Endangered Species and Uncertainty: The Economics of a Safe Minimum Standard

Abstract

Abstract Species extinction irreversibly narrows the reservoir of potential resources. The future repercussions of this narrowing are uncertain. This paper develops the safe minimum standard (SMS) approach to public decisions involving endangered species. The SMS approach is based on game theory and calls for avoidance of extinction unless the social costs are unacceptably large. The level at which costs become excessive is a matter of intergenerational distribution. The paper also explores important linkages between the SMS approach and recent literature on preservation of natural environments.