Property Owners for Regulation?

We can better align the incentives for property owners to conserve endangered species

With endangered species reform getting some much deserved attention, it is a happy coincidence that the Supreme Court will soon consider whether it is lawful to designate as critical habitat land that isn’t suitable habitat. In the Washington Post, PERC’s Tate Watkins explains why such designations generate conflict without benefiting imperiled species—and how one of the reforms proposed by Interior could improve things. An amicus brief recently filed in the case inadvertently highlights the benefits when, instead of relying on conflict, property owners’ and species’ interests are aligned.

In Weyerhaeuser v. United States Fish and Wildlife Service, a property owner challenges the designation of 1,500 acres of timber land as critical habitat for the dusky gopher frog, a species that doesn’t live there, hasn’t lived anywhere near the land for decades, and couldn’t live on the land in its current condition. According to the agency, the cost of the designation to the property owners may be as high as $34 million. Therefore, it’s hardly surprising that the designation has led to years of conflict and litigation, whereas in Mississippi the Nature Conservancy has voluntarily taken great strides to restore habitat for the species.

A group of landowners filed an amicus brief in the case opposing the property owners’ challenge because they and many other property owners value the environmental amenities of their land. They explain:

The ability to live among rare forms of wildlife is of substantial value, in both an economic and a non-economic sense, to a great many people. Some landowners buy property specifically because it is the habitat of endangered species, and many more welcome efforts to protect endangered species found on their land. The presence of endangered species can be a valuable amenity associated with real property, like a view of the ocean or proximity to a park.

Of course, that people highly value having rare species on their land does not necessarily mean that they also benefit from regulations imposed on them. Such property owners are often unaffected when regulations require them to do what they would have freely done anyway. Instead, they are only affected when regulations get in the way of species recovery efforts they wish to undertake, a not uncommon occurrence.

The key to promoting more species recovery is to ensure that the incentives for all property owners are aligned with the interests of species, so that more have the positive experience described by the landowners in their amicus brief. For decades, burdensome regulations have made a species’ presence a significant liability for many property owners. Trade-offs are inevitable. So if the choice for property owners is between benefiting a species and saving for retirement or paying for their kid to go to a good college, the environment is far less likely to win out.

In the Weyerhaeuser case, it should hardly be surprising that the landowners are not grateful for the government’s imposing burdens on them costing millions of dollars. That’s no way to create the good will needed for property owners to undertake the difficult task of restoring habitat and managing land to benefit species. The Nature Conservancy’s Becky Stowe notes the role of incentives in discouraging others to follow the group’s lead in restoring dusky gopher frog habitat:

Looking back over the longleaf prairie, Stowe emphasizes the amount of effort required to maintain this landscape. She also recognizes the unique position and mission of her organization, which enable it to navigate the costly federal approval processes that are needed to work with endangered species and carry out the project. But she also adds: “It’d be cool if private landowners could do something like this and get credit for it—or at least not get penalized for it.”

There must be some incentive for landowners to provide these benefits. That can be accomplished by converting species into assets rather than liabilities. Or regulations can be designed to reward contributions to species recovery. Where incentives are such that what’s good for species is also good for property owners, we’re much more likely to achieve recovery. And more people can view a species’ presence as a significant benefit, like the landowners who filed the amicus brief.

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