The grisly economics of elephant poaching

November 6, 2013

The U.S. Fish and Wildlife Service has declared that it will destroy six tons of confiscated African elephant ivory next week — a stockpile amassed over 25 years. The aim is to deter ivory poachers, who have been killing record numbers of elephants in recent years.

Ivan Lieman/AFP/Getty Images - An elephant is pictured in Tsavo East National Park in southern Kenya in January 2013.
Ivan Lieman/AFP/Getty Images - An elephant is pictured in Tsavo East National Park in southern Kenya in January 2013.

"We want to send a clear message that the United States will not tolerate ivory trafficking and the toll it is taking on elephant populations, particularly in Africa," the agency said in a statement.

But does this unconventional tactic actually deter poaching? Countries have destroyed their confiscated ivory stockpiles before. Kenya did it twice in 1989 and 1991. Gabon burned tens of thousands of pounds of ivory, culled from 850 elephants, just last year. Yet some economists remain skeptical that this is the best way to stem the illegal ivory trade — part of a debate over the economics of poaching that has persisted for years.

Over at the Property and Environment Research Center, Michael 't Sas-Rolfes, a conservation economist based in South Africa, argues that the "ivory crush" could actually prove counterproductive. The move will reduce the global supply of ivory without affecting demand at all. That, in turn, could drive up the implicit "price" and perversely encourage further poaching:

In 1989, Kenya's dramatic ivory burn seemed to have the desired effect. It raised global awareness, helped bring about an international ivory trade ban, and attracted substantial donations to Kenyan conservation efforts.

During the last decade, however, Asian demand for ivory has grown and continues to do so with rising affluence. Consumer surveys show that demand is currently widespread and not always concerned about ethical issues related to the source of supply. ...

We know that destroying stockpiles reduces supply, but not necessarily demand. The ill-conceived USFWS gesture could create the perception that ivory is an increasingly scarce commodity on illegal markets, leading to higher prices and further poaching.

The Fish & Wildlife Service, for its part, doesn't agree with this. Their position is that the confiscated ivory was already off the market, so the destruction won't affect global supply much at all. The main point is to send a message that poaching is unacceptable.

Fish & Wildlife officials also argue that there's no good way to put the confiscated ivory back on the market, to create a legal trade that would satiate demand. That's because, they say, doing so would make it easier for poachers to launder illegal ivory. Here's an FAQ that the agency has posted on the subject:

Why doesn’t the Service sell the ivory?

... It is extremely difficult to differentiate legally acquired ivory, such as ivory imported in the 1970s, from ivory derived from elephant poaching. Our criminal investigations and antismuggling efforts have clearly shown that legal ivory trade can serve as a cover for illegal trade. Therefore, selling the ivory stockpile and allowing it to enter the marketplace could contribute to increased elephant poaching and stimulate even more consumer demand for ivory.

Won’t destroying this ivory make elephant ivory rarer, thus driving up the cost and creating a greater incentive for poaching? 

As we explained above, this ivory would never be made available to the market. Its destruction has no impact on the overall supply and does not create any incentive for poaching. By demonstrating our commitment to combat poaching and illegal trade, and to arrest and prosecute people who engage in these activities, we are providing a strong disincentive to poachers and wildlife traffickers.

The economics of the ivory trade has always been a difficult subject, stretching back for years. Back in 1989, some 175 countries agreed to a global moratorium on ivory sales. But then, in 1999 and again in 2008, a few countries, including South Africa, Namibia, and Zimbabwe, were allowed to sell off some of their ivory stockpiles legally, with the proceeds going toward conservation.

Those "one-off" sales triggered a fierce debate. Critics argued that legal sales would lead to an uptick in poaching by making it easier for illegal ivory to go undetected. Proponents argued that the sales would reduce demand for poaching and raise money for elephant protection. Studies have been fairly inconclusive on this question, with evidence on both sides. (Sas-Rolfes offers reasons to think the sales weren't very beneficial for elephant conservation.)

Either way, poaching remains extremely hard to eradicate. An estimated 30,000 elephants were killed in 2012, the most in three decades. Rhino poaching is also approaching record highs. Much of the recent surge in demand has come from China, where ivory can sell for $1,000 per pound in some regions.

Ivory tusks are displayed after being confiscated in Hong Kong after a seizure on Jan. 5, 2013. (Kin Cheung/AP)
Ivory tusks are displayed after being confiscated in Hong Kong after a seizure on Jan. 5, 2013. (Kin Cheung/AP)

In a 2010 essay for New Scientist, wildlife trafficking expert Tom Miliken also pointed to gaps in law enforcement as another major reason for the surge in poaching. African countries that span the elephants' western range make surprisingly few seizures each year. And illicit markets have sprung up all over the world, from Nigeria and Egypt to China and Vietnam. Meanwhile, Asian crime syndicates have played an increasingly large role in moving the ivory from Africa to Asia.

The Fish & Wildlife Services' "ivory crush" is just one of several efforts the United States is making to stem the resurgent trade. Earlier this year, President Obama pledged $10 million in aid to Africa to fight poaching and created an inter-agency task force on wildlife trafficking.

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Neil Irwin · November 6, 2013