Q&A on markets and endangered species

Q: In 1998, you authored a PERC Policy Series called “Who Will Save the Wild Tiger?” What has changed in the world of tigers?

A: A lot has been done. There have been many conservation initiatives, much money spent, and many, many meetings. A wide range of conservation NGOs and even the World Bank established initiatives, culminating in last year’s grand “Tiger Summit” in St. Petersburg, Russia. Wild tiger numbers, however, have continued to decline. In 1998 the estimate of wild tiger numbers was between 4,800 and 7,300. Last year the official World Wildlife Fund estimate was 3,200. So in another sense, not much has changed at all—the wild tiger remains in trouble.

Q: What are the incentives for tiger conservation?

A: Conservation NGOs benefit from the tiger’s charismatic high profile as a means to raise funds, and conservation scientists like to study tigers, so one could argue that they have an incentive to prevent them from becoming extinct. By contrast, rural people living near tigers have to deal with threats to their livestock and children, and human-tiger conflict is a serious problem over most of the wild tiger’s range. Rural people have less of an incentive to conserve tigers, especially when offered large sums of money for tiger carcasses. There is a mismatch between who pays the costs and who gets to benefit from tiger conservation.

Q: How can tigers become assets instead of liabilities?

A:  Right now most wild tigers are typically "owned" by governments, but that is a weak and dispersed form of ownership, which does not benefit or incentivize specific people who control the wild tiger’s destiny. By creating stronger property rights—i.e. more direct ownership of tigers—one could create ways for more specific groups communities or agencies to control and benefit directly from tigers. Ways to benefit could include genuine “adopta-tiger” schemes, contractual agreements with local people, tourist viewing, and possibly trophy hunting (although this is currently banned). This would give tigers much greater asset value.

Q: On your new website, rhino-economics.com, you explore the incentives for poaching, can you explain?

A: In Africa there is still abundant rhino habitat so the principal threat is from poaching for rhino horn. Rhino horn has been used for several thousand years as a key ingredient in traditional Chinese medicines to treat toxicity, inflammation, and fevers. This means that the rhino horn trade ban simply drives up prices and therefore raises the incentives for poaching.

Q: What role does hunting play in rhino conservation?

A: Legal white rhino hunting started in South Africa in 1968. At the time there were only 840 white rhinos in the country. Today, rhino trophy hunts make a significant contribution to the South African economy and last year they counted 18,780 rhinos, of which 25% were privately owned. The value of a live rhino has soared during this time, making rhino breeding a highly lucrative business, not only for private owners but also for the state parks who sell their surplus rhinos to the private market.

Q: What is CITES and what has its effect been on rhino and tiger conservation?

A: CITES is the United Nations Convention on International Trade in Endangered Species. It is an international treaty that seeks to prevent the overexploitation of species by regulating wildlife trade between countries. My work suggests that the CITES bans may be having perverse effects on the rhino horn market (and possibly tiger bone market too), by causing a supply constriction which drives prices up to artificially high levels, stimulating sophisticated poaching and illegal trade activity involving organized crime cartels. CITES attempts to regulate the trade of thousands of different species across thousands of international border crossings – it is ambitious to the point of being absurd. For this reason, I believe the option of legal trade must be investigated, particularly in the case of rhinos, whose horns can be easily and sustainably harvested without harming them.

Q: What can environmentalists in the Western world do?

A: Donors can be more discerning about where their money goes! Many environmental groups claim to be saving the tiger, yet wild tigers keep declining. Those groups should be held accountable by their donors, and if they don’t perform they shouldn’t be rewarded further. Effective conservation measures are the ones that incentivize local people to protect rhinos, tigers, and their habitat—that is money and effort well spent. Conversely, there is much ineffective action (such as endless meetings, aimless scientific research consultancies, and media campaigns) that does not deserve support.The larger diversified multinational organizations are especially guilty of this.

Q: What implications does your work have for wildlife management in Africa?

A: Market solutions have been emerging naturally in South Africa for some time. It is especially interesting to contrast the experience of South Africa versus Kenya. South Africa had almost no wildlife in 1900—it had almost all been hunted to extinction. A few private reserves and state parks slowly built up wildlife numbers and, then from the 1960s markets were progressively opened. Today there is a thriving commercial wildlife industry comprised of tourism, trophy hunting, and game ranching. Twenty-three percent of South Africa’s land is under conservation management and of that 17% is private. Estimated numbers of game have risen from 575,000 in 1964 to more than 18 million in 2007. Contrast this with Kenya, which banned hunting in 1977 and has lost between 60 and 70% of its large wild animals since then!

Q: What is the biggest challenge facing the trade of wildlife and is there a role for free market environmentalism?   

A: The biggest challenge facing the trade of wildlife is the lack of appropriate institutions such as clearly-defined, strong property rights and related market incentives. Because of this, conservationists resort to very weak ‘second-best’ solutions: restrictive trade measures and even bans which are costly to monitor and enforce. There is definitely room for institutional reform—to create property rights first and then establish appropriate markets, so as to create better incentives for self-regulation.

For more of PERC’s ongoing Q&A series visit percolatorblog.org

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