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SCB Recommends Improvements in the Procedures Used to Conduct Economic Analyses of Critical Habitat

October 25, 2012.  Under the Endangered Species Act (ESA) the U.S. Fish and Wildlife Service and the National Marine Fisheries Service (collectively the “Services”) must consider the economic impacts of designating any particular area as critical habitat for a threatened or endangered species. The Services have the discretion exclude any area from critical habitat if they determine that the economic impacts or other impacts of excluding an area as critical habitat outweigh the benefits of specifying such area as part of the critical habitat.  In August, the Services proposed to modify the regulatory framework that guides this impacts analysis and balancing inquiry.  Today, SCB is providing comments with recommendations to improve the on the Services’ proposal in order to insure that the process of evaluating economic impacts and benefits is transparent and accurate and that the public is able to make meaningful contributions to the process evaluating proposed critical habitat and its costs and benefits. 

SCB is recommending that the Services closely follow the approach described in the 2008 Interior Department Solicitor’s Opinion on critical habitat exclusions, which was drafted in response to an extensive review by the Inspector General of political interference in implementation of the ESA by the Fish and Wildlife Service.

Second, in situations where the Services do not possess the required data to conduct a full economic analysis at the time it is making an initial listing determination, the Services should conduct a threshold economic analysis.  If the economic impact of designation does not exceed $100 million for directly-regulated small entities, then the Services should be permitted to conclude that no further economic analysis is required.

Third, if the Services elect to exclude any areas from a critical habitat proposal, then the Services should make such a determination only at the final rulemaking stage.  Requiring that such a decision can only occur at this point reduces the risk of improper political interference in the scientific aspects of designating critical habitat.

Finally, with respect to any balancing inquiry relating to the exclusion of critical habitat, SCB recommends that the rulemaking language make clear that any exclusion of critical habitat must be supported by the record.  In order to exclude an area from critical habitat after it has been identified to contain the essential features for a species recovery, the Services must show that the costs to society of including an area as critical habitat are in fact higher than the projected direct and incidental benefits of including it as critical habitat.

Read the full comments HERE.