One thing you quickly find is that many people bring their own ideas of how economics works to the debates on conservation policy. Some of these ideas are quite dangerous and yet, remain part of the folk-economics of conservation. They are often employed by NGOs and the like.
The first is that legal trade fuels demand for illegal. Now we do know that legal trade can generate pathways that lead to more poaching, but fundamentally, legal sellers and illegal are in competition. They’re in competition because the products are substitutes. Hermes isn’t going to demand more poached alligator or crocodile leather because they’re buying lots of legal leather. Legal trade doesn’t fuel demand for illegal. It crowds the illegal out (all else being equal). That’s a big part of why the sustainable, regulated trade in crocodilian skins has crushed the illegal trade.
The caveat is there are pathways where legal trade does sustain illegal. One important is laundering where illegal wildlife products are merged into the market as sold as legal. But this is a different mechanism to fueling demand. That’s the important point. Legal trade isn’t a panacea or instant solution. But the problems it creates aren’t demand-driven.
The second dangerous idea is that concentrating market power in incumbent sellers is bad for their business. This is nuts. Some of how most enduring conservation problems are a result of concentrating market power in large, criminal organisations. For ivory, we’ve choked back the export of legal ivory to an erratic trickle since 1990. We have large, organised crime networks involved now. And the latest move to destroy ivory stocked by governments is further concentrating market power with the bad guys. This is literally the only setting I’ve been in, when people argue and believe that competition will make the incumbents (the bad guys) better off. By analogy, this would predict that Blackberry and Nokia would be much more profitable after Apple entered the market with the iPhone than before.
We’ve done the same thing for rhino horn. The quasi-legal export of rhino horns (as trophies) out of South Africa to key Asian states was tightened up- so poaching increased. Then as a response, it was banned. And poaching exploded. Concentrating market power in the bad guys is a pretty dangerous step to take if you’ve got nothing to counter their responses with.
The third dangerous idea is that everything must be explained in terms of demand. There is an astonishing neglect of the supply influences on poaching. A good example is the explanations for the rapidly rising poaching levels of African elephants since 2008-9. A number of NGOs are certain that roughly in this period, middle-class Chinese all took evil pills, and became insatiable, avaricious consumers of ivory products.
Figure 1: Ivory Seizures increase rapidly from 2008-9
If we explore the supply-side then there’s actually two very important changes. The first is the several Central African states have became pretty unstable and they’re a major source of ivory. Not a lot is being spent on parks management and rangers there, and various groups are cashing in ivory to pay for their warring.
The second is that shipping costs have collapsed. Globally, shipping costs were in the rise in the mid 2000s, reaching a peak in early 2008 before the Global Financial Crisis. They then collapsed. They haven’t just fallen a little bit. They’ve dropped to about a third of pre-GFC levels. This matters because the ivory has a unique aspect. It is the only wildlife product that is transported by the ton, in shipping containers. It’s a major part of the supply cost. It’s just dropped. Indeed, the change is so dramatic, there’s evidence ivory in the early 200os is only been exported in this period.
And this supports a crucial observation. We’re not seeing the volumes of carvings for sale that match this influx. This is a point the CITES Secretariat has made in its summaries of the evidence. If demand had really exploded to match the influx we seen in Figure 1, then we’d detect that with a big increase in number of retailers, stocking rates and turnover. And nobody has seen that occur. Yes, demand for ivory is going up, but in line with the growing affluence in China. That’s a steady increase. It’s an important increase. But it doesn’t come close to matching that surge in supply.