Discussion Paper

Identifying the Impacts of Critical Habitat Designation on Land Cover Change

Jun 17, 2015 | Erik J. Nelson, John C. Withey, Derric Pennington, Joshua J. Lawler


Under the US Endangered Species Act, regulators can confer a critical habitat designation on areas considered vital to the recovery of listed species—a move some say results in considerable economic consequences for landowners. However, an expert assessment of the impacts from 1992 to 2011 finds no significant effect on average.


The US Endangered Species Act (ESA) regulates what landowners and land managers can do on lands occupied by listed species. The act does this in part through the designation of habitat areas considered critical to the recovery of listed species. Critics have argued that the designation of critical habitat (CH) has substantial economic impacts on landowners above and beyond the costs associated with listing in general. Here we examine the effects of CH designation on land cover change from 1992 to 2011 in areas subject to ESA regulations. We find that, on average, the rate of change in developed land (urban and residential) and agricultural land is not significantly affected by CH designation. In addition, our estimate of the effects of CH designation is not strongly correlated with the costs of CH as predicted by economic analyses published in the Federal Register. While CH designation, on average, does not affect the overall rates of land cover change, CH designation does appear to modify the impact of land cover change drivers. Generally, land prices had more impact (statistically) on land cover decisions within CH areas than in areas subject to ESA regulations but with no CH designation. Land cover decisions in these latter areas tended to be driven more by clustering and land availability concerns. These trends suggest that CH designation has increased landowner uncertainty and that conversion to developed and agricultural use in CH areas, on average, requires a return premium. Overall, however, this different reaction to land prices in and outside of CH areas has not been strong enough to differentiate the average rates of developed or agricultural land change in CH areas versus areas subject to ESA regulations but with no CH designation.