January 20, 2011

There's something fishy with the government's economic analysis

By There's something fishy with the government's economic analysis

Author:  Damien M. Schiff

An important issue now pending for certiorari in the U.S. Supreme Court is how the Fish and Wildlife Service is supposed to assess the economic impacts of critical habitat designation under the Endangered Species Act.  That issue is raised in two petitions, one brought by the Arizona Cattle Growers Association, another by a collection of home building and agricultural groups represented by PLF attorneys.  The courts have been in disagreement about the issue for years.  One of the dividing lines is over two competing approaches to economic impact assessment, both used at times by the Service.  The first, termed the "coextensive" approach, requires the Service to assess all costs attributable to critical habitat designation, even if those costs can also be attributed to some other cause.  The second, termed the "baseline" approach, requires the Service to assess only those costs for which critical habitat designation is a "but for" cause.  The Tenth Circuit Court of Appeals has given its imprimatur to the former, the Ninth Circuit to the latter.  Is there any real difference between the two?

Based on a new proposed critical habitat designation for the Sonoma County population of the California tiger salamander, issued this week, the clear answer is YES.  The previous designation for the salamander contained about 17,000 acres.  The Service, using the coextensive approach, estimated the designation's economic impact to be about $193 million over the next 20 years.  In contrast, in this week's new proposed designation of about 50,000 acres, the Service used the baseline approach and concluded that the designation would have a total cost, over 25 years, of only $465,000.  There's something fishy here.

What to read next