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Study finds small economic effects from endangered species protection

The Endangered Species Act has not had a negative economic impact on states, despite the claims of its detractors, according to a working paper published by the Project on Environmental Politics and Policy at MIT.

"Weakening the act will not spur job creation and economic growth," says Professor Stephen M. Meyer, author of the paper and director of the research group. Nor will weakening the act "launch poor rural or western communities on the road to prosperity" or save "over-extended developers from bankruptcy."

Professor Meyer, a political scientist, asserts: "If `growing the economy' is the top priority of government, then we should focus on policy options that can make a difference."

The working paper, "Endangered Species Listings and State Economic Performance," says an analysis of data from the last decade and a half "clearly suggests that endangered species listings are a consequence of strong economic performance over the 15-year period." The paper compares growth rates in gross state product and construction employment with the corresponding number of federally listed species.

"A closer look at the data suggests that population growth is the common link," Professor Meyer says. "States with booming economies attracted larger numbers of new residents, which in turn put increasing pressures on habitats," and that "implies a larger likelihood of human-wildlife collisions that result in a new listing."

The paper asks: How can one reconcile this finding with the "well-publicized horror stories" suggesting that the Endangered Species Act is leading to a national economic crisis?

"The answer is simple: the economic effects of endangered species listings are so highly localized, of such small scale and short duration that they do not substantially affect state economic performance in the aggregate. They are lost in the noise of background economic fluctuations. A rare toad may indeed impede construction of an ocean resort or golf course, but such events do not ripple back through state economies."

These local effects must be considered in context, the paper says. "For example, the recent series of military base closings have had economic effects hundreds of times greater than all the listings during the 20-year life of the Endangered Species Act. Even greater economic and social harm resulted from the ill-conceived deregulation of the savings and loan industry during the 1980s. The number of jobs lost to leveraged buy-outs in the 1980s exceeds by many times the wildest estimates of jobs lost to endangered species. "

The MIT working paper also concludes: "Although detractors of the Endangered Species Act often describe it as blind to the needs of people and the economy, every government and academic examination of the endangered species process has reached the opposite conclusion: political, economic and social considerations permeate the listings process.

"In fact, for every tale about a project, business or property owner allegedly harmed by efforts to protect some plant or animal species, there are over 1,000 stories of virtual `non-interference.'"

Professor Meyer went on: "It is not my intention to trivialize the economic or social effects at the sub-state level that may result from some individual species listing or habitat designation. Counties, cities and towns are much more sensitive to single-employer or single-industry effects. Endangered species' critical habitat listings may, under certain conditions, have demonstrable negative economic impacts at the local level. The evidence, however, remains to be collected and analyzed.

"But even conceding the possibility of systematic local effects, in terms of scale and scope they are a far cry from the national economic crisis that the Endangered Species Act's detractors depict."

A version of this article appeared in MIT Tech Talk on April 12, 1995.

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