Part I · Incentives Gone Wrong · No. 7

The Unintended Consequence of Protection

How the Endangered Species Act spurred the destruction of habitats it was designed to save.

2 min read · from UNINTENDED by Mayank Mehta

In 1973, the United States passed the Endangered Species Act, one of the strongest environmental laws in the world. Its purpose was to prevent the extinction of threatened species and to protect the habitats they needed to survive. The law gave federal agencies the power to designate critical habitat on private as well as public land, and to restrict activities that might harm endangered species or the ecosystems they depended on.

For conservation, the law was a landmark. Bald eagles, gray wolves, grizzly bears, and hundreds of other species owe their continued existence, in part, to the protections it established. But the law also created an incentive that nobody had anticipated.

If your property was found to contain habitat for an endangered species, the government could impose severe restrictions on what you could do with your land. You might be prohibited from logging, building, farming, or developing. The restrictions could be permanent and financially devastating.

Some landowners, faced with the prospect of losing control over their property, made a calculation. If the government was going to restrict their land because it harbored an endangered species, the simplest way to avoid those restrictions was to make sure the species wasn't there when the surveyors arrived.

The practice became known as shoot, shovel, and shut up. Landowners in the southeastern United States, aware that red-cockaded woodpeckers nested in old-growth pine forests, began preemptively cutting down mature trees. If there were no old pines, there could be no woodpecker habitat, and if there was no habitat, the government had no basis for restrictions. The woodpecker, already endangered, lost habitat not despite the law, but in part because of it.

The pattern repeated with other species and in other regions. Landowners who might otherwise have tolerated wildlife on their property had been given a reason to eliminate it before it triggered regulation. The law created a perverse incentive: the more endangered a species became, the more reason landowners had to ensure it never appeared on their land.

None of this diminishes the Endangered Species Act's overall importance. The law has saved species from extinction and preserved ecosystems that would otherwise have been destroyed. But its unintended effect on private landowners illustrates a recurring theme: protection, when it imposes costs on the wrong people, can generate the very behavior it's trying to prevent.