New Landowner-friendly Endangered Species Policy: Not so New, Not so Friendly

Commentary

New Landowner-friendly Endangered Species Policy: Not so New, Not so Friendly

The U.S. Fish and Wildlife Service recently announced a proposed new initiative, called the Prelisting Conservation Policy, that appears to make the Endangered Species Act more landowner-friendly. In reality, the Policy, like other purportedly landowner-friendly initiatives that preceded it, does little of substance to lessen the regulatory burden on landowners because it leaves untouched the Act’s draconian penalties ($100,000 fine and/or 1 year in jail for harming a single species or even its habitat).

On the surface, the Prelisting Conservation Policy looks like a good deal. According to the Fish and Wildlife Service:

“Under the proposed policy, landowners could obtain credits for current efforts that benefit declining species. These conservation credits could later be redeemed to offset or mitigate actions that are detrimental to a species were it to subsequently be listed under the Act. The credits may also be traded or sold to a third party.”

And based on how Fish and Wildlife’s leadership is enthusiastically pitching the proposed policy, it appears to move the conflict-ridden Endangered Species Act in a positive direction. Dan Ashe, Director of the Fish and Wildlife Service, said:

“The proposed policy is a win-win for people and for wildlife species that are in decline but not yet listed as threatened or endangered. This smart approach expands on our existing efforts to work cooperatively with landowners to save the great landscapes of America and both the wildlife and the way of life of Americans that depend on them. By incentivizing early voluntary conservation efforts, this policy demonstrates our continued commitment to innovation and flexibility in implementing the Endangered Species Act.”

So, what’s the problem? After all, this looks like a good deal for species and landowners: species get additional conservation, and landowners potentially avoid getting whacked by the Endangered Species Act.

The problem is that the proposed Prelisting Conservation Policy is another in a long line of so-called landowner-friendly reforms (such as No Surprises, Candidate Conservation Agreements and Safe Harbors) that mask the central problem with the Endangered Species Act by leaving intact the Endangered Species Act’s massive penalties. These penalties create strong incentives for landowners to destroy habitat in efforts to deny refuge to species, and as a result the Act may well be doing more harm than good. Another problem is these superficial reforms have been done administratively, not codified in to law, and so can be altered at the whim of Fish and Wildlife.

Some of the country’s leading legal scholars provide some much-needed insight in to the true nature of these reforms. Barton Thomson of the Stanford University Law School commented on the No Surprises Policy (which was unveiled in the mid-1990s by then-Interior Secretary, Bruce Babbitt):

“Through its no surprises policy, the FWS tries to create a form of property right to insure property owners against future regulatory activities…Absent explicit statutory (and preferably constitutional) guarantees, however, property owners will be wary of the promised insurance. Even if property owners trusted the government and its no surprises policy, they would still have grounds for unease. Under the no surprises policy, the FWS reserves the right to require additional mitigation in “extraordinary circumstances” (although the mitigation cannot involve additional payments or involve land parcels set aside for development or land management under the original terms of the HCP).”

As Professor Thompson alludes to, “extraordinary circumstances” can apply to species and land not covered in the Habitat Conservation Plan (federally approved mitigation schemes in which landowners put off limits some of their land in order for permission to use the rest of their land for activities such as farming and cutting trees). Given the ever-growing list of endangered species, the prospect of an extraordinary circumstance is very real for landowners who have signed Habitat Conservation Plans.

Professor Thompson had this to say about Safe Harbors, another of Secretary Babbitt’s reforms:

“While a growing number of property owners are finding safe harbor agreements attractive, the uncertainty and distrust created by prior ESA implementation has hindered the government’s attempts to market the safe harbor concept.”

“A proactive regulatory scheme is not, however, a substitute for compensation. Absent broader compensation than is provided today, even a proactive scheme is likely to encounter evasive habitat destruction, since such a scheme would not eliminate the incentive to destroy habitat, but simply narrow the window of opportunity.”

Richard Epstein, of New York University and the University of Chicago, commented on landowner-friendly initiatives, which he refers to as “covenants”:

“[T]hese covenants are not universal in scope, and they require confidence that they will be respected over time when the remedies for government breach are uncertain at best. Absent strong ownership rights, the unmistakable incentive remains: destroy habitat now in order to preserve freedom of action later.”

Jonathan Adler, of Case Western University, who has written extensively on the Endangered Species Act’s adverse effects on species, has the following observation about reforms touted as landowner-friendly:

“Recent administrations have sought to offset these effects through various programs and initiatives designed to encourage voluntary conservation efforts and provide landowners with greater regulatory certainty. Yet such regulatory assurances and ‘safe harbors’ can only go so far to reduce the economic consequence of species listings for private landowners, and there is only so much flexibility in the law itself. Such reforms may ameliorate the anti-environmental incentives created by the Act, but they do not eliminate them.”

Which brings us back to the latest of these reforms, the proposed Prelisting Conservation Policy. As is clear from the analysis of these three legal scholars about previous reforms, the reality of the Prelisting Conservation Policy is far different from how it’s being touted for a very simple reason: the Policy leaves untouched the Act’s massive penalties, which create overwhelming disincentives for landowners to harbor species.

Layering incentives, and so-called landowner-friendly initiatives like the Prelisting Conservation Policy, on top of the Endangered Species Act’s existing highly punitive structure is like putting a shiny, new facade on a house with an unsound foundation and then claiming the house is as good as new. Any serious discussion of reforming the Endangered Species Act must distinguish between disincentives and incentives, and fix the disincentives before adding incentives. The central problem with the Endangered Species Act is not a lack of incentives, but rather the presence of overwhelming disincentives

Brian Seasholes is a former research fellow with Reason Foundation.