Environmentalists Flex Muscle Over Key Appointment : Transition: Backed by Gore, they are fighting a move to name Summers as Clinton’s chief economic aide. His statements on Third World are assailed.

In their first major test of strength within the nascent Bill Clinton Administration, environmental advocates backed by Vice President-elect Al Gore appear to have won a fight over a key appointment, battling a move to name Lawrence Summers, top economist of the World Bank, as Clinton’s chief economic adviser.

The saga of Summers’ rise and likely fall provides a glimpse into the intersection of politics and policy in the newly forming Administration and the role being played by Gore.

As of late Wednesday, the battle continued, transition sources said, with allies of Summers seeking to revive his prospects, while opponents touted two other candidates for the job--chairmanship of the Council of Economic Advisers. The others are Alice Rivlin, a senior economist at the Brookings Institution and former director of the Congressional Budget Office, and UC Berkeley economist Laura Tyson, an expert on international trade and a Clinton campaign adviser.

According to transition sources, who spoke only on condition that they not be identified, Gore and his aides weighed in against Summers because of statements the economist has made that seemed to advocate shipping pollutants from industrial nations to the Third World.

In addition, a transition source said, some aides to Hillary Clinton worked against Summers on policy grounds and because the most likely other candidates for the job were female. A source close to Mrs. Clinton, however, denied that was the case, saying that no one connected with her had been involved in the argument.

The nomination for the post could come as early as today but, because of the controversy the appointment probably will be delayed, transition officials said.

The sources describe a fierce battle of memos and faxes over the last several weeks in which environmental activists circulated copies of a memo that Summers wrote a year ago. In it, he argued that “dirty industries” should be encouraged to move from wealthy nations to the Third World.

Summers did not respond to calls Wednesday but in a more recent memo, written after the criticisms arose about his earlier statements, he argued that his comments had been intended to be “sardonic” and were placed in a “highly ironic context.”

Environmental activists strongly dispute that, however, saying that Summers’ statements reflected both ignorance of Third World environmental conditions and a basic policy approach fundamentally at odds with the positions taken explicitly by Gore in his book on environmental issues and implicitly by Clinton in selecting Gore as his running mate.

In his memo, Summers made three arguments:

--Overall world health could be improved if polluting industries and wastes could be shifted from relatively heavily polluted areas, such as Los Angeles, to “underpolluted” areas in the Third World.

--The demand “for a clean environment for aesthetic and health reasons” has a lower priority in poor countries with more immediate health concerns.

--On grounds of economic efficiency, pollution should be concentrated in low-wage countries.

That last argument may have been the most damaging.

“The measure of the costs of health-impairing pollution depends on the forgone earnings from the increased morbidity and mortality,” he wrote, according to a copy of the memo made available to The Times by opponents of the nomination. In other words, the impact of pollution should be judged in terms of how much money its victims earn and how much they forgo by dying young or falling ill.

“From this point of view, a given amount of health-impairing pollution should be done in the country with the lowest cost, which will be the country with the lowest wages. I think the economic logic behind dumping a load of toxic waste in the lowest-wage country is impeccable and we should face up to it,” Summers wrote.

Critics charged that statement amounts to placing a lower value on the lives of people with low incomes, an argument that could also be used, for example, to support shifting pollutants from suburban areas to inner-city neighborhoods within the United States.

The job at the center of the battle is an important one. Since assuming a high-profile status in the John F. Kennedy Administration, jobs on the Council of Economic Advisers have been hotly sought-after by economists--the platform from which members of their profession can best influence the shaping of economic policy.

Summers, who was the senior economic adviser to Michael S. Dukakis’ presidential campaign in 1988, has worked assiduously toward the job for months. His rise was unusually striking given that unlike several other prominent economists, he had no direct, early role with the Clinton campaign.

Summers had several reasons to expect success--a strong reputation within the profession for his work at the World Bank and as a professor at Harvard University, friendships with key Clinton advisers and family and other ties to many of the nation’s best known economists. His father, mother and both uncles were all prominent academic economists. Roger Altman, a friend of Clinton since college who is slated to be named deputy Treasury secretary, is a friend of Summers, and Gene Sperling, deputy director of economic policy for the Clinton transition, worked for Summers in the Dukakis campaign.

Using all those resources, Summers moved steadily from the periphery to the center of the transition team, emerging in recent weeks as one of the most prominent members of Clinton’s loosely knit group of economic advisers.

Now, however, “while whether he’s been torpedoed or not remains questionable,” said one transition source, “his star is definitely in free fall.”