Who Owns Endangered Species?

In this paper, Jason F. Shogren and Gregory M. Parkhurst raise the question, who owns endangered species? The simple answer is that we all do. However, the authors note, that answer does not help us resolve the practical problem of ensuring the preservation of endangered species, especially the approximately 90 percent of those species whose critical habitats are on privately owned lands. Publicly owned endangered species on privately owned lands inevitably create a property regime conflict that federal agencies have attempted to defuse, to some extent, with safe-harbor and habitat-conservation plans. In addition, federal and state agencies, as well as nongovernmental organizations, have offered funding in the form of grants, loans, case payments, and tax allowances to private landowners who engage in habitat-protection, enhancement, or restoration activities. Whether such funding constitutes implicit compensation for a taking of private land for endangered species preservation is not the central question for Shogren and Parkhurst. Instead, they are concerned with the quality of habitat for species preservation, stemming from uncoordinated land management decisions of multiple private owners when species require relatively large, contiguous parcels of land crossing multiple private boundaries.

As the authors note, “voluntary compensation programs are not designed to address directly the biologist’s concern that landowners may not coordinate conservation efforts to create a contiguous reserve that falls across property lines. . . .” What is required is an incentive mechanism that will induce voluntary participation in species preservation while, at the same time, creating the necessary spatial configuration for effective preservation. Shogren and Parkhurst offer, as a potential solution to this two-part problem, agglomeration bonuses (a.k.a., “smart subsidies”), which provide higher levels of compensation to private landowners who retire land adjacent to other parcels devoted to species habitat. An experimental test of the agglomeration bonus confirms that it is a potentially superior tool of habitat preservation. It is “more biologically efficient at creating contiguous conservation reserves than current status quo policies of compulsion and a simple flat fee subsidy.”

This paper was presented at the Lincoln Institute’s conference entitled “Evolution of Property Rights Related to Land and Natural Resources” in 2010 and is Chapter 7 of the book Property in Land and Other Resources, edited by Daniel H. Cole and Elinor Ostrom.