President Orders Agencies To Adopt Earlier Consideration Of Economic Impacts From Critical Habitat Designations

On February 28, 2012, President Obama issued a Presidential Memorandum for the Secretary of the Interior, directing the Department of the Interior to revise its regulations regarding the evaluation of economic impacts associated with designating critical habitat under the Endangered Species Act (ESA). The Presidential Memorandum was issued in conjunction with a proposed rule to revise the critical habitat designation of the threatened northern spotted owl in the Pacific Northwest. The president's direction comes as part of the U.S. Fish and Wildlife Service's (FWS) efforts to improve regulatory efficiency pursuant to the January 18, 2011, Executive Order No. 13563.

Timing of EconomicCconsiderations Under the Endangered Species Act

Section 4(b)(2) of the ESA provides that "[t]he Secretary shall designate critical habitat . . . on the basis of the best scientific data available and after taking into consideration the economic impact, the impact on national security, and any other relevant impact, of specifying any particular area as critical habitat." 16 U.S.C. § 1533(b)(2) (emphasis added). Unless doing so would result in a species' extinction, the secretary may exclude any area from critical habitat designation if he determines that the benefits of exclusion outweigh the benefits of inclusion. Id. FWS and the National Marine Fisheries Service's (NMFS) (collectively, the Services) joint regulations affirm the duty to consider economic impacts prior to designating critical habitat. See 50 C.F.R. § 424.12.

The Services' current practice is to complete economic evaluations of the designation of critical habitat after the completion of the scientific analysis, rather than having them be completed simultaneously. As a result, the Services have released proposed critical habitat designations prior to the completion of the economic analysis, meaning that both the Services and the public do not have the benefit of such analysis when conducting their review of the proposed rule. The Presidential Memorandum directs the Services to promptly begin the process of revising the regulations to require that economic analyses be completed and made available for public review and comment at the time of the publication of the proposed rule for a critical habitat designation.

Exclusion of Private and State Lands

In the context of the spotted owl designation, FWS has been encouraged to balance the economic and public benefits associated with excluding some...