An Early History of the Association of Environmental and Resource Economists: 1970 - 1995

Based on an original memoir by John V. Krutilla  (October 1994)  as modified and expanded to reflect the comments of:  William J. Baumol, Emery N. Castle, Pierre R. Crosson, Ralph C. d'Arge, Allen V. Kneese, Joseph J. Seneca, and Elizabeth A. Wilman and information to be found in "Activation of the Association of Environmental and Resource Economists," by John V. Krutilla, Journal of Environmental Economics and Management, (vol. 7, no. 2) June 1980 

Compiled by Clifford S. Russell (January 1995; Revised May 1995)

The first stirrings of the life that eventually became AERE occurred in discussions between Larry Ruff, then a member of the Ford Foundation staff, and Terry Ferrar, then Director of the Environmental Policy Center at the Pennsylvania State University. They agreed that those then (mid-1970s) operating in the fairly new field of environmental economics should be consulted about the desirability of creating an association, the goals of which would include promoting intra- and interdisciplinary communication, increasing visibility, and assisting in communications with policymakers. Under Ferrar's leadership, a group of roughly twenty people gathered at the Allied Social Science Associations (ASSA) meetings in Dallas, Texas in December 1975, to discuss this notion. Perhaps not surprisingly there was general agreement that such an association would be desirable, and a study committee was created to explore the idea further. The members were Ferrar, John Cumberland (chair), Alan Carlin, Ralph C. d'Arge, and V. Kerry Smith. It was also decided at this first meeting to explore with Academic Press, Inc. the possibility of adopting the Journal of Environmental Economics and Management (JEEM) as the new association's journal. And, finally, the group agreed to request slots from the American Economic Association (AEA) for two sessions at the next meetings.

There was a second meeting of the still-informal group during the next ASSA meetings--in September 1976, in Atlantic City, New Jersey. The dozen or so in attendance agreed to proceed with steps to formalize the association; William J. Baumol and Cumberland (whose committee report had helped the process along) took responsibility for drafting by-laws and a budget. It was also agreed that the association's name would reflect concern with natural resources per se as well as with environmental matters. Allen V. Kneese and d'Arge were appointed as a nominating committee and asked to produce a slate of officers. During the following fifteen months, the draft by-laws were circulated and ultimately agreed to. They laid out a system of governance quite like that in place today, except that the terms of president and vice-president have subsequently been extended from one to two years; and the positions of secretary and treasurer have effectively become of indefinite term instead of the original two-year renewable terms.

An informal but extensive search for nominees among interested economists was made by d'Arge, and it became obvious that Kneese and Baumol were the leading candidates. He contacted both about this result, but both initially declined to be considered, urging a slate of younger officers. After much cajoling and third party appeals, Kneese and Baumol reluctantly agreed to accept the nominations coincidentally for sequential terms, but appropriately, while standing adjacent to Trail Lake in the Jim Bridger Wilderness. The order of nominations was determined at that time by Baumol's insistence that Kneese become the first president. The new officers took over at the beginning of 1978 with Baumol slated to be president in 1979. During 1978, two other events occurred which breathed promise into what might otherwise have been a stillborn organization. First, Bill Pendleton, at the Ford Foundation at that time, let it be known he would be favorably disposed to making a grant of $25,000 for start-up assistance. Second, the organizers were offered by Emery N. Castle, vice president of RFF at that time, "a couple of thousand dollars," also to help with the start up. The existence of these offers made it clear that the would-be AERE had to become a legal entity with 501(3)c status, otherwise neither grant could be made.

Krutilla called d'Arge, stating that RFF had made a commitment of "several thousand dollars" to start up the association, but that $5,000 was needed immediately for legal fees to preserve the receipt of the Ford Foundation grant. D'Arge scrounged through research accounts and was able to find $3,000 in unallocated and unrestricted funds. The $3,000 was then sent to RFF to make up the $5,000. (Deans and Provosts would never allow these uncaptured funds to exist today.)

The first step to this end was to get a corporate charter to operate in Washington, D.C. Krutilla's secretary, Virginia Reid, had experience in setting up a not-for-profit organization in D.C. and was asked to lend a hand (and brain, too). It turned out to be a very simple matter owing to Virginia's expertise. Armed with the document she prepared, Carlin, Cumberland, and Krutilla proceeded to the appropriate office in the D.C. government to incorporate AERE. Reid had obviously done a very competent job because the transaction at the relevant D.C. office took them only about thirty minutes, and cost about $100.

Getting a legal identity was one thing. Running it by the Internal Revenue Service (IRS) to establish AERE's tax-exempt status was quite another. Castle was asked if he would authorize the use of RFF's law firm to draft the request for 501(3)c status. Most generously he did, and the law firm provided the new corporation with very exceptional expertise. Nevertheless, it took about a year to get the request framed to meet all of the IRS examiner's conditions.1

In due course, in August of 1979, AERE got its 501(3)c status followed, in February, 1980, by a $25,000 grant from Ford. The new association also received a $5,000 grant from RFF, and $3,000 from d'Arge's program, the Resource and Environmental Economics Laboratory, at the University of Wyoming. But the previous roughly $2,000 in services obtained free from RFF's law firm was perhaps the most critical gift of all, because without it AERE would not have qualified for the Ford, RFF and d'Arge grants in timely fashion. (There was a change in the leadership at the Ford Foundation at about this time which would have greatly reduced chances of success had the grant application been any further delayed.)

In 1979, AERE also held its first official annual meeting with the ASSA in Atlanta, Georgia. During the AERE business meeting, those attending were polled to elect both officers and a board of directors. Krutilla was advanced to president for 1980, d'Arge to president-elect, Smith to vice president, and Elizabeth A. Wilman was elected secretary/treasurer.2 This last choice began a tradition that continues today--having the working heart of AERE at Resources for the Future.3

There was a lot of official and unofficial correspondence to attend to during the first year, and AERE could not have had a more giving, conscientious, and competent secretary and treasurer than Liz. Fortunately, she had some banking experience in a previous life that left her with accounting skills and the grace to use them on AERE's behalf. This was exceedingly important in order to provide professional accounting to the IRS. Liz helped Virginia to set up a relevant set of accounts and taught her the necessary skill to do the bookkeeping, with Liz standing by until it became routine for Virginia. Further, there was a need to invest our $33,000 nest egg wisely and to account for its use. Liz reviewed the risk/return possibilities and invested in Funds for Government Investors which paid 14% in that time of inflation, sufficient income to engage Virginia Reid parttime to organize a spanking new "going concern". All things considered, as Krutilla emphasizes, "Liz did a phenomenal amount of professional work, supplying necessary skills not otherwise available to AERE, and generally managed the affairs of AERE with sheer competence!"

Krutilla also recalls other details of the crucial year of his presidency:

“I canvassed the board and officers of AERE to empower me to set up an executive committee comprised of persons in the D.C. area who had strong interests in, and formal connection with, AERE. Some of the persons beside myself were: Allen Kneese, Bob Davis, Liz Wilman, Mordecai Schecter, and Alan Carlin [and Terry Ferrar].

The purpose of this committee was to review some of the actions I felt necessary to take to get off the ground and running. This provisional council provided a legitimacy for the actions I needed to take more promptly than canvassing the Board would permit. There were two or three decisions to be made with reference to the letterhead for our official use. Being unable to propose international members for our board, owing to the necessity of having a quorum at board meetings, but wanting international ties, I suggested that we appoint a council of international correspondents to grace our letterhead. This was how the world came to know of our prestigious foreign and international connections, for example, Karl Göran Mäler, Geoffrey Heal, Partha Dasgupta, Mordecai Schecter, and Hirofumi Uzawa.”

It was also under John's leadership that the early moral support of Tjalling Koopmans was acknowledged by naming him "honorary president" for five years from 1979 to 1983.

No doubt the two most important actions of that year, however, were the initial membership drive and the initiation of discussions with Academic Press, Inc. about making JEEM the official journal of the association. The former enterprise was coordinated by Wilman and Virginia Reid, with John adding personal notes to those individuals he knew on the mailing lists being used (e.g., the AAEA). As reported by the 1981 president, d'Arge, in his "President's Message" in the inaugural AERE Newsletter, the effort resulted in AERE having 400 members by the end of 1980 and 575 by the end of June 1981.4

In the matter of JEEM, Krutilla, Wilman, and d'Arge went to New York to talk with the publishers of the journal with the eventual result we know today.5 The first issue that included the imprint of AERE, including a list of officers, was vol. 10, no. 3, of September 1983.

The other AERE publication, the AERE Newsletter just mentioned, was begun in 1981 by Baumol and Joseph J. Seneca, who jointly edited vol. 1, no. 1. Then, as now, the AERE Newsletter included policy essays, meeting announcements, calls for papers, new publications, research reports, and position announcements. It was, and is in a real sense, the one Olsonian private good with which AERE rewards it members, for anyone can subscribe to JEEM. (Why anyone would want to do so without joining AERE and obtaining the discount along with the newsletter, etc., is another question.)

Two other features of the current AERE also date from these early days: the workshops and the informal relationship with the AAEA. The first of these is generally recognized as Smith's idea and creation; with the indefatigable V.K. doing everything from raising the first, outside money (from the U.S. Environmental Protection Agency) to organizing at least the first couple of events.

The background of the AAEA link is murkier. Castle remembers the idea of joint AAEA/AERE meetings having been raised to him by "some RFF/AERE people". Pierre R. Crosson credits Ron Cummings, who was president in 1983. In any event, its major (only) manifestations are the sessions that AERE is credited with organizing at the AAEA summer meetings. It should be noted that these are not, as with the AEA, fixed in number in advance. But rather the AERE president submits proposals to the AAEA executive board, which is free to choose as few or as many as it desires. There is usually, and informally, an AERE representative at those board meetings.

Past Officers, Directors, and Publication Editors

1 John Krutilla recalls of this process: "When it was all done, I sent the finished document to the IRS for final approval. It was returned to me because I was not a suitable officer. (There were no duties specified for the ‘president-elect’ in our articles of incorporation.) Being president-elect at the time, I was not an officer this IRS examiner could understand. So I sent the application in final form to Will Baumol to sign."

2 As Allen V. Kneese noted in his comments on Krutilla's initial draft of this history: "I think that it comes through in the text, but I want to note that AERE might never have come into existence except for John's efforts. The steps Will Baumol and I tried to make were hindered by the great distance separating us and by the limited time either of us could devote to the enterprise. John took the bull by the horns and devoted all the time that was needed to make AERE a going concern. In this he had the able help of several people, which he so generously recognizes." Krutilla was recognized for his very substantial presidential contribution to AERE with a special citation. In scroll form the citation was presented to him at the 1981 Denver meeting of AERE. This has, so far, been the only special presidential citation given by AERE since its inception.

3 Emery N. Castle has opined: "The location of AERE's office at RFF may have been of greater importance to AERE than the financial help RFF provided. It is my impression this arrangement has worked well for both organizations. It is to RFF's benefit to have a strong professional organization in this field. And John Krutilla has indicated how AERE has benefited from the stability of an organizational home for AERE and the infrastructure RFF provided. While I was at RFF, I was under the impression the AERE people appreciated the arrangement, and displayed integrity in their conduct of AERE affairs with respect to RFF."

4 It is interesting to note that d’Arge was predicting that AERE would ultimately have "at least 1000 members". Currently, according to Marilyn M. Voigt, the association's executive secretary since 1988, we have 800. But this is actually almost double the level reached during a trough of unexplained origin in the late 1980s.

5 JEEM, itself, began in 1974, so was already a comparatively venerable institution by 1980.