Endangered Species:

Pombo, Scarlett and other experts debate future of landmark protection law

As lawmakers in both the House and Senate consider potential changes to the Endangered Species Act, a panel of experts debated the law recently at an event sponsored by the Federalist Society. During today's E&ETV Event Coverage, House Resources Committee Chairman Richard Pombo (R-Calif.), Interior Department deputy secretary Lynn Scarlett, Michael Bean of Environmental Defense, John Kostyack of the National Wildlife Federation and Steven Quarles of law firm Crowell & Moring talk about the options facing lawmakers as they seek to rewrite species protection law.

Transcript

Richard Pombo: To begin with, we need to have a little bit of a background on the process that we've gone through over the last several years on the Endangered Species Act. When I was elected, originally elected, fourteen, almost fourteen years ago now, I introduced a bill to rewrite the Endangered Species Act. And over the last several years I think I've had an opportunity to learn a lot about what has worked and what has not worked in terms of the implementation of the act. Well if you go back to the original purpose of the act, I don't think anybody could really argue that we don't need an Endangered Species Act. It has become a value, a moral value, a value that we as a society have supported over the last 30 plus years, mainly because people, you know we've had a situation that had developed because of a lack of planning, a lack of attention to certain species. And we were in the midst of some of our grand species with the possibility of becoming extinct. Things like the bald eagle and the gray wolf and things that people identified with were on the verge of becoming extinct. So Congress responded to that during the '50s and the '60s and then into the '70s with a number of different laws to try to save endangered species. Ultimately with the passage of the Endangered Species Act the decision was made that as a government, as a federal government, we would act to try to stop species from becoming extinct. And that became a goal of the Department of Interior and Fish and Wildlife Service was to stop species from becoming extinct and recover their populations to a healthy limit.

Over the years we've seen the law be interpreted in many different ways and implemented in different ways. And it has caused a number of conflicts with private property owners and with the desires of people. And that conflict has manifested itself mainly throughout the western part of the United States, but increasingly in other parts of the country. The original bill I introduced when I came into Congress dealt a lot with the private property rights side and changing the implementation of the law so that we could reduce the number of conflicts that we had with private property owners. But it became very apparent that that was not going to be enough. And getting into subsequent bills and learning more about the way the law was being implemented I came to realize that not only did we have conflicts with private property owners as a result of the way the law was being implemented, but we weren't doing a very good job of recovering species either.

And last year, or two years ago now, we sat down and actually went through all the Fish and Wildlife's documentation on the recovery of species and the health of the species. And it was kind of surprising to us, and I think to most people, what we found was that the vast majority of species that are on the list are either still in declining population or Fish and Wildlife really didn't have any idea what their numbers were. And as a result of that we weren't do a very good job of recovering species. Out of the nearly 1,300 species that have been listed on the endangered species list, less than 10 have been removed because of a recovery. And I would argue that of those 10 many of those probably had data error when they were originally listed. And it was a mistake on their original listing. They may have been an endangered species, but they were off on their numbers, on their reproduction rates, other important things that are considered as part of the science in a listing and a recovery plan.

So we began to look at the law to figure out what we had to do to put the focus back on recovery, to try to get away from all of the conflicts that had resulted from the implementation of the law. And reduce those conflicts and at the same time put the focus on recovery. What we came up with was, after several months and negotiating a bill and trying to move forward on fixing what had become obvious problems and things that people from all sides of the debate were talking about, we came to the conclusion that one of the major problems we had was with the current critical habitat process. It dealt more with land-use and controlling land that it did with what was necessary to recover the species.

So we came to the conclusion that we would take away the current process of protecting habitat under critical habitat and go with something that we referred to as recovery habitat. And change the focus of the law so that we would go from a species being listed as endangered and then having a statutory deadline on the adoption of critical habitat, to instead putting the focus on you list a species as endangered, you figure out how you're going to recover it and then you can protect the habitat that is necessary to fulfill that recovery plan. And almost everybody in the House that worked on this bill agreed with that approach. And even in the substitute bill that was put forward, they took a very similar approach to what we did in the bill that ultimately passed the House. So putting the focus back on recovery, putting the focus on protecting land that is necessary to fulfill that recovery plan became the real linchpin of how we would move forward with changing the Endangered Species Act, changing the way that it was being implemented today.

We also did a couple of other things in the bill, one of those was that under current law, under the current implementation of the law, we have an odd process where someone can come in that's trying to have a development or trying to do something with their property and never get an answer back from Fish and wildlife services as to whether or not the activity that they're proposing would, is legal under the act and they can move forward. And sometimes guys spend years trying to move forward and get an answer and figure out how they can move forward. And we came up with a process where after they have entered into the process and they're trying to move forward they can send a letter to the Secretary of Interior saying this is the activity I want to conduct on my property and giving the Secretary a deadline to give them an answer. And say tell them yes or no. But we don't tell them that you have to tell them yes, but you do have to give them an answer, a definitive answer as to whether or not they can move forward from that point.

And also we did something in the bill in terms of protecting private property. And this has obviously become one of the most controversial parts of what we did in the House. Under current law we have the ability, the federal government has the ability to step in, declare habitat, declare critical habitat and in effect take control of activity that happens on that property based on it being critical habitat or habitat for an endangered species. That has resulted in the loss of value, the loss of use, the ability of someone to be able to use their land in accordance with local law. If you look at the way that that has operated over the years it has probably been one of the most controversial parts. And one of the parts of the law that has caused the greatest amount of conflict with private property owners. Whether or not it has an impact on them, many property owners have a fear that if they are part of critical habitat or they do have endangered species on their property that they will lose the ability to use their land. And as a result of that, many guys manage their land in a way, many property owners manage their land in a way to not attract wildlife because they don't want to have that fear or that ability for someone to come in and tell them what they can do with their property.

So it has worked contrary to the goal of recovering species, 90 to 95 percent of the species that are listed have, at least part of their habitat is on private property. Private property owners have to be part of the solution. They have to be part of how we're going to recover species because they represent so much of the habitat that species need to recover. If you have an adversarial relationship between Fish and Wildlife Service and the property owners they will never work in a cooperative manner to help recover species. And they won't do things that are necessary to improve habitat and create habitat on their property in order to recover species. So we had to figure out a way, if we're going to make this law work, we had to figure out a way to protect those private property owners so that if they did have habitat or they created habitat on their property there would not be an economic disincentive for them to participate in that and to have that habitat on their property.

The solution that we came up with was first a series of grants and incentives that would go to private property owners that would say if you create habitat or if you have habitat and you improve that on your property we will participate with you. And give them an economic incentive in order to improve that habitat and therefore recover the, improve the chances of species recovering. Ultimately we have a provision in there that if the Secretary comes in and says you can't use part of your property. We need that in order to recover this endangered species and you can't use part of your property. We've taken away the value or the use of that particular piece of property, then at that point they can then qualify to be compensated for the loss of that private property. Now a lot of people have said that that's wrong to compensate private property owners if you take part of the value and the use of their private property. And we've been going through this debate for a number of years and even back into the 70s they were debating this same issue. But I've always believed and believe that this bill reflects that if we as a society decide that recovering an endangered species is a priority and something that we want to do as a society, as a government, then we as a society should pay for that priority.

If we pass a law in Congress that says we need to build an interstate highway system. And we go across somebody's property in order to put a highway in, we pay them for it. Even if putting a highway across their property increases the value of their property we still pay them for what we took from them. But if we declare that property necessary to recover an endangered species and take away the value of that property we don't. And I think that that is wrong. I think that if we're going to use someone's private property to recover species then we should pay that individual for what we have taken from them. There's no reason for a single individual or a small group of property owners to have to bear the entire financial burden of what we as a society decided was important, it was a priority to us.

So we included that in there as a means of giving private property owners the protections that they need in order to protect them from losing their property, but also to give them the financial incentive to participate in the recovery of species. And I don't believe that the Endangered Species Act will ever work in terms of recovering species unless you have a cooperative agreement, a cooperative relationship between private property owners and those whose charge is to carry out the Endangered Species Act. I believe that's the only way we will never have a successful law that we can look back on.

The law, right now, has not been full of successes. It's not been full of a number of species that we can point to and say because of the act we were able to recover this. And if it were not for this, these species would have become extinct. And I know people will tell you that that's the case, but the numbers don't bear that out. And we put together that full report on all of the species that are listed on the act and the numbers just don't bear that out. The law has not worked in its current implementation. Again, I will tell you we have to have some kind of an Endangered Species Act. I don't believe that we can just get rid of the Endangered Species Act and say that it's going to go away. We have to have a law but if we're going to, we also have to have a law that's going to work. And I believe that that's extremely important.

We were able to put together a bill that not only passed the resources committee with a majority of the Democrats who voted, voted for it. It was a strong bipartisan vote coming out of the committee. But it was also a strong bipartisan vote on the House floor. And it moved with a large majority out of the House of Representatives. It's in the Senate now. Senator Chafee is a subcommittee chairman on the Senate side. Senator Inhofe is the full committee chairman. They are working on the process right now. I believe that they will have a bill that they will put together in the next couple of months that will be able to pass the Senate. And we will have an opportunity to sit down and work out whatever differences there are between what ultimately what the Senate does versus what the House has already done. And I believe that as the more that people begin to pay attention to the law and what some of the shortcomings have been the better chance we have of getting a law that will actually work and be something that can be implemented and begin to put its focus back on recovering species. So I believe that's extremely important. It's one of the major issues that the resources committee and Congress will take up this year. But it's also extremely controversial. And anytime you talk about going in and modernizing or updating any of our existing environmental laws it draws a lot of emotion. It draws a lot of controversy. And sometimes people will yell and shout and scream about it and really not concentrate too much on the facts. But when it comes right down to it I do think that we are moving in the right direction and ultimately we will have a bill that will do a better job than the current law. So thank you for giving me the opportunity to come in and spend some time with you. Unfortunately I'm not going to be able to stay for the rest of the panel discussion, but knowing all of these folks up here very well I'm sure that they will give you a lively discussion. So thank you very much.

Lynn Scarlett: We're going to have what I hope to be a great roundtable discussion, preceded by some presentations by our four panelists. Before I turn to introducing them, and I will introduce them each as they stand up, I want to build upon some of the things that Congressman Pombo said and just set the stage for us here. The act, as we all know, was passed over 30 years ago. It has had its three decade anniversary. There are currently some 1268 species listed under the act as threatened or endangered, at least as of the end of last year. Now as Congressman Pombo noted, the act has long been a lightning rod for debate. Current debates are no exception to several decades of discussion. The history is one marked by litigation, indeed for critical habitat designations litigation entirely dominates at the Department of the Interior, the Fish and Wildlife Service decisionmaking.

The implementation of the act, as Congressman Pombo eluded, arouses debates over science. It ignites the passion sometimes of property owners. It generates concerns over how the current act affects landowner incentives. Yet at the same time, as Congressman Pombo noted, the act is also a symbol, a symbol for many, of our commitment as a nation to ensuring the rich diversity of plants and wildlife, the values to which Congressman Pombo eluded. For some the act offers a backdrop of security, security that species protection will in fact hold a place in agency actions and decisions. And of course amid this debate some point to the work that is getting done in the context of all of this controversy, both for regulatory and non-regulatory tools within the act.

The Fish and Wildlife Services, for example, has enrolled some 3.6 million acres under Safe Harbor agreements, a recent tool under the act, with landowners to protect a variety of species. I could go on and on with some of these accomplishments. Now we have a roundtable of panelists here to explore the act, its implementation and to focus on the question of whether and how updating the act might affect its effectiveness. We'll explore questions that include the role of states in protecting species and enhancing their well being, the relevance of critical habitat, the scope and definition of protections such as prohibitions against take of species, issues pertaining to the listing process and uses of science, the meaning of critical terms within the act such as jeopardy and adverse modification. All matters of which have been the subject of litigation, court decisions and agency actions. And then of course the final question is whether, given all that, there is a case for updating the act, reforming the act or otherwise altering its implementation and in what ways.

We're going to start with Michael Bean. There's Michael over there. Michael, someone I have known for a long time, is a guru of the Endangered Species Act one might say. He is with the, with Environmental Defense. He leads their legislative policy making and litigation activities that pertain to wildlife and especially and particularly the Endangered Species Act and issues related to it. He serves as the consultant to national and international wildlife conservation organizations. He's the author of many, many articles, many of them focused on the Endangered Species Act. As early as two decades ago he wrote a book entitled The Evolution of National Wildlife Law, something of course that has many chapters since probably to be written. He directs the wildlife program for, or did direct the wildlife program for the Environmental Law Institute, prior to eventually coming to Environmental Defense. A very creative thinker I might add. A graduate of Yale and was editor of the Yale law journal during his tenure at Yale. Michael?

Michael Bean: Thank you very much Lynn. Good morning everyone. Today in the Federal Register Fish and Wildlife Service announced the reopening of the public comment period on a proposal to remove the bald eagle from the endangered species list. That proposal was originally made in 1999, July 6, 1999. And on that day some 6 1/2 years ago there were fewer than 6,000 pairs of bald eagles in the lower 48 states. And the Dow Jones industrial average on that day closed at 11,120. Today bald eagle numbers have increased by roughly 50 percent since that date, while the Dow Jones average is roughly 50 points lower than it was on that date.

If it reflected changes in eagle abundance, rather than stock prices since 1999, the Dow Jones index would have climbed to nearly 17,000 today rather than remaining flat at 11,000. It's not just bald eagles that have outperformed the market however. If the Dow Jones index measured changes in whooping crane abundance since 1999 it would be in excess of 13,000 today. If it measured changes in the abundance of the Kirtland's warbler, an endangered songbird of the Michigan Upper Peninsula, it would be nearly 19,000. And if the measured changes in the number of Kemp's Ridley sea turtles nesting along the Texas coast it would stand at around 30,000. So I'm tempted to ask, is James Glassman in the room?

I could go on for the remainder of this talk and use my allotted time with examples like this, but I won't, because you get the point. Yesterday, in a guest opinion column that appeared in the Sacramento Bee, Representative Pombo said, again, as he has said many times before, that the ESA has had quote, "A stunning record of failure." close quote. Those were his words in print yesterday. He calls the Endangered Species Act a failure because only a few species have yet recovered and been taken off the endangered list. Apparently then the bald eagle is a failure and the whooping crane and the Kirtland's warbler and the California Condor and the Kemp's Ridley sea turtle and the wolves and grizzly bears in Yellowstone. All of them are apparently failures in Mr. Pombo's calculation, because none of them has yet recovered and been taken off the endangered species list. But if those were stocks, rather than species, I don't think I'd be complaining about their performance.

Mr. Pombo's mischaracterization of the Endangered Species Act is not new, but what is new is his mischaracterization of his own bill. For yesterday, in that same Sacramento Bee guest editorial, Mr. Pombo said the following about the compensation provisions of his bill. The provisions he discussed here this morning. Quote, "The amount is based only on the value of the land's current use rather than any future increased value. In other words, if the land in question is farmland the payment is based upon its value as farmland." Close quote. That statement, I will submit, is patently, flatly and undeniably false. Contrary to his statement his bill creates a mechanism whereby property owners can submit a quote "proposed use", close quote, of their property for review by the Fish and Wildlife Service. The property owner's submission must include quote, "A demonstration that the property owner has the means to undertake the proposed use." Close quote. If the Fish and Wildlife Service determines the proposed use would not comply with the prohibition against taking an endangered species, the property owner may agree to forgo the proposed use. Whereupon he is entitled to be paid the fair market value of that foregone proposed use. The bill even includes a statement that fair market value shall take into account the likelihood that the foregone use would be approved under state and local law. The bill's explicit reference to a proposed use, that the owner must demonstrate that he has the means to undertake and do a fair market value that takes into account the likelihood of securing state and local approval, clearly does not limit compensation to current land use.

Indeed, the plain language of the Pombo bill is utterly irreconcilable with the characterization of it that appeared in print yesterday under his name. So I ask how is it possible to have an intelligent debate about the merits of legislation in the face of such clear misrepresentation? What is sad, in my opinion, about this state of affairs is that the administration of the Endangered Species Act is in need of intelligent reform. Intelligent reform would begin by recognizing that there is need both for improving the effectiveness of the act in conserving imperiled species and in making it less onerous for those whom it affects.

In particular, reform needs to remove the impediments to beneficial actions by private land owners and others. To the extent that progress toward conservation goals can be achieved through incentive based strategies, there is that much less need to rely upon regulatory strategies to achieve those goals. A lot of these reforms, I believe, can be accomplished within the existing framework of the current Endangered Species Act. And we've already seen evidence of that in recent years. When comparing the then of a decade or so ago to the now of today, for example, I might have added that then the idea of a safe harbor was a place where you might moor a boat. But today, as Lynn has pointed out, it's a mechanism whereby literally hundreds of land owners, who own literally millions of acres of land, are managing that land in ways to improve its value for endangered species, in effect laying out the welcome mat on their land for endangered species.

It's just one of many administratively created innovations that can make the Endangered Species Act better for species and better for property owners. And that, in my opinion, is where the attention of serious reformers ought to be focused. The House bill, ironically, has probably reduced the prospects of legislative reform rather than enhance them. It is an extreme measure and one that even its chief sponsor won't obviously acknowledge, thank you.

Lynn Scarlett: We turn now to Steven Quarles, whom I first met, I believe, in the airport. Steve is, of course, like Michael, well known over many years for his work on the Endangered Species Act. He is chair of the Natural Resources and Environmental Law Group with the law firm of Crowell & Moring here is Washington. His practice is wide-ranging, but they do include wildlife and endangered species issues, federal lands issues, water issues and related environmental matters. His practice includes both litigation, administrative practice and legislative practice. He represents clients in federal courts in all the Federal Circuit and the Supreme Court, again, often on environmental matters including the Endangered Species Act. His administrative practice, likewise, includes work on habitat, conservation plans, environmental impact statements and other environmental matters. His legislative practice too has a similar focus. He has held positions in government including at the Department of the Interior, also with the U.S. Senate. And like Michael he is a prolific writer, many of those writings, law articles pertaining to the Endangered Species Act. With that, Steve.

Steven Quarles: Also, like Michael, I'm a graduate of Yale Law School and before I go on I need to say something about Michael. His record, unlike mine, can't possibly be summarized, although Lynn did a very good effort at it. She mentioned, for example, the Safe Harbor program and the many hundreds of thousands to millions of acres that have been protected under it. Michael is well-known as the father of that program. And a skill of Michael's that is not often recognized is, was put on good display today when he, and that is his skill with analogy and his analogy of species restoration to stock prices. My favorite Michael Bean analogy of many years ago when he talked about how under funded, one place where conservatives and liberals agree, how under funded is the endangered species program. I remember he once said that the entire budget of the Fish and Wildlife Service for endangered species was less than the citizens of Washington, DC spend each year on pizza. And I thought that was just a classic analogy.

In eight minutes it's, which is what we're all aiming for here, and since most of us are lawyers that probably means 10, there's not enough time to talk about substance. Now I think we will get into it in a serious way in the question or answer period. Or at least not time enough for me to talk about it coherently. So I think instead I'm going to try to put the Pombo bill in some sort of context or perspective and identify what I think is the greatest, contrary to Michael, although I admire Michael we often disagree, largely unreported contribution of the Pombo bill. And tantalize you with perhaps a hint of what I believe to be the explosive unaddressed issues in that bill.

Putting that House action on September 29, the passage of H.R. 3824, in perspective, I want to emphasize how important an accomplishment that was. And also emphasize that unreported story, which is how much consensus or at least emerging consensus there may be. There is consensus, I believe, on the importance of ESA and its purpose. I believe that there is consensus not on the fact that the ESA is a failed law, but on the fact that it is a flawed law with identifiable problems. And I think there is also consensus, although both Michael and John will quickly add that the devil resides in the details, but I think there is even some consensus on solutions to a surprising number of those flaws and problems.

Perspective, more than a decade and a half has passed since comprehensive amendments to the ESA were enacted in 1988. In fact, more than a decade and a half has passed since comprehensive amendments to the ESA has passed on either floor of either chamber of the Congress. The last try for a comprehensive bill was S 1180 in 1997, the so-called Kempthorne, Chafee, Baucus, Reid bill. That bill had everything going for it. It was sponsored by the Chairman and ranking minority member of the Committee of Jurisdiction and the subcommittee of jurisdiction, support of the Senate leadership, strong advocacy in favor of it by the Clinton administration and even support from a number of moderate environmentalists. Yet it went nowhere. Environmentalists basically kept it from the floor of the Senate. And when a Rump conference was created to see if there could be agreement on a bill that could be brought both to the floor of the Senate and the House, Western property right advocates killed it in the House.

To the contrary, H.R. 3824, the first to pass on either floor of, in either chamber in a decade and a half, enjoyed none of these favorable conditions. H.R. 3824 did enjoy bipartisan support, but to a distinctly lesser degree than the S 1180. If the Bush administration did not manifest indifference towards H.R. 3824, it certainly did not lend a vigorous vocal and highly visible support that the Clinton administration did for S 1180. The House leadership was in disarray. This vote occurred the day after Mr. DeLay resigned as Majority Leader and you should've seen the amount of whipping that was going on in the Democratic cloakroom. And the fact that Nancy Pelosi, who knows absolutely nothing about the Endangered Species Act, was sent to the floor to speak on it, a rare occasion, gives you a feeling that the Democrats were as much or more concerned about giving the Republicans their first defeat on the House floor after Mr. DeLay's resignation than almost anything else. And of course it had the active and very stiff opposition of a united environmental community. I think Chairman Pombo should be congratulated, no matter how you feel about the bill, by the way he went about building that bill from the bottom up with long discussions between his staff and the ranking minority member's staff on where they could find consensus. And drafting provisions that tried to bring, no matter how you may feel about their individual substance, they tried to bring landowners into a constructive relationship with the ESA. Where they are not actively opposing it, but actively assisting in the recovery of species.

Now some spoil sports or cynics may say how can you maintain that H.R. 3824 enjoyed significant bipartisan support when the alternative bill sponsored by very prominent Democrats in George Miller and John Dingell and some moderate Republicans, most notably Sherry Bullard and Mr. Gilchrist, lost by only 10 votes on the House floor? And by the cruel mathematics of the legislative process that's only five representatives, although it's 10 votes. The easy answer is that many more D's voted for H.R. 38 than R's voted for the Miller Bullard substitute. But the better answer is to give the Miller Bullard substitute effort all the credit it deserves. And the knowledge it is the key to the untold story. Sponsors of the Miller Bullard substitute asserted over and over on the House floor that their bill contained 80 to 90 percent of the language of H.R. 3824. Now that was a bit hyperbolic, but it wasn't that far from the truth. It does demonstrate how much of a consensus or emerging consensus, as fragile as it is, does exist. Now it's not my intention to gloss over how wildly divergent or significant are the remaining differences, but I do think the missed story is that there is a nascent consensus building.

Certainly the big reforms in H.R. 3824 are well known, strengthening recovery planning, new landowner incentives programs, adding more carrots to the sticks, elimination of the God squad, consolidation of implementation in a single agency, elimination of critical habitat in favor of recovery habitat, compensation for loss of land uses due to ESA implementation. Now a number of those ideas have been trumpeted by environmentalists or at least some of them, such as improving recovery planning, developing more attractive land owner incentive packages and even dropping critical habitat. And no environmentalist that I'm aware of has ever supported the God squad. But of course, again, as Michael and John will tell you, the devil is in the details. And certainly they do not support, I am positive, most of the provisions with those purposes in H.R. 3824. The biggest accomplishment of H.R. 3824 in my mind is its attempt to reduce the transaction costs of many of the ESA processes. I'll give you just one example. The greatest accomplishment of the last administration was Secretary Babbitt's vivifying the habitat conservation plan incidental take permit process, which has now protected millions of acres of habitat. But that program is now dying a slow death. And some of the most prominent companies that have, with the greatest environmental ethics, that have been most active in doing HCP's, have announced that they are going to disengage from the process because the transaction costs are too high. And of course when the transaction costs are too high, they're also too high for the woefully under funded agencies, the Fish and Wildlife Services and NOAA Fisheries and doesn't allow them to put that money on the ground in protecting species and habitat.

And I think many of H.R. 3824's provisions, whether they got it right or wrong, are a very great effort to try to streamline many of the decision making processes, so as to reduce those transaction costs and allow those scarce dollars and funds to be converted to on the ground activities to conserve species. Now my time is up and the only thing I'm going to tell you is that I don't want you to think that the regulated community believes H.R. 3824 is any kind of home run that clears the ESA base paths of all remaining issues. I believe that even if any legislation passed, ESA will remain one of the most controversial, the most controversial environmental act. I'd be happy to tell you why, but I've are republished on that in the ELI Environmental Law Report, the eight basic reasons. But I also would be happy to tell you that I think we've only begun to see the most critical issues. And amazingly, 30 years later, I believe that over the next two or three years the greatest amount of litigation is going to go to the very definition section of the act, which normally is where litigation begins. And the greatest litigation will be over the definition of species, the definition of endangered species and threatened species and their significant portion of the range component, and the definition of critical habitat, if, as I suspect, critical habitat's deletion is not supported by the Senate. And during the question and answer period I'd be happy to answer on any of those. Thank you.

Lynn Scarlett: We have next John Kostyack, who is senior counsel and director of wildlife conservation campaigns in the National Wildlife Federation's Washington office. He too, like the other panelists, is an expert on the Endangered Species Act. He is responsible for overseeing the National Wildlife Federation's advocacy on endangered species before the Congress, before federal agencies and also before the courts. He oversees the National Wildlife Federation's work on invasive species and state wildlife action plans. John serves as counsel for the National Wildlife Federation as well as other conservation groups in a variety of legal initiatives, including, more recently, cases to protect the ivory billed woodpecker in Arkansas, the Florida panther in the Everglades and to restore the gray wolf in the northeastern United States. John too writes often and lectures on meeting the challenges of conserving the U.S. wildlife. He has authored with Professor Reid Ewing of the University of Maryland the first national study that tries to quantify the impact of sprawl on the nation's biological diversity. John?

John Kostyack: Thanks a lot, Lynn. It was a pleasure to follow Steve and Michael since we have been trapped in a room together now for about the past four or five months. So we know each other's lines. We can finish each other's sentences. And I'll try to do a little bit of that today. I'd like to start out by talking a little bit about the trends that is facing wildlife in this country and abroad, because I think it's a key premise to any discussion of updating the Endangered Species Act to understand the threats that are facing wildlife and habitats. And I would argue that those threats are greater today than ever before in human history. Lynn already mentioned the work I've done on sprawl. We can talk about sprawl or we can talk about invasive species, but let me elaborate a minute on what I see as the biggest threat and what a number of scientists are now saying is the biggest threat facing biodiversity. And that is global climate change.

In the past century we've already seen a 1 degree Fahrenheit increase in the Earth's temperatures. And scientists are projecting in the coming century a 2 to 10 degree increase in the Earth's temperatures. A recent study by the Wildlife Society shows how plants and animals have already begun to shift in both elevations and in latitudes the locations of their habitats to adapt to this change in surface temperatures. And the real question that faces all of us who have been working for decades on conservation is are all of the good works that we have accomplished and achieved in the past several decades going to be lost as a result of global climate change? Now why does this relate to the Endangered Species Act? Well when the law was enacted in 1973 it probably was the most visionary wildlife law ever enacted and for decades after that people were saying that. And I think even today you can say that, but in 1973 Congress was not talking about global climate change. In fact they weren't talking about invasive species and they weren't talking much about land use patterns in terms of sprawl, where we've essentially consumed per capita a greater number of acres every single decade than the previous decade.

So we have new challenges to face. Wildlife habitat is still disappearing at an unprecedented rate and we're facing trends that suggest that it could be disappearing even more quickly than in the past in the next few decades. The Endangered Species Act is our nation's most comprehensive tool to address this problem. Now we have challenges that are new, such as thinking about buffers and wildlife corridors, making sure those corridors are oriented in a north-south direction to address this movement of plants and animals. These are the kinds of challenges that I hope to work with as long as I'm here in DC. We're working on modernizing the Endangered Species Act and basically facing some of the most fundamental challenges facing humanity, not just plants and animals.

Now we heard this morning for Mr. Pombo. And he is, so far, the one person who has gotten a bill completed on the House and Senate floor for the first time since 1988. This is unfortunate that this is the leader, I have to say, because his leadership is essentially ignoring the fundamental challenges. And essentially suggesting that it's time for a retreat from this nation's commitment to conserving wildlife. Now he did say that his bill is more oriented toward recovery. And I'd like to spend a moment on sort of following up Michael Bean's argument on why that is essentially a cynical argument. In fact this bill that he got passed on the House floor was introduced two weeks before its approval by the House of Representatives. So we had very little time to debate the fundamental question, is the Endangered Species Act a success or failure? Michael gave some pretty good anecdotes to suggest why it's really one of the most powerful laws and very successful in bringing species back. But I like to refer to the U.S. Fish and Wildlife reports that were the foundation of the study that Mr. Pombo says is the basis for his efforts.

It's a biannual study that comes out from the U.S. Fish and Wildlife Service called its recovery reports. If you look at the numbers that are put forward by these official statistics that Mr. Pombo relies upon it not only shows that over 99 percent of the species ever protected remain with us today. It also directly counters his argument that the law is not recovering species. The longer species are protected by the Endangered Species Act, the more likely species are to be stabilized and recovering. That's a fundamental fact you can draw from those reports. The species that have been protected for five years or more, the majority, are stable or improving.

So where does this argument really come from that the ESA is a failure? I would argue that it's not based upon any meaningful analysis. What it's based upon is public relations. Back in the 1990s, when Mr. Pombo led the charge to weaken the Endangered Species Act, it was based upon the argument that the act was interfering with business and private property rights. That argument proved to be a failure. The American people didn't buy it. And after a relentless PR campaign advancing that message for five to 10 years, the most recent polling shows that the law is as popular as ever, 86 percent of the people in this country continue to favor a strong Endangered Species Act.

So Mr. Pombo obviously has adopted a new message to try to achieve his objectives, but the underlying goals have not changed. He says the bill is for recovery and yet you can walk through each of the key provisions and show, and figure out how the law pushes his in the opposite direction away from achieving species recovery. Now we talked a little bit about what might happen in the Senate. What I've been hearing from Senate staff, and this isn't just sort of the Liberals to moderates, we're hearing this now from conservatives, that the word Pombo, unfortunately, has become a poison pill. There's now a new verb that's been adopted in the lexicon called the Pombo-ization of the Endangered Species Act. A fear that if the Senate moved forward with even a responsible bill, that it would have to be met in the conference committee with the Pombo bill and the law would end up being weakened. This has taken all the wind out of any efforts to achieve sort of a responsible compromise in the Senate.

Mr. Pombo's recent initiative in December would essentially allow a fire sale of millions of acres of public lands across the West under the guise of the 1872 Mining Law, who would further exacerbate this problem. We had all of our members, many of the hunters and anglers that are conservative Republicans, fired up, going to their members and saying this is an outrage. Our fundamental commitment to protecting wildlife habitats in this country would essentially disappear as a result of this kind of provision. So this is the context in which we are operating. I actually I'm not hopeful at all in terms of our ability to achieve a solution in the Senate in the context we're dealing with here.

On the other hand, I do agree with the fundamental point that Steve made, which is that there are plenty of opportunities for achieving consensus. There is sort of a middle ground that's out there that's been identified on a lot of the key policy issues in the Endangered Species Act. A compromise is waiting to be struck. And let me walk through some of the sort of what I see as the fundamental policy issues that are facing us. I realize my time is short, so it's going to be a little bit of an oversimplification.

Private landowner incentives, this is one where there probably is the greatest degree of consensus and the greatest amount of hope. There are an enormous number of opportunities for getting landowners to do positive things on the land. Already there are some existing programs, such as the Safe Harbor, that are making that happen. To give these programs real juice we have to get the tax code and other key incentive programs that are existing under the current regulatory structures as well as spending programs as well as the tax code more oriented toward providing private land owners with the incentives to conserve habitats. There's a long list of suggested ways to do that that have broad support from within the conservation community and the regulated side.

Now in the Pombo bill, and to a lesser extent the Crapo bill, and we should talk a little bit about the Crapo bill. This is the only pending Endangered Species Act bill in the Senate right now, that's 2110. There are references to private landowner incentives, but a fundamental distinction between paying for landowners to do things above and beyond what's required by the law and paying for land owners to essentially take compliance measures on the law is missing from both of these bills. And so it essentially would be creating perverse incentive. Under the Pombo bill if you are a developer who's trying to decide whether to construct a development that steers around endangered species habitat, which is essentially the fundamental dynamic we have right now, you have a great incentive to make essentially a conservation oriented development. To work your way around the habitats and not destroy them. That incentive disappears under the Pombo bill because if you target the endangered species habitat on your property then you are entitled to an automatic paycheck from the federal taxpayer for any lost profits that might have been suffered as a result of any endangered species restrictions.

And so this consensus that awaits on private property conservation needs to deal with this fundamental difference that Mr. Pombo and Mr. Crapo's bill highlights. Which is you're never going to get a consensus on the notion of undermining the regulatory program, paying for compliance measures. But there is an enormous opportunity for consensus about management and the restoration activities above and beyond the law, getting the federal government to shift a lot of its current spending and tax programs to help those programs along.

Real briefly on critical habitat, as we mentioned a few times, you know there are two fundamental safety net provisions of the act dealing with federal agency actions. One is the jeopardy protection and the other is the critical habitat protection. And then there's another key regulatory provision known as the take prohibition for nonfederal activities. Of those three critical habitat is the only one that explicitly protects habitat. For the other two key provisions we'd have a lot of differences of implementation around the country, but often times it fundamentally comes down to a debate over whether or not the species is present there. That is not a sufficient amount of habitat to save an endangered species. You have to deal with the broader habitat needs of the species. Critical habitat gets at that fundamental challenge.

There is broad support for addressing recovery needs of species. We have a consensus that we want to maintain the goal of recovery. We don't want to keep species at the brink of extinction. Then the real question is how you go about it? Well this notion of recovery habitat is out there. Everybody seems to agree that it would be worthwhile to at least have some kind of consensus on mapping habitats needed for recovery. Then the big challenge is what do you do about it? And there are a range of possible solutions to it, but this notion that there is a consensus to get rid of critical habitat masks the fact that critical habitat does address a very legitimate problem. You know the discussions need to continue. Mr. Pombo is completely wrong in suggesting that he moved forward with an idea that had broad support, because he completely gutted the critical habitat provision. He essentially has no responsibility whatsoever for protecting these habitats under his bill.

The jeopardy provision has its own set of challenges because of the fact that oftentimes the dynamic under the act is piecemeal law.

So now we'll look at the larger, big picture of challenges facing species we have with a gradual chipping away that leave species to head closer and closer to extinction. That is a problem that we're going to need to deal with and any update on the Endangered Species Act, to essentially find a way to make sure that this provision of the act ensures no net loss of the habitat needed for a recovery, using mitigation and other strategies. Mr. Pombo's bill, again, takes us in the wrong direction. He essentially says the opposite of what needs to happen. Under his provisions dealing with the analysis of the baseline condition of the species he essentially says you may only look at the project in isolation. You may not, you are forbidden, the agency, from looking at the big picture surrounding actions and projects that are threatening the species. So there is another issue we're going to have to solve.

Real quickly on state roles and on science. I would say the last two big issues that are commonly debated. State roles is an area I think where there's an enormous amount of consensus that we would like to increase the role of states in endangered species conservation. Most of the state wildlife agencies are severely under funded. That's one of the first challenges we'd have to deal with and local governments as well, because they are the ones involved in making so many of the zoning and other key decisions affecting the endangered species. However, oftentimes the notion of expanding the role of states is used as a Trojan horse to essentially weaken the act and that's something we cannot support. In the Pombo bill, as well as in the Crapo bill, there are massive new authorizations for incidental take of endangered species if you can get your activity somehow covered by a state conservation agreement. No requirements whatsoever that you minimize and mitigate the harmful effects of your activity, which is the current way the law operates. So we can find a way to expand the role of states, but we can't use it as a way just for weakening habitat protections.

Finally on science. Obviously the Endangered Species Act is a success because of the fact that it has a very strong scientific foundation. Numerous leading scientists, scientific societies, have made this point over and over again, that the scientific foundation of the Endangered Species Act is a strong one. It was a key to the operation and the law. So the basic standard we have today, which is use the best available science, is a good one. It means we can adapt to the latest information, deal with things on a case specific basis using the experts on that species. The Pombo bill essentially says let's come up with a new definition of best available science, but let's hand that to the Secretary of Interior. We, the Congress, won't even make clear what we want to change about the existing standard. We're just going to turn it over to a political official to come up with new regulations narrowing and defining what science may be used in protecting endangered species. This essentially takes us in the exact wrong direction. The problems we have had with science and the endangered species act is when it's become politicized. We seen surveys conducted by the Union of Concerned Scientists saying that there is an increased problem of political officials reaching down and telling biologists to change your decision based upon non-scientific reasons as a way of removing protections for endangered species. That kind of problem would be exacerbated under a Pombo bill, which essentially says let the politicians decide scientific issues and not scientists.

So let me wrap up by just saying we've had a lot of people from around the country speaking up recently in support of a strong in Endangered Species Act, sensing the threat that the Pombo bill poses. Leading scientists from around the countries, hunters and anglers, faith groups, businesses, they're all writing to Congress right now saying this is a serious concern. And it goes to the notion that this is a bedrock conservation law that people around the country care passionately about. I don't feel badly at all about the passion that Mr. Pombo was alluding to. That's the key to having saved this law from numerous threats over the years. That's actually a good thing. But what's missing so far, right now, is leadership. We're going to need members of Congress to step forward and be honest in confronting the challenges facing species and habitats across this country. And once we have that I actually think there is the making for a lot of consensus and resolution of the reauthorization debate. Let me close there. Thanks.

Lynn Scarlett: Our next speaker is Larry Liebesman, who has 30 years of experience as an environmental lawyer and litigator. Like his colleagues here, his practice emphasizes endangered species, also wetlands, water pollution, environmental impact assessments and coastal protection issues. He is a nationally recognized expert, in particular, in wetlands and endangered species. Like the others up on this panel, he is the author of a number of works on wetlands as well it on endangered species including the co-authoring of an endangered species deskbook for the Environmental Law Institute. He authored Supreme Court amicus briefs in Babbitt v. Sweet Home, a very familiar and Larry Liebesman is a graduate of Rutgers University and received his law degree from George Washington University right here in town. So with that, Larry.

Larry Liebesman: Thank you Lynn. It's a pleasure to be here today. And I'm going to give you a little different perspective than what John just did regarding ESA reform. As an attorney representing public and private sector clients dealing with ESA, I've seen all aspects and many sides of the debate. I've come to the conclusion that tinkering around the edges legislatively is not going to work to come up with a meaningful solution to the conundrum that we're dealing with under the act. In my view we must not lose the momentum that came out of H.R. 3824. And that this is a golden opportunity, we have to seize the moment to try to solve these many problems. What I'd like to do today is to identify what I consider to be the three main sort of failed themes of the existing Endangered Species Act. And comment a little bit on the legislative approaches that are now swirling around in Congress. And give you sort of my sort of view of the future as to where we're going.

I would lump the major problems with ESA, as it is now is constituted, in three major categories; number one flawed science, number two unrealistic deadlines and priorities, and finally inadequate, and I don't say failed, but inadequate incentives for recovery, especially dealing with private property owners. And then I'm going to get into some of the reform proposals. We've heard a lot of debate on the flawed science aspect of things. The environmental community says the science is good. ESA is fundamentally a science based bill. I would submit that there are major problems in how scientific decisions are made under the ESA. In my view, the standard of best available science means, in many ways, just about anything that can go into a petition. And a case in point, we were involved in dealing, challenging the listing of a number of species of fairy shrimp. They're little crustaceans that live in the Central Valley south of California, up and down the spine of California. And while the listing of those species was upheld, I would submit that science was indeed very flawed. And it did not go through the kind of rigorous peer review that is necessary to ensure sound scientific decisions. If you're going to make a judgment that a particular species is in danger of extinction throughout its range you fundamentally have to have good scientific data analysis and have it peer reviewed in the sunshine, in the public view, to make sound decisions. Now we've heard a lot of the debate saying well if you go to peer review, if you seized onto the Pombo view and approach of regs and then going out there in this process, you'll never make a decision. It's a recipe for extinction. Frankly I would submit it's not a recipe for extinction, it's a recipe for good sound decision making. And that's what government should really be doing.

The second major area is unrealistic deadlines and priorities. We've heard a lot of talk about how the courts are running the Endangered Species Act. I would submit that judicial policing is but a symptom of a deeper problem, namely that Congress has created a framework here, a patchwork of disconnected requirements, deadlines and priorities. They basically created a mission impossible for the Department of the Interior and NOAA Fisheries to ever meet. Now when you look at critical habitat, which has gotten so much attention in the courts in the last couple of years, I think that's sort of a prime example. We were involved in the critical habitat challenge for the wintering population of Piping Plover in Cape Hatteras and also around the country. And I think that's sort of, you know, a case in point, where that critical habitat designation that really covered over 1,500 miles of the American coastline, and we were involved in the Cape Hatteras aspect of that and in the litigation. It was rushed. It was based upon a decision that did not have good adequate data. It essentially resulted in a redline of a lot of properties because of the potential that these coastal areas would be habitat in the future for wintering populations coming out of the Great Lakes and Great Plains.

And Judge Lamberth here agreed with us in coming out with a very strongly worded opinion and pointing out the various flaws in that process. And this is simply one example of the extensive amount of litigation that's going out in critical habitat. And I would agree with Lynn that, you know, you're seeing so many of the important resources within the department being devoted to dealing with this litigation, but it's a symptom of a law that needs to be dealt with. And when you're representing private clients or public sector clients like we do, that are affected by critical habitat, sometimes you have no choice but to sue. When you're looking at the effects of critical habitat, which I would submit does not really promote recovery but it has a disincentive of redlining private property and dissuading folks from taking proactive measures, property owners, to promote recovery, to enhance recovery, to do what's right, then I think you've got to change the law. It's not working. There's a disconnect between critical habitat and recovery that the Pombo bill is indeed going to address.

And that leads me to the third major flaw, inadequate incentives. And you know I must certainly commend the Department of Interior for working very strongly in enhancing and expanding the various landowner incentives that are out there; the cooperative agreements, the Safe Harbor programs. They're all great. Candidate conservation agreements. There's a great sort of, you know you want to encourage this sort of biodiversity ethic on the part of land owners and encouraging them to do the right thing. But that's not enough. I mean we live in a market based economy and unfortunately without having economic incentives and without facing disincentives and getting away from disincentives and putting a positive incentive based approach, property owners are not going to cooperate. Fundamentally we're facing an unreality if we think that property owners in this country, that this market based economy, is going to deal with these issues unless you create positive economic based incentives. And unfortunately, the way I see the act right now, it does not promote those results. When you're dealing with so many species that are on private lands, whether you're dealing with pygmy owls in Arizona, you look at the pervasive litigation that's gone around that issue. So many private land and land owners have to deal with that, in many ways they're trying to find ways not to have species on their property or to cover up the existence of those species because they know that it is a disincentive. It's going to make it very difficult to make sound land use decisions. It's not going to promote stewardship that is really, really necessary under these circumstances.

We've seen, in terms of these disincentives, when you're dealing with a Section 7 consultation process, very interesting, I mean that's sort of in many ways the heart and soul of the way the agencies interact when you have a federal handle. And many times we've seen interagency squabbles, in terms of Section 7 consultations, whether action is actually going to result in a take of a species. A lot of folks want to find a federal handle because they think that's a better way of approaching things through Section 7, rather than through the habitat conservation process. So that's a whole issue that's sort of a topic of you might say another discussion. But it's sort of a crazy quilt of how you solve the consultation issues, how you promote these kinds of incentives.

It's interesting, you know I heard Mike talk about the recovery of the Kemp's Ridley turtle and how that's doing better. I don't know whether Mike is aware of it, but a lot of that was done through the positive work of land owners. We represented a company in Padre Island, Texas that won the right to explore for oil and gas. And there was a whole issue dealing with habitat for the Kemp's Ridley turtle down in Padre Island, Texas. A prime area for habitat for that very endangered species. And through a cooperative arrangement with the Department of Interior and the Park Service we were able, through our clients, to allow for reasonable exploration and a stewardship program. And the result of that and several years ago was the best season for Kemp's Ridley production they'd had in years. And no evidence of any kind of impact from oil and gas operations in taking these species. In which our clients went out and worked really very hard in the stewardship, in recovering eggs and promoting and working with the understaffed Park Service officials and promoting recovery. In which there was this quid pro quo of working out the need for oil and gas exploration, the right to do that, and the ability to promote the recovery out that particular species. So indeed these opportunities do exist.

Now sort of commenting on where things are going legislatively. I submit that the Pombo bill is an excellent start. It tackles these issues head-on. This is not an issue of sort of going at things at the edges. It's really getting at the guts of what these problems are that I've tried to articulate today. I think it's critical. The critical element is promoting cooperation with states and tribes. Unfortunately, unlike a lot of environmental laws, and I've seen this over 30 years as an environmental attorney, the ESA does not really promote sort of the cooperative federalism that is at the heart of the Clean Water Act and the Clean Air Act. It is a command and control. It is a federally run program. And when you deal with a lot of state agencies, there are very well meaning and well qualified biologists and state wildlife agencies, a lot of database, a lot of focus on biodiversity. We have to promote those kinds of partner issues. We have to find a way to recognize that states play an active role and they should be an interactive partner with the federal agencies in promoting recovery. The law hasn't worked that way. The Pombo bill will achieve that if it's done the right way.

I think the whole issue regarding sunshine, that's another problem I see in the ESA today. So many decisions are made behind closed doors. You know, representing clients, it's like almost impossible to be able to comment on a draft biological opinion. Things are done between the action agency and the Fish and Wildlife Service. The bill will allow for public comment from all sides, giving folks a chance to deal with those kinds of issues. You have to deal with ESA in a public arena. You have to get it out there. There must be a database. You should be able to log into that database to find out information. That's the only way that the act is going to really achieve its lofty goals. Otherwise it's going to be based upon suspicion, innuendo and fear. And fear is not a way to promote biodiversity and recovery. And I think the Pombo bill will help achieve that.

Now I want to comment briefly, I know my time is sort of running up here, and I'll be happy to answer questions of course later, on the land owner compensation issues. You know in many ways they reflect sort of the good and bad. I mean I think the fundamental idea about property owners in this country being compensated for promoting a public use is sound. It's absolutely essential. We have to find a way to recognize that property rights must be protected. Now whether the Pombo bill achieves it the right way is a big question quite frankly. I mean I think the idea of the foregoing use, the idea of getting your determination from the Interior may have some problems in terms of whether it's going to create misinformation. You know, folks that may identify species on their property to get higher, highest and best use if it's not done the right way. On the other hand I think it does recognize the need that there must be a balance between public and private uses. And the government should pay and compensate in some way to recognize uses that are foregoing to protect protected species. I must say that I think the Crapo Lincoln bill has some very interesting approaches that may turn out eventually to be the best solution, particularly regarding tax credits and conservation benefits.

Let me just, how many of you are familiar with wetlands mitigation banking and that whole approach? Well, conservation banking is sort of the analog under the ESA. And what it does is create a market for preserving and protecting habitat. It's working in the wetlands context. You see markets emerging in Florida, folks buying up wetlands that are degraded or areas in need of restoration, restoring that. There's a whole infrastructure that's been created over the last 10 years to promote conservation of wetlands mitigation banking. Why can't that be done in the ESA context? When you're going out in parts of the country where there are multi-species, where habitat loss is a significant issue, why can't you promote and encourage folks to create habitat? And then sell credits. Create that incentive, that market based approach to achieve the ends of the act. Create those kinds of incentives. We can look back years hopefully in the future and say we did it right. We created these kinds of markets. And I think the Crapo Lincoln bill will help achieve that. And that's got to be tied to tax credits. The idea that if you're going to go ahead and encourage conservation backing you must give a tax break to folks that take that approach. So I find a lot of those concepts to be very interesting and may provide an avenue to try to deal with these very, very difficult, difficult issues.

Now the future. I'm going to sort of wrap up by saying that we can take the easy path, the Band-Aid solution, one in which that nibbles at the edges. It deals with a couple of these policy issues and says, well, the act's working. We haven't seen, species are not going extinct. That's sort of the argument that we've heard. You know it's not a failure because species are not going extinct. Or we could recognize the more important issue, and that is when the act was created it's conservation. It's getting species to a point that there are sufficient protections there without the ESA necessarily being in place. It's bringing species to that point of recovery. And it seems to me the only way you do that is to take the road less traveled and tackle these issues head-on. In my opinion that is the only road that will save the act from its own extinction. Thank you.

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