The Endangered Species Act (ESA) was enacted about 35 years ago and intended to protect endangered species. Under Section 9 of the act, “it is illegal for a private landowner to engage in activities that could harm an endangered species, including habitat modification, without first obtaining a federal permit”. Incurring in violations can result in heavy fines. This resulted in “preemptive habitat destruction”, which means that, when people or firms encountered an endangered species in their property, they would fear loss in the value of their property and either remove it or increase the exploitation rate of the land.
How would a better designed law protect endangered species without creating perverse incentives for the private land owners? How should it account for private incentives?