The differences among varieties of fullerenes, for instance, may be the reason behind some recent, seemingly contradictory research results, says Richard Denison, a senior scientist at Environmental Defense (formerly the Environmental Defense Fund) in Washington, DC. Some research shows that fullerenes are powerful anti-oxidants, possibly useful for improving the health of cells by neutralizing free radicals. In contrast, other research seems to show that they're powerful oxidants, capable of working their way into the brain and damage cell membranes.

If regulations were to be based only on the research indicating potentially dangerous properties, consumers might never see the health benefits of some fullerenes. Alternatively, if the wrong type of fullerene were used as an anti-oxidant, it could also do damage.

Here's where the policy issue arises: If the effort at regulation is underfunded, it may not ferret out these distinctions, Maynard and others say. On the other hand, if the field of nanotechnology is over-regulated, it could stifle innovation and prevent new products from coming to market. Yet of course there needs to be an adequate level of research and regulation, to prevent the destruction of ecosystems and also head off a possible consumer backlash that would stifle progress. "We can't afford to get it wrong," says Maynard. "If something does go wrong, not only will this put human health and the environment at risk, it will put businesses at risk."

Former EPAer Greenwood says the Office of Pollution Prevention and Toxics, which is charged with administering the Toxic Substances Control Act, is likely to be regulating nanotechnology. This program, which reviews new chemicals and enforces quality controls on existing chemicals, is "woefully underfunded," says Greenwood, especially over the last several years. “I don’t think that the current program is capable of dealing with the complexity, the variety, and the data needs of nanotechnology, unless they get a big infusion of resources,” he says.

Denison concurs. Environmental Defense has suggested that 10 percent of the budget for the National Nanotechnology Initiative, which involves* about one billion dollars in federal money spent by a range of agencies, be earmarked for studying the environmental, social, and health implications of new nanomaterials. Other groups have suggested that even more be spent. Currently, no more than four percent of the money goes for such research.

In addition to greater funding, Denison says, some group would need to coordinate the efforts of multiple agencies more than is the case now. The size of the problem may require international cooperation, he claims: "The magnitude of the research that really needs to be done is probably beyond what any single country could do."

As regulations are imposed, it will likely affect small nanotechnology startups. Materials testing could be too time consuming and expensive. Since some regulation is inevitable and necessary, though, such innovative startups may need to develop partnerships with other, larger companies to meet regulatory requirements.

Another possibility is a government- or an industry-sponsored fund to help such companies jump through the regulatory hoops necessary before their products can start making a profit.

"There's a window of opportunity here for maintaining the ability of this technology to deliver the benefits it promises and for building public trust," Denison says. But he warns that the task will be difficult. "I think we've got a really fine balancing act."

*The story originally indicated that the NNI allocates the money. The money is technically allocated by Congress.