification systems also differ. Government regulations often attempt to control the behavior of larger producers of natural resources or pollution because their impact is most significant, and the burden of identifying, monitoring, and enforcing against small entities is disproportionate to the benefits. (The exceptions are where small entities may be substantial sources of toxic pollutants, such as uncontrolled metal finishing opera-

Suggested Citation:"2 Certification's Place in the Toolbelt." National Research Council. 2010. Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/12805.
×

tions. Many in this category do not survive as producers after regulations are imposed.)

In the case of regulation, most firms or sources are happy not to be covered on the basis of their size. This may well not be the case for small producers of coffee or other certified materials who may risk being shut out of important markets if they cannot afford the transaction and compliance costs of becoming certified. The choices then are to assume that small producers, especially in developing countries, will not be disadvantaged because they have other markets, or to press the certification program or governmental agencies to provide subsidies and undertake capacity building to enable them to participate. Some stressed that smaller, local participants might be enlisted to help as monitors of the program.

The challenges of building and funding a certification program for a period long enough to see results are greater than they are for government. While regulatory programs must compete for authority and resources in a political process and environmental regulation and especially enforcement often rank low on the scale of priorities, there is nevertheless a set of institutions and processes, in place to frame and fund their activity. Certification programs are generally funded by philanthropy (foundations), by large companies who participate, and by fees for certification from participants. Some workshop participants saw the need to seek ways to share good practices and develop cooperation among the various programs. The growing number of certification programs is itself a challenge in crowding the field of programs in search of funds.

TRANSITIONS FROM VOLUNTARY CERTIFICATION TO GOVERNMENT PROCUREMENT OR REGULATION

In some cases, the government administers public programs akin to certification like EPA’s Energy Star program. It provides efficiency ratings based on published criteria for various kinds of products. The government also has the authority to prescribe minimum energy efficiency standards for many products, so the disclosure and labeling program in this case is an adjunct to a regulatory program.

The success of government certification of products and services may be determined by complexity and market demand. This point was illustrated at the workshop by the experience of California in developing a program to certify innovative environmental technologies. The intent was to provide a governmental validation that would aid the deployment of innovations, perhaps reducing hurdles in permitting. In practice, the evaluation process turned out to be complex and involved differing judgments on technologies, resulting in lengthy and costly certifications. Interest in certified environ-

Suggested Citation:"2 Certification's Place in the Toolbelt." National Research Council. 2010. Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/12805.
×

mental technologies by potential adopters was less than anticipated. The program was ultimately discontinued.

More common are the links between independent certification organizations and programs and governments. Workshop participants pointed out that governmental staff may participate in certification standard setting as advisors or observers or may use certification standards in procurement of goods and services. The U.S. government’s reference to the LEED standards of the Green Building Council is a well known example of incorporating certification standards into purchasing decisions. Depending on budgetary impacts or the sensitivity of product selection based on environmental or social criteria, these procurement policies may or may not require legislative sanction. Since the U.S. government is the largest purchaser in the United States, and states and localities may also adopt these policies, procurement preferences can provide powerful leverage to the spread of compliance with privately sponsored certification standards.

In several situations, a certification program or programs can evolve into a governmental program established by rule. These cases include proliferation of standards leading to public confusion in an area of growing public concern as in the shift to governmental standards for organically grown food. Another is governmental decisions to control or prohibit practices considered unacceptably “brown” and needing to be proscribed for a larger group of producers than are covered by voluntary certification standards. A third is where information produced voluntarily through a certification or other optional program is no longer considered sufficient to support regulatory decisions, as in the case of greenhouse gas inventories established by NGO and industry groups. These are now being supplanted by a mandatory greenhouse gas registry. In all of these cases, the work of organizations involved in certification of practices or information disclosure protocols aids the development of regulations and speeds the achievement of public benefits. As later chapters explore, certification programs may need to evolve to have a closer relationship to governments and public regulatory programs, where each plays a complementary role in developing standards, rewarding compliant parties and eliminating noncompliant parties through regulation.

Suggested Citation:"2 Certification's Place in the Toolbelt." National Research Council. 2010. Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/12805.
×

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Suggested Citation:"2 Certification's Place in the Toolbelt." National Research Council. 2010. Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/12805.
×
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Suggested Citation:"2 Certification's Place in the Toolbelt." National Research Council. 2010. Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/12805.
×
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Suggested Citation:"2 Certification's Place in the Toolbelt." National Research Council. 2010. Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/12805.
×
Page 11
Suggested Citation:"2 Certification's Place in the Toolbelt." National Research Council. 2010. Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/12805.
×
Page 12
Suggested Citation:"2 Certification's Place in the Toolbelt." National Research Council. 2010. Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/12805.
×
Page 13
Suggested Citation:"2 Certification's Place in the Toolbelt." National Research Council. 2010. Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/12805.
×
Page 14
Suggested Citation:"2 Certification's Place in the Toolbelt." National Research Council. 2010. Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/12805.
×
Page 15
Suggested Citation:"2 Certification's Place in the Toolbelt." National Research Council. 2010. Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/12805.
×
Page 16
Suggested Citation:"2 Certification's Place in the Toolbelt." National Research Council. 2010. Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/12805.
×
Page 17
Suggested Citation:"2 Certification's Place in the Toolbelt." National Research Council. 2010. Certifiably Sustainable?: The Role of Third-Party Certification Systems: Report of a Workshop. Washington, DC: The National Academies Press. doi: 10.17226/12805.
×
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Next: 3 The Landscape of Certification Schemes »
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Consumption of goods and services represents a growing share of global economic activity. In the United States, consumption accounts for more than two-thirds of gross domestic product. This trend of increasing consumption has brought with it negative consequences for the environment and human well-being. Global demand for energy, food, and all manner of goods is on the rise, putting strains on the natural and human capital required to produce them. Extractive industries and production processes are prominent causes of species endangerment. Modern economies are underpinned by substantial energy consumption, a primary contributor to the current climate crisis. Expanding international trade has led to many economic opportunities, but has also contributed to unfair labor practices and wealth disparities.

While certain processes have improved or become more efficient, and certain practices have been outlawed or amended, the sheer scale of global consumption and its attendant impacts continue to be major challenges we face in the transition to sustainability. Third-party certification systems have emerged over the last 15 years as a tool with some promise. There has been anecdotal evidence of success, but to date the overall impact of certified goods and services has been small. Moreover, definitions of sustainable vary across sectors and markets, and rigorous assessments of these programs have been few and far between.

In order to take a step in learning from this field of practice, the National Academies' Science and Technology for Sustainability Program held a workshop to illuminate the decision making process of those who purchase and produce certified goods and services. It was also intended to help clarify the scope and limitations of the scientific knowledge that might contribute to the economic success of certified products. The workshop, summarized in this volume, involved presentations and discussions with approximately 40 invited experts from academia, business, government, and nongovernmental organizations.

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