taking seriously the ambiguities that initiate con- sideration of the SMS approach, attempts to rec-
oncile to pre-articulated social objectives miss the point. Ambiguities about how to balance current
concerns with duties to the future ‘compels a resource manager to regulate by consensus’
Farmer and Randall, 1998. Consensus processes can be focused by anchoring to relevant and
familiar issues. To the extent that the dimensions of preservation costs size and distribution are
immediate, these costs can serve as a touchstone.
Some scholars express legitimate concern that an unarticulated value for the full range of social
benefits of preservation disadvantages those pro- tections against clearly articulated costs Norton,
1995; e.g. in the rush to get something done the difficult-to-measure benefits of preservation may
not be fully considered. An alternative concern is that management practices for species preserva-
tion may frequently be delayed as is common under the ESA in measuring impacts and their
distribution. Such delay risks unnecessarily over- riding protection actions in the political consensus
process, since unmitigated costs can mount. The sooner these costs and their distribution are artic-
ulated, the less muddled the consensus process can become. Thus, working to some political con-
sensus on what constitutes intolerable cost is a central issue. Properly conceived, the SMS ap-
proach is a collective choice process and not just identification of safety standards.
3. Linking the ESA and the SMS approach
3
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1
. Conceptual links The ESA of 1973, as amended, contains several
provisions that are conceptually consistent with the SMS approach. While the initial orientation
of the ESA is towards protecting a listed species, information on economic consequences can be
used at several points in the process.
To be protected under the ESA, a species must be listed either as ‘threatened’ or ‘endangered’.
The listing decision is to be made utilizing the best scientific data available, and cannot be based on
any economic analysis. Once listed, critical habi- tat for the species must be proposed, and a recov-
ery plan developed by the implementing agency primarily the USFWS. The critical habitat desig-
nation process requires a draft economic analysis, which begins with a biological evaluation to ob-
tain habitat requirements, which are then con- verted into direct economic impacts by linking
habitat requirements to economic activities that must be altered. After public comment and input,
the final economic analysis is used along with physical and biological data as inputs into the
exclusion process. The ESA Section 4 requires consideration of economic and other relevant im-
pacts in deciding whether to exclude areas from the critical habitat. Such exclusion cannot jeopar-
dize recovery of the listed species and be likely to cause extinction.
Thus, in implementation the ESA directs that probable economic ‘impacts’ be considered in the
exclusion process, and this necessitates economic modeling e.g. input – output [I – O] or computable
general equilibrium [CGE]. While falling short of strict economic surplus measures, impact analyses
are often the only practical measure of economic consequences. Aside from this pragmatic perspec-
tive, changes in economic activity will often be focused on in the public debate over critical habi-
tat cases Berrens et al., 1998.
While the ESA permits exclusion only if the species is not threatened with extinction, it con-
tains a second level exemption opportunity be- yond the critical habitat exclusion process. This
additional opportunity comes under Section 7 in the form of special hearings. Section 7 applies
exclusively to federal agencies and requires that their actions not jeopardize the existence of the
species, or destroy or adversely modify designated critical habitat Rohlf, 1989. However, an appeal
can be made to an Endangered Species Commit- tee the ‘God Squad’, which possesses the author-
ity to permanently exempt species from ESA protection. The committee is composed of federal
cabinet-level members and an appointed represen- tative for each state involved.
An Endangered Species Committee exemption can only be made after it is determined that
development actions have no reasonable or pru- dent alternatives Rohlf, 1989, and the exemption
is in the ‘public interest.’ The Committee has the power to designate an administrative judge, secure
information, hold hearings, subpoena witnesses, and allow cross-examination. The type of infor-
mation that might be included in any particular hearing could be wide ranging e.g. economic
impacts, distributional concerns, and evidence on nonmarket values. In practice, the critical habitat
exclusion process is commonly used while the exemption process has been rarely used.
In summary, the exclusion process under the ESA allows the exemption of individual areas
from designated critical habitat if inclusion would entail severe economic impacts, and a second level
decision process can allow species to be com- pletely exempted from protection. Comparably,
the SMS approach would allow the extinction of a species if the economic consequences of preser-
vation were judged to be somehow intolerable, which might include distributional concerns.
Taken together, the ESA’s exclusion and exemp- tion processes are consistent with the extraordi-
nary decision making process of Randall 1991 under the SMS approach.
3
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2
. Related modeling considerations The previous discussion focused on conceptual
links between the ESA and the SMS approach. However, in practice the ESA requires that crite-
ria be developed for determining the severity of economic impacts for foregoing preservation ac-
tions. Criteria for such choices are not articulated in the ESA itself, and appear to be implemented
on a case-by-case basis. The related issue is that regional modeling decisions e.g. region of analy-
sis, choice of analytical method can affect the accounting
of aggregate
impacts and
their distribution.
Of concern is the role of distributional conse- quences in determining the severity of economic
impacts. Distributional considerations arise at both a spatial and a sectoral level, and the eco-
nomic analysis must choose the appropriate re- gion and level of sectoral detail. Much of the
design is left to the judgement of the analyst, and the choices are not innocuous. For example, these
modeling choices are likely to be connected to the exclusion criterion that is selected in any particu-
lar case. This is seen in the two case studies discussed below; they differ in that the endan-
gered fishes case addresses distributional conse- quences by assessing the geographic distribution
of impacts, while the owl case focuses on sectoral distribution.
Defining the region for analysis is always prob- lematic and somewhat imprecise. An artificially
small region may fail to capture all of the resource reallocation that accompanies the designation of
critical habitat, while a large region may mask the impacts imposed on a subset of the population or
particular sectors of the economy. The region must be sufficiently large to contain substantially
all of the direct and indirect impacts associated with habitat designation, but not so large as to
obscure impacts. The region must cover at least the areas that are expected to incur direct impacts
from preservation actions; extension to indirect impacts is less clear-cut.
4. Case studies described
