Pricing The Non-Human Cost Of BP Spill

BP has spent more than $4 billion cleaning up the oil spill. But what about the non-human cost. How much should BP pay for dead and injured animals?

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In that other spill, in the Gulf of Mexico, BP has already spent more than $4 billion, and will be spending billions more, on the cleanup effort. That includes a lot of human costs - cleanup workers, checks for shrimpers. But our economics team, Planet Money, wondered about the non-human cost. How much should BP pay for dead and injured animals? NPR's Robert Smith went searching for the price tag on a pelican.

ROBERT SMITH: I started out pretty far from the Gulf - the Bronx Zoo. Ted Breg comes here every week to take pictures of the pelicans.

Mr. TED BREG: They're just beautiful, and they're easily photographed. They almost pose for you.

SMITH: So as he shoots, I ask him to estimate: What is a wild pelican killed in the Gulf worth? He lowers his camera.

Mr. BRAGG: It just can't be done. They're dead. All the money in the world won't bring them back.

SMITH: I will hear this answer from just about everyone I talk to on this story. A pelican, they say, is priceless. And you know what? That may actually be the right answer. But it's not a useful answer.

In economics, saying something is priceless is like saying it's not worth anything. You can't present an invoice to BP for infinite dollars. And you sure can't rely on the marketplace to come up with a fair price. It's illegal to buy or sell pelicans. No eBay, no Craigslist.

But there are places where people are spending money on pelicans. And that can give us the starting price. Next stop: Hammond, Louisiana, the oiled-bird cleaning facility.

Mr. JAY HOLCOMB (International Bird Rescue Research Center): The approximate number of pelicans that have come through is about 600.

SMITH: Jay Holcomb runs the International Bird Rescue Research Center. He says BP is spending millions on his cleaning project, but that's not a normal price tag.

Back in California, they figured out, in general, what it costs to save a pelican.

Mr. HOLCOMB: It's an average number, and we're saying 500 bucks is about it.

SMITH: Now, from an economic perspective, this strongly implies that whatever the value of a pelican is, it has to be more than $500, because that's how much you're willing to spend.

Mr. HOLCOMB: I didnt make that leap. But yes, I guess you could say that.

(Soundbite of laughter)

SMITH: Okay, we got $500. Five hundred dollars, do I hear $1,000?

Mr. MARK JACKSON (Animal Trainer): You could probably buy a pelican in Europe -though Im guessing - but probably for around a thousand dollars.

SMITH: Okay, there you go. Mark Jackson is a Hollywood animal trainer. He doesnt own a pelican, but he's coached them for movies and ads, and he says they can bring in a lot of money. One company is renting pelicans at $4,500 a day.

Mr. JACKSON: And over its lifetime, theoretically, it could make you, you know, hundreds of thousands of dollars.

SMITH: Okay, so we're up to a hundred thou. But, you know, we're still missing something. How much do Americans personally value a wild pelican flying free? Luckily, there are experts who calculate the incalculable.

Professor GARDNER BROWN (University of Washington): Gardner Brown, professor emeritus of economics, University of Washington.

SMITH: Professor Brown became a bit famous in this field decades ago, when he figured out how much people valued a wild duck: $30 - the 30 buck duck. He talked to hunters.

Prof. BROWN: I asked them how much they would be willing to pay for one more duck.

SMITH: So if you could walk home with 12 ducks instead of 11 ducks, how much would you slip some guy money under the table?

Prof. BROWN: Or be willing to pay to change the harvest regulations.

SMITH: Now, there's a lot of sophisticated math and design to make sure people aren't just guessing, but this survey method became the standard. Professor Brown helped put prices on endangered spotted owls, and viewing elephants in Africa.

Prof. BROWN: The economists got really angry with me years ago, years ago - theyve changed - and said I was bizarre, that I should try to value an elephant, because they're creatures of God.

SMITH: I thought I'd give this survey thing a shot, so I went back to the Bronx Zoo, and I posed the question like Professor Brown might: How much would you personally pay to have stopped pelican deaths in the Gulf? The numbers were all over the place.

Unidentified Man #1: I would contribute our vinyl siding account, which is maybe around $10,000.

Unidentified Woman: A thousand dollars, I would pay.

(Soundbite of laughter)

Unidentified Man #2: I would pay a dollar, for sure. Yeah, it's not a lot.

SMITH: A dollar, $10,000, $1,000? I think Im creating volatility in the pelican market. But it turns out there is a very simple way to avoid all of these problems.

Mr. ROGER HELM (Fish and Wildlife Service): We do not value them on an individual, let's go to the store and buy one.

SMITH: Roger Helm is the chief of environmental quality for the Fish and Wildlife Service. And he says after an oil spill, they used to do exactly what I tried to do: Survey, figure out the cost for each animal, and total it all up. But now, they look at the big picture.

An offending company is required to spend whatever it takes to restore the population to its original level.

Mr. HELM: They kill 47 pelicans, they owe the public 47 pelicans. They are responsible to make the public whole.

SMITH: And there's no single price. For instance, a company might build fences around a pelican nesting area to help increase the population - thats a cheap fix. Or the restoration could be really expensive - there's talk in the Gulf of having BP create new barrier islands for pelicans.

Best of all, though, this technique skirts that awkward question.

So when I ask you how much is a pelican worth that died in the BP oil spill...

Dr. HELM: My answer is, that is worth one pelican.

SMITH: And the price for a turtle is a new turtle. A dolphin, a dolphin -there's no need to do the conversion into dollars.

Robert Smith, NPR News, New York.

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