Tuesday, July 13, 2010

How much are polar bears worth as a species?

There are lots of ways to go about answering this question.  I'll just pursue one line of reasoning.

My governor thinks that  "hundreds of millions" is too much to try to protect the polar bears' environment.  Actually, the Anchorage Daily News reported,
An independent economic review*, paid for by the state and a private corporation, estimates the designation will cost hundreds of millions of dollars in added expense for the oil industry and lost revenue for state and local governments.
Much of the ADN story comes right from the press release on the Governor's website, which says the results of the report (not the report itself) have been released.  There's a link to his letter to the Secretary of Interior in which he says "hundreds of millions or even billions in just the next 15 years" (as opposed to the Interior Department's estimate of $650 million over 29 years).

So that's just costs to Alaska and oil companies in Alaska.

But what is a reasonable price for human beings to pay to maintain polar bear habitat in the world?  Let's assume that 'hundreds of millions" is about $400 million.   What can you get for $400 million?

  1. One day of war in Iraq

  2. Four auctioned pieces of art.  

  3. 1.5% of all pizzas consumed by Americans in one year.  ( Pizzaware says Americans consume 3 billion pizzas a year at $30 billion.)  I bet that's less than all the left over slices that got thrown out. 

  4. Knik Arm Bridge with a couple hundred million to a billion to spare.  (Official bridge site says $650-700 million.  An anti bridge site says federal highway report puts total costs at $1.5 billion.)

  5. What Americans spent last year to see Transformers:  Revenge of the Fallen ($402,111,870)

  6. Half of Alaskans' Permanent Fund Last year ($875 million total to divide)  or we could spread it out over several years.  I know Alaskans consider this their money, even the ones who accuse Obama of being a socialist.  But not even to save the polar bear? 

  7. 4.5% of what Americans spent on veterinary care for their pets in 2007.  We spent $10 billion on vet care in 2007.  ($41 billion altogether on pets.)  I know that pets are family members to their owners, but I'm sure some of this wasn't necessary or even prolonged a pet's suffering.   We can spend it all on cats and dogs and birds, while we let the polar bears disappear?

Think about your great-great-grand kids studying history 100 years from now and asking questions like -

"You mean they spent the money needed to save polar bears on  pizza? to buy four paintings? to see a movie?. . .?"

OK, I understand this is just the money the governor says it would cost our economy and oil companies to fulfill the conditions of the Endangered Species Act and not all it would cost to save the polar bear.  (And we don't know that his numbers - vague as they are - are accurate either.  And he doesn't consider the benefits that would accrue because we make the effort to save one of the most magnificent animals on earth.)  And I recognize that the Governor challenges whether these actions would even do anything positive for the bears.  The point though is to say that if we wanted to save the species, there's slack in our budgets to do it.

A point I don't get into here is that human thinking and economic incentives are set to the keep the status quo.  We could create alternative life styles that would be more earth friendly without sacrificing living rich human lives (and lots of people around the world are working on this), but it does mean making perceived sacrifices and Americans like what they have.  We focus on what we would give up, not what we would gain.  And the companies. that sell them what they have, bombard them with advertising to make sure they keep buying more.

Sure, there are lots of questions that can be raised about the Endangered Species Act and polar bears, but I think that our governor thinks small and short term on this issue.  To frame this as jobs versus polar bears is stunted thinking.  Once the polar bears are gone even a couple billion dollars (which we do have sitting in the Permanent Fund) won't bring them back.  What happened to being good stewards of the earth? 

*The 'Independent'  economic review was done by Econ One Inc.

Econ One Research, Inc. provides economic research and consulting services. The company focuses on areas such as contract disputes, antitrust, intellectual property, patent infringement, regulation, and unfair competition. Its clientele includes Atkinson & Thal, Keker & Van Nest, American Central Gas Co., Enron Corp., GE Capital, Hughes Electronics Corp., IBM Corp., PepsiCo, Inc., US Department of Justice, and The World Bank. The company caters to airline, energy, oil and gas, healthcare, retail, and telecommunications industries. Econ was founded in 1997 and based in Los Angeles, California with an additional office in Texas.

They've done a lot of consulting for the Alaska Department of Revenue on the gasline and also for the legislature. They're heavy on economists.  It would be interesting to see how much money this company has made from its Alaska government work and whether the interest in future contracts might have influenced how they calculated costs in this report.   We know this happens, even egregiously, as when  Arthur Andersen switched its Enron accountants for ones more willing to agree with Enron's calculations.  Enron was another of Econ One's clients - did they help Enron cause the California blackouts? Probably not, but they do energy and gas work and it's worth asking.  It would also be interesting to know which private company helped pay for the report.  Don't have time for that now.

[Update:  I missed that when I first read the ADN article.  It says:
Arctic Slope Regional Corp., an Alaska Native corporation, also paid for the report, prepared by Econ One Research Inc.]


  1. I am reminded of the basic model my engineering design prof required us to work within with some of your questions here...
    Clearly stating criteria for judgment and discussion of weights attached to each was/is fundamental to choosing the final project path.
    Our governor has not done that with the release of the material in this study thus far so I am not convinced this study he is relying on should be accepted by Alaskans ...
    I am hoping you have the time to explore
    "human thinking and economic incentives are set to (the) keep the status quo"
    sometime soon.
    Far too many of these kinds of studies assume a starting point which IS the status quo and work from there...
    And it's rarely clear that this is so.
    Much of the shortsighted aspect of human behavior lives right at this muddy junction...


  2. Much of the responsibility of protecting the Polar Bear's environment is on Alaska's shoulders, but why must Alaska shoulder all of the cost? I love the polar bears. I'd glady give up some of already stretched dollars to help out, as would my children. I imagine that a good portion of the world would give something to help. If Alaska can't or won't spend the money, then your state should turn to the rest of the world and ask for help.

    (btw... i love your blog. i made a point of using my turn signal all day today, while driving.)

  3. Hi Alaskapi good to hear from you.

    Anon, I don't think Alaska's 670,000 people are enough to cause the climate changes that are affecting the polar bear, so I really think everyone is responsible, as you say. For the tiger, the rhino, and also the less iconic species. thanks for your comment.

    And btw, just use the turn indicator when you're turning. :) [It's clear I'm joking right?]


Comments will be reviewed, not for content (except ads), but for style. Comments with personal insults, rambling tirades, and significant repetition will be deleted. Ads disguised as comments, unless closely related to the post and of value to readers (my call) will be deleted. Click here to learn to put links in your comment.