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INTRODUCTION Although it sometimes seems as if we have been debating endangered species issues forever, our federal endangered species law is a mere twenty years old. Society is just taking its first wobbly steps toward devising a system that will prevent extinction of the varied life forms on earth. We are still investigating new techniques and exploring innovative approaches for making endangered species recovery more successful and more acceptable to all citizens. Many experts have advised that economic incentives should be an important part of future endan- gered species recovery strategies. Consequently, in May of 1993, Defenders of Wildlife invited nationally recog- nized economists, policy experts, and agency representatives with extensive on- the-ground endangered species experience to submit papers on specific ways to build incentives into the Endangered Species Act (ESA). Fourteen responded, and we believe this publication represents the most exhaustive look at this subject to date. Too often, controversy over the ESA has been generalized and undefined. The authors of this publication have done an excellent job of narrowing the debate by identifying specific aspects of the law that most need improvement. In Chapter 5, Walter Reid makes the case that the ESA has been most successful in address- ing endangered species recovery on public lands. He points out that of the ap- proximately 74,000 endangered species consultations conducted by the U.S. Fish and Wildlife Service between 1987 and 1991, only 19 were terminated because of the ESA. He effectively argues that while a few actions have been quite contro- versial -what Secretary of the Interior Bruce Babbitt has termed "train wrecks" - most endangered species recovery issues on public lands have been resolved by modifying projects to allow them to proceed in a compatible way with endan- gered species recovery. On the other hand, virtually all the authors agree that the ESA's record on private lands is poor. A citation provided in Chapter 1 places the gravity of this problem in perspective: Fully fifty percent of the 728 species currently listed as threatened or endangered are found exclusively on private lands. By any measure, private landowner dissatisfaction with the ESA has escalated appreciably during the past decade. Our authors report that landowners increasingly feel they are being asked to carry the primary responsibility for endangered species recovery while the public at large enjoys the benefits. During the last year, the more extreme commodity interests -including some in the so-called "wise-use" movement -have raised the stakes by suggesting that implementation of the ESA represents a "taking" of private property. They call for full compensation by the federal government. Takings legislation has been introduced in the U.S. Senate by Senator Robert Dole (R-KS). Not surprisingly, it vii