agency will not readily disclose where rare and endangered species are located." With the perverse incentives created by the current FWS procedures, it is no wonder, as reported by Michael Bean," a leading expert on the FWS procedures, that "increasingly, recovery strategies are effectively writing off private lands."

30

According to many environmentalists, including Bean, the FWS's poor performance can be mostly attributed to Congress' refusal to provide sufficient funds." This claim is common even though, as the Wall Street Journal reported, the number of FWS regulators has doubled since 1985 and the agency's annual appropriation has increased from $426 million in 1988 to $764 million in 1992. No amount of additional money, though, would change the disincentives created by the FWS procedures - disincentives which make landowners try to keep anything that sounds close to a biologist off their land or which cause landowners to eliminate habitat before it is discovered.

Other problems stem from the fact that the FWS procedures can be manipulated such that regulators and their political bosses can work behind the scenes to frustrate species protection efforts while publicly avowing their importance. One tool has been to delay the listing of species until a project that threatened the species was completed." Through such selective enforcement practices, bureaucrats can appease key lawmakers who could be hurt if projects in their districts were canceled or delayed.

Budgetary decisions and the leveraging of administrative options are the routes by which politics distorts what should be strictly scientific determinations." According to Mann and Plummer," FWS decision making has become highly politicized: "The agency, formerly a haven for guys who liked to work outdoors, is now a hot spot of sophisticated partisan arm-twisting."

It may be that the law and its implementing regulations were deliberately written to foster an environment conducive to influence-peddling. Alternatively, the extent of influencepeddling over ESA decisions may provide evidence that implementation is the weakest link in

"Klintberg, op. cit.

"Op. cit.

"Tom Horton, "The Endangered Species Act: Too Tough, Too Weak, or Too Late?", Audubon (March/April 1992), pp. 68-74; Nancy K. Kubasek and M. Neil Browne, "The Endangered Species Act: An Evaluation of Alternative Approaches," Dickinson Environmental Law Journal (forthcoming).

10 Wall Street Journal, "Go Fish," November 8, 1993, p. A22.

"Michael Bean, "Looking Back over the First Fifteen Years," chapter in Kohn, op. cit.

32Peter Montgomery, "Science Friction: Playing Politics with Scientific Research" Common Cause Magazine (November/December 1990), pp. 24-29.

"Mann and Plummer, "The Butterfly Problem."

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public policy making and its analysis. Influence-peddling pressures may also explain why the FWS persistently ignores its own priority system and changes it so often.

Current ESA Reform Proposals

As Kubasek and Browne" report, the 1994 congressional ESA reauthorization debate (and its counterpart in 1995) has not offered a basis for much optimism about the likely nature of ESA reauthorization legislation. None of the published proposals would maintain biodiversity with minimum costs to landowners (either monetarily or in loss of freedoms). Instead, each would further reduce the ESA's effectiveness, or increase landowners' burdens, or both. Unless, as some hope, the high costs of these proposals would terminate the public effort to maintain biodiversity, their implementation would also significantly increase the scope of government.

One set of proposals would further encumber the FWS with extra due process and decision-making criteria. These schemes would reduce the ESA's environmental effectiveness without assuring landowners any relief. By lengthening the decision-making process, these proposals could actually leave landowners in limbo even longer.

Another set of proposals, put forth by ESA supporters, would increase the FWS' enforcement powers and increase funding levels for listing and recovery efforts. This might shorten permitting timetables, but it would also strengthen the hand of the FWS, adding to landowners' burdens. The end result would likely magnify perverse incentives to conceal and destroy habitat.

A third set of proposals sought to require compensation for any landowner losses incurred as a result of the prohibition of activities that reduce biodiversity. Such proposals raise several issues: one is cost. Land acquisition, tax incentive, and fee approaches would create significant, permanent budgetary obligations and possibly lead to a major increase in federal land holdings. Administrative and philosophical issues might be even more troublesome. Should people be paid to refrain from socially harmful actions? We do not, for example, pay people not to emit pollutants on their property. It would be difficult to ascertain appropriate compensation, which would require a determination of what someone would otherwise have done, and a measure of what benefit their decisions would have netted them.

The Clinton ESA Initiative

On March 7, 1995, Clinton Administration officials announced a plan to make the ESA more palatable to landowners. Interior Secretary Bruce Babbitt and Dr. D. James

1993.

Charles Wolf, Jr., Markets or Governments: Choosing Between Imperfect Alternatives (MIT Press, London),

"Op. cit.

U.S. Fish and Wildlife Service, "Administration Proposes Endangered Species Act Exemptions for Small Landowners: 'Guideposts for Reform' Would Give More Authority to States," March 7, 1995, 21 pp.

92-528 96-30

Baker, Undersecretary of Commerce for Oceans and Atmosphere, explained that the Clinton plan would exempt small residential tracts of property (under 5 acres) from ESA restrictions for threatened species, increase participation by state regulatory bodies in ESA decision making, and mandate greater scrutiny of the scientific analysis supporting endangered species decisions.

According to Babbitt," the Clinton plan demonstrates that the Administration is "serious in its efforts to balance the rights of individual landowners with the community's right to a healthy environment." The 10-point package includes promises to provide quick, responsive answers and certainty to landowners; create incentives for landowners to conserve species; focus on groups of species dependent upon the same habitat; and prevent species from becoming endangered or threatened.

The Clinton plan does address most of the major complaints that citizens have lodged against the ESA. Unfortunately, the incentives package, as outlined, would apply only to those situations in which it is possible to measure a conservation benefit to a species from habitat improvements; the "carrot" is that landowners would not be penalized for making such improvements. Moreover, the proposal relies on regional habitat conservation plans, which lack a statutory foundation and are thus on shaky legal ground, as its primary tool in preventing species from becoming threatened or endangered. Since RHCPs also require long lead times and the cooperation of large numbers of landowners, the Clinton plan may be irrelevant in many places.

Summary

In summary, neither the existing ESA, nor the proposals put forth in 1994 as ESA reauthorization options (which are still on the table), nor the Clinton Administration's justreleased 10-point plan provide adequate solutions to the problem of protecting threatened and endangered species and their habitat without endangering rural landowners and fueling the growing backlash against all federal species protection programs.

R. J. Smith, senior economist for the Competitive Enterprise Institute, has argued that the only appropriate fix for the problems with the ESA is a solution that provides incentives for landowners to house rare species.38 Like many others, Smith says that the current ESA "harms people and private property as well as harming wildlife and wildlife habitat. It penalizes them for being good stewards and makes wildlife and wildlife habitat a liability instead of an asset." Much more testimony on the negative impacts of the current law is provided by the Texas House Committee on Natural Resources.39

"Op. cit.

Valerie Richardson, "Add Species Act to Endangered List," The Washington Times, National Weekly Edition, February 13-19, 1995, p. 11.

39Op. cit.

Chapter 2. Reforming the ESA Listing Process

As noted in Chapter 1, the Endangered Species Act as now constituted is bad law for several reasons. First off, species can be proposed for listing, and even listed, based only on the "best available data"; there are no concrete standards which proposed listings must meet to justify the stoppage of commerce in real property in the supposed habitat areas of the species. Second, the law does not provide for compensating those whose property values are negatively impacted from the listing of a species. Third, those most impacted by the listing process are virtually powerless to protest on either scientific or economic grounds. As a result, the law allows the FWS near-dictatorial powers to wreak havoc with landowners and destabilize long-range economic planning for entire ecosystems.

Basing Listings on Sound Science

Almost every critic of the ESA agrees that the quality of the science undergirding the listing of species and the allocation of habitat needs considerable improvement, especially in the area of consistency. Yet in a world in which so many scientists and their institutions depend on government grants, and in which questioning the "official wisdom" may have severe consequences, it would not be too difficult to expand the official scrutiny of proposed listings without providing affected landowners any more real protection from abuses of the listing process than they have today. After all, it takes a brave person to suggest that the emperor has no clothes.

1140

In the words of West Texas water district manager A. Wayne Wyatt, the FWS' listing procedures constitute a "carefully crafted process, which avoids any serious opposition to the listing of a species as endangered until they have woven their net so carefully and tightly that those who will be affected have in essence been ambushed. It certainly is not a process of fair and equitable treatment to those who will be affected by the process.' Basing his comments on three case studies of FWS actions in Texas, environmental consultant Steven D. Paulson argues that, when species are listed on opinions based on little or no data, the FWS will not respond to data that run contrary to those opinions, and that, when FWS contractors provide information that is contrary to its own opinions, that information will not be released to the public.

41

According to Wyatt, in drafting the rule to generate a listing, the FWS is required by law only to assess the best available scientific and commercial information on a species and the threats faced by the species. This evidence could be hearsay or from a one-day survey. Moreover, Wyatt says, the same FWS employee who drafts a proposed listing rule commonly

*A. Wayne Wyatt, manager, High Plains Underground Water Conservation District No. 1. Testimony before the Task Force on Endangered Species, U.S. House Resources Committee, Boerne, Texas, March 20, 1995.

"Steven D. Paulson, SWCA Inc. Environmental Consultants, Testimony before the Task Force on Endangered Species, U.S. House Resources Committee, Boerne, Texas, March 20, 1995.

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serves as the principal reviewer of public comments. Bob Stallman, President of Texas Farm Bureau, expressed concern that anyone can petition the Secretary of the Interior for the listing of a species without presenting any evidence to substantiate their demands. In a recent study, Stallman noted, the Natural Resources Foundation of Texas found this to be true of a large group of petitions submitted by student groups. *3

43

One proposal to improve the listing process is to require "peer review" of the science supporting the listing. But Langford warns that, since the FWS can choose its own peer reviewers from among recipients of its own or other federal research grants, the peer review process is not likely to be objective." Wyatt suggests that the review process be conducted by a non-biased peer review group comprised of trained scientists with expertise in all areas addressed in the proposed listing rule, including zoologists, biologists, geologists, hydrologists, and engineers, and selected from a list of willing scientists at random by computer.*

45

What most supporters and critics of the ESA's listing process commonly ignore is that the soundness of the science used to justify a.species listing needs to be subjected to greater public scrutiny. Paulson cites one example of how the FWS skews the playing field in the listing process. After five environmental organizations petitioned the FWS for the listing of nine invertebrates in Bexar County, Texas, in 1992, the FWS admitted that there was insufficient data to warrant the listings, but then awarded a research grant to the same individuals who had done the consulting work for the environmental groups to conduct research to develop data to support their claims. Not only would this grant appear to create a conflict of interest, added Paulson, the money was doled out without any competitive bidding and without informing the affected landowners, who found out when the researchers began to seek access to their property."

Wallace Klussmann, a fish and wildlife specialist who recently retired as Professor Emeritus from Texas A & M University, suggests that peer review be done by the National Academy of Science outside the realm of the regulating agency; that persons petitioning for a listing not be eligible for research funds relative to that listing; and that there be a minimum standard for the scientific information base supporting any listing. He also recommends that economic and social impact analyses be conducted along with the biological research during the listing process.* Whether it is the National Academy of Science or other outside peer reviewers chosen randomly from lists of qualified individuals with no stake in the listing

47

Wyatt, op. cit.

"Bob Stallman, President, Texas Farm Bureau, Testimony before the Task Force on Endangered Species, U.S. House Resources Committee, Boerne, Texas, March 20, 1995.

"Langford, op. cit.

"Wyatt, op. cit.

"Paulson, op. cit.

"Wallace G. Klussmann, Testimony before the Task Force on Endangered Species. U.S. House Resources Committee, Boerne, Texas, March 20, 1995.