CEI Report: Endangered Species Act Costs Billions More than Generally Acknowledged, Government Accounting Obscures Costs

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A Competitive Enterprise Institute (CEI) report released today reveals the actual costs of the Endangered Species Act (ESA) to taxpayers, local and state governments, landowners, and others are much greater than generally acknowledged.

Originally enacted in 1973 to save animals facing extinction, the ESA has been ineffective at recovering endangered species despite the law’s tremendous costs and adverse impact on private property owners and effective land management.

The paper, titled “Whatever the Cost” of the Endangered Species Act, It’s Huge by CEI Adjunct Fellow Rob Gordon, shows government estimates its own costs to recover species are likely in the tens of billions of dollars, but there is no systemic analysis of overall economic impact. The Act can severely restrict the way individuals and businesses can use their property if a protected species might possibly or theoretically be found on the premises. The law also requires complicated and potentially lengthy consultation with regulators when a federal action, such as issuing a permit, may affect a listed species. When these extra, obscured costs and others are taken into account, it likely pushes the total cost of implementing ESA to hundreds of billions of dollars.

 “This report makes it clear that over the past 40 years of the Endangered Species Act, costs have been obscured and not even considered by policymakers, Congress, and the public,” said director of CEI’s Center for Energy and Environment Myron Ebell. “When you consider that the ultimate cost of this program is likely tens, if not hundreds of billions of dollars, at the same time species are rarely recovered and taken off the federal list, it’s clear we are not getting what we pay for.”

In July, the Department of Interior announced proposed revisions to the enforcement of the Endangered Species Act that would lessen the regulatory burdens of this ineffective and outdated piece of legislation. CEI supports these reforms but encourages the Interior Department to go further. This report recommends several measures that would improve transparency and accountability related to estimating implementation costs. These include:

  • The government must improve expenditure reporting. Specifically, the U.S. Fish and Wildlife Service (FWS) should encourage states to fully report ESA annual expenditures and that should be taken into consideration when reviewing Cooperative Endangered Species Conservation Fund grants to states.
  • Regulations should allow for inclusion of economic analysis when species are listed. Even though economic analysis cannot be considered during the decision as to whether a species is endangered or threatened, conducting such analyses and including data within listing regulations increases transparency and accountability. Such analysis could then be used during critical habitat designations.
  • Make economic impact conclusions easily findable and clearly marked. The basic conclusions of economic analyses referenced within regulations listing species or designating critical habitat are often hard to find and decipher. Economic analysis should up front, readily identifiable, and be consistently presented to allow comparison and analysis.

View the report: Whatever the Cost” of the Endangered Species Act, It’s Huge by CEI Adjunct Fellow Rob Gordon