Perverse Incentives and Safe Harbors in the Endangered Species Act: Evidence from Timber Harvests Near Woodpeckers

The Endangered Species Act creates perverse incentives for private landowners to destroy potential habitat in order to prevent endangered species from moving onto their properties. Federal agencies recognize these incentives and have tried to counter them with safe-harbor programs that allow landowners to voluntarily provide conservation in exchange for more regulatory certainty. Congress and agencies are both interested in shifting enforcement of the ESA toward this type of voluntary conservation, but there is little evidence of the effectiveness of these programs. This paper uses parcel-level data from federal agencies to provide the first empirical estimates of the effectiveness of a federal safe-harbor program. I find evidence that the program successfully decreases timber harvest behavior that appears to be targeting potential habitat. Based on estimates from both triple-difference and matching models, participation in the safe-harbor program is associated with a 7 to 13 percentage point decrease in harvest activity. The safe-harbor program holds promise to conserve imperiled wildlife while allowing landowners' greater flexibility to maintain traditional land uses.