Marten Law: Proposed Rule Would Limit Extent of Economic Impacts Considered in ESA Critical Habitat Designations

Jessica Ferrell   By Jessica K. Ferrell, Partner, Marten Law PLLC

Excerpt from the Commentary:

In this Emerging Issues Analysis, Jessica Ferrell of Marten Law PLLC discusses a proposed rule that would require the U.S. Fish and Wildlife Service and NOAA Fisheries to publish a draft economic analysis for public comment at the time they propose critical habitat for listed species. The rule would also govern the analytical framework under which the Services consider economic impacts from critical habitat designations.

On October 23, 2012, the comment period on a significant proposed rule under the Endangered Species Act (ESA) will close. The rule, jointly proposed by the U.S. Fish and Wildlife Service (USFWS) and NOAA Fisheries (together, the "Services"), would require the Services to publish a draft economic analysis for public comment at the time they propose critical habitat for listed species. It would also govern the analytical framework under which the Services consider economic impacts from critical habitat designations by formalizing the Services' adoption of the "baseline" approach, limiting the scope of economic impacts considered in that context to "incremental" impacts.

Statutory and Case Law Background

Under the ESA, the Services may not consider purely economic impacts when making listing determinations. They must, however, consider economic, national security, and other impacts of critical habitat designation before designating habitat, and may exclude an area from designation if (1) the benefits of exclusion exceed the benefits of designation and (2) exclusion will not result in a species' extinction.

Listing alone creates protections for species by, for example, activating the ESA's take prohibition and consultation requirements, requiring that federal agencies "insure that any action authorized, funded, or carried out by such agency ... is not likely to jeopardize the continued existence of any endangered species or threatened species." These protections often impose economic burdens on federal, state and local governments, as well as on private actors.

Once critical habitat is designated, federal agencies must also "insure that any action authorized, funded, or carried out by such agency ... is not likely to ... result in the destruction or adverse modification" of critical habitat. Parties have long argued in various contexts over whether the Services' economic analysis in the critical habitat stage must "attribute to the critical habitat designation economic burdens that would exist even in the absence of that designation." Generally, two approaches have been recommended, termed "baseline" and "coextensive."

Marten Law Group attorney Jessica Ferrell focuses her practice on environmental and natural resource litigation. Jessica represents clients on a broad range of environmental matters in litigation arising under state and federal environmental laws. She has special expertise in endangered species and marine resource issues.

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