The Endangered Species Act (ESA) (1) provides for the listing and protection of species that are found tobe "endangered" or "threatened" -- species that need conservation efforts because they might becomeextinct. The listing of a species as endangered triggers the prohibitions in the act against "taking"(killing or harming) individuals of the protected species, unless a permit is obtained to takeindividuals incidental to an otherwise lawful proposed action, or unless an exemption for theproposed action is obtained. Unauthorized taking of a listed species can result in civil or criminalpenalties. These prohibitions and potential penalties can affect various activities, including the useand development of land, with attendant economic impacts. Therefore, the extent to which likelyeconomic impacts can be taken into account under the ESA has been of interest. Some parts of theact relate to importation and commercial trading in listed species. (2) This report does not addressthose issues, but discusses the ESA generally and how some of its provisions, aside from thecommercial context, relate to the consideration of economic factors. It will be updated ascircumstances warrant. The ESA defines an "endangered species" as any species which is "in danger of extinctionthroughout all or a significant portion of its range." Excepted from this definition, however, are"species of the Class Insecta determined by the Secretary to constitute a pest whose protection underthe provision of this chapter would present an overwhelming and overriding risk to man." Thislanguage appears to recognize the economic or health threats that some insects present. A"threatened" species is one likely to become an endangered species within the foreseeable futurethroughout all or a significant portion of its range." The Secretary of the Interior (with respect to terrestrial species) and the Secretary ofCommerce (with respect to anadromous fish and certain other marine species) decide whether to lista species as endangered or threatened. The listing of a species triggers certain duties for federalagencies and applicants for federal permits, authorizations, or funding to consult with the Secretary(in practice either the Fish and Wildlife Service or the National Marine Fisheries Servicerespectively) if a proposed action may affect a listed species. This consultation will determine ifthe proposed action is likely to jeopardize the continued existence of a species or destroy oradversely modify habitat of a species determined by the Secretary to be critical. (3) If so, the Secretary is tosuggest reasonable and prudent alternatives to the proposed action that would avoid jeopardizing thelisted species. Listing a species as endangered also means that the prohibitions of the ESA regarding the"taking" of endangered species apply. "Taking" means to harass, harm, pursue, hunt, shoot, wound,kill, trap, capture, or collect, or to attempt to engage in any such conduct. (4) The meaning of "harm" iselaborated on in regulations to include destruction of habitat severe enough to actually kill or injurewildlife by significantly impairing essential behavioral patterns, including breeding, feeding, orsheltering. (5) Currentregulations provide that unless a special rule has been promulgated for a threatened species,threatened species shall receive the same protections as endangered species. (6) Exceptions to the takingprohibitions are allowed as a result of either the consultation process under Â§ 7 of the act, or underthe Â§ 10 provisions that allow "incidental take permits" to be issued. If a development or activity cannot be modified so that it avoids jeopardizing a listed species,the person or agency proposing the action must either desist, risk penalties for unlawful takes, orpursue the exemption process provided under the ESA to exempt that activity (not the species) fromthe penalties of the act. This report will discuss the role of economics in the listing of species, designation of criticalhabitat, the exemption process, and the development of recovery plans. The determination of whether a species should be listed as endangered or threatened mustbe based on several factors that relate to the surviving numbers of a species and threats to itscontinued existence, but do not include a consideration of the economic effects of listing. (7) While the origins of threatsto a species may be caused by development or other economic activities, listing determinations areexpressly to be made "solely on the basis of the best scientific and commercial data available." Theword "solely" was added in the 1982 amendments to the act (8) to clarify that thedetermination of endangered or threatened status was intended to be made without reference toextraneous conditions such as economic factors. The committee reports elaborated on this point andalso state that "commercial data" refers to trade data: ... The principal purpose of the amendments to Section4 is to ensure that decisions pertaining to the listing and delisting of species are based solely uponbiological criteria and to prevent non-biological considerations from affecting such decisions. Toaccomplish this and other purposes, Section 4(a) is amended in severalinstances.... Section 4(b) of the Act is amended in several instancesby Section 1(a)(2) of H.R. 6133. First, the legislation requires that the Secretary base hisdeterminations regarding the listing or delisting of species "solely" on the basis of the best scientificand commercial data available to him. The addition of the word "solely" is intended to remove fromthe process of the listing or delisting of species any factor not related to the biological status of thespecies. The Committee strongly believes that economic considerations have no relevance todeterminations regarding the status of species and intends that the economic analysis requirementsof Executive Order 12291, and such statutes as the Regulatory Flexibility Act and the PaperworkReduction Act not apply. The Committee notes, and specifically rejects, the characterization of thislanguage by the Department of the Interior as maintaining the status quo and continuing to allow theSecretary to apply Executive Order 12291 and other statutes in evaluating alternatives to listing. Theonly alternatives involved in the listing of species are whether the species should be listed asendangered or threatened or not listed al all. Applying economic criteria to the analysis of thealternatives and to any phase of the species listing process is applying economics to thedeterminations made under Section 4 of the Act and is specifically rejected by the inclusion of theword "solely" in this legislation. Section 4(b) of the Act, as amended, provides thatlisting shall be based solely on the basis of the best "scientific and commercial data" available. TheCommittee did not change this information standard because of its interpretation of the word"commercial" to allow the use of trade data. Retention of the word "commercial" is not intended,in any way, to authorize the use of economic considerations in the process of listing a species. (9) The conference report confirms that it was the intent of both chambers that economic factorsnot play a role in the listing of species for protection. Section 2 of the Conference substitute amends section4 of the Act in several ways. The principal purpose of these amendments is to ensure that decisionsin every phase of the process pertaining to the listing or delisting of species are based solely uponbiological criteria and to prevent non-biological considerations from affecting such decisions. (10) The Committee of Conference (hereafter theCommittee) adopted the House language which requires the Secretary to base determinationsregarding the listing or delisting of species "solely" on the basis of the best scientific and commercialdata available to him. As noted in the House Report, economic considerations have no relevanceto determinations regarding the status of species and the economic analysis requirements ofExecutive Order 12291, and such statutes as the Regulatory Flexibility Act and the PaperworkReduction Act, will not apply to any phase of the listing process. The standards in the Act relatingto the designation of critical habitat remain unchanged. The requirement that the Secretary considerfor listing those species that states or foreign nations have designated or identified as in need ofprotection also remains unchanged. (11) Therefore, the act makes it clear that the decision as to whether a species is endangered orthreatened is to be a scientific one in which economic factors do not play a part. Once thisdetermination has been made, however, economic considerations may be, and in some instancesmust be, considered in analyzing what actions may be taken. This process has been analogized tomaking a diagnosis of whether a patient has cancer solely on medical grounds, but later consideringeconomic factors in determining appropriate treatment once the patient has been diagnosed. In contrast to the process for listing a species as needing the protections of the ESA, in whichprocess economic factors are not to play a part, economic factors expressly are to be considered inthe designation of critical habitat for species. Concurrently with determining a species to beendangered or threatened, the Secretary "to the maximum extent prudent and determinable" is todesignate the critical habitat of the species. (12) When the Secretary designates critical habitat, the Secretary must take into consideration theeconomic impacts of doing so: on the basis of the best scientific data available and aftertaking into consideration the economic impact, and any other relevant impact, of specifying anyparticular area as critical habitat. The Secretary may exclude any area from critical habitat if hedetermines that the benefits of such exclusion outweigh the benefits of specifying such area as partof the critical habitat, unless he determines, based on the best scientific and commercial dataavailable, that the failure to designate such area as critical habitat will result in the extinction of thespecies concerned. (13) Therefore, although economic factors are not to be considered in the listing of a species asendangered or threatened, economic factors must be considered when deciding whether and whereto designate critical habitat, and some habitat areas may be excluded from designation based on suchconcerns, unless the failure to designate the habitat would result in the extinction of the subjectspecies.