Protecting endangered species could be costing the economy hundreds of billions of dollars above the federal government’s official estimates, according to a new study released Tuesday.
The libertarian think tank Competitive Enterprise Institute estimates that the cost of protecting animals on the endangered species list skyrockets from tens of billions to hundreds of billions of dollars annually when factoring in broader economic cost, such as lost investment opportunities for energy development.
“Whatever the [Endangered Species Act’s] cost is, it is much larger than generally acknowledged, and likely measured in the hundreds of billions of dollars,” the report concludes. “Unfortunately, the ESA’s poor record of recovering species does not indicate that we are getting what we pay for.”
The federal government’s estimates “woefully lowball” the actual costs to taxpayers, landowners, and state and local governments for protecting endangered and threatened wildlife, according to a summary.
“Often it seems as if regulations have been written to obscure the full economic impacts of ESA regulations when designating critical habitat,” it explains.
Federal estimates are limited to only the bureaucratic costs of placing species on the list of threatened or endangered animals. “They do not account for revisions such as changing a species from endangered to threatened or vice versa, expanding critical habitat designations, or the dollar costs associated with the regulations necessary to throw the process into reverse and remove the species from the list when and if it is ever recovered,” the report continues.
“While the government’s own often uninformative estimates clearly indicate tens of billions in recovery costs, these are not the lion’s share of ESA costs,” the report reads. The bigger cost come from the loss of opportunity for development, in addition to costs that come associated with accidentally killing an animal listed as endangered or threatened.
But even those costs can be low compared to government’s economic analysis. For example, the California Resource Management Institute calculated that the total economic impact due to the critical habitat designation of the California gnatcatcher bird is $4.6 billion, while the U.S. Fish and Wildlife Service draft cost assessment estimated a cost of $880 million, the report points out. That’s a difference of roughly $3.7 billion.
“Differences in the magnitude of these estimates of total impact are primarily due to differences in the scope of the impacts measured,” the report points out.
“The economic impact of the Endangered Species Act is so large that states often impose regulations and management regimes as part of an effort to prevent species from being added to the endangered species list,” it adds. For example, multiple western states have negotiated with the federal government to avoid an endangered listing for the chicken-sized sage grouse, which would have cost the country an estimated $5.6 billion in annual economic output.
Given the consistent lowballing of the cost of these animal protections, the Competitive Enterprise report recommends that the government bake into its economic analysis a broader list of economic factors to capture the real cost to list an animal under the Endangered Species Act.
The two principal agencies that need to be improved are the Fish and Wildlife Service and the National Oceanic and Atmospheric Administration, the two most important agencies when it comes to listing new protected species and enforcing critical habitat restrictions.
The agencies should conduct a “standardized analysis” of the economic impact of listing a specific animal, the report recommends. “While such analysis cannot be taken into consideration during listing determinations, the ESA does not preclude conducting such analyses and presenting the data within a regulation when adding a species to the list.”
The report also recommends that a standardized economic analysis be used in determining the scope and extent of protected areas of land, or habitat, for endangered and threatened wildlife. Determining critical habitat is often considered the more far-reaching aspect of species protections, which can make large tracks of land off limits to development.
The report is being released as the Trump administration is taking comment on three proposed regulations to update and reform the management of endangered species, which are expected to be more beneficial for industry.
