asymmetry argument. Since the services of the natural environment are gifts of nature not producible by man, we cannot look to specific gains in productive efficiency to augment the stock of amenity-related resources such as the Hells Canyon. However, since complementary goods and services are producible, and particularly since the amenity services are income elastic--then with general technological progress increasing productivity and, hence, income per capita, we can anticipate a growing demand for a fixed stock of amenity-supporting natural environments. This leads to expected increases in the value of the services of such natural assets as the Hells Canyon when retained in its natural condition.
There will be other environmental cases in which more of the unevaluatable benefits will have to be assessed in order to reach a decision, and as time and experience with such problems is gained, analysis may be relied on to play an important role in a larger number of cases. It is important to note, however, that careful analysis using relevant concepts can be useful in a variety of cases without pretending to be capable of valuing all attributes of natural phenomena.
Since the analysis of the Hells Canyon alternatives was prepared in 1969, the more recent gyrations in the market for energy commodities might well raise a question as to the continuing validity of our analysis. Several points should be made to assist in evaluating the final results.
First, it should be borne in mind that the thermal alternative determined to be the most economic by methods employed by the Bureau of Power of the Federal Power Commission was nuclear rather than fossil fueled; the market for only the latter of these has been in an uncertain condition. Even so, it is not clear that a fossil fuel alternative was not in fact, and does not remain, a lesser cost thermal alternative. The Bureau of Power's evaluative procedures incorporate the taxes that utilities pay as part of the cost of the energy from any given source. A Montana-based operation utilizing the thick-seamed strippable coal in eastern Montana would be charged with a percentage of taxes on investment reflected in the taxes paid by the Montana Power Company. It develops that, owing to the favorable treatment the Montana Power Company receives from the state public utilities commission in figuring its rate base, it earns very large profits as determined by the Internal Revenue Service and thus pays in federal income taxes about 85 percent more per dollar of investment than the weighted average of all utilities. Accordingly, what the peculiarities of the FPC evaluation practice produce is a result that reckons a half of the excessive profits of the company as a cost of producing thermal electric power from Montana energy sources.
Were the evaluation to be conducted on a conceptually more adequate basis, it is likely that stripmined eastern Montana coal would represent the lowest cost thermal alternative. And, given the impressive economy of mining very