The Rise of Candidate Species:
Good News For Conservation Banking?

Jemma Denny

Environmentalists and businessmen alike are scrambling to keep species from becoming candidates for endangered status, and a conservation banking-based approach could provide land-intense businesses a system to voluntarily rescue threatened species before they reach the tipping point.

Environmentalists and businessmen alike are scrambling to keep species from becoming candidates for endangered status, and a conservation banking-based approach could provide land-intense businesses a system to voluntarily rescue threatened species before they reach the tipping point.

11 July 2012 | We all know what “Endangered Species” are, even if we’re foggy on how that status is determined. Globally, the International Union for the Conservation of Nature (IUCN) compiles its Red List of species that run the gamut from being vulnerable to threatened to extinct, while domestically it’s left to agencies like the Fish and Wildlife Service (FWS) to determine which species are legally recognized as endangered and protected.

Within the United States, however, “Candidate Species” like the Dune Sagebrush Lizard have been quietly taking up the spotlight.

These are species that have been short-listed for endangered status, and they moved to center stage last September after a settlement between FWS and two environmental non-profits – the Center for Biological Diversity (CBD) and the Wild Earth Guardians (WEG) – forced them onto the regulatory stage before they enter the danger zone. In so doing, the settlement provides a clear incentive for land-intense businesses to proactively – and voluntarily – take steps to protect valuable habitat. It may also provide a golden opportunity for conservation bankers and the environment.

The Settlement

The settlement came after decades of high-profile skirmishes over species like the Californian Condor, the Grey Wolf, and the Snail Darter. The two non-profits ratcheted up the pressure in 2007 with a campaign to petition the FWS to list those species they considered most overlooked.

That campaign generated a series of lawsuits that culminated in a September 2011 settlement where the CBD and WEG agreed to stop the continual listing litigation in return for agreement by the FWS to provide listing decisions on 841 plants and animals. As a result, in FY 2011, the FWS listed 539 species – more than in any previous year since the Act was signed 39 years ago.

The FWS are now required to decide upon nearly 300 “Candidate Species”, which gives each species a listing timeframe. The Lesser Prairie Chicken’s deadline, for example, is September 30, this year, and the Greater Sage Grouse is 2015. Once a species is listed, quite a bit of work and money must materialize so there is a formal process in place; several stages of sequential review, with many species given the ‘warranted by precluded’ status as higher priority species absorb the Services’ limited resources.

The landmark WEG settlement, the newly-definitive timeline, and the unprecedented number of Candidate Species coming up for listing are why Candidate Species are now such a priority.

Conflicting (Short-term) Interests

Listing is contentious because species like the Lesser Prairie Chicken, the Sage Grouse, and the Dune Sage Brush Lizard either have wide ranges or ranges in economically important areas or both. Listing the species and invoking Endangered Species regulations will directly effect large areas that are prime development locations for wind and solar power generation, oil and gas drilling, and ranching across the mid and southwest.

This has sparked pushback from land-intensive sectors, which claim endangered status could slow economic development by driving up compliance costs or causing project delays. The political climate of the early 2010’s with energy and the economy front-and-center make this even more challenging, although the magnitude of this economic impact involves a wobbly amount of future speculation.

And it’s this collision with the economy that is perhaps the most interesting, and most likely to drive ESA changes. On June 19, the Senate Committee on Natural Resources held a hearing provocatively entitled “Taxpayer-Funded Litigation: Benefitting Lawyers and Harming Species, Jobs and Schools“, which was just one element of the wider discussion many participants referenced over how Endangered Species policy becomes intertwined with economic development or outcomes, and how local and regional communities, and the American people as a whole see such issues of sustainability and development.

The Potential For Conservation Banking

No one really wants to see a species listed as endangered – FWS and environmental groups because it means another species is at risk; and industrial groups, because it means the cost of doing business just got higher.

That’s sparked efforts to either take pro-active steps to prevent the need to list, or obtain conservation and assurances now that carry through once listing occurs. This, in turn, creates an opportunity for existing conservation banks that are able to create some form of candidate species banking.

What has to Happen First

The recent Candidate Conservation Agreement with Assurances signed as the Texas Conservation Plan for the Dune Sagebrush Lizard provides a promising template, but species banking must meet the requirements of a diverse group of interests. It must be practical for the conservation banker or landowner, credits must be feasible for developers, and it must meet the species and legal responsibility of the Fish and Wildlife Service. Most fundamentally species banking is based on regulation and law, which necessarily changes between Candidate and Endangered Species classification.

It’s these legal differences that create the greatest challenge to Candidate Conservation Banking. The requirements are different between the two classifications because the standards go up when the species are listed. When the species is a Candidate, it’s reasonable to provide extra recognition to those pro-actively conserving species and habitat, compared to those just waiting for listing. When a species is listed, issues of ‘Incidental Take’ and addressing loss of habitat become relevant, so extra scrutiny is applied when giving credit for compensating for this.

So how do you reconcile all this in a single system that can withstand the likely change in species status, and the fundamental needs of all parties? As various suggestion are attempted and tried, those most involved with species credits – the conservation bankers and agency personnel who’ve made it possible – are concerned that marrying these two different legal items and standards might have counter-productive consequences. At a minimum there is a risk that in an effort to promote candidate conservation, good-faith compromise on the part of agencies might disrupt effective conservation. More dubious companies could take advantage of such a compromising attitude and try to torpedo the process by simply appearing to pro-actively conserve species, yet using agreements without the strength to actually do so.

At worst, integrating different standards and efforts to appeal to the widest group of landowners may ‘lower the standard’ and undermine the very conservation banking market aspired to. But it can be hard to listen to that group of conservation bankers because the overlap between higher standards for conservation and more expensive species credits appear as vested interests to the uninitiated. Yet given this Conservation Banking is the very industry that’s inspiring these new solutions for Candidate Species, there could be an important message here. Conservation bankers keeping an eye on their own bottom line have a larger vested interest in the long-term sustainability of their industry itself, already shown to conserve species habitat. Lucrative credit prices are the key to attracting more private landowners, so it’s actually essential to making Candidate Species Banking effective over the long-term, landscape level.

In fact, every stakeholder has a vested interest in keeping the highest possible standards, because anything less risks greater species and habitat loss – and when all is said and done more Endangered Species creates more of the very same problems all sides can agree are driving this issue across the nation.

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