Reduction of greenhouse gas emissions in the U.S. will have significant impacts on our economy. There are strong positive and negative precedents for how to go about this. Powerful industry opposition to the transparent data collection and release was successfully overcome by prominent economists like Paul Joskow working through the Acid Rain Advisory Council. The thorough studies this made possible have helped make cap-and-trade for sulfur dioxide successful, most notably the definitive book Markets for Clean Air: The U.S. Acid Rain Program by Ellerman, Joskow, Schmalensee, Montero, and Bailey. Resources for the Future (RFF) has realized not only that it is critical to learn from past successes like this and build reporting requirements into the regulatory plans now being formulated, they have also recognized the need to train a new generation of scholars who will have a stake in monitoring and analyzing the data going forward many years. This project will also cooperate with an ongoing RFF study of how to measure carbon sequestration in forests that the Sloan Foundation has funded. Such grants do not necessarily signal the beginning of a full climate change program at the Sloan Foundation, but are consistent with our emphasis on promoting open access to information and enabling non-partisan policy relevant research.

Nicholas Kiefer of Cornell University is developing new analytical techniques directly motivated by and applicable to the needs of effective international bank regulation. Specifically, the Basel Accords set standards for determining how much capital a bank should be required to keep in reserve to guard against financial and operating risks. There are two main approaches that statisticians use to estimate probabilities. Frequentists think of the probability of an event (say, flipping heads with a coin) as the long run proportion of repeated trials when it occurs. By contrast, Bayesian statisticians approach an estimation problem with subjective beliefs about the "prior probability" and then concentrate on systematically using whatever data becomes available to update their estimates. Through further consultations with practitioners, more research publications, continued work with graduate students, and the development of a course on Bayesian risk estimation in finance, this project stands to improve the understanding, management, and regulation of financial risk.

At the December 11, 2007 Board meeting, the Trustees established an authorization of $400,000 to honor Ralph Gomory and authorize Ralph to develop a plan on how the authorization would be used. A plan was to be developed by Ralph Gomory. This grant to the Business History Conference will establish a prize to honor Ralph Gomory. The Ralph Gomory Prize will recognize historical work focused on the effects that business enterprises have on the economic conditions of a country in which they operate. Beginning in 2011, two prizes of $5,000 each will be awarded annually, one for a book and the second for an article, and may be for work published in the two years prior to the year of the award. The grant will be separated into an endowment and an advertising fund intended to be used up in the early years of the award to enhance its visibility and to generate nominations. The endowment portion of the gift shall comprise at least 85% of the principal and be invested such that the prize can exist in perpetuity. In any given year, expenditures from this endowment can exceed no more than five (5) percent of the value of the endowment at the end of the previous year.