Earlier this month, the Biden administration indicated it would reverse changes to the Endangered Species Act made by President Trump. One such change was to open up a large chunk of the threatened northern spotted owl’s habitat to logging. The move fueled a decades-old debate between industry and conservationists in the Pacific Northwest and northern California—a tension that is broadly characteristic of the Endangered Species Act’s history.

“The history of the Endangered Species Act is marked by a contested choice: should we save wildlife or jobs? The northern spotted owl is the poster species in that debate,” says Eyal Frank, an assistant professor at the University of Chicago’s Harris School of Public Policy. “But that decision is often made without needed evidence. And if we don’t quantify the costs of species protection, direct or indirect, we end up assuming they’re infinitely large.”

Frank and his co-author, Ann Ferris, examined the impacts on the timber sector of the 1990 listing of the northern spotted owl as threatened under the Endangered Species Act, specifically changes in industry employment. Their study, published in the Journal of Environmental Economics and Management, found that the listing did lead to job losses. But the losses were just a small fraction of the 130,000 jobs the industry predicted would be lost.

When the 6.9 million acres of old forests were designated as protected habitat, prohibiting logging, timber employment declined by 14 percent compared to regional employment in the sector. It declined by 28 percent in the impacted counties compared to the industry at the national level. These reductions reflect a decline of about 32,000 jobs in the Lumber and Wood Products sector when compared nationally, or 16,000 jobs when compared within the region. These estimates are significantly lower than the projections made by industry and align with federal projections (13,000 near-term jobs and 28,000 jobs in the long run).

“Those job losses were a short-term cost, which likely had real welfare impacts on the workers, but in exchange we got back the chance to save a species and protect many others,” Frank says. “The proper context should also be given here. Had the logging continued as projected, the roughly 200-years-old forests those workers were cutting down would likely be gone today—and with them, the jobs.”

To account for possible changes in global timber markets, the study compared timber employment in the impacted counties to the Canadian sector and found no similar decline in Canada. In other words, the declines in the Pacific Northwest and northern California were not due to larger industry trends.  Meanwhile, the unemployed workers didn’t flock to similarly land-intensive and physically exertive industries such as agriculture, mining and construction in the region. Only a small percentage of working-age men left the region. Timber sales in the affected area declined by 45 percent relative to sales in unaffected forests, and the projected future price of lumber doubled relative to other commodities.

The authors note their analysis demonstrates that environmental conservation aiming to protect species’ habitats can impact related industries and employment, though it is not straightforward to generalize this case to other Endangered Species Act listings and other industries. However, extractive industries, and especially logging, might represent the worst impacts conservation policy may have on employment.

“This case likely represents one of the worst labor market impacts, as it resulted in placing 40 percent of an industry’s resource base under protection. The listing of other species would have smaller impacts on other sectors,” Frank says. “It should therefore not be taken as a cautionary tale to prevent the listing of species, but rather an example of why we need solid data to show that the costs are real, manageable, and not infinite.”

Areas of Focus: Environment
Producing and using energy damages people’s health and the environment. EPIC research is quantifying the social costs of energy choices and uncovering policies that help protect health while facilitating growth.
Conservation Economics
Conservation Economics
Human society profoundly shapes – and is shaped by – the natural world. EPIC research is helping to identify the costs and benefits of preserving natural ecosystems.