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RFF turns 50

Resources for the Future (RFF), a DC think tank that focuses on resource and environmental issues, turned 50 years old on the 15th. Happy birthday!
Jonathan Rauch takes a look at the history of RFF and how ideas can take a (long) while to make their way into policy. As one example, Rauch examines pollution: the idea was to use market mechanisms to address pollution reduction.
The idea did not come from RFF, but they have been arguing for reasonable policies for a long time. The economist A.C. Pigou is thought to have laid the major ground work, some 80 years ago, on how to think about correcting externalities, such as pollution, using taxes or subsidies.
If took a while, but in the 1980-1990s market based mechanisms of taxes or tradable permits began to be an important part of environmental regulation discussions.
Let’s hope that in the “information age” good ideas won’t take so long to impact policy.

Ideas Change the World—and One Think Tank Quietly Did
In 1990, however, Congress decided to try an emissions-trading program for sulfur dioxide, a pollutant that causes acid rain. Instead of telling every company to reduce its SO2 to the same level using the same technology, the government set an overall cap and let companies buy and sell pollution allowances. The concept is closely related to Kneese’s pollution tax, and it worked for the reasons he outlined: By letting the market rather than the federal bureaucracy allocate reductions in SO2, the trading scheme has cut the cost of cleanup by more than half. Impressed, many mainstream environmentalists have come to look on market mechanisms as tools rather than traps.
“It’s one of those rare cases when history vindicated a maverick idea in the lifetimes of the people who advocated the maverick idea,” Easterbrook says. “In the long run, it will be RFF that will get most of the credit for this historic achievement. Many economists had toyed with these ideas. But RFF laid the hard groundwork as far back as the 1950s and ’60s, when environmentalism itself was considered a quirky cause.”
RFF? No demerits if the initials don’t ring a bell. They stand for Resources for the Future, a Washington think tank whose research staff included, until 1974, Allen Kneese. On October 15, RFF will celebrate its 50th anniversary, perhaps prompting a brief respite from its unchallenged status as the most important think tank you’ve never heard of.


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