Polar Bears Threatening to Deliver Us $200 Oil

Senior Fellow Kevin A. Hassett
Senior Fellow
Kevin A. Hassett
Protecting the environment is a noble cause, although the consequences can be costly.

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.

The snail darter almost killed a single dam. The polar bear could, in theory at least, stop everything.

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.

If things go the right way this week, the local nature of this issue might change. An endangered species could have an effect on economic activity everywhere in the U.S., not just in a single locale. U.S. District Judge Claudia Wilken recently ordered the Interior Department to decide by May 15 whether polar bears should be listed under provisions of the act. There is a strong chance that the polar bear will be declared "threatened." If so, then everything about the economics of endangered species will be turned on its head.

Why is the polar bear in trouble? The main risk is that global warming will melt ice in the Arctic. Polar bears, biologists believe, need ice to live. Take away the ice, and no more polar bears.

Arctic Predator

The dependence on ice results from the bear's evolution as a predator. They mostly eat seals, and capture them by lurking around on the ice. They can't outswim a seal, but they can pounce on one when the seal slides into its den on an ice floe.

They are so good at hunting on the ice, and so bad at surviving without it, that bears that live in areas that have significant summer ice melts tend to go without food during the iceless times. So it is reasonable to believe that global warming would, if it melted the ice caps, be a serious threat to polar bears.

This week's probable decision is debatable, to say the least. One problem is that the beast, which is notoriously hard to count, exists in vast numbers throughout the Arctic. Opinions even differ as to whether its population is increasing or decreasing.

Population Dispute

For example, professor J. Scott Armstrong of the Wharton School at the University of Pennsylvania recently told Science Daily that "the polar bear populations have been increasing rapidly in recent decades due to hunting restrictions."

Others, such as biologists Ian Stirling and Andrew Derocher, see troubling signs of decline in specific subpopulations that live in regions more affected by ice melts.

The truth is, as noted by my American Enterprise Institute colleague Kenneth P. Green in a recent article, "Is the Polar Bear Endangered, or Just Conveniently Charismatic?" we just don't have the data to assess what is happening to polar bear populations.

"Polar bear populations are difficult to measure, in part because they travel so much, are sparsely populated, and live far from people," he writes. Even aerial surveys and mark-and- recapture studies, which are the best tools to estimate changes in polar bear populations, offer ambiguous results.

If the polar bear is to be declared threatened it must be because the Interior Department accepts the forecasts of continued global warming, and a significant reduction in Arctic ice.

There are two reasons why that decision, if it is made, will be momentous.

Geographic Reach

The first is the possible wide geographic reach of the global warming argument. The snail darter almost killed a single dam. The polar bear could, in theory at least, stop everything.

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.

Costly Restrictions

These restrictions will have a large cost. "The U.S. Geological Survey and the Norwegian company StatoilHydro estimate that the Arctic holds as much as one-quarter of the world's remaining undiscovered oil and gas deposits," Scott Borgerson, an international affairs fellow at the Council on Foreign Relations, wrote in the March/April issue of Foreign Affairs. "Some Arctic wildcatters believe this estimate could increase substantially as more is learned about the region's geology."

Many biologists believe that global warming is a serious threat to the polar bear. If that leads to the polar bear being listed as threatened this week, then the world you live in will have fundamentally changed.

Kevin A. Hassett is a senior fellow and director of economic policy studies at AEI.

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About the Author


Kevin A.
  • Kevin A. Hassett is the State Farm James Q. Wilson Chair in American Politics and Culture at the American Enterprise Institute (AEI). He is also a resident scholar and AEI's director of economic policy studies.

    Before joining AEI, Hassett was a senior economist at the Board of Governors of the Federal Reserve System and an associate professor of economics and finance at Columbia (University) Business School. He served as a policy consultant to the US Department of the Treasury during the George H. W. Bush and Bill Clinton administrations.

    Hassett has also been an economic adviser to presidential candidates since 2000, when he became the chief economic adviser to Senator John McCain during that year's presidential primaries. He served as an economic adviser to the George W. Bush 2004 presidential campaign, a senior economic adviser to the McCain 2008 presidential campaign, and an economic adviser to the Mitt Romney 2012 presidential campaign.

    Hassett is the author or editor of many books, among them "Rethinking Competitiveness" (2012), "Toward Fundamental Tax Reform" (2005), "Bubbleology: The New Science of Stock Market Winners and Losers" (2002), and "Inequality and Tax Policy" (2001). He is also a columnist for National Review and has written for Bloomberg.

    Hassett frequently appears on Bloomberg radio and TV, CNBC, CNN, Fox News Channel, NPR, and "PBS NewsHour," among others. He is also often quoted by, and his opinion pieces have been published in, the Los Angeles Times, The New York Times, The Wall Street Journal, and The Washington Post.

    Hassett has a Ph.D. in economics from the University of Pennsylvania and a B.A. in economics from Swarthmore College.

  • Phone: 202-862-7157
    Email: khassett@aei.org
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    Name: Emma Bennett
    Phone: 202-862-5862
    Email: emma.bennett@aei.org

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