Like many commentators who have gone before him, Jonathan Remy Nash argues that the Endangered Species Act's (ESA's) command-and-control structure produces results that "flout[ ] both science and efficiency." According to Nash, the ESA "fails to achieve species or habitat preservation in a cost-effective way," and its "inflexibility gives rise to initiatives that run counter to preservation and expansion of species' habitat."

Nash is correct on these points. The ESA's regulatory system can only react to development proposals at the time they are proposed by someone else. As a result, the U.S. Fish and Wildlife Service (FWS) (one of the agencies that administer the ESA) proceeds pretty much on a first-come/first-served basis, and its regulatory analyses are predictably piecemeal and myopic. Further, he is right about the perverse incentives. The rigid rules that kick in when a species is listed or when a listed species occupies theretofore unoccupied land can motivate landowners to develop their land before a species that lives on the land is listed, or to manage their land so as to discourage a listed species from inhabiting the land. Nash finds habitat conservation plans authorized under §10 of the ESA more attractive, but the transaction costs are still too high and the regulatory scope still too narrow. He quotes Richard Stewart approvingly to the effect that "[w]ithout further progress toward fungibility and commodity-like markets, resource-tracking systems are likely to remain . . . hostage to regulatory discretion in the permitting process."