Docket ID No. FWS-HQ-ES-2025-0039
RIN: 1018-B173
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Introduction
The Endangered Species Act (ESA) is a landmark piece of environmental legislation intended to promote the conservation and restoration of endangered and threatened species in the United States and abroad. Originally passed in 1973, the ESA was a response to the growing number of declining species and worries that industrial development was occurring without regard to the long-term effects on the environment. In passing the ESA, Congress established a series of environmental protections, including mandatory listing and recovery procedures for protected species, prohibitions on the taking of listed wildlife, requirements to protect Critical Habitats, and obligations for federal agencies to ensure that their actions do not jeopardize protected species.
Since it was passed, the law has generated controversy due to its burden on landowners and other stakeholder groups. As of 2025, 107.5 million unique acres of land are protected as Critical Habitat, underscoring the spatial intensity of the law and area protected under it.
While the effects of the ESA’s requirements on land is unclear at best, the additional layer of regulation adds administrative burdens to new development, including permitting hurdles for otherwise lawful uses of private property. At the same time, the law has prevented the extinction of over 99% of species that have been listed, including species such as the Bald Eagle, Whooping Crane, and American Alligator. This points to an ongoing policy discussion within the conservation community about how species protections interact with other societal interests.
Both the courts and Congress have dealt with this question of how to balance economic and conservation interests over the years. Tennessee Valley Authority (TVA) vs. Hill, a landmark ESA case, noted that the “plain intent of Congress in enacting [the ESA] was to halt and reverse the trend toward species extinction, whatever the cost.” Congress responded to this case when it passed the 1978 amendments establishing the Endangered Species Act Committee, colloquially referred to as the God Squad, which it authorized to exempt an agency action from Section 7 requirements if it was of national importance.
The subsequent 1982 amendments pushed back on economic considerations by requiring that species listings be conducted “solely on the basis of the best scientific and commercial data.” Notably, the same amendments did allow Critical Habitat designations to be made partially on the basis of economic considerations, underscoring the differential treatment of economic considerations between Critical Habitat designations and species listings. In November 2025, the FWS, along with NOAA, (the Services) proposed a rule to allow economic impacts to be incorporated into the administrative record for species listings. The text of the rule seeks to remove the phrase “without reference to possible economic or other impacts of such determination” from the end of 50 CR § 424.11(b), thereby realigning the phrase with the previously rescinded 2019 rule. However, the proposed rule provides little guidance on how the Services will measure economic effects. This comment reviews the methodological challenges and suggests adoption of a break-even approach, following guidance in the Office of Management and Budget’s Circular A4 (2003).
In enacting the ESA, Congress emphasized extinction prevention and habitat protection. This goal and the difficulty of quantifying species impacts suggest that a breakeven approach may be most conducive to presenting economic information for species listings. Unlike more traditional benefit-cost analysis (BCA), breakeven analysis asks how small the value of qualitative benefits or how large the value of qualitative costs would need to be for a rule to yield zero net benefits.
By applying this framework to both costs and benefits, agencies avoid selectively quantifying one side of the ledger while leaving the other qualitative, allowing for the quantification of welfare effects that may typically produce a wider range of estimates.