Government Is Not Reporting Billions Spent on Endangered Species Act, Study Shows: PLF Calls for True Accounting of Economic, Human, and Social Costs of ESA

Contact: Dawn Collie
Pacific Legal Foundation
Phone: (916) 419-7111

Posted 4/26/04

Sacramento,CA; April 14, 2004: Pacific Legal Foundation today called for a true accounting of the Endangered Species Act, pointing to a study released today showing that billions of dollars in costs spent enforcing and complying with the ESA are not being reported to Congress or the American people. The study, Accounting for Species: Calculating the True Costs of the Endangered Species Act, was conducted by the Property and Environment Research Center (PERC). PERC researchers found that the U.S. Fish and Wildlife Service (FWS) grossly underreported federal and state ESA costs in its recent report to Congress, and completely ignored the private economic and social costs of ESA compliance, which together easily total billions of dollars a year.

The ESA requires the FWS to report to Congress annually on ESA expenditures by federal agencies and states receiving grants under the Act. In December, 2003, FWS released its Three-Year Summary of Federal and State Endangered Species Expenditures, Fiscal Years 1998-2000, to account for three years of missed reports from 1998-2000.

PERC researchers found that the FWS report does not provide an accurate or comprehensive assessment of the true costs of the ESA. For example, the FWS reports that in 2000, state and federal expenditures totaled $610.3 million. PERC estimates that the actual government costs annually are as much as four times greater—or $2.4 billion. FWS also reports that in the 11 years from 1989 to 2000, just over $3.5 billion of taxpayer dollars was spent on ESA-related activities. According to PERC, the actual cost of protecting species, adding private costs to government expenditures, may easily reach or exceed $3.5 billion per year.

“PERC’s study shows that the government has no idea what the ESA is truly costing, but it does give us an idea of the enormous human costs of ESA regulation—and they’re often devastating. People have lost their jobs, businesses, homes, farms, and even their lives to protect plants, insects, and fish,” said Emma T. Suárez , an attorney with Pacific Legal Foundation, a public interest legal organization that is a national leader in the effort to raise awareness of the ESA’s impact on people.

“The government is accountable to the people, and good law takes people into account,” said Suárez. “When it comes to the ESA, a true accounting for the law’s impact on Americans begins with Fish and Wildlife Service doing a better job at collecting the information it is supposed to collect under the law. Furthermore, the ESA needs to be changed so that information on impacts to local governments, communities, and individuals is also collected.”

“We’re asking the government to account to the people for a failed law that ignores human values,” added Suárez.

“The FWS report does not come close to accounting for the true costs to taxpayers and consumers of complying with the ESA,” said report authors Dr. Randy T. Simmons, a Senior Associate at PERC and a political science professor at Utah State University, and Kimberly Frost. Dr. Simmons has studied the Endangered Species Act extensively and is the author of a book on endangered species written for high school students.

“We’ve spent trillions of dollars on the ESA and the few species that have been delisted were not removed because of ESA protections. Taxpayers deserve to know if we’re getting what we pay for. An honest public dialogue about the value and effectiveness of the Endangered Species Act must take into account the costs incurred by taxpayers and the people being regulated. The government is ignoring the human costs in the ESA equation,” added Simmons and Frost.

WHY THE FWS COST REPORT IS INCOMPLETE AND INACCURATE

According to PERC’s study, FWS omits the following critical information in its 2003 cost report:

Not Reported: Actual costs to taxpayers; only estimates are provided.

Not Reported: Government-wide costs. Only a handful of the many federal agencies and departments affected by the ESA reported expenditures to the FWS. In addition, only costs “reasonably identifiable” for individual listed species are reported. ESA costs that benefit multiple species are not reported, nor are staff salaries, operations, and other services—even though hundreds of federal employees in dozens of agencies administer the ESA.

Not Reported: Costs to taxpayers of litigating ESA cases.

Not Reported: Costs to state and local entities of implementing species recovery. State and local governments are responsible for much of the implementation of the ESA. However, because there are no standardized or required reporting procedures, only those states and local expenditures voluntarily reported are estimated in the report. For 2000, FWS reports that states voluntarily reported spending only $115 million. Hundreds of millions of dollars in state and local expenditures remain unaccounted for. For example, in San Diego County, California, implementing ESA recovery strategies through a single countywide Habitat Conservation Plan will impose an estimated $650 million in costs to state, local, and private entities.

Not Reported: Additional costs to local governments from ESA-caused interference with building schools, hospitals, roads, and other infrastructure projects. For example, San Bernardino, California, spent $4.5 million to purchase a new hospital site a few hundred feet away so the original site could remain vacant to protect the Delhi Sands flower-loving fly.

Not Reported: Costs to private landowners. 75% of all listed species have portions or all of their habitat on privately owned land, and FWS regulates 38 million acres of private land through conservation plans. Landowners are not compensated for their losses from ESA regulations that prohibit them from using their land productively. Yet these enormous costs to private landowners are not included in the FWS report. For example, designating critical habitat just for the coastal California gnatcatcher alone from 2003 to 2020 will cost between $4.6 and $5.1 billion, or about $300 million per year.

Not Reported: Private costs such as development projects being denied, delayed, or their scope reduced, which result in higher home prices. Consumers are most affected by critical habitat designations for listed species, and consumers on the lowest end of the housing affordability spectrum disproportionately bear the economic burden of species protection. ESA regulations that cause reductions in the size of regional housing stock, changes in the configuration of cities, delayed projects, and increased commute times all cost consumers dearly, both in their pocketbook and in their day-to-day quality of life.

Not Reported: Economic and social costs from regulatory burdens placed on agricultural production, water use, forest management, and mineral extraction. The costs of ESA regulation to private industry are enormous and are passed on to consumers in the form of higher prices for food and other products. The costs to individuals who earn their livelihoods in these industries is devastating. For example, farmers and their families in the Klamath Basin of Oregon lost an estimated $53.9 million of crop value in 2001 when their irrigation was cut off to protect the Lost River and shortnose suckerfish.

Not Reported: Lost jobs, lost business, and lost tax revenue. FWS does not report the costs of ESA regulation that causes reduced or terminated business activities, increased costs to provide services, reduced personal income and tax revenues, property devaluation, and costs of public assistance provided to individuals who have lost jobs. For example, at least 130,000 jobs were lost when more than 900 sawmills, pulp, and paper mills closed in mid-1990 to protect the northern spotted owl. In California, ESA-mandated water reductions in the Westlands Water District cost the state economy more than $218 million and 4,500 jobs statewide, while the federal government lost about $2.3 million in revenue. Unemployment results in other social costs, including alcohol abuse and domestic violence.

Not Reported: Costs of protecting foreign species. The report does not include taxpayer dollars spent on protecting species in foreign countries, although FWS lists 517 foreign endangered species and 41 threatened species. The FWS 2005 budget request for international wildlife trade and international conservation totals $8.6 million.

HALF OF GOVERNMENT ESA DOLLARS SPENT ON JUST SEVEN SPECIES

According to PERC, 50% of the total expenditures reported by the FWS for 2000 are for the top seven species, or just 0.6% of the ESA list. Salmon species are by far the costliest, accounting for the top five most expensive species in 2000. Fish make up a full eight of the top ten.

PERC’s study reveals that these FWS cost numbers are also gross underestimates and conflict with other government reports. For example, a 2002 General Accounting Office study on federal expenditures to preserve only salmon on the Columbia and Snake River Basins in Oregon, Washington, and Idaho reported that $1.505 billion in taxpayer dollars was spent from 1997-2001. However, the 2003 FWS report states that just over $1.87 billion was spent on all ESA-listed species from 1997-2000.

THE ESA IS NOT SAVING SPECIES

According to the FWS, as of December, 2003, 1,260 U.S. species were listed as endangered and only 15 have been delisted. However, PERC reports that the majority of the 15 delisted species were delisted because of original listing data errors, such as inaccurate government surveys that undercount a species later found to never have been endangered. Other species were conserved by state agencies or private organizations.

“The fact that salmon protection is eating up the bulk of ESA spending is particularly outrageous in light of recent court decisions finding that the coho salmon has been undercounted and illegally listed by the government,” said PLF attorney Emma Suárez. “The government has been using the same illegal counting methods for the chinook, chub, sockeye, and steelhead salmon, which means five of the top ten most expensive species never should have been listed in the first place. Many dollars have been wasted and people's lives have been devastated for fish that are not endangered.”

About PERC
The Property and Environment Research Center is a nonprofit institute dedicated to improving environmental quality through the markets. Located in Bozeman, Montana, PERC conducts research and policy analysis on a wide variety of natural resource issues, and offers environmental education programs for students, local community members, legal scholars, and journalists.

About Pacific Legal Foundation
PLF is a nonprofit, public interest legal organization that is a national leader in the effort to reform the Endangered Species Act and raise awareness of the Act’s impact on people. In February, PLF won a landmark court victory at the Ninth Circuit Court of Appeals in Alsea Valley Alliance v. Evans, which invalidated the ESA listing of the Oregon coast coho salmon. PLF’s headquarters are in Sacramento, California, with offices in Washington, Florida, and Hawaii.

[PERC Study]
[PLF Endangered Species Act Project]
[PLF Endangered Species Act cases, op-eds & press releases]