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U.S. Environmental Protection Agency
Office of Research and Development
National Center for Environmental Research


Decision Making and Valuation for Environmental Policy

EPA/NSF Joint Competition
Interagency Announcement of Opportunity



The Decision Making and Valuation for Environmental Policy competition encourages research on decision making and understanding public values in environmental policy and related public issues. Within this component, priority will be given to fundamental and methodological research on benefit-cost analysis, ecosystem valuation, and normative behaviors and environmental decision making. The goal of this competition is to support research that advances the scientific basis of valuation and decision analysis as it contributes to the formulation and evaluation of environmental policy. Funding priority will be given to research that assists environmental agencies at all levels of government to address issues of practical significance to their activities.

Theoretical and empirical research in mathematics, engineering, social and behavioral sciences, and environmental ethics have provided a number of useful analytical frameworks for organizing information on the economic and social consequences of alternative environmental policies. Benefit-cost analysis, multi-criteria decision analysis, cost-effectiveness analysis, and consensus modeling represent well known approaches in environmental decision making. At the federal level and to a more limited extent at the state level, benefit-cost analysis is required for all major regulations as well as legislative initiatives and some other decisions. A general lack of accepted methods for determining many important economic and social benefits and costs limits the use of decision-analytic frameworks, particularly for problems that involve ecosystems. This competition invites applications that address key theoretical and methodological needs associated with the use of these frameworks. Novel, collaborative, or interdisciplinary scientific efforts are especially encouraged.


Government agencies responsible for policy analysis, statutory rules, regulatory decision making, priority setting for environmental actions, and assessment have an interest in advancing research to help develop practical approaches to estimating economic and social benefits and costs that are systematic and credible. This competition is intended to support research projects in four areas: (1) benefits of environmental policies and programs; (2) costs of environmental policies and programs; (3) ecosystem protection; and (4) normative behaviors and environmental decision making.

Benefits of Environmental Policies and Programs

Environmental policies and programs are generally intended to protect or improve the health and well being of humans and the ecosystems vital to human welfare. Policies that enhance and protect the environment provide economic value and benefits to society. Currently, there are several approaches to measuring this value, including methods that rely predominantly upon either revealed or stated preferences for health and environmental goods and services. Improvements to existing methods and the development of new methods are encouraged. Examples of areas where government agencies have significant information needs in the environmental valuation area include:

Methods to improve estimation of values for reductions in mortality and morbidity risks resulting from pollution and other environmental hazards. Research on methods to address non-cancer health benefits is particularly encouraged.

Identification and improvement of methods for measuring environmental quality influences on human welfare, including those that recognize distributional factors in addition to efficiency.

Methods to apply existing benefit estimates or valuation functions to assess the benefits of a distinct, but similar environmental change (i.e., benefits transfer methods).

Improved methods for valuing changes in the environmental quality of public resources (e.g., groundwater) regulated by multiple laws.

Methods to assess the benefits of providing environmental information to consumers, investors, and/or producers of goods and services.

Costs of Environmental Policies and Programs

The societal costs of environmental policies and programs include compliance costs, government regulatory costs, losses to consumer and producer welfare, costs of displaced resources, and other costs to the economic system arising from changes in product quality, productivity, innovation, and market structure. Industry, however, increasingly abates pollution by changes in production processes (i.e., pollution prevention) instead of waste remediation. As a consequence, traditional financial and engineering methods must be augmented by dynamic models that incorporate resource substitutions, price changes, technological change, and innovation. This component of the competition seeks to strengthen the conceptual and empirical basis for cost estimation methods. Examples of topics of interest in this area are:

Integrated approaches to modeling production technology that includes both desirable outputs and potential wastes or pollutants, including conceptual and methodological research that captures life-cycle or legacy factors.

Methodology to estimate the cost savings from using economic incentives relative to other approaches to environmental pollution control.

Empirical research that compares estimated and realized costs for pollution prevention and abatement at levels of the plant, market, industry, and economy.

Improved methods to estimate and validate aggregate and sectoral costs of environmental protection programs including, for example, empirical analyses of system-wide and dynamic effects that capture plant location, productivity, and technological change.

Ecosystem Valuation and Protection

Traditional valuation approaches have focused on changes in the individual services or functions of ecosystems to identify benefits or costs of environmental policy or regulation. Comprehensive assessments of changes in ecosystem functions are often limited by inadequate knowledge of the relationships among ecosystem inhabitants, functions, and services. Another limiting factor is the poorly understood relationship between keystone species or critical biological functions and human activities. Scientific advances in ecosystem valuation and cost analysis require better understanding of the interconnectedness among social, economic, physical, and biological systems. Proposals submitted to this component of the competition should emphasize these interdependencies in their research and focus on how comprehensive or critical ecosystem changes can be measured in terms of social welfare. Examples of the topics of interest in this component include:

Core concepts of comprehensive ecosystem function, including research that characterizes and quantifies the natural environment and links measures of ecosystem productivity and sustainability with economic activities and changes in human welfare. Improved understanding of the economic-ecological relationships in areas such as wetlands, timber, watersheds, minerals, wildlife/fish, and grasslands are of particular interest.

Methods for valuing biodiversity, populations of native species, amounts of protected areas and open space, and other critical ecosystem attributes, including research that illuminates the interactive and synergistic role of these attributes and their economic and social implications.

Methods for defining the scope of ecosystem restoration that reflect the cost to restore the quality and service characteristics.

Methods for valuation, including research that identifies ecosystem functions of value to society and addresses issues of time, scale, and natural and political boundaries.

Normative Behaviors and Environmental Decision Making

This research opportunity area encourages research to identify and examine behavioral and institutional factors that influence the development, implementation, and evaluation of environmental policies. Research is expected to be theoretically and methodologically sophisticated and to contain an empirical component. Psychological attitudes, socio-cultural, legal, and ethical norms, economic forces, and political and communication activities, in isolation and altogether, affect the development and use of environmental policy. Better understanding of these factors, and the ways in which they can improve or interfere with social negotiations about environmental issues is needed. Potential topics for consideration here include, but are not limited to:

Identification and characterization of communities and the values and normative behaviors that influence their responses to new environmental information, proposed development plans and regulations, and of processes to involve communities in developing and assessing criteria for decision making about environmental and economic investments and problems.

Identification and analysis of social, political, and ethical factors relevant to environmental problem-solving in a trans-jurisdictional context, and effective mechanisms for addressing those factors.

Implications of geographical and political boundaries and personal, group, and organizational characteristics, behaviors, and attitudes for environmental problem solving.

Comparative analysis of different models of environmental decision making that emphasizes their descriptive, predictive, and prescriptive implications.


To assist in the evaluation of how the research contributes to the decision needs of environmental agencies, proposals must include a special information and supplementary documentation section (Proposal Section I) titled "Policy Relevance." Section I is described in detail on page 10 of the GPG, and is not counted in the 15-page Project Description limitation. For the purposes of this solicitation, the Policy Relevance discussion is limited to two pages and must contain an explicit statement on the policy relevance of the proposed research. In particular, the principal investigator (PI) must identify the "target group," or set of policy makers and/or policy analysts who are likely to benefit from this research. Once identified, the PI must elaborate on the potential benefits of this research for the designated target group. The PI should also address ways that members of the research team intend to communicate the results to the relevant target group.

In addition, if the project will produce data and information of value to the broader research community, Section I also must include a discussion of "data and information availability." This discussion, not to exceed two additional pages, should describe the data and information products, the management plans for their validation, quality control, and archiving, costs for these activities, and whether and under what conditions the data will be made available to interested parties.

The GPG normally limits the number of pages for the Project Description to fifteen. However, for this announcement, any proposal submitted under the Decision Making and Valuation for Environmental Policy component which involves a survey is hereby authorized to deviate from the requirement that all information be contained in Sections A through I of the proposal: proposers should append the survey instrument as an appendix to their proposal (see GPG, Section C.11., Appendices -- Proposal Section J).

Please see Section 6.0 for complete instructions for proposal submission.

Proposals received by NSF under its normal unsolicited proposal mechanisms may also be deemed appropriate for consideration by the Decision Making and Valuation for Environmental Policy competition, and may be funded under this joint program.

Approximately $2.5 million is expected to be available for this competition. The projected award range is $60,000 to $250,000 per award per year, with a duration of up to 3 years. Laboratory and field experiments and survey research, and multi-investigator projects may be considered for a higher funding level. Depending on the quality of proposals and the recommendations from merit review, the sponsoring agencies expect more than half the resources to be allocated to the component area of benefits of environmental policies and programs.

For more information please contact:

Dr. Robin Cantor
Internet: rcantor@nsf.gov
voice (703) 306-1757

Mr. Gregory C. Ondich
Internet: ondich.greg@epamail.epa.gov
fax (202) 260-4524
voice (202) 260-5753

Dr. Mary Jo Kealy
Internet: kealy.mary@epamail.epa.gov
fax (202) 260-5732
voice (202) 260-5728

Dr. Alan Carlin
Internet: carlin.alan@epamail.epa.gov
fax (202) 260-5732
voice (202) 260-5499

Return to NSF 96-45 NSF/EPA Partnership for Environmental Research FY 1996

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