How To Save Endangered Species: — As Costs Soar, Markets May be the Best Tool

By Michael Fumento

Investor’s Business Daily, January 8, 1993
Copyright 1993 Investor’s Business Daily

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Farmers Cindy and Amy Domenigoni are plagued by rats.

It isn’t that the rats are eating their grain or spreading disease, though they may be doing both. It’s their existence on the Domenigoni’s land in Riverside County, Calif., that’s the problem.

The rats are Stephens’ kangaroo rats, which happen to be on the Endangered and Threatened Species List. The protection plan for the animal — really a type of squirrel — has denied the Domenigonis use of 370 of their 720 tillable acres, costing them $75,000 in gross income since 1990.

How many jobs is this little fellow worth?

"I feel [the Endangered Species Act] is unfairly discriminatory," said Cindy Domenigoni. "Our actions have not caused that species to become threatened or endangered. We should not be the ones forced exclusively to pay for it."

The plight of the Domenigonis, however, is becoming an increasingly familiar one to farmers, other landowners and businesses.

The Endangered Species Act (ESA), passed two decades ago and amended three times since, now protects 727 species as endangered or threatened.

In a suit settled in December, the Fish and Wildlife Service agreed to list an additional 400 varieties of plants and animals and said that 3,600 more may warrant listing after further review.

Only five species have been removed from the endangered list because of recovery, as opposed to extinction.

Four of these — three types of birds on a distant Pacific island and an American plant — were delisted primarily because more were discovered, according to the National Wilderness Institute, a Washington-based group seeking to reform the Endangered Species Act.

The fifth, delisted just last week, is the gray whale. Environmental Defense Fund attorney Michael Bean was quoted saying the whale’s removal may help rebut criticism that the Endangered Species Act "is a one-way street that species only go on the list and never come off."

Yet the gray whale illustrates something else. Rather than a success story attributable to the Endangered Species Act, the gray whale’s numbers have been growing steadily since the turn of the century, largely due to the declining commercial value of whale products.

According to estimates compiled by Steven Reilly of the National Marine Fisheries Service, the gray whale population grew from about 2,000 in the late 19th Century to 10,000 in the 1940s, and to about 15,000 by the time it was listed under the ESA. The current estimate is a little more than 21,000.

Not exactly a fair description of a species that’s been growing in numbers since 1900.

"Certainly in terms of recoveries and delistings, it hasn’t been a success," said Robert Gordon, executive director of the National Wilderness Institute. "Some of these things take time, but I would expect to see some delistings that are legitimate."

In 1990, the U.S. Inspector General issued a report in which it estimated that it could cost up to $4.6 billion to recover the species that were listed as endangered or threatened, or about $2 million for each species.

But this considerable sum is only part of the cost to the federal government, since it excludes consultation, permitting and law enforcement, which together cost more than twice as much as recovery alone.

The figures also do not include several factors that could push the total cost of the Act sharply higher, Gordon said.

Further, the report covered only currently listed species, not the thousands that may eventually make the list in the next decade.

The National Wilderness Institute projects a range of about $7 billion to $11 billion in federal outlays, depending on how many species are listed, just for recovery of the species.

Gordon says the more factors included in the calculations, the mushier the final estimate gets.

"My point isn’t that we’re going to be spending $11 billion plus another $25 billion, but that the tremendous projected costs could perhaps be even larger," he said.

Further, said Gordon, "The lion’s share of the costs of this Act are borne by persons whose land has been restricted and hence devalued or whose businesses have been impaired or even wiped out."

While Gordon says he wants to commission a study to determine how much is being spent, none has yet been done.

Individual examples, however, may be telling. Maj. Gen. Ernest Harrail of the Army Corps of Engineers has said that it "is in fact becoming a probability" that preserving the sockeye salmon will cost more than a billion dollars.

Likewise, those attempting to create a planned enterprise zone in California’s San Bernardino County have found a fly in the ointment — namely, the giant Delhi Sands fly.

The insect is being considered for listing as threatened or endangered. If it is, that could scuttle the 20,000 jobs the zone’s planners hoped would be created.

Even federal losses may be masked because they are kept off-budget. For example, while the Fish and Wildlife Service lists federal expenditures of $12.9 million for the spotted owl, a study conducted by Walter Mead at the University of California, Santa Barbara, for the U.S. Forestry Service put sales losses from growing timber at $24 billion.

Mead notes that this does not include the future value of the forests that could otherwise be harvested every 50 years. Stated one Interior Department researcher who had come up with a similar figure, "That comes out to a lot of money per bird."

’Shoot, Shovel, Shut Up’

Nevertheless, the 1982 amendment to the Endangered Species Act specifically excludes economic considerations.

"I ain’t fixin’ to comp’mise with no stinkin’ spittid uwl."

Those whose land has been occupied by an endangered species often do not suffer them gladly. Indeed, some have responded with a practice known as "shoot, shovel, and shut up."

Spotted owls have been nailed to signposts, endangered sea turtles have had their throats slashed, and Riverside area residents wear T-shirts urging the killing of kangaroo rats. Penalties are stiff for those caught killing endangered species, but the odds of being caught are tiny.

Further, landowners legally can change their land to make it less likely that endangered species will want to live on it. The Domenigonis regularly till their land to keep what they have left from hosting more kangaroo rats.

"It would be hard to think of a worse way to protect species" than the Endangered Species Act, said Richard Stroup an economist with the free market oriented Political Economy Research Center in Bozeman, Mont. "The Constitution says you can’t be forced to quarter soldiers against your will for even a day, but you can be forced to quarter a species forever," he said.

One answer, he said, is to provide economic incentives to subsidize the keeping of endangered species.

"You could put out bids," he said. "We find owls still there, we’ll pay you. I’ll bet for a million dollars they’ll have all the owls they want saved."

Yet he admits that one problem with protecting species efficiently is that some environmentalists don’t want efficiency. Instead, they want to use the Endangered Species Act to take land out of use or stop business operations.

What laymen understand to be the definition of a species — two animals that can produce fertile offspring — is not the definition used by environmentalists or the government.

Instead, the Endangered Species Act specifically calls a subspecies a species. For example, the Northern spotted owl, now the source of a bitter dispute between loggers and environmentalists, is not in fact a species. It is a subspecies that differs only slightly from two other types of spotted owls.

Ripe For Abuse

As of November 1991, only 28% the protected mammals were actually species, with the remainder subspecies such as the Stephens’ kangaroo rat. Of those on the candidate list, only 13 were species.

Because of the lack of "bright lines" in differentiating subspecies, critics of the ESA claim that the system is ripe for abuse.

Indeed, Andy Stahl of the Sierra Club Legal Defense Fund, admitted, "The Northern spotted owl is the wildlife species of choice to act as a surrogate for old growth protection. And I’ve often thought, thank goodness the spotted owl evolved in the Northwest, or we would have had to genetically engineer it."

Said Gordon, "You can list something on less than purely objective biology. The farther away you get from the species unit, the more you allow subjectivity into definition, and that allows opportunities for people who would use the Act for political purposes."

Peter Broussard, head of the Department of Biology at the University of Nevada at Reno, said that abuses are certainly possible by people defining a species too narrowly.

Extinction happens.

But he added, "The whole intent of the Act is to preserve as much genetic diversity within species as possible. It may be true that you could reduce spotted owls to 50 manageable birds, but you wouldn’t have preserved the great majority of genetic information."

The problem, say critics of the Act, is, that preserving so much genetic information from so many species is simply impossible.

Norman D. Levine, in the journal BioScience, pointed out "Perhaps 95% of the species that once existed no longer exist."

Levine added: "What species preservers are trying to do is to stop the clock. It cannot and should not be done. Extinction is an inevitable fact of evolution. New species continually arise, and they are better adapted to their environment than those that have died out."

So what should we try to preserve? "It’s very much like the question of how much chocolate ice cream should we be producing," Stroup said. "There’s no answer but to let the market decide."

Stroup says one practical mechanism would be a pure market, such that individual or environmental groups could buy up land or easements to land on which endangered species could thrive.

"If you want to save something, go out and buy it," said Stroup.

Some groups, he notes, such as the Nature Conservancy and Ducks Unlimited, are already doing just that. Other environmental groups, he says, certainly have budgets large enough to do so, but "while these groups do a heck of a lot, right now they do it in Washington and in the courts."

On-Budget Strategy

The other way, says Stroup, would put species preservation on-budget by forcing the government to pay fair market value for its takings. What the Endangered Species Act does now, he said, "is to avoid not only the takings question but it avoids the budget process on private lands."

By putting everything on-budget, Congress would then have to decide — or possibly appoint someone else to decide — which species are worth trying to preserve based on the value of the species, the cost of preserving them, and the probability of success.

This way, explains Stroup, the environmentalists would still have influence on the process but would have to "battle it out" with everyone else competing for a share of expenditures.

"The genius of the process to date is they’ve been able to hide what they’re doing by hurting a few people at a time," said Stroup.

We want to preserve bears . . .

Most people, when they think of endangered species, think of majestic bald eagles and cuddly-looking brown bears or manatees. Indeed, the current list of protected creatures is weighted toward the esthetically appealing ones.

Together, mammals and birds make up 40% of all protected non-plant species and subspecies, although they probably comprise a small fraction of all endangered species.

They also receive vastly disproportionate funding, with birds getting almost half of Fish and Wildlife spending on species protection even though they make up only 14% of the total list.

But strictly interpreted, the Endangered Species Act doesn’t allow discrimination between species based on aesthetics.

Thus, the lowly Tuna Cave cockroach may soon find itself standing proudly beside the Florida panther and the grizzly bear on the protected list.

. . . but roaches?

Indeed, while insects comprise only about 6% of currently protected non-plant species, of the non-plant species that are candidates for listing, over a third are insects.

It’s a pretty safe bet that a lot of Americans who spend millions each year eradicating cockroaches won’t want to spend millions to keep them around.

"I supported the ESA when it was enacted, but I didn’t realize we would be protecting mold and fungus," said Donald Fife, a San Bernardino, California scientist who has studied the kangaroo rat problem.

Under either of Stroup’s proposals, aesthetic value could become a major factor in choosing which species will be protected. Large furry creatures could breathe easy, while creepy crawlers would be writing their wills.

Meanwhile, Eric Davis is looking at having a good part of his farming and cattle-raising business wiped out when irrigation water to his southern Idaho land is cut off to protect the habitat of the tiny Bruneau Hot Springs snail.

"No doubt we need to be more cognizant of good environmental practices than we once were," said Davis. "But when it comes down to picking between a snail and whether this family will stay in business and how we’ll raise our children, I guess people shouldn’t be surprised as to which side we are going to come down on."


Read Michael Fumento’s additional work on laws and legislation and on economics.