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In his course "Natural Resources Law and Policy", Professor Jason Johnston
covers not only the law governing the acquisition of private rights in
natural resources such as water, timber, and wildlife, but also the law
and economics of public resource management. The course analyzes
the administrative law of public resource management (such as NEPA and
the Endangered Species Act (ESA)), and also explores alternative, market-based
management approaches. He analyzes the recent movement toward a transactional
approach to environmental protection (such as Habitat Conservation Plans
under the ESA) in a forthcoming article “The Law and Economics of Environmental
Contracts” in Environmental Contracts and Other Innovative Approaches to
Environmental Regulation, editors Dekeletaere and Orts.
Regulators, Developers, and Communities in Accord With many of the most egregious forms of pollution now reduced, environmental law and regulation is increasingly oriented toward ecosystem restoration and renewal. Environmental contracts are a cornerstone of restoration-oriented environmental law. For instance, under the leadership of Secretary of Interior Babbitt, over two hundred Habitat Conservation Plans (HCPs) under the federal Endangered Species Act have been negotiated since 1994.
HCPs represent a formal, legally binding agreement between regulators
and developers. Rather than simply enjoining development (as the
ESA’s private taking prohibition has been interpreted to require in some
circumstances), HCPs recognize that development itself may generate the
necessary capital to effectively preserve critical species habitat.
HCPs represent a compromise, but one in which local environmental groups
and local citizens play a much more important role than under traditional
regulation. While incomplete, our HCP study so far indicates that
you don’t have a successful HCP without some pretty strong local support
for preservation of the habitat. Often, an HCP provides general local
amenities by preserving open space. As a legal matter, this is not
what the Endangered Species Act was targeted to do. As an empirical
matter, this is one of the local benefits that predicts when an HCP will
be successful and when it won’t.
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