Exploring Incentives in Species Protection


Species at Risk: Using Economic Incentives to Shelter Endangered Species on Private Lands. Shogren, J. F. 2005 . University of Texas Press , Austin , TX . 271 pp . $24.95 (paperback). ISBN 0-292-70597-2 .

Many endangered and threatened species in the United States occur only or primarily on private lands. In recent years, a variety of individuals and organizations has called for modifying the Endangered Species Act (ESA) so that it relies more on economic incentives for private landowners and less on regulations. For several years congressmen and senators who objected to the current approach of the ESA introduced legislation that would curtail the regulatory approach to endangered species conservation, putting the emphasis on paying landowners to conserve the habitat of listed species. Although these attempts to change fundamental components of the ESA did not succeed and are dormant with a Congress controlled by the Democratic Party, the issues have not gone away and will continue to affect the broader ESA debate.

Advocates of the proposed changes claim that the regulatory approach has failed because few species have recovered and the act impinges on private-property rights. Defenders of the ESA point out that the act has successfully prevented many extinctions and that recovery of species is a lengthy process. The Act's defenders also focus on flaws in reliance on incentives, such as the very high cost to the taxpayer.

This volume is a collection of essays by economists, biologists, and a law professor that explore economic incentives to protect endangered species on private lands. It provides a great deal of information and ideas from multiple viewpoints that help the reader understand pros and cons of a variety of economic incentives and some of the issues involved. The authors define economic incentives broadly, including approaches in which landowners provide habitat protection to obtain permits for economic activities such as housing development.

An introduction by economist Jason Shogren explains the rationale for a focus on economic incentives to protect endangered species. This rationale includes arguments based on private-property rights, the view that a regulatory approach has shortcomings and by itself is insufficient to achieve recovery of species, and the concept that the entire nation benefits from species conservation and therefore should compensate landowners. Law professor Debra Donahue examines the incentive-based approaches that are in play under the current ESA, approaches based on regulatory assurances such as safe-harbor agreements for habitat enhancement. There is an extensive discussion of habitat conservation plans (HCPs) under which landowners and local governments can obtain “incidental take” permits with approval of a conservation plan that minimizes and mitigates the impact of that take upon listed species. Habitat conservation plans allow landowners to develop land in return for conservation of habitat that can be a direct economic benefit to other landowners. Habitat conservation planning is an ever-changing arena that has been contentious in the past. The latest large-scale conservation plans under preparation by local governments in California, however, may overcome many of the past problems. These plans utilize a recently revamped state Natural Community Conservation Plan law that has a recovery standard for species and requires effective conservation of natural communities.

Three chapters focus on a variety of possible incentives from the perspective of economists. Gregory Parkhurst and Jason Shogren discuss various incentive mechanisms, ranging from direct economic subsidies of landowners who conserve habitat to impact fees and local government zoning. Much of their analysis addresses the pros and cons of each mechanism. In a final chapter these authors evaluate each incentive from biological, landowner, and government perspectives. Thomas Crocker examines markets for conservation of biodiversity habitat, with a strong emphasis on achieving economic efficiency and least cost to landowners. These chapters are quite theoretical in nature. They provide biologists and others with a valuable opportunity to understand the viewpoints and arguments of economists. One complexity is that some incentive mechanisms, such as impact fees and tradable development rights, are affected by state land-use law and local government planning systems. The viewpoints of these authors fit well with states that have minimal land-use restrictions, where every landowner has the option to develop his or her land. But when state and local planning requirements strongly limit where development can occur, the implementation of impact fee, tradable development rights, and several other incentives can be quite different. In these more restrictive settings, it is possible to combine several of the incentive approaches into an overall system that regulates land use, provides ESA permitting for development within urban boundaries in return for land set-asides or impact fees, and then directs the resulting land conservation to designated habitat areas.

A second chapter by Debra Donahue provides a critical analysis of some economic incentives, bringing together the published perspectives of several scientists and lawyers. Professor Donahue focuses on two topics. One is that incentives will fail if not backed up by regulations with teeth. The second is the concept that incentive programs could turn biological conservation into a commodity, promote the notion that government bears the entire burden of conserving species, and so erode stewardship and counter the spread of an all-important land ethic.

Additional authors explore topics that are germane to any discussion of incentive programs. The theme that incentives require a method for determining habitat values of land parcels occurs repeatedly throughout this volume and the authors recognize the difficulties we face. Biologists Steven Buskirk and Samantha Wisely explore this issue and outline a possible bioappraisal system, whereas three economists discuss a complex economic approach to the problem. Sociologists Frieda Knobloch and R. Cawley examine the relationship between species protection and the way of life of rural residents, taking a broad view of the term economy and considering the importance of a land ethic.

This set of essays will prove useful to everyone concerned about the future of the ESA. They illuminate the potential and difficulties of incentive mechanisms used to promote conservation by private landowners and help show how a combination of regulations and incentives will benefit endangered and threatened species and broader biodiversity conservation.