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August 2005



 "TESRA" Endangered Species Act Reform Proposal Would Do More Harm Than Good


by David Ridenour

 

Congress is once again contemplating changes to the Endangered Species Act.  As in the past, prospects for the adoption of meaningful reform are poor.  This is unfortunate, as few laws have been as ineffective and counterproductive as the Endangered Species Act.

ESA's 32 Years of Failure

In the 32 years the ESA has been on the books, just 34 of the nearly 1,300 U.S. species given special protection have made their way off the "endangered" or "threatened" lists.  Of this number, nine species are now extinct, 14 appear to have been improperly listed in the first place, and just nine (.6% of all the species listed) have recovered sufficiently to be de-listed.  Two species - a plant with white to pale-blue flowers called the Hoover's Woolly-Star and the yellow perennial, Eggert's Sunflower - appear to have made their way off the threatened list in part through "recovery" and in part because they were not as threatened as originally believed.

A less than 1% recovery rate isn't good.1  Some environmental groups, however, insist that this statistic proves the opposite - that the ESA has been very effective.  These organizations note that, since 99% of all the species given special protection have either recovered or are still on the endangered and threatened lists, these species all "still exist" and, therefore, the ESA has worked.  The "still exist" standard, however, tells us little about the true status of endangered and threatened species and certainly does not prove the efficacy of the ESA.

It is not clear that species recoveries so far can be attributed to the ESA.

* The American Peregrine Falcon's recovery benefited enormously from captive breeding programs sponsored by The Peregrine Fund and other private organizations.  Such programs would have existed without the ESA.2

* The recovery of the Aleutian Goose would have occurred without the ESA.  The Goose's decline was largely due to the introduction of a non-native predator, the Arctic Fox, to the goose's island habitat.  Once the foxes were removed, the goose again flourished.3

* The American Alligator's recovery had little to do with the ESA.  There were already 734,000 alligators in 13 states by the time the ESA became law - much of the recovery likely due to a 1967 ban on alligator hunting.4

* The Gray Whale was recovering well before the ESA's adoption.  Thanks to the collapse of the market for whale oil (due to the advent of petroleum-based alternatives in the late 1880s) and a ban on commercial hunting of these whales in 1946, Gray Whale populations had been increasing for more than 100 years by the time they were de-listed in 1994.5

Continued listing as a protected species under the ESA neither proves that a species exists nor that the ESA works.

As the U.S. Fish and Wildlife Service recently noted in its rejection of a petition to de-list the slackwater darter (etheostoma boschungi), petitions for delisting are frequently delayed "due to low priorities assigned to delisting petitions in accordance with our Listing Priority Guidance...  That guidance identified delisting activities as the lowest priority (Tier 4)."  The petition was filed by the National Wilderness Institute on February 3, 1997, but this finding was not made until July 7, 2005 - more than eight years later.  Such findings are supposed to be made within 90 days.

The Ivory-Billed Woodpecker, for example, was never removed from the endangered list despite widespread belief that it had been extinct for decades before the ESA became law.6  A petition to de-list the woodpecker due to its extinction filed in 1997 was never acted upon.7

The act of delisting a species for any reason is so politically-charged that it practically takes an act of Congress to get a species off the threatened or endangered lists.  By one estimate, 30 or more of currently listed species are extinct.8

Ivory-Billed Woodpeckers reportedly were recently spotted in Arkansas.  Some experts, including Jerome Jackson, a zoologist from Florida Gulf Coast University, have publicly disputed the evidence for the bird's existence, however.9

Even if the bird does exist, the ESA could not be credited with its recovery.  There hasn't been a rule, proposed rule, federal agency notice, or executive order regarding the woodpeckers since June 2, 1970 - clear indications that, as far as the federal government was concerned, the bird was extinct.10

Even for species that aren't believed to be extinct, "existing" doesn't mean success, especially when the species are hanging on by a thread.  Just 36% of the species on the endangered and threatened lists are currently believed to be stable or improving - meaning that 64% are declining.11

The Threatened and Endangered Species Recovery Act

The ESA's failure to save rare animal and plant life coupled with its enormous costs to taxpayers and to landowners who are subject to the ESA's sharp land-use controls have prompted a number of lawmakers to renew the push for reform.

In June, House Republicans began circulating a "staff discussion draft" of a bill entitled "The Threatened and Endangered Species Recovery Act of 2005," referred to by its acronym, TESRA.

Although the legislative process is dynamic and early TESRA drafts are likely to undergo changes before the full House votes (assuming TESRA receives a vote at all), the draft provides clues on what the final bill might look like.

TESRA, unfortunately, disappoints on two grounds: Provisions within the draft legislation itself, and the fact that the TESRA draft represents the opening position in a contentious debate of a Member of Congress who traditionally has been one of the ESA's staunchest critics and the most fervent supporters of property rights, House Resources Committee Chairman Richard Pombo (R-CA).

Significant policy problems with the draft proposal include:

* TESRA would add new regulatory authority to the Endangered Species Act.

The TESRA draft bill includes a provision that would permit regulation of so-called "invasive species" under the Endangered Species Act12 for the very first time.

Under an Executive Order signed by President Bill Clinton, invasive species are defined as "any species, including seeds, eggs, spores, or other biological material capable of propagating that species, that is not native to that ecosystem."

By this definition, almost any living thing could be considered an invasive species, thereby giving federal regulators broad new powers to regulate human activity - where we live, what we plant in our yards, and where and how we vacation.

The authors of the draft bill appear to have been attempting to establish a more narrow definition of "invasive species," to prevent a wide expansion of the government's regulatory powers.  But inclusion of "invasive species" would make a regulatory expansion inevitable, essentially opening a Pandora's box that could not easily be closed.13

The draft defines "invasive species" as:

...any species that is not indigenous to the habitat of an endangered species or a threatened species; is not grown for food or fiber or other human use; and may significantly degrade the value of the habitat for, or otherwise pose a risk to, such endangered species or threatened species.14

This language has sufficient loopholes to give federal regulators wide discretionary powers to regulate human activities.  It is unclear, for example, whether flowers for honey bees or certain food for cattle would be exempt from regulation under the "food, fiber and other human uses" exemption, as human beings are further down on the food chain.

How the courts would interpret such activities is anyone's guess.

The draft also provides no exemption from regulation could be expected for the activities of outdoor enthusiasts who inadvertently contribute to the spread of invasive species.  Since equestrians, dirt bikers, and ATVers, among others, can carry seed on or in their clothing, equipment and horses, "invasive species" regulations could, and, most likely, would be used as a pretext for banning recreationists from our national parks and forests and even certain private land.15

Given the wide array of animal and plant life that can be considered "invasive," the addition of the invasive species provision is likely to make the ESA significantly more intrusive.

* TESRA would do little to restore property rights, while potentially giving regulators operating under the ESA greater powers to violate these rights.

The draft TESRA legislation calls for compensating property owners when the application of the ESA diminishes their property value, but only when the affected portion of the property is diminished by 50% or more.  Many small landowners can't afford to lose 25% of their property value without compensation, much less 49.9%.16

Some argue that this compensation level, while not ideal, would be a significant improvement over the current ESA, which offers no compensation.

This is unlikely.

This argument assumes that the compensation provision wouldn't be watered down further before it is approved.  To achieve a 50% trigger, a much lower trigger - 1%, 10%, or 30% - would likely be needed at the bill's introduction.

Furthermore, few people would benefit from the compensation provision.

The problem is not that the Takings Clause of the U.S. Constitution doesn't apply to takings under the ESA, but that procedural hurdles make it nearly impossible for landowners of modest means to obtain any relief.

As James Burling of the Pacific Legal Foundation has noted, "One of the most troubling procedural hurdles is that landowners are not able to get a final agency determination that land cannot be used - unless the landowner wants to risk becoming a defendant or... can afford the time and money to seek an incidental take permit or a habitat conservation plan."17

Landowners should not be required to jump through costly and lengthy bureaucratic hoops to file a just claim for compensation for losses.  Unfortunately, the bill does little to address this problem.

In at least one respect, the bill's compensation provision may even place property rights at greater risk than under the current law.

Section 20 (13)(e) of the TESRA draft states: "The United States shall take title to the property interest for which the United States pays a claim under this section."18

This provision is troubling for several reasons.

First, it would risk giving the federal government permanent ownership of property even in cases in which the risk to species is only temporary.

Second, transfer of title coupled with the fact that the relevant portion of land subject to the bill's 50% compensation trigger is not clearly defined, could allow the federal government to acquire private property at bargain prices.

Consider this hypothetical scenario:

Red-Cockaded Woodpeckers are discovered on private forestlands that abut your property on three sides.  The federal government has already imposed strict land-use controls on your neighbors to protect the woodpeckers' habitat.  As a consequence, the value of nearby property - yours included - plummets.  Later, when an endangered species is found on your land, your property value drops even further.  You eventually receive compensation for your losses, but only for the losses linked to the discovery of rare species on your property, not for the earlier, ESA-related, devaluation.  The result: The federal government receives title to your entire property substantially below the initial market rate.

Or, consider this scenario:

The Fish and Wildlife Service determines that the withdrawal of water from a stream on your $100,000 property might jeopardize an endangered sucker fish, so it bars you from drawing water.  It is determined that, as a result, a parcel consisting of 40% of your property has lost all its value.  This portion of your property represents 60% of your total land value.  As you have lost more than half of the value of your property, you qualify under TESRA for compensation for 100% of your loss, or $60,000.  In return for the $60,000, the federal government receives clear title to the parcel.  Some time later, the FWS discovers a population of milk-vetch distributed widely on the property you have left.  As this remaining parcel no longer has water access, it no longer worth $40,000, but $15,000.  The new milk-vetch regulations reduce this $15,000 to zero.  You are again compensated for your entire loss.  The federal government pays you $15,000 and takes title to the remaining land.  The federal government now owns all your land.  It originally was worth $100,000, but the government only paid $75,000 to obtain the title for it.

There are other problems with transferring property title when a claim is paid, too.

For example, it would vastly increase the size of the federal estate, which is too large already, estimated to be 670 million acres or one-third of all land in America.

Some advocates of a 50% trigger for takings claims argue that the trigger makes the case for compensation more compelling and thus more likely to be approved by Congress.  Who wouldn't agree, they ask, that a landowner wouldn't be due compensation when denied the use of more than 50% of their land?

It remains to be seen whether this approach gains more congressional support than it loses.  Even if it proves to be a net gain politically, however, it would be a gain earned at the cost of compromising the American people's basic civil and Constitutional rights.

As economist Walter Williams noted in an August 3, 2005 column, "Creating false distinctions between human rights and property rights plays into the hands of Democrat and Republican Party socialists who seek to control our lives.  If we buy into the notion that somehow property rights are less important, or are in conflict with, human or civil rights, we give the socialists a freer hand to attack our property."

President John Adams put it even more bluntly.

"Property is surely a right of mankind as real as liberty," he said.  "The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence."19

* It gives too much discretionary power to the Secretary of Interior.

An example of this discretionary power is found in Section 9(e), which states, in part: "The Secretary may, by regulation of commerce or taking, and to the extent the Secretary considers advisable, treat any species as an endangered species or a threatened species even though it is not determined to be such a species..."

The stated purpose of this provision is to alleviate difficulties federal enforcement officials have in protecting endangered and threatened species because they can't distinguish between listed and non-listed species.20

With this provision, they would no longer have to.

The provision makes a certain degree of sense if the Secretary can be trusted to use good judgment in the interests of species recovery, not to expand his or her regulatory powers.  But even if one assumes the current Secretary of Interior's judgment is good, what about a future Secretary of Interior?  Would Americans of all political persuasions be comfortable granting these powers to a Secretary in the mold of Clinton Administration Interior Secretary Bruce Babbitt?

The listing process - whatever its shortcomings - applies at least some brakes to the ESA.  This provision granting de facto listing powers to the Secretary of the Interior would push the accelerator.

* It exempts recovery terms from "sunshine" requirements.

The draft bill states "Recovery teams... shall not be subject to the Federal Advisory Committee Act [FACA]."21

Among other things, FACA requires, "the Congress and the public... be kept informed with the respect to the number, purpose, membership, activities, and cost" of advisory committees.22

There are few things more dangerous than unaccountable, unelected advisors making important public policy decisions, but this is one: Anonymous, unaccountable, unelected advisors making such decisions.

* The TESRA draft favors urban America over rural America, large landowners over small ones.

The draft bill specifies, "consideration of economic impact... shall include direct, indirect, and cumulative economic costs and benefits, including changes in revenues received by landowners, the Federal Government, and State and local governments."

By requiring the ESA's costs to be calculated in "cumulative" terms, this provision would make it easier for large landowners and large urban areas to escape ESA restrictions.  Small landowners and small communities would continue to shoulder a disproportionate portion of the burden.

If a farmer can't grow anything on 49% of his 1,000-acre farm due to ESA restrictions, his plight is unlikely to significantly affect U.S. GDP or federal or state revenues.  If, on the other hand, a major urban area isn't able to build a much-need road or bridge, the costs of the ESA can be enormous.

It's easy to see the result: The farmer would be stopped from planting while the road or bridge project would proceed.

Justice Sandra Day O'Connor, in her dissenting opinion in the eminent domain case, Kelo v. City of New London, noted that the beneficiaries of the decision "are likely to be those citizens with disproportionate influence and power in the political process, including large corporations..."  A similar statement could be made about this provision of TESRA.

The trouble with the ESA isn't that it imposes "one-size fits all" regulations on everyone, but that it imposes one size on the politically-powerful and a different size on the politically-weak.

Conclusion and Recommendations

The Endangered Species Act has failed not because it isn't strong enough or expansive enough, but because its incentives are wrong.

Today, private landowners live in fear of the ESA.  Those who harbor endangered species on their property or merely own land suitable for them often find themselves subject to severe land use restrictions.  To avoid such restrictions and the losses in property values that accompany them, many have been forced to preemptively "sterilize" their land to keep rare species away.

Such preemptive sterilizations benefit no one - least of all the species the ESA was meant to protect.

At the same time, the ESA has been enormously expensive.

As a recent House Committee on Resources report noted, "The cost of the ESA is clearly measured in billions but an accurate accounting of federal, state and private expenditures is not determinable with currently available data."

Last year, the Fish and Wildlife Service and the National Marine Fisheries Services by themselves spent over $238 million on the ESA.23 Many other government agencies - from the Bonneville Power Administration to the Coast Guard to the Air Force - together spend hundreds of millions of dollars more on the ESA every year.

Government expenditures, of course, don't include the devastating costs to individual property owners who have lost their investments and their livelihoods in the name of species protection.

Altogether, the ESA costs Americans billions of dollars annually.

As the Property and Environment Research Center noted in a 2004 report: "From 1989 to 2000, the FWS estimates that a little over $3.5 billion of taxpayer dollars was spent on ESA-related activities.  We recognize today that the actual cost of protecting species, including private costs... may easily reach or exceed that figure per year."24

For ESA reform to come close to working, both for species and for people, the perverse incentives of the law must be eliminated.

This can be achieved in a number of ways.

One way this might be achieved is by providing an economically viable means for landowners who lose property rights under the ESA to receive full and fair compensation for their losses.

The draft TESRA legislation falls far short of this and, because it would expand the ESA to cover "invasive species" and require landowners to transfer property titles to the federal government when compensated, could further exacerbate problems.

Another possible reform would be to take away the federal government's blunt instrument of regulation in favor of voluntary, time-sensitive leasing arrangements.  This way, not only would landowners have the incentive to preserve species, but the federal government's inventory of land - already to big for it to handle - wouldn't grow.  These leasing arrangements could be terminated, or not renewed, once a species has recovered, or either the landowner or government determines they are no longer worthwhile.

Yet another alternative is to exempt private property entirely from the ESA.  Eliminating the perverse incentives - even without establishing a system of positive incentives - would do more for rare species than the ESA has done in its 32 years on the books.

If all else fails, the ESA could be repealed.  Although the political will likely doesn't currently exist for repealing the law, it's clear that endangered and threatened species would be better off without the ESA.  If the ESA continues this abysmal performance - more species de-listed due to data error and extinction than due to recovery - a popular consensus for repealing the Act may develop.

What remains certain, however, is that putting another layer of powers on the current ESA structure won't repair the ESA's fundamental problems.  You can't fix an already poisonous law by increasing its dosage.  Unfortunately, in several respects, the TESRA draft legislation would do just that.

The TESRA draft's proposed expansion into so-called invasive species, increases of the discretionary authority of the Secretary of Interior, its gift to the federal government of the means to acquire additional property potentially at bargain prices (at the expense of private, often small, landowners), and the exemption of ESA recovery teams from sunshine laws all would exacerbate the very problems TESRA ostensibly is meant to address.

# # #

David Ridenour is vice president of the National Center for Public Policy Research. Comments may be sent to [email protected].



Footnotes:

1 "Delisted Species Report," Threatened and Endangered Species System (U.S. Fish and Wildlife Service), May 13, 2005.

2 R.J. Smith, "How Private Conservation Saved the Peregrine Falcon," Environment News, October 1, 1999.

3 Ned Rozell, "Nizki, Population 1," Alaska Magazine, August 2005.

4 Brian Seasholes, "Fools for Falcons," CEI Update, October 1994.

5 Ibid.

6 Ed Stoddard, "'Extinct' Birds in Comeback, But No Hope for the Dodo," Reuters, August 12, 2005.

7 "Species Profile: Woodpecker, Ivory-Billed," U.S. Fish and Wildlife Service Endangered Species Homepage, August 15, 2005.

8 "Implementation of the Endangered Species Act of 1973," Report of the House Committee on Resources, May 2005.

9 "Expert Questions Existence of Ivory-Billed Woodpecker," Associated Press, July 22, 2005.

10 "Species Profile: Woodpecker, Ivory-Billed," U.S. Fish and Wildlife Service Endangered Species Homepage, August 15, 2005.

11 "Endangered Species," The Wall Street Journal, July 1, 2005.

12 "Staff Discussion Draft: Threatened and Endangered Species Recovery Act of 2005," U.S. House of Representatives, June 2005.

13 David Ridenour, "Pombo Proposal Wouldn't Gut the ESA: It Would Give it Formidable New Teeth," July 25, 2005.

14 "Staff Discussion Draft: Threatened and Endangered Species Recovery Act of 2005," U.S. House of Representatives, June 2005.

15 David Ridenour, "Pombo Proposal Wouldn't Gut the ESA: It Would Give it Formidable New Teeth," July 25, 2005.

16 "Staff Discussion Draft: Threatened and Endangered Species Recovery Act of 2005," U.S. House of Representatives, June 2005.

17 James Burling, unpublished comments entitled "amendments," June 15, 2005.

18 "Staff Discussion Draft: Threatened and Endangered Species Recovery Act of 2005," U.S. House of Representatives, June 2005.

19 Walter Williams, "Human Rights Vs. Property Rights," Jewish World Review, August 3, 2005.

20 "Staff Discussion Draft: Threatened and Endangered Species Recovery Act of 2005," U.S. House of Representatives, June 2005.

21 Ibid.

22 Public Law 92-463.

23 "Implementation of the Endangered Species Act of 1973," Report of the House Committee on Resources, May 2005.

24 Randy T. Simmons and Kimberly Frost, "Accounting for Species: true Costs of the Endangered Species Act," Property and Environment Research Center, April 2004.



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