I greatly appreciate the opportunity to testify today regarding critical habitat protections under the Endangered Species Act (ESA). I have been working on ESA issues for nearly ten years, serving as a litigating attorney, a policy analyst and commentator, and most recently, as manager of NWF’s Species Conservation program. Based on this experience, I have developed an ever-increasing recognition of the importance of critical habitat. At the same time, I have come to recognize that significant changes are needed in how the two federal wildlife agencies designate and protect critical habitat. My testimony explains why critical habitat is important and suggests measures that could be taken to make it work better.

THE IMPORTANCE OF CRITICAL HABITAT

The ESA reaches its 30th anniversary this year, and there is much to celebrate. Hundreds of species that were once heading toward extinction are now either recovering or at least stabilized. Across the country, people recognize the ESA as a vitally important law for protecting the nation's precious biological heritage.

Yet many of the species on the ESA’s list of threatened and endangered species are not yet on the path to recovery. Scientists tell us that the chief reason why so many of our animal and plant species are declining toward extinction is habitat loss, fragmentation and degradation. We need to do a better job protecting, managing and restoring habitats. We cannot hope to save endangered species until we come to grips with the continual, piecemeal loss of their habitats, even after their listing under the ESA. It hardly matters what else we do for an endangered species if we fail to protect its habitat. Congress itself recognized this essential point when it enacted the ESA in 1973, stating at the outset its that its purpose was to conserve “the ecosystems upon which endangered species and threatened species depend.”

Congress and the Administration should now focus on improving implementation of each of the ESA provisions that conserve habitats. Looking first at the critical habitat provision, as this Subcommittee is doing today, makes sense. For at least three reasons, the ESA’s requirement to designate and protect a listed species’ critical habitat is among the most important of the ESA’s habitat protection provisions.

First, Section 4 of the ESA requires that, with few exceptions, critical habitat be designated for every species listed as either endangered or threatened. The ESA’s implementing regulations require that when designating critical habitat, the U.S. Fish and Wildlife Service or National Marine Fisheries Service (“Services”) must produce maps delineating all designated critical habitat. Drawing lines on a map gives clear guidance to the public about which lands and waters are particularly valuable to listed species. This helps educate people about the natural world they inhabit, and, more importantly, helps to ensure that key habitats are not destroyed out of sheer ignorance. As the U.S. Fish and Wildlife Service stated in connection with its designation of critical habitat for the northern spotted owl:

“[C]ritical habitat serves to preserve options for a species' eventual recovery…[It] helps focus conservation activities by identifying areas that contain essential habitat features (primary constituent elements) regardless of whether or not they are currently occupied by the listed species, thus alerting the public to the importance of an area in the conservation of a listed species.” 57 FR 1796 (emphasis added).

Second, Section 3 of the ESA defines critical habitat as encompassing all areas “essential for the conservation of the species,” and defines conservation as those methods and procedures needed to achieve species recovery. Thus, the critical habitat provisions are designed to protect more than just the habitat occupied by the species in its depleted state; they ensure that all habitats needed for recovery are taken into account.

Third, once a species’ critical habitat is established, Section 7 of the ESA prohibits federal agencies from carrying out, funding or permitting any action that is likely to result in the “destruction or adverse modification” of critical habitat. Thus, Section 7 gives federal agencies a clear mandate to protect the habitat essential for species recovery.

MAKING THE CRITICAL HABITAT PROVISIONS WORK BETTER

Seven steps by the Administration and/or Congress would make the ESA’s critical habitat provisions work better for both people and wildlife.

Define Which Lands And Waters Are “Essential” to Conservation

Critical habitat designation is essentially a three-step process:

· First, the Services must define what habitat areas, whether occupied by the species or not, are “essential to the conservation of the species,” and what habitat areas occupied by the species “may require special management considerations or protection.” 16 U.S.C. § 1532(5).

· Second, the Services must consider “the economic impact, and any other relevant impact, of specifying any particular area as critical habitat.” 16 U.S.C. § 1533(b)(2).

· Third, the Services “may exclude any area from critical habitat” if they determine “that the benefits of such exclusion outweigh the benefits of specifying such area,” unless they find that a failure to designate a particular area “will result in the extinction of the species.” Id.

Unfortunately, the Services often have excluded lands from critical habitat in the first step of this process despite the fact that the lands are “essential to the conservation of the species.” This approach has undermined the vital role that critical habitat plays in species recovery. Only by defining which lands and waters are essential to conservation can the public be informed about which habitats are needed and empowered to begin devising measures for saving those habitats. Any exclusions from critical habitat should be handled in the third step of the designation process, not the first.

The Services have sometimes justified the exclusion of lands essential to the conservation of a species on the ground that they are protected by other regulatory mechanisms and thus may be receiving "special management considerations or protection" within the meaning of ESA §3(5). However, this justification reflects a fundamental misunderstanding of ESA §3(5) and the purpose of critical habitat. Under ESA §3(5), the fact that a particular area is protected through a habitat conservation plan or as a park argues for its status as critical habitat, not against. Although a listed species may already be receiving "special management considerations or protection" on certain parcels of land, it would receive important additional benefits from a critical habitat designation on those parcels. For example, such a designation educates land managers and others about the importance of maintaining and enforcing those management considerations or protections. It also provides a "safety net" of protection in the event those management considerations or protections are removed.

In Center for Biological Diversity v. Norton, 240 F. Supp. 2d 1090 (D. Ariz. 2003), a federal court struck down the Services’ interpretation of ESA §3(5)’s “special management considerations or protection” language. The court explained that this interpretation – which limits the number of allowable protections to a listed species’ habitat – is not only “unsupported by the English language, but runs contrary to one of the enunciated policies of the ESA.”

The Services should issue new regulations defining “special management consideration or protection.” The new definition should recognize that the existence of special management considerations in an area does not operate as a basis for excluding habitat there from designation. To the contrary, it should lead the Services to presume that such an area is, in fact, critical habitat.

A consistent methodology for drawing critical habitat maps is also needed. No commonly accepted methodology has been developed to date. In some circumstances, the Services have taken short cuts such as drawing lines around entire regions, encircling both habitat areas and developed areas. The Service should solicit public and scientific input on alternative approaches to map drawing, with the ultimate goal of achieving a uniform methodology that is both cost-effective and scientifically rigorous.

Change the Timing of Designations

To ensure that designation of critical habitat is based on carefully-developed science, Congress must change the deadlines for critical habitat designations. Under current law, which requires designation at the time of listing or at most one year thereafter, the Services have little time to gather the best scientific thinking on a species recovery needs. In this general time period, the Services are focused on the challenges of making the listing determination and on the threats contributing to species decline, not on what is needed to ensure species recovery. Initial designations should be postponed to coincide with development of the recovery plan, so that the recovery team’s thinking helps to inform the decision on the scope of critical habitat. Similarly, the decision on critical habitat can help inform the recovery plan.

Because the ESA does not currently impose deadlines for completion of recovery plans, Congress should impose deadlines of 3 years from the date of listing for both critical habitat designations and recovery plans. This was the approach taken in S.1100, a bill introduced in 1999 by the late Senator Chafee (R-RI), Senator Crapo (R-ID) and Senator Domenici (R-NM). The bill was approved by the Senate Environment and Public Works Committee and won the support of conservationists, industry groups and the Clinton Administration. It also established a reasonable and enforceable schedule for clearing up the critical habitat backlog. A similarly targeted approach to improving the critical habitat process would be welcome today.

Issue Guidance on Economic Impact Analysis

In New Mexico Cattle Growers Ass’n v. U.S. Fish & Wildlife Service, 248 F.3d 1277 (10th Cir. 2001), the court upheld an industry challenge to the ESA §4(b)(2) economic impact analysis of the southwest willow flycatcher’s critical habitat. Without soliciting public comment, the Administration elected to adopt this controversial ruling as its national policy, rather than to fix the underlying problems that led to the lawsuit. As discussed below, this decision is wreaking serious havoc with the entire critical habitat program. New guidance on ESA §4(b)(2) economic impact analyses is needed to minimize the damage caused by the Administration’s wrongheaded approach.

In New Mexico Cattle Growers, the industry plaintiffs targeted the U.S. Fish and Wildlife Service’s economic analysis of the southwestern willow flycatcher’s critical habitat designation, which concluded that there would be no costs associated with the designation. This no-cost conclusion was arrived at through use of the Services’ baseline method, which called for analysis only of the impacts of the critical habitat designation, not of the impacts of other ESA protections (such as jeopardy and takings) that follow automatically from listing. Applying the baseline method, the Service found that critical habitat designation alone has no costs. Underlying this finding was the Service’s controversial view that critical habitat designations duplicate the protections provided by the ESA’s jeopardy provision. However, the Tenth Circuit did not question this controversial view of critical habitat. Instead, it overturned the Service’s baseline method, finding that “Congress intended that the FWS conduct a full analysis of all of the economic impacts of a critical habitat designation, regardless of whether those impacts are attributable co-extensively to other causes.”

Without soliciting public comment or waiting for the judgment of any other Circuit Court, and without revisiting its controversial assertions about the redundancy of critical habitat, the Bush Administration has quietly adopted the New Mexico Cattle Growers holding as Administration policy. This decision increases the risk to imperiled species in several ways. First, virtually all of the critical habitat designations across the country will now likely need to be redone, draining precious resources away from imperiled species awaiting listing, and delaying critical habitat protections for species that have never had a designation in the first place. Second, because the Administration has refused to keep critical habitat protections in place during the remand periods, habitat already designated as important for species recovery will lose vital protection for years while new economic analyses are performed. Third, because the Administration will now begin evaluating the economic impacts of listing, the difficulty of getting new species listed will increase. Meanwhile, the longstanding ESA principle that listing determinations be made based solely on science will be in jeopardy. Fourth, as Administration officials have suggested in comments to the media, the extensive re-write of critical habitat rules will ultimately lead to smaller areas covered by the critical habitat designations, as the Services begin to use the ESA §4(b)(2) exclusion authority in unprecedented ways.

To ensure that vital species protections are not lost, a rulemaking is needed on how to perform an ESA §4(b)(2) economic analysis. Whether to follow New Mexico Cattle Growers or whether to reinstate the baseline approach is an important policy question that should be answered only after a full public airing of alternatives. The Administration should begin this process by issuing an advanced notice of proposed rulemaking (ANPR) concerning procedural and substantive standards for implementing Section 4(b)(2). Although an ANPR is not required for such a rule-making, it would allow the public to weigh in with the Administration before its views become locked in.

In an ANPR, and the proposed and final regulation that follows, the Administration should pay close attention to two issues.

First, any methodology must be cost-effective and time-sensitive, so that overall ESA implementation is not undermined by the costs and delays of the Section 4(b)(2) process. This is a strong argument for reinstating the baseline approach and not following New Mexico Cattle Growers. It is extremely wasteful to analyze the impacts of ESA protections other than critical habitat when the sole purpose of the ESA §4(b)(2) process is to decide the scope of critical habitat protection.

Second, any methodology must give a fair accounting to the ecological benefits of designating critical habitat and the costs of not protecting species and ecosystems. Too often, economic studies have failed to take into account the ecological limits of economic activity. Input from experts in the rapidly growing field of ecological economics should be solicited to ensure that a truly balanced methodology for economic analysis is developed.

4. Set Limits on Exclusions from Critical Habitat

In various ways, the current Administration has signaled that a major expansion of the ESA §4(b)(2) process for excluding lands from critical habitat is underway. A random sampling of recent critical habitat designations shows that this Administration has begun using ESA §4(b)(2) to exclude sizable parcels of land from critical habitat designations. In a New York Times article dated March 17, 2003, Assistant Interior Secretary Manson acknowledged that “we in this Administration have been looking at [this exclusion provision] quite a bit more robustly than has been done in the past." In testimony before this Committee last week, Mr. Manson stated that entire Defense Department installations should be excluded from critical habitat designations simply upon a showing that a Sikes Act management plan has been completed. This pronouncement was made despite findings by the Defense Department’s Inspector General that there is no documented evidence of implementation of those management plans. What the Administration has not said about the ESA §4(b)(2) exclusion process is where are the limits. Lands and waters deemed by the Services to be “essential” for species conservation should not arbitrarily be denied protection. Policy guidance setting parameters for the ESA §4(b)(2) exclusion process is needed now, before a host of critical habitat designations are finalized, to ensure that the letter and spirit of the ESA’s critical habitat provisions are not undermined by ESA §4(b)(2) exclusions.

Revise “Adverse Modification” Regulation

Two years ago, the court in Sierra Club v. U.S. Fish and Wildlife Service, 245 F.3d 434 (5th Cir. 2001), held that critical habitat serves the goal of species recovery, and comes into play even when species survival is not immediately affected. For this reason, the court struck down the 1986 regulation defining “adverse modification” of critical habitat, which limited the application of critical habitat to actions affecting both recovery and survival.

To date, the Administration still has not responded to this court ruling. In fact, despite its extensive behind-the-scenes policy making on species-specific critical habitat determinations, it has never enunciated and sought public comment on its overall approach to critical habitat. To date, its species-specific actions have moved in a direction opposite from what the court in Sierra Club suggested was necessary. Rather than using critical habitat in a manner that furthers species recovery, it has weakened critical habitat protections.

Regulatory action is needed now to redefine “adverse modification” of critical habitat consistent with the Fifth Circuit’s decision in Sierra Club. If the Administration believes that critical habitat means something other than habitat essential to a species recovery, then it is obliged to state what that meaning is, and explain how the ESA would achieve its recovery goal in the absence of the critical habitat tool.

In addition to furthering the conservation of listed species, revising the “adverse modification” regulation would also help the Administration avoid wasting precious resources in ESA §4(b)(2) economic analyses. The New Mexico Cattle Growers ruling calling for expanded economic analyses stemmed from the Service’s rationale that the “adverse modification” definition is redundant with jeopardy. If the Administration were to fix its “adverse modification” definition, then the Services would be free to return to the less costly baseline approach to ESA §4(b)(2) economic analyses without violating New Mexico Cattle Growers. The baseline approach would lead consistently to findings of both positive and negative impacts of critical habitat designation, and thus the basis for the prohibition against this approach in New Mexico Cattle Growers would disappear.

Educate the Public

In the March 17, 2003, New York Times article discussed above, developers argued that that any benefit of the proposed critical habitat designation for the endangered pygmy-owl in Arizona would be outweighed “by the economic costs of effectively barring development in 1.2 million acres, or two-thirds of the privately held, developable land in the area.” This assertion, which was not rebutted elsewhere in the article or in any subsequent statements by the Administration, is not remotely connected with the truth. As discussed earlier, a critical habitat designation only affects actions carried out, permitted or funded by the federal government. In other words, most private land development is completely unaffected. Moreover, even where a federal action is contemplated, the designation of critical habitat does not mean that the action is terminated. It simply means that a consultation must take place with one of the Services to ensure that the action does not cause adverse modification of the critical habitat.

Unfortunately, the kind of alarmism about critical habitat voiced in the New York Times article is frequently employed by individuals seeking to undermine public support for the ESA, with the ultimate goal of evading their own responsibilities under the law. This is not surprising. What is disappointing, however, is the failure of the Services to clarify for the public what critical habitat does and does not do.

Critical habitat is a key provision in one of the nation’s most important environmental laws. It is time for the agencies charged with implementing this provision to launch a public education campaign to explain the meaning and purpose of critical habitat and to build the necessary public support for its protection.

Provide Adequate Funding

The Services’ budgets for ESA implementation has never been adequate. In fact, the chronic budget shortfalls for listing and critical habitat determinations have become worse in recent years as more species have joined the threatened and endangered lists and as the Services have embarked upon a massive reevaluation of their economic analyses.

To make the critical habitat program succeed, the Administration must request, and Congress must appropriate, the funds needed to remedy this growing budgetary gap. The nation’s goal of recovering and delisting species can be achieved only if this essential habitat protection program is properly funded.

CONCLUSION

Thank you for the opportunity to testify today. I would happy to answer any questions that members of the Committee may have.