Economics of the Endangered Species Act

Abstract

The Endangered Species Act of 1973 is one of our most far-reaching and controversial environmental laws. While the benefits of protecting endangered species accrue to the entire nation, a significant fraction of the costs are borne by the private landowners who shelter about 90 percent of the nearly 1,000 listed species. The pressure to know whether the social benefits of preservation exceed the private costs has thrust economics into ongoing reauthorization debate. This paper examines how economists can help better the odds that when society imposes and bears costs to protect endangered species, it will be more likely to succeed.

An agglomeration payment for cost-effective biodiversity conservation in spatially structured landscapes

“…In Europe, farmers receive several billion Euros annually in the context of agri-environmental schemes for applying biodiversity-enhancing farming measures These voluntary schemes are needed-they are necessary because property rights are frequently allocated so landowners have considerable latitude to manage their land in their own private interest. Experience with the US Endangered Species Act also demonstrates that forcing owners of land with endangered species to carry out conservation measures might encourage them to eradicate these species to escape the burden of conservation costs (Brown and Shogren 1998).…”

A Century of Environmental Legislation

“…While this charge (and explanation) can be levied against other federal statutes affecting wildlife passed in the 20th century, the clamor has been most associated with the ESA. We suggest, as Brown and Shogren (1998) do, that the conflict stems from a divergence in socioeconomic and geo-physical allocations of costs, which are concentrated, and benefits, which are dispersed.…”

“…Support for the theory that legislative conflict over wildlife preservation arises in these cases from dispersed economic benefits with concentrated costs comes from biological research (Flather and Knowles 1998;Wilcove, Rothstein et al 1998) and subsequent economic and public choice analyses (Cain and Kaiser 2003;Loomis and White 1996;Brown and Shogren 1998;Metrick and Weitzman 1998;Mehmood and Zhang 2001). A Congressional Representative's vote should reflect these tradeoffs as a function of self-interest; a representative's ideological beliefs and his community's role as electorate combine as the representative seeks to maintain his position.…”

Biodiversity Conservation on Private Lands: Information Problems and Regulatory Choices

“…If compensation is absent or too low, governments may be tempted to oversupply conservation. Also problematic incentives may be created for landowners (such as shoot, shovel, and shut up , see Brown and Shogren 1998), and little cooperation can be expected from landowners in prospecting for biodiversity (Polasky and Doremus 1998). If on the other hand a compensation scheme is implemented, basing compensation on opportunity costs (market value of the land mainly) may be problematic since it will encourage early development of land in order to raise the payment (Blume et al 1984).…”