Docket ID No. FWS-R3-ES-2024-0132
RIN: 1018-BH72
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Introduction
One of the key tools available for federal agencies through the Endangered Species Act (ESA) framework is critical habitat designation. Critical habitats are geographic areas that impose consultation requirements for actors with a federal nexus seeking to use the land. On November 26, 2024, the FWS issued a proposed rule seeking to designate 1.6 million acres of land as critical habitat for the RPBB. The FWS argued that the area is essential to the species conservation at the time of designation thereby warranting the critical habitat designation.
While the critical habitat designation will confer important benefits to the species, the FWS ought to consider how this action will impact other environmentally-beneficial federal activities in order to ensure that the critical habitat designation does not inadvertently set back the federal government’s environmental goals. The FWS should also consider the feedback effects of critical habitat designation on the costs of federal agency actions that take place outside of the ESA framework or should provide a rationale for why they were not included in their incremental effects analysis.
Relevant ESA Rules
Since its passage in 1973, the ESA has successfully prevented species extinction throughout the US and abroad. In cooperation with state and local partners, the ESA provides a framework for the federal government to prevent extinction of and rehabilitate threatened and endangered species (listed species) through protection of both individual species and large ranges of habitat. The FWS and National Marine Fisheries Service (NMFS), referred to as the services, together administer the ESA.
Section 4
Section 4 of the ESA outlines the requirements for designating a listed species or critical habitat. When the services list a species as endangered, the species will receive all protections that are described by Section 4. If the species is listed as threatened, then the respective agency will determine which of the protections the species will receive.
Section 7
Section 7 of the ESA outlines the compliance requirements for federal agencies including the required consultations if an agency's actions may impact a listed species or critical habitat. Importantly, Section 7 may also apply to private actors if the actions of the private actor have a federal nexus (e.g. receives federal funding, permitting, or other governmental support). The consultation process begins with a determination of whether the action impacts a listed species or critical habitat. If it does, consultation with the services begins either with an informal consultation where the agency responsible for the action collaboratively determines if there will be an adverse impact on the species. If the services determine that there is no impact, then the process ends. If the services determine that there will be an impact, the action undergoes a formal consultation including the submission of a biological assessment. At the end of the process, either of the services determines that there is a no jeopardy determination thereby allowing the action to continue with agreed upon mitigation measures. If there is a jeopardy determination, then the action must proceed with the adoption of reasonable and prudent alternatives.
Section 9
Section 9 of the ESA outlines the protections given to listed species or critical habitat. They may include prohibitions on any of the following: 1) importing or exporting a species into or out of the United States; 2) the take of a species within the US, its territories, or the ocean; 3) possessing, selling, or transporting the species; 4) delivering, receiving, transporting, or selling between states or abroad; and 5) violating any other of the services’ rules pertaining to the species. If a species is listed as threatened, the services will determine which protections that species receives. If they are listed as endangered, the services provide the species with all Section 9 protections.
Compliance with Regulatory Analysis Requirements
Incremental Effects Methodology
Executive Order 12866 establishes expectations for regulatory bodies, namely that:
Federal agencies should promulgate only such regulations as are required by law, are necessary to interpret the law, or are made necessary by compelling public need, such as material failures of private markets to protect or improve the health and safety of the public, the environment, or the well-being of the American people. In deciding whether and how to regulate, agencies should assess all costs and benefits of available regulatory alternatives, including the alternative of not regulating.
50 C.F.R. § 424.19 requires the services to employ incremental analysis for the consideration of economic and national security impacts of the proposed critical habitat designation or species listing. This approach to evaluating projected impacts compares the status quo without critical habitat designation to a hypothetical scenario in which the proposed area receives critical habitat designation. Although the species is required to have been listed as either threatened or endangered to receive the designation, the services are only required to evaluate the impacts associated with the critical habitat designation and not the listing.
Importantly, the ESA is a procedural law and as such, does not confer specific consequences onto the designated area. Thus, the primary impacts considered by the incremental effects approach are associated with the consultations themselves rather than the hypothetical substantive outcomes associated with critical habitat designation. To this end, there are four costs that may be considered in the analysis: 1) administrative efforts associated with designation; 2) conservation measures; 3) requirements triggered by state law; and 4) perceptional effects on the value of land.,
The incremental effects analysis may use either a qualitative or quantitative approach to the analysis of the regulation. Federal agencies, as well as ecologists and natural resource economists, have previously noted the difficulty of estimating the monetary value of ecosystem services and natural capital arguing that trying to quantify the dollar value of natural resources may be difficult because of a lack of data on individual species and because the value of natural capital is often undervalued in a market setting., This, they argue, provides a rationale for the services use of qualitative analysis in species listing or critical habitat designations.
Proposed Rule
History of Rulemaking
Since 2000, scientists have documented declines in the range and population of the RPBB. Responding to this decline, Canada listed the species as endangered in 2012, while the International Union of Conservation Red List listed the species as endangered in 2015., In 2016, the FWS conducted a species status assessment. The FWS argued that the RPBB was facing threats from pesticides and introduced pathogens, along with stressors from habitat loss, climate change, and non-native bees. This was followed by a final rule that led to an endangered species classification of the RPBB the following year.
The proposed rule to classify critical habitat for the species came in 2017, however, the FWS ruled that critical habitat was not determinable due to the lack of complete data regarding the life history of the species. The Natural Resources Defense Council (NRDC) filed a lawsuit against FWS following the “not determinable” classification. The settlement agreement between the FWS and NRDC required the FWS to either submit a final rule for critical habitat designation or submit a “not prudent” determination prior to July 31, 2020. FWS reviewed the species the following year using more complete life data and determined that a critical habitat designation would not be prudent as the species is considered a habitat generalist and is flexible in its habitat requirements. Environmental groups appealed the determination, arguing that the not prudent determination was a violation of the Administrative Procedure Act’s arbitrary and capricious standard. The DC District Court ruled against the FWS. As a result of the case, the FWS was required to issue a rule designating critical habitat for the species by November 20, 2024 with a finalized designation prior to October 31, 2025.
Proposed Critical Habitat
The proposed critical habitat includes 1,636,746 acres across 33 counties in 6 states across a total of 14 units. The land is 83% privately owned, 9% state owned, 8% federally owned, and under 1% tribally owned. The determination of critical habitat areas was based on the presence of multiple interacting colonies. Areas were included if they contained the necessary physical and biological features for the species’ survival, as well as if they needed special management considerations for protection. The physical and biological features analyzed by the FWS included upland forest interior with a particular focus on the area proximal to the forest’s edge with well-drained soil and native floral resources. Areas were further included if they were susceptible to ground disturbance or compaction activities, habitat management, forestry activities, actions that facilitate flooding, actions that increase demand for floral resources, and pesticide applications.
Importantly, the critical habitat designations contained large areas of continuous land. As these areas may contain developed territories, the FWS excluded physical features such as buildings, pavement, or other structures; however, lands immediately adjacent to these physical structures were not excluded. Lack of genetic distinction between colonies was also used to exclude areas followed by exclusion of areas impacted by pesticides or managed bees.
Regulatory Analysis
Non-ESA Environmental Activities
The ESA’s conservation goals require that agencies will undergo additional Section 7 consultations in areas overlapping with critical habitat. This could inadvertently undercut the ability of agencies to perform other environmentally-beneficial activities. In particular, hazardous waste and pollution cleanups could face significant administrative barriers resulting from critical habitat designation. Under 40 CFR 270.3(c), Resource and Conservation Recovery Act (RCRA) and Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) require ESA consultation prior to the execution of clean-up activities.
While Section 7 consultation would be required irrespective of critical habitat designation due to the federal nexus of these actions, the consultation process would be significantly shortened should they not take place in critical habitat areas. Indeed, this would eliminate the need for a Biological Assessment related to habitat designation. The proposed rule does exclude developed areas from designation, likely eliminating RCRA/CERCLA sites in developed areas; however, this does not include a) the territory immediately adjacent to the developed areas which may also be part of the RCRA/CERCLA site nor b) RCRA/CERCLA sites that do not include buildings, pavement, or other structures.
This issue is not limited to RCRA/CERCLA cleanups. The proposed rule notes that habitat management activities – including prescribed burns – could require special management considerations under the designation. Multiple federal agencies use prescribed burns either as a conservation measure (e.g. USDA-NRCS and DOI-BLM) or as a method to reduce wildfire risk (e.g. DOI-BLM)., Notably, burns are only included in the analysis as a potential harm to the RPBB, however, few details are provided for why the agency only considers this to be a harm. Importantly, additional permitting requirements for prescribed burns could undercut the ability of federal agencies to engage in wildfire management efforts. Given the marked increase in major wildfires – including those on federal lands – the financial burden associated with delays in prescribed burns could be significant.
Pollinator Density
The statutory requirements for the methodological approach of the incremental effects analysis require that the agency consider the costs associated with discretionary actions, as well as administrative efforts resulting from the habitat designation. While the incremental effects analysis correctly includes the effect of critical habitat designation on RPBB populations, it only includes it as a cost associated with ESA designation and associated consultations but not the spillover effects that it may have on other federal agency conservation programs. That is, as critical habitat designation preserves or increases bee populations, similar federal conservation or habitat management programs may experience spillover effects resulting from the benefits of species and habitat conservation under the critical habitat designation. That is, if RPBB populations are projected to increase or stabilize under critical habitat designation, other federal agencies with geographically adjacent habitat management programs would benefit from a lower strain on their own conservation resources – an economic impact unaccounted for in the incremental effects analysis. This, of course, does not include the private impacts associated with enhanced natural capital including pollination, food production, and indirect impacts on other ecosystem services.
Perceptional Effects
The consideration of perceptional effects is a statutory requirement for the incremental effects analysis; however, it may be excluded from documentation if the perceptional effects are considered to be minimal. For this proposed designation, agency rulemakers opted to exclude perceptional impacts from the incremental effects analysis. Indeed, FWS has suggested in previous rulemakings that perceptional impacts are minimal and a lack of data availability would make such analysis difficult. Of the few empirical studies connecting the ESA and private market impacts, there is a lack of consideration of the specific causal pathway between designation and perception, nor is there consideration to the perceptional versus other non-perceptional market impacts., Previous researchers, however, have proposed several mechanisms that could explain the connection including the 1) availability of substitute sites for the proposed activity; 2) previous experience with Section 7 consultations; 3) economic significance of proposed activity; 4) baseline demand for land use; and 5) necessary to time to complete permitting requirements absent Section 7 consultations. These suggestions could warrant consideration.
Notably, earlier rulemakings have qualitatively described the potential behavioral consequences of critical habitat designations including encouraging private landowners to preemptively destroy sensitive land to avoid critical habitat designations. The services have further noted that they seek to prevent these behaviors by identifying the existence of plans and partnership agreements that incentivize landowners to further the conservation of a species allowing them to exclude certain areas from critical habitat designation. Such agreements, however, are not identified within this rulemaking.
Recommendations
Recommendation 1: FWS should exempt RCRA/CERCLA sites, as well as the immediately adjacent land, from critical habitat designation.
Non-ESA programs that prove beneficial to the RPBB population should receive special consideration when designating critical habitat. In particular, RCRA/CERCLA hazardous waste cleanups warrant attention, and the FWS should consider ways to reduce EPA’s permitting burden for these programs. One potential avenue to reduce this burden would be to exempt RCRA/CERCLA sites, as well as the immediately adjacent areas, from the habitat designation. While the EPA would still have the statutory obligation to consult the FWS regarding whether the area has a habitat designation, they would not have to undergo the same Biological Assessment that would be required if the site was found to have a critical habitat designation. This would result in a significantly shortened ESA timeline compared to an ESA process with formal consultation requirements.
Recommendation 2: FWS should consider the effects of critical habitat designation on the demand for other federal habitat management programs
The purported benefits of critical habitat designations are not limited to RPBB conservation. Species and habitat conservation related to critical habitat designations reduce the demand for similar habitat management programs elsewhere among federal agencies. The incremental effects analysis, however, fails to include these displacement effects as an economic impact in the analysis. While there isn’t a need to quantify the precise effect, it is important to note that agencies receive an indirect benefit through the lower demand for agency action through other habitat management programs.
Recommendation 3: FWS should provide a rationale for their exclusion of perceptional effects and clarify if areas were excluded from designation because of conservation agreements with landowners
The exclusion of perceptional effects is warranted under an incremental effects analysis that leverages quantitative methods, as the lack of available data makes such analysis difficult. The analysis in this rule, however, uses a qualitative approach, making such analysis more accessible to the FWS. Given the previously identified causal pathways between critical habitat designation and perceptional effects on markets, the FWS should consider the effect of the designation on private markets through these pathways, even if that consideration is qualitative. At the very least, a rationale should be provided for why perceptional effects were excluded given the agency’s statutory authority to include them in this analysis.