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, W AIS Document Retrieval u02G95 The Consequences of Designation Section 7 of the Act requires that Federal agencies refrain from contributing to the destruction or adverse modification of critical habitat. This requirement is in addition to the prohibition against jeopardizing the continued existence of a listed species, and it is the only mandatory legal consequence of a critical habitat designation. An understanding of the interplay of the "jeopardy" and "adverse modification" standards is necessary to the proper evaluation of the prudence of designation as well as the conduct of consultation under section 7. Implementing regulations (SO CFR part 402) define "jeopardize the continued existence of" and "destruction or adverse modification of" in virtually identical terms.- Jeopardize the continued existence of means to engage in an action "that reasonably would be expected * * * to reduce appreciably the likelihood of both the survival and recovery of a listed species. " Destruction or adverse modification means an "alteration that appreciably diminishes the value of critical habitat for both the survival and recovery of a listed species. " Common to both definitions is an appreciable detrimental effect on both survival and recovery of a listed species, in the case of critical habitat by reducing the value of the habitat so designated. Thus, actions satisfying the standard for adverse modification are nearly always found to also-jeopardize the species concerned, and the existence of a critical habitat designation does not materially affect the outcome of consultation. This is in contrast to the public perception that the adverse modification standard sets a lower threshold for violation of section 7 than that for jeopardy. In fact, biological opinions which conclude that a Federal agency action is likely to adversely [[Page 39132]] modify critical habitat but not to jeopardize the species for which it is designated are extremely rare historically, and none have been issued in recent years. Scope of Analysis Given the difficulty of separating the independent incremental effects of designation of critical habitat from those associated with the listing of a species, it should not be surprising that the approach to economic analysis is problematic. A recent analysis for the designation of nearly 4 million acres of critical habitat for the marbled murrelet concluded, in part, that the designation "is not likely to restrict the activities of any federal agency" and that it "will not cause these agencies (the Forest Service and Bureau of Land Management) to manage federal lands in a manner that will have immediate, direct impacts on the flow of goods and services from these lands." Critics have complained that economic analyses of critical habitat designations greatly underestimate the effects of the ESA on the economy, or alternatively that environmental benefits are generally given cursory coverage. Both points of view have elements of validity. On the one hand, the effects of the ESA on society stem overwhelmingly from the protection afforded by the listing of species, but the tenuous effects of critical habitat designation are the only ones subject to the requirement of economic analysis. On the other hand, the object of the analysis is an examination of areas for possible exclusion from critical habitat, leading to a focus on possible deleterious economic effects that might provide grounds for exclusion, rather than the benefits society derives from the operation of the ESA. The Cost of Designation In a recent declaration filed in a Federal District Court, the Tuesday, July 22, 1997 Page 6 of21 2:0S PM