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Wednesday, May 14, 2008

Polar Bears, Gas Prices, and Absolute Power

Today, the Department of the Interior officially declared the polar bear an endangered species.

The Bush administration is trying to tackle a bear of a policy headache — classifying polar bears as a threatened species because their habitat in the Arctic polar ice caps is melting.

The U.S. Fish and Wildlife Service, an Interior Department agency under Secretary Dirk Kempthorne, asked the Bush administration in January 2007 to give polar bears protection under the Endangered Species Act.

Kempthorne said declines in sea ice over the last three decades and projections of continued losses means the polar bear is a species likely to be in danger of extinction in the near future.

This decision has several pieces of significance. The first is that it continues to show the unintended consequences of certain laws. The polar bear is being listed as endangered under the Endangered Species Act. This act was well meaninged in that it meant to protect species from being put out of existence. Unfortunately, the unintended consequences are that it centers an awful lot of power into a few person's hands and allows anyone with an agenda to create a lot of havoc.

Back in August 1973, a biologist found a humble fish called the snail darter in the Little Tennessee River. At the time, it was believed that this species would be pushed to extinction if the Tennessee Valley Authority finished its Tellico Dam.

The snail darter became a celebrity, as environmentalists used the Endangered Species Act to halt the project. It took six years and an act of Congress to complete the dam.

Since then, the snail darter has been the poster child of endangered species litigation. The fish, which subsequently was found in other Tennessee waters, established the conventional wisdom about the interaction between endangered species and development. The pattern is familiar. Someone discovers a rare species in a local area. It is declared endangered, and then local projects are blocked.

It is noble to protect endangered animals, but this act also allows any environmentalist or even anti business activist to stop economic activity in the name of protecting an endangered animal.

Now, let's look at the potential consequences of making the polar bear an endangered animal.

Suppose someone wants to build a coal-burning power plant in Florida. Environmentalists might challenge the construction on the grounds that the plant will emit greenhouse gases leading to global warming and an increased threat to polar bears.

It is hard to say how such challenges would play out. My guess is that it would heighten the pressure on the U.S. to adopt a cap-and-trade emissions program or a carbon tax.

The second impact of this ruling is that it will likely end all Arctic exploration for oil and gas, at least in the U.S. Given surging world demand for oil, increased supply is the only thing standing between us and $200-a-barrel oil.

Now, it is all well and good to try and protect the polar bear, however in this case, it means any environmentalist can force a halt to drilling anywhere that they deem would cause more global warming. Of course, this is a nebulous distinction. Anyone can say just about anything can cause global warming and thus threaten the polar bear. The implication of this ruling goes well beyond the threat to gas prices. Yet, it may very well be that the polar bear will put even more pressure on gas prices.

The lesson here is to be careful and pay attention to what sorts of new powers laws will create in bureaucracies. One of the greatest failings of the federal government over the last hundred years is the enormous new power it has put into the hands of all sorts of bureaucracies and this act, and its current coronation is just one example.

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