What is the value of a pelican?

August 6, 2010 10:13 AM

What is the value of a pelican? - The Planet Money crew investigates how we can estimate the value of a pelican killed in the Deepwater Horizon oil spill. (podcast)
posted by Argyle (25 comments total)

From a study entitled 'A Fine is a Price"

The deterrence hypothesis predicts that the introduction of a penalty that leaves everything else unchanged will reduce the occurrence of the behavior subject to the fine. We present the result of a field study in a group of day‐care centers that contradicts this prediction. Parents used to arrive late to collect their children, forcing a teacher to stay after closing time. We introduced a monetary fine for late‐coming parents. As a result, the number of late‐coming parents increased significantly. After the fine was removed no reduction occurred.

While I appreciate the exercise, putting a value on pelicans just means that in the future, an oil company can pay a certain amount of money for the wholesale slaughter of an entire species because at some point, that value will be plugged into an equation that has an answer in the black.
posted by infinitefloatingbrains at 10:37 AM on August 6, 2010 [7 favorites]

The notion at the end that a pelican is worth a pelican is a preposterous method at the macro level. It doesn't treat an ecology as a system and so it ignores what unintended consequences can occur from the loss of X amount of a particular flora or fauna.
posted by prunes at 10:41 AM on August 6, 2010 [4 favorites]

They've crippled - if not destroyed - an entire ecosystem that millions of people's livelihood and culture depend on. In a just country, the "price" would be crushingly long prison sentences for everyone directly responsible, and the seizure of all their personal assets. Dickering around like this would be laughable.

Also, I'm really sick of Adam Davidson's grating Ira Glass impersonation.
posted by ryanshepard at 10:41 AM on August 6, 2010 [3 favorites]

A pelican in her piety no longer has to vuln herself. Other folks are more than happy to take care of it for her. Poor Louisiana.
posted by sciurus at 10:48 AM on August 6, 2010

Oh boy that's a good question. I'm bad with numbers, maybe $80? ...Seems high. Maybe $4?
posted by 2bucksplus at 10:50 AM on August 6, 2010 [2 favorites]

I listened to this on the train ride home yesterday. The interesting part of this was their analysis of pricing something that has no market. The 20 minute walk they took was interesting from an economist's view point that available rates for Hollywood movie pelicans and costs to clean up pelicans were skewed, just as skewed as the results of a random survey. I do think that the answer that the cost is whatever it costs to return a pelican is somewhat sidestepping the issue, and I worried about the fact that they ignored extinction. What if a company causes the pelican to go extinct? Does that mean the cost (determined by replacement cost) becomes infinite as there is no feasible way to replace them? It would see to me then that the cost of replacing a pelican is an exponential one. Replacing one or two would be possible but the further along you get the steeper the curve of the cost, up to infinity. An interesting discussion but needs some more fleshing out than a 20 minute podcast could handle.
posted by msbutah at 10:54 AM on August 6, 2010

I'll assume this is ridiculing the whole notion of pricing a single animal, as a way to quantify impacts in real-world money terms. But the summary says it all (SPOILER):

Instead of telling a company what they have to pay for dead animals, [the U.S. Fish and Wildlife service] just [tells] them they are required to restore the population of the animal. 47 dead pelicans? The company has to pay for enough habitat or conservation programs to bring back 47 pelicans.

Logic wins in the end.
posted by filthy light thief at 11:00 AM on August 6, 2010

I think the important part is at the very end... about how, if you don't come up with some kind of price for a pelican, even if that is simply "a pelican is worth a pelican, so replace all the ones you killed", then killing pelicans is free, and we end up with a lot more dead pelicans.
posted by hippybear at 11:04 AM on August 6, 2010 [1 favorite]

There's a large group of people, mostly US federal and state government regulators, but also academics and private consultancies, who do this kind of work. It's called natural resource damage assessment (NRDA or nerd-a). NOAA has a page about it here. The US fish and wildlife service page on it is here. The old joke is that they go around putting price tags on fish.

The reality goes further than what's described in the article---I've only read the transcription, forgive me if the audio goes into more detail. Most agencies use an ecosystem restoration apporach, it's not enough to restock fish and call it a day, a fully functional ecosystem has to be left behind, enough such that the natural one can regenerate itself. Among other things this meas careful control over soil erosion, water flow management and other things. There have been too many cases where sea grasses have been replanted only to wash away in the next season because the sediments have eroded away.

The important thing here is how long the damage mitigation process lasts. Timescales need to be measured on seasons or years. Typical recovery times are 3-5 years after something like this. A decade or more has been necessary in some situations. Prince William Sound is still recovering. The estimate for the Gulf region is 2 to 3 years, based on how productive it can be, but no one really knows for sure.
posted by Anonymous 5$ Sockpuppet at 11:06 AM on August 6, 2010 [1 favorite]

Does that mean the cost (determined by replacement cost) becomes infinite as there is no feasible way to replace them?

Reminds me of this paper estimating the total economic value of the world's ecosystem services at $33 trillion, which was twice the global GDP at the time. But, like these pelicans, it only really works if you're counting at the margins, as the value of the sum total is going to approach infinity given limits to substitutability. For environmental advocates, there's interesting tradeoffs in choosing whether to accept these dollar values strategically. By appealing to people's wallets, I wonder if you preclude appealing to their morality.
posted by eagle-bear at 11:06 AM on August 6, 2010

Oil companies and pelicans compete for a scarce resource -- the right to operate in certain area in the Gulf of Mexico without compromising the safety and physical integrity of the area. If the pelican population somehow hurt an oil company's ability to operate safely, or if they began damaging the environment for everyone else, you can be sure the birds would be eliminated. Likewise, an oil company that has compromised the environment or made it unsafe should be removed from the affected area.

The cost of a pelican? The future right to come near other pelicans.
posted by swift at 11:06 AM on August 6, 2010

$20, same as its belly can.
posted by Horace Rumpole at 11:08 AM on August 6, 2010 [4 favorites]

Oh boy that's a good question. I'm bad with numbers, maybe $80? ...Seems high. Maybe $4?*
posted by 2bucksplus at 11:15 AM on August 6, 2010 [2 favorites]

The "price" would be crushingly long prison sentences for everyone directly responsible, and the seizure of all their personal assets.

While the anger is a natural reaction to what's happened, it solves nothing. Jail and punitive fines, corporate "death penalties", won't bring the birds, fish and salt-marshes back. Punishment isn't the (only) answer.

The NRDA process response is instead: Fit it! You break it, you bring it back to the same or better.

This means not letting the companies at fault pay a fine, throw a corporate exec to the wolves (or declare bankruptcy) and walk away. This means keeping pressure in politicians so they keep resources focused on the cleanup. Is Jindal still going to be paying for environmental assessors three years from now? Is Obama?
posted by Anonymous 5$ Sockpuppet at 11:16 AM on August 6, 2010

Humans have already done this with humans so animals will be a snap.
posted by effluvia at 11:18 AM on August 6, 2010 [1 favorite]

This is a question we can readily answer with a new Settlers of Catan expansion set.
posted by Wolfdog at 11:21 AM on August 6, 2010 [1 favorite]

Most agencies use an ecosystem restoration apporach, it's not enough to restock fish and call it a day, a fully functional ecosystem has to be left behind, enough such that the natural one can regenerate itself.

This approach falls apart when it comes to irreparable damage. Then, logically, the cost is infinite. In these cases, the corporation is never charged $∞.
posted by JHarris at 11:30 AM on August 6, 2010

While the anger is a natural reaction to what's happened, it solves nothing. Jail and punitive fines, corporate "death penalties", won't bring the birds, fish and salt-marshes back. Punishment isn't the (only) answer.

It's not the only answer, but utterly and very publicly destroying the lives of corporate executives responsible for disasters like this might have some preventative effect.

I'm aware that's unrealistic, though.

Fix it! You break it, you bring it back to the same or better.

Nature generally doesn't work that way, obviously - 21 years after the Exxon Valdez, for example, there is still oil everywhere in the Prince William Sound, its fishery is still in ruins, and exposed residents are still heading to early graves.

Even if Exxon hadn't fought for years to avoid responsibility, no amount of money or effort would have fixed many of the related problems. It just isn't possible to recover that much oil.

So, the "pelican price" is just reductive nonsense - propaganda for BP and the feds, and self-delusion for those who want to believe that the Gulf isn't going to be a sick, toxic mess for generations to come.
posted by ryanshepard at 11:39 AM on August 6, 2010

This sort of strained analysis may be due to the fact that, while we ostensibly triumphed over Communism in the West, the sheer historical enormity of the struggle between Communism and Capitalism as competing ideological systems lo these many years has led many of us to unconsciously internalize the belief that all problems are ultimately reducible to analysis in economic terms. This subtle shift in thought has dangerously narrowed the way we define and understand many modern problems.

It should be obvious, as others pointed out up-thread, that a single pelican is part of a complex system of natural resources whose real value is beyond the measure of any crude cost analysis. But since we've all been so busy digging in our heels and defending our preferred economic theories as the front line troops in one of history's most epic ideological struggles for as long as most of us can remember, I think we've forgotten how not to view the world through the lens of economic theory.

The NRDA process response is instead: Fit [sic] it! You break it, you bring it back to the same or better.

That assumes it's possible to fix everything that breaks. Ever try to "fix" a broken egg? The laws of physics allow that change is often irreversible. How would you suggest "costing out" irreversible damage?
posted by saulgoodman at 11:49 AM on August 6, 2010

NRDA is a response to Exxon's complete and utter disavowal of responsibility for the ecological destruction in PWS. After the Valdez ran aground, Exxon was charged huge penalties, was forced to set-up a fund for clean-up, but afterward left the residents to more or less fend for themselves and to manage the long-term restoration by themselves (disclaimer here, I've done some of this work under contract to PWS RCAC). The only Exxon-funded people running around PWS following the immediate clean-up were consultants specifically hired to minimize or deny fault for the company.

How would you suggest "costing out" irreversible damage?

What does irreversible mean? Does that mean nothing can be done? That nothing should be done? Even if the pre-existing ecosystem can't be fully restored (and I'm not at all convinced that this is the case here), should a company be able to leave a devastated mess behind because it's "irreversibly damaged"?

What we're talking about here is part of a process for holding the parties at fault responsible. To keep them working on a damaged site after the telegenic emergency operations are complete. To do the slow, unsexy restoration of ecologies until the government regulators and the local citizens and the academic ecologists think that what has been done is what could be done (and not more, which is another way you can cause irreparable harm). It's about avoiding the problems of the Valdez spill: Spillers just paying a fine and walking away, disclaiming liability. That's what this is about.
posted by Anonymous 5$ Sockpuppet at 12:09 PM on August 6, 2010

Glances down at bruise left from last weeks pelican encounter.
posted by notreally at 12:44 PM on August 6, 2010

On the other hand, scaring the bejeebus out of the industry by nationalizing and slowly selling off the assets of any company responsible for this kind of disaster (the equivalent of the death penalty for the offending company, in other words) would do a lot more to discourage other companies in the industry from thinking they can simply build the costs of remediating any environmental harm they might cause through operational cost-cutting into their business models, which would have the effect of changing the behavior of the entire industry much more rapidly and effectively toward responsible practices. Especially if there were international treaties in place around the world that applied the same standards and penalties everywhere.

But nothing like that's ever going to happen, of course, whether it should or not. Corporations get the right to free speech, but they're still immune to the death penalty.
posted by saulgoodman at 12:50 PM on August 6, 2010

On the other hand, scaring the bejeebus out of the industry by nationalizing and slowly selling off the assets of any company responsible for this kind of disaster

Considering what happened to the initial 5B$ Exxon judgement on appeal, I can't ever see a US court allowing that.

Especially if there were international treaties in place around the world that applied the same standards and penalties everywhere.

There are. Just not in the United States. Explicitly so.
posted by Anonymous 5$ Sockpuppet at 1:33 PM on August 6, 2010

That assumes it's possible to fix everything that breaks. Ever try to "fix" a broken egg? The laws of physics allow that change is often irreversible. How would you suggest "costing out" irreversible damage?

I think one of the points of the story was that when you declare something irreplaceable, you are basically saying it has no cost. By declaring a situation as 'irreversible' it heads down a similar path where a company can avoid repairing the damage they have done.

The concept of "making the US public whole" on the loss of the pelicans can be extrapolated to the entire situation, bringing a framework to economic damage and environmental damage in a common rationale.

The idea of companies budgeting to handle the environmental costs is handled by deciding on whether the damage was created by 'gross negligence'. If that condition is found, the penalties become uncapped and we enter a realm of punitive damages well beyond the true costs of the damage.
posted by Argyle at 1:53 PM on August 6, 2010

We Have Yet to See The Biggest Costs of the BP Spill
posted by homunculus at 6:06 PM on August 6, 2010