Topic Area: The Endangered Species Act after almost 30 years

Geographical Area: U.S.A

Focal Question: Has the Endangered Species Act (ESA) been successful in protecting threatened and endangered flora and fauna and preserving biodiversity in a viable sustainable manner since its inception in 1973?


(1) Brown, G.M., Jr. and J.F. Shogren., "The Economics of the Endangered Species Act." The Journal of Economic Perspectives Vol. 12, No. 3 (1998): 3-20

(2) Polasky, S. and H. Doremus, "When the truth hurts: Endangered species policy on private land with imperfect information." Journal of Environmental Economics and Management ; Vol. 35, No. 1 (1998): 22-47

(3) Smith, A.A., et al., "The Endangered Species Act at 20 — An Analytical Survey of Federal Endangered Species Protection." National Resources Journal Vol. 33, No. 4 (1993): 1027-1075

Reviewer: Stan O’Loughlin, Colby College ‘01


Passed in 1973, the Endangered Species Act is probably the most comprehensive and one of the most controversial of U.S. Environmental laws. According to the Act, its express purpose is to "save all species." It aims to do this by compiling and listing species which are then designated as either "threatened" or "endangered". Once "listed", any action by any party (public or private) which harms the species in any way is unilaterally prohibited by this law. In addition, it is specifically alluded to in the wording of the act that economics considerations are proscribed in listing considerations. Because of its strict wording and ambitious scope, this law is widely considered by many to be a possible abuse of federal power.

There are currently over 1,100 species of plants and animals listed under this act, 90% of which make their homes on private, not public land. The cost of protecting these habitats is thus borne primarily by private landowners, while the benefits are accrued by the nation as a whole. From an economic perspective, a landowner would have little incentive to protect a listed species on his land, since his benefit in doing so is equal to the total benefit of saving the species divided by the population at large, but he bears the entire cost of doing so. The Endangered Species Act as is currently stands has proven to be an inflexible tool and has helped illustrate that federal and judicial fiat cannot banish the principles of economics from any situation.

One of the primary problems of the Act is that it has endeavored to save "all species". It would seem that in order to do so, it would have to have a fairly unlimited budget, which is clearly not the case. The Act, since it bans economic considerations in listing decisions has a hard time allocating its budget appropriately among the various species. Despite the bill’s ambitious attempt to preserve 100% of threatened and endangered biodiversity, as of 1997, only 40% have approved recovery plans. Even more detrimental is the fact that budgetary constraints place the upper limit on the number of species that can be listed around 100 taxa per year. To put this into perspective, two years ago, the agency in charge was forced to eliminate a list of 3600 "possibly endangered or threatened" species due to the confusion it was creating and their inability to fully investigate the possibility of listing.

Budgetary issues are only one of the problems with the Act. As described above, even if economic language is left out of the wording of the bill, it does not preclude interested parties from acting in their own economic self-interest. Because the Act is prohibitive rather than incentive-based in nature, it has given rise to a particularly brutal and yet alarmingly common form of self-interest known as the "shoot, shovel, and shut-up" strategy. This describes the reactions of some landowners who perceive that a listing decision might limit the use of their own land.

In one of the most famous cases of this type of reaction, as the golden-cheeked warbler was in the final stages of being added to the endangered species list, a firm which owned hundreds of acres of warbler habitat hired migrant workers to chainsaw the entire stand of oak and juniper trees, thus preserving their investment, since it could no longer be considered "warbler habitat" Ten days later the warbler became a listed species. This type of behavior, while predictable to an economist, is in theory anathema to the wording of the bill.

Lack of economic considerations in listing decisions has also been shown to cause strange and inefficient preferences for certain types of flora and fauna. A 1996 study by Merick and Weitzman show that "charismatic megafauna" such as mammals and birds are routinely ranked above fish and reptiles. Species that are perceived to lack personality or individuality (most invertebrates) have proven very unlikely to be listed, despite the Act’s ambition to protect all species equally. The only remedy for this is a 1982 decision that requires "scientific considerations" to be made in listing decisions. This seems a poorly defined stipulation at best.

Perhaps the real question is how successful the Act has been at stemming the tide of extinction. One of the primary problems with asking this question is that despite the clearly defined goal of species recovery, the Act does not clearly define what recovery means. But looking at the numbers, things do not look particularly good. Since 1973, only 11 species have been taken off the list (of more than 1000) and less than 10% of listed species have exhibited any sort of improvement in status. Worse, real budget per listed species has declined to less than 60% of its level of 25 years ago, making improvement in success rates very unlikely at this point.

From an economic perspective, the Endangered Species Act seems to be somewhat of a failure. Without using any sort of valuation techniques, listing methodology is inefficient and unscientific. Because budgetary resources are scarce, it seems clear that some criterion must be used to determine one species over another, but this has not been the case. Moreover, the final statistic in the paragraph above reveals that the Act itself is apparently not sustainable. As budgets become thinner, it seems likely that mistakes and inefficiencies may become even more common than they currently seems to be.