Testimony of

Robert D. Thornton

Counsel

Orange County Transportation Corridor Agencies

Before

United States Senate

Subcommittee on Fisheries, Wildlife and Drinking Water
Committee on Environment and Public Works

Regarding

Habitat Conservation Planning Under

Endangered Species Act of 1973

REGULATORY ASSURANCES ARE ESSENTIAL

FOR CONSERVATION PLANNING TO SUCCEED ON PRIVATE LANDS

i. INTRODUCTION & SUMMARY.

I am Robert Thornton, general counsel to the Orange County Transportation Corridor Agencies -- two regional transportation agencies in Orange County, California who have played a leading role in the Southern California Habitat Conservation Planning Program. These agencies are developing 68 miles of new regional transportation facilities. Since 1987, these agencies have spent well over $100 million for the conservation of wildlife habitat and other environmental protection measures.

I have labored most of my professional career to make the Endangered Species Act work on the ground -- in the real world. I am proud of the fact that I was the original author and advocate for what eventually became the habitat conservation plan ("HCP") amendments to the ESA in 1982. I have represented public agencies, landowners, developers, farmers and forest products companies in the negotiation of two dozen habitat conservation plans, including the first HCP approved by the Fish and Wildlife Service (San Bruno Mountain), one of the largest regional HCPs (Metropolitan Bakersfield), and one of the first habitat-based HCPs (Orange County Central/Coastal Natural Community Conservation Plan). Most recently, I acted as counsel to the Pacific Lumber Company with regard to the Headwaters Forest transaction and the related HCP concerning the Company's 200,000 acres in Humboldt County, California.

The views expressed today are mine alone, though I believe they fairly reflect the views of many of the private landowners who I have represented on endangered species matters for the last twenty years.

In Summary:

1 Habitat Conservation Planning is at a crossroads. Whether landowners will continue to cooperate in conservation planning depends on the continued viability of the assurances (or no surprises) rule and the other Babbitt reforms of the ESA. But certain elements of the environmental community are attempting to kill the Babbitt reforms through a concerted litigation strategy;

2 Fundamentally, the assurances rule is a device to allow the federal government to share risks and burdens between the federal government and private landowners. The policy allows landowners and the Services to enter into consensual agreements under which the landowners agree to commit to significant investments in endangered species protection now, in return for the federal government assuming the risk and burden of future protection measures in the event of unforeseen circumstances;

3 It is now widely accepted that habitat conservation plans are essential if the goals of the ESA are to be achieved. The National Academy of Sciences has commented favorably on HCPs because such regional conservation approaches are more consistent with principles of conservation biology than project-by-project, species-by-species regulatory approaches;

4 Emerging underground interpretations of the ESA within the agencies will seriously undermine landowner cooperation in habitat conservation planning efforts. These underground interpretations include attempts to impose a recovery standard on HCPs and efforts to define "jeopardy" by reference to impacts on sub-populations;

5 The authority in the ESA to prepare "habitat-based" HCPs should be solidified. One of the great potential advantages of the HCP process to the development community is the opportunity, in one planning effort, to resolve conflicts involving both listed and unlisted species through a single HCP. But the wildlife agencies and the environmental community are reluctant to agree to plans that absolve developers from the need to provide additional mitigation in the event that the unlisted species are subsequently listed -- especially if the biological studies did not specifically survey for and study the species; and

6 New market-based approaches to HCP planning are needed. Most of the HCPs developed to date have relied on command and control regulatory mechanisms. Typically, biological consultants identify areas that are the highest priority for future preservation. Lines are drawn around these areas prohibiting or greatly restricting development in the proposed preserve areas. Landowners developing habitat outside of the preserve areas are required to contribute to the acquisition of the preserves -- usually through the payment of development fees. This model can work fine as long as the owners of land within the preserve areas are willing participants. Often, this is not the case. We need to develop market-based approaches, which provide economic incentives to landowners to engage in conservation planning.

1 Habitat Conservation Planning is at a CROSSROADS.

Secretary Babbitt breathed life into Section 10(a) through the adoption of the "assurances" policy, candidate conservation agreements, the "safe harbor" policy, and various other measures to encourage landowners to participate in habitat conservation planning. Secretary Babbitt's initiatives have exceeded beyond anyone's wildest dreams. Four hundred HCPs have either been approved or are under development. Beginning in the early 1990's, landowners and local governments initiated so-called "habitat-based" HCPs. These new form of HCPs attempt to move away from the "species-by-species" approach of the early HCPs and resolve conflicts with development activities through an ecosystem or habitat-based approach. Collectively, these plans will address tens of millions of acres of land and the habitat of hundreds of endangered or threatened species.

It is now widely accepted that habitat conservation plans are essential if the goals of the ESA are to be achieved. The National Academy of Sciences has commented favorably on HCPs because such regional conservation approaches are more consistent with principles of conservation biology than project-by-project, species-by-species regulatory approaches.⁽¹⁾/ The former general counsel of the National Wildlife Federation has also recently documented the conservation benefits that are being realized through HCP planning efforts.⁽²⁾/ The National Academy of Sciences has identified six tenets of conservation biology:

1. Species well distributed across their range are less susceptible to extinction than species confined to small portions of their range.

2. Large blocks of habitat containing large populations of a target species are superior to small blocks of habitat containing small populations.

3. Blocks of habitat that are close together are better than blocks far apart.

4. Habitat that occurs in blocks that are less fragmented internally is preferable to habitat that is internally fragmented.

5. Interconnected blocks of habitat serve conservation purposes better than isolated blocks, and habitat corridors or linkages function better when the habitat within them resembles habitat that is preferred by target species.

6. Blocks of habitat that are roadless or otherwise inaccessible to humans are better than roaded and accessible habitat blocks.⁽³⁾/

The record of the last twenty years under the ESA strongly indicates that tenets are more likely to be achieved through regional conservation planning efforts than through project-by-project, species-by-species approaches.⁽⁴⁾/ This is the case because it is only through comprehensive, regional conservation programs that entire ecological systems can be effectively conserved.

Initially, the environmental community endorsed the notion of regional planning to conserve endangered species habitat and resolve conflicts with development.^/(5) The endorsement appeared to be driven by a sincere realization that the traditional regulatory mechanisms of the ESA could not address effectively the immense challenge of habitat conservation on private land. As a leading environmental advocate has stated:

Given that the ESA's only current tool to affect the behavior of private landowners - the taking prohibition - does not effectively address many of the most serious threats to rare species, and given that fear of that tool has sometimes prompted landowners to act against - rather than for - the best interests of such species, other conservation tools are clearly needed. Simply deterring harmful conduct - as the taking prohibition seeks to do - is not enough. It is necessary to encourage and reward beneficial conduct.⁽⁶⁾/

Certain segments of the environmental community - including groups that previously endorsed multi-species conservation planning -- are increasingly critical of HCPs and Secretary Babbitt's administrative reforms. A coalition of environmental groups have challenged the "No Surprises" rule under the ESA and the Administrative Procedure Act.^/(7) Lawsuits challenging the San Diego Multi-Species Conservation Plan have been filed as have sixty-day notices to challenge the Pacific Lumber HCP. Challenges to pending HCPs in other parts of the west are very likely. The outcome of this litigation will largely determine the future of habitat conservation planning on private land.

A number of innovations have emerged in recent years in the HCP process including the following:

1 The emergence of multi-landowner regional habitat conservation plans;

2 The development of multi-species and "habitat-based" conservation plans;

3 The issuance of the "no surprises" policy by Secretary Babbitt and the emergence of workable interpretations of the policy in several HCPs;

4 The use of free market mechanisms to conserve wildlife habitat; and

5 New funding sources.

Whether any of these new initiatives survive depends on the political debate in Washington, litigation over the "No Surprises" rule, and the fate of other attempts to undermine the Babbitt reforms of the ESA.

1 the assurances rule is essential to obtain the cooperation of the private landowners and LOCAL public agencies in habitat conservation planning.

None of the Babbitt reforms have generated as much interest, or as much controversy, as the "assurances" or no surprises policy. In simple terms, the policy provides that once the federal wildlife agencies have approved a HCP, they will not seek more land or more money from the HCP parties beyond the land and money committed through the HCP. Secretary Babbitt has eloquently described the rationale of the policy:

[W]e need to codify the success stories that I've told you about. The habitat conservation idea, signing these agreements that say we can accommodate resource use and development with protection guarantees. . . With it comes a concept that we call no surprises. It's a very important idea. We once again learned this not here in Washington but out on the ground in Southern California where the developers, after we had gone through months of the intense difficult negotiations on the ground, as we were nearing closure on the design of these preserves, . . . the developers were saying, "Now what happens if we sign onto this and a year or two from now the Fish and Wildlife Service comes back and says," '[W]e want a second bite.'

If we're going to make this Act work on the ground in the real world, and ask timber companies and developers to make those kinds of concessions . . ., we've got to establish one simple common-sense principle, and that is one bite at the apple -- take a good one -- thrash it out, then say to the developer, "Okay, a deal's a deal."⁽⁸⁾/

Although some environmental groups have derided the policy as a radical new idea, the policy was explicitly contemplated by Congress in 1982. The legislative history of Section 10(a) indicates that Congress contemplated that a Section 10(a) permit approval would also encompass the FWS' agreement not to impose additional mitigation, except as contemplated by the approved HCP. The conference report to the Act's 1982 amendments stated the following in this regard:

The Committee intends that the Secretary may utilize this provision to approve conservation plans which provide long-term commitments regarding the conservation of listed as well as unlisted species and long-term assurances to the proponent of the conservation plan that the terms of the plan will be adhered to and that further mitigation requirements will only be imposed in accordance with the terms of the plan.⁽⁹⁾/

This legislative history reflected the structure of the San Bruno Mountain HCP. The landowners and agency participants in the San Bruno Mountain HCP entered into an agreement which set forth the terms and conditions of the Section 10(a) permit. The agreement included covenants by the public agencies that they would not impose additional mitigation measures beyond the terms of the agreement.

The policy emerged out of the southern California NCCP plans. In the southern California NCCPs, the parties to the planning processes, including the FWS, have agreed to "no surprises" language in the implementing agreements that would preclude the imposition of additional mitigation requirements that would require the contribution of additional land or more money. The effect of this approach is to shift a certain amount of the risk of "unforeseen circumstances" to the government. Given the disproportionate share of the burden of endangered species protection that is borne by the private landowners, this shift is entirely appropriate.

In late 1996, several organizations challenged the "No Surprises" policy alleging that the policy was issued in violation of the Administrative Procedure Act and the ESA.^/(10) The plaintiffs alleged that the APA required the policy to be adopted after notice and comment procedures. In early 1997, the government settled the litigation by agreeing to promulgate the rule through a noticed and comment rulemaking proceedings. The agencies promulgated the rule February 23, 1998 with certain modifications.⁽¹¹⁾/ The plaintiffs in the earlier case have filed a new action challenging the rule on its face as a violation of the ESA and APA.⁽¹²⁾/

The "No Surprises" rule provides that an incidental take permit holder will not be required to provide more land, water, natural resources or financial commitments in the event of "unforeseen circumstances" if the HCP is being properly implemented. The term "unforeseen circumstances" means a change affecting a species or area covered by an HCP that could not reasonably have been anticipated and that results in a substantial and adverse change in the status of the covered species. If the Services determine that additional mitigation is required due to unforeseen circumstances, such action must be provided on federal land to the maximum extent possible. If those protective measures are insufficient, the Services may seek additional mitigation from the permit holder. Such additional mitigation must be limited to modifications of the HCP's operating conservation program for covered species, while maintaining the original terms of the HCP to the maximum extent possible.

The rule makes a distinction between "unforeseen circumstances" (events which are not reasonably foreseeable) and "changed circumstances" (events which are reasonably foreseeable). Unlike unforeseen circumstances, HCPs are required to include measures to address the effect of changed circumstances. In the event of changed circumstances the Services may require the incidental take permit holder to undertake additional mitigation, but only to the extent described in the HCP.

The defense of the rule is founded on the legislative history of Section 10. It is also founded on the principle of judicial deference to the interpretations of the administrative agency enunciated in Chevron U.S.A. Inc. v. Natural Resources Defense Council:

When a challenge to an agency construction of a statutory provision, fairly conceptualized, really centers on the wisdom of the agency's policy, rather than whether it is a reasonable choice within a gap left open by Congress, the challenge must fail. In such a case, federal judges - who have no constituency - have a duty to respect legitimate policy choices made by those who do.⁽¹³⁾/

Plaintiffs' argument that the rule violates the Services' Section 7 "no jeopardy" obligation has been seriously undermined by the FWS' promulgation of new standards governing the revocation of ITPs. In the regulation, FWS indicated that where use of their other authority would not avoid jeopardy, FWS will revoke an ITP to avoid violating the Section 10 permit issuance standards (which include the "no jeopardy" requirement).⁽¹⁴⁾/ While the ITP revocation rule will likely assist in turning back the challenge to the No Surprises rule, it may diminish the level of assurances that can be obtained by landowners through a HCP and, in turn, deter landowners from participating in regional conservation planning efforts.

Fundamentally, the no surprises rule is a device to allow the federal government to share risks and burdens between the federal government and private landowners. The policy allows landowners and the Services to enter into consensual agreements under which the landowners agree to commit to significant investments in endangered species protection now, in return for the federal government assuming the risk and burden of future protection measures in the event of unforeseen circumstances.

Antagonists to the policy in the environmental community argue that the policy is flawed because surprises are inherent in natural systems and because the federal government may not elect to spend sufficient resources to address unforeseen circumstances - even if the government has a legal obligation to do so. Ultimately, this is a policy debate over the extent to which federal taxpayers should shoulder the cost of endangered species protection, or whether the lion's share of this cost should continue to be borne by affected landowners and their customers.

III. emerging underground interpretations of the esa will undermine landowner cooperation.

A. Attempts to Impose the Recovery Standard on Section 10 Permits.

The statutory standards for issuing a Section 10(a) permit are relatively simple. The applicant needs to demonstrate that the plan will minimize and mitigate the impacts of the development activity and that the taking will not reduce the likelihood of the recovery and survival of the species in the wild. This latter standard is the regulatory definition of the "jeopardy" standard applicable to inter-agency consultations on federal agency actions under section 7(a)(2) of the ESA.^/(15)

In several recent HCP negotiations, the Fish and Wildlife Service ("FWS") and National Marine Fisheries Service ("NMFS") are attempting to require the HCP applicants to do more than minimize and mitigate and avoid jeopardy. They are seeking conditions in the HCP to achieve the recovery^/(16) of the species. For example, in several pending HCP on the west coast addressing the recently-listed coho salmon, NMFS biologists are seeking to impose restrictions on timber operations that NMFS asserts are necessary to achieve the recovery of the coho salmon. In other HCPs involving the marbled murrelet, the FWS is seeking to define "jeopardy" by reference to the impacts of the HCPs on sub-populations of murrelets within "conservation zones" in order to achieve certain recovery goals identified in the draft recovery plan.

These agency demands are well beyond the requirements of the ESA. The section 7 regulations define the term "jeopardy" narrowly. The term "jeopardy" is defined to mean:

[T]o engage in an action that reasonably would be expected ... to reduce appreciably the likelihood of both the survival and recovery of a listed species in the wild....⁽¹⁷⁾/

The preamble to the regulations explained that the word "both" was added to the definition to make it clear that "to find that an action is likely to jeopardize a listed species . . . the Service must identify detrimental impacts to 'both the survival and recovery' of the listed species."⁽¹⁸⁾/ The FWS and NMFS explicitly rejected proposed definitions of jeopardy that would have expanded the definition to include actions where the impact did not jeopardize the survival of the listed species. For example, FWS and NMFS rejected a definition of jeopardy that would have required a jeopardy finding when there was "injury to recovery for an already depleted species."⁽¹⁹⁾/

The agencies' suggestion that HCP applicants are required to achieve recovery standards also ignores clear distinction in the ESA between the obligations of private parties and those of federal agencies. A fundamental precept of the ESA is that the federal government in general and the Departments of Interior and Commerce in particular have special obligations under the ESA which are above and beyond the obligations of the private sector and state and local governments. Under section 7(a)(1), the Secretary is required to take actions in furtherance of the purposes of the ESA.⁽²⁰⁾/ The courts have interpreted this provision to impose special burdens on Interior and Commerce which do not apply to other federal agencies -- let alone non-federal entities.⁽²¹⁾/

B. Attempts to Define "Jeopardy" With Reference to Sub-Populations.

The Services' formal interpretation of the jeopardy standard (as enunciated in the section 7 regulations) is in sharp contrast to the assertion of certain Service representatives that it is appropriate to define jeopardy by reference to the impact on a sub-population of a listed species. If "injury to recovery for a depleted species" does not constitute jeopardy (as the FWS concluded in the section 7 regulations), then it is difficult to understand the basis for a claim that jeopardy can be defined by reference to injury to a sub-population.

The attempt to define "jeopardy" by reference to impacts to sub-populations is also contrary to the clear Congressional directive to limit the regulatory reach of section 7 of the ESA to distinct population segments and higher taxonomic units. During the consideration of the 1979 amendments to the ESA, Congress debated extensively an amendment recommended by the General Accounting Office to eliminate the authority to list separate populations. Although Congress ultimately retained the FWS' authority to list "distinct population segments" of vertebrate species, it made it clear that it was retaining this authority in the ESA to provide the Services with greater (not less) management flexibility. Congress further emphasized that the population listing authority should only be utilized in very limited circumstances. The Report of the Senate Committee on Environment and Public Works on the 1979 amendments stated the following:

[T]he General Accounting office recommended that the subcommittee consider an amendment . . which would prevent the FWS from listing geographically limited populations. . . . [U]nder the GAO proposal FWS would be required to provide the same amount of protection for the bald eagle population in Alaska, which is healthy, as for the bald eagle population the conterminous states, which is endangered.

[T]he committee is aware of the great potential for abuse of this authority and expects the FWS to use the ability to list populations sparingly and only when the biological evidence indicates that such action is warranted.⁽²²⁾/

In other words, Congress authorized the listing of distinct populations in limited circumstances and only because it wanted to provide the FWS with greater management flexibility under the ESA. Throughout the lengthy ESA debate preceding the 1978, 1979 and 1982 amendments, no one suggested that the section 7 "no-jeopardy" standard could be applied to sub-populations. As the above legislative history indicates, Congress considered eliminating entirely the authority to list distinct populations.⁽²³⁾/ It intended that the listing of separate populations should be a rare event. It never intended or contemplated that the jeopardy requirement would be applied to units below the population level.

The above agency demands, if they become established agency policy, will almost surely put the brakes on the recent increase in regional habitat conservation efforts. If the FWS' proposed standard were to be applied to other HCPs, it is extremely doubtful that landowners and local agencies would agree to participate in conservation planning for unlisted species.

III. esa authority to prepare "habitat-based" plans should be solidified.

Over the last decade, HCPs have become increasingly complex and sophisticated. They have grown from the relatively small scale of the San Bruno Mountain HCP (3,000 acres; three species) to large scale regional plans (such as the Metropolitan Bakersfield HCP) which addressed dozens of species over hundreds of square miles of habitat.

The movement toward the development of large scale, multi-species HCPs is driven by two primary factors:

1. The recognition that regional conservation issues often can only be effectively addressed on a regional basis; and

2. The reluctance of private landowners to commit to permanent restrictions on development and other costly conservation measures in the absence of protection against additional regulatory restrictions as a result of future listings.

One of the great potential advantages of the HCP process to the development community is the opportunity, in one planning effort, to resolve conflicts involving both listed and unlisted species through a single HCP. The inclusion of unlisted species in a plan is important because it provides some level of certainty that the FWS will not impose additional obligations on the permit applicant in the future in the event of the listing of a species.

The conference report to the 1982 amendments expressed the congressional intention that HCP's not be limited to resolving conflicts involving only listed endangered and threatened species.⁽²⁴⁾/ But the wildlife agencies and the environmental community have been reluctant to agree to plans that absolve developers from the need to provide additional mitigation in the event that the unlisted species are subsequently listed -- especially if the biological studies did not specifically survey for and study the species.

The Stephens' kangaroo rat HCP in Riverside County, California is a good example of the folly of focusing a long-term HCP on a single species. Acquiring the proposed kangaroo rat reserves has cost tens of millions of dollars, yet there is no assurance that public acquisition will protect other species in the area sufficiently to obviate their listing under the ESA. Subsequent to the initiation of the Stephens' kangaroo rat HCP, the FWS listed the coastal California gnatcatcher and the quino checkerspot butterfly which are also found in Riverside County. There is very little enthusiasm in the development community for the imposition of development fees, and the expenditure of enormous resources, necessary to protect the kangaroo rat only to turn around and confront the same problem with the gnatcatcher and the quino checkerspot.

The HCP process underway for the habitat of the gnatcatcher in Southern California have broken new ground on this issue. Certain of these so-called "Natural Community Conservation Plans" (or "NCCPs") have been developed using "target" or "indicator" species as planning surrogates for a larger list of species that occupy the coastal sage scrub ecosystem. A committee of nationally-recognized conservation biologists endorsed the target species approach.

Secretary Babbitt approved the first NCCP plan -- the plan for the Central/Coastal portion of Orange County, California -- in July 1996. The FWS approved a second plan, for the southern portion of San Diego County, in late 1997. The Orange County plan establishes a reserve of over 37,000 acres and comprehensively resolves conflicts involving development within the coastal sage scrub habitat of the California gnatcatcher and a large number of other species.

The biological rationale for the NCCP approach is that the gnatcatcher and the other target species are strongly associated with coastal sage scrub habitat in southern California, and thus, the adequacy of the protections for the target species will be a test of whether the HCP has adequately addressed the conservation of the coastal sage scrub system. The target or indicator species approach now being utilized in the NCCP process has also been advocated for HCP planning efforts in other parts of the country.

In order to provide the kind of assurances typically required by banks in order to obtain project financing, Congress may need to amend the ESA to authorize explicitly the use of "target" and "indicator" species in the preparation of HCPs, and to authorize the issuance of a Section 10(a) permit for all species found within the habitat types addressed in the HCP, whether or not such species are specifically identified in the HCP.⁽²⁵⁾/ in the winter and spring of 1996, a coalition of environmental, real estate, timber, urban water, and state fish and game agency interests negotiated a set of amendments to the ESA to codify the NCCP approach in the ESA and explicitly to authorize the use of "indicator" species in habitat conservation planning.⁽²⁶⁾/ This effort failed - in part due to the continuing ESA gridlock in Congress, but also due to opposition from certain segments of the environmental community who are antagonistic to any form of regulatory assurances for private landowners.

iv. new conservation planning approaches are needed to stimulate pro-active conservation planning.

Most of the HCPs developed to date have relied on command and control regulatory mechanisms. Typically, biological consultants identify areas that are the highest priority for future preservation. Lines are drawn around these areas prohibiting or greatly restricting development in the proposed preserve areas. Landowners developing habitat outside of the preserve areas are required to contribute to the acquisition of the preserves -- usually through the payment of development fees.

This model can work fine as long as the owners of land within the preserve areas are willing participants. Often, this is not the case. Unless the agencies are prepared to acquire all private parcels within the preserve areas at fair market value without deducting for constraints imposed by the ESA, the HCP soon devolves into a zero sum game with distinct winners and losers. In the case of the one HCP in which the preserve areas include thousands of landowners -- the HCP for the Stephens' kangaroo rat in Riverside County, California -- many of the landowners questioned the benefits of the HCP and, for some time, opposed it.

The HCP process needs a new approach to address this problem -- an approach that eliminates the zero sum game problem by allowing landowners that own valuable habitat to realize economic value from the conservation and enhancement of that habitat. One approach, proposed in Kern County, California, is a market-based system that would allow landowners to create conservation credits by dedicating or enhancing habitat and then sell those credits to developers as mitigation for impacts on wildlife habitat. Using this approach, the preserve system would emerge from market-based transactions rather than command and control zoning regulations.

The plan under consideration in Kern County includes elements of a traditional regulatory component and a market-based system. Market driven transactions will determine the size, shape, timing and location of the preserves within broader "conservation zones" identified by the agencies. But the plan also includes a "safety net" that prohibits development receiving authorization under the HCP from exceeding a limit or "cap" on development in the conservation zones.

A market-based system relies on the efficiency and creativity of the marketplace, rather than a command and control planning system to ensure the conservation and enhancement of natural resources for the protection of endangered species. A market-based approach has a number of important potential advantages. First, it avoids the zero sum game and resulting political and legal problems. Second, it ensures that the conservation plan that emerges will in fact reflect a deliberate conservation strategy rather than simply a politically feasible planning arrangement. Market-based strategies hold out this promise because the transactions using habitat credits would be required to conform to the underlying conservation strategy of the plan.

Third, the market-based approach could be structured to provide strong incentives to landowners to restore habitat on their property to make money. Encouraging restoration holds out the promise of expanding the balance of wildlife habitat and alleviating emotional fights over the development of the last remaining endangered species habitat in an area.

The approaches to market-driven solutions are potentially numerous. Over the last few years, we have seen the emergence of increasingly sophisticated and elegant market systems to encourage habitat conservation.⁽²⁷⁾/

²⁷/ For a discussion of one such market-based approach, see T. Olson, D. Murphy, and R. Thornton, The Habitat Transaction Method: A Proposal for Creating Tradable Credits in Endangered Species Habitat, in Fischer and Hudson, Building Economic Incentives Into the Endangered Species Act (Defenders of Wildlife 1993)