New Study: Legal Ivory Trade Backfired, Unleashed Elephant Poaching Crisis

Many consumers took market availability of ivory for the legality of trade.Having worked a long time protecting elephants from commercial ivory trade and understanding the dynamics of demand from Chinese consumers, I have always been sure that the 2008 one-off stockpile sale was a bad idea, as we had warned before it was executed. But no scholarly research backed up that notion…

…until now.

A new paper titled “Does Legalization Reduce Black Market Activity? Evidence from A Global Ivory Experiment and Elephant Poaching Data” published on Monday in the National Bureau of Economic Research indicates that the 2008 one-off ivory sale “corresponds with an abrupt, significant, permanent, robust, and geographically widespread increase in the production of ivory through elephant poaching.”

Using an econometric method, the researchers Solomon Hsiang and Nitin Sekar found that the CITES-approved legal ivory sale in 2008 “corresponds with an abrupt ~66% increase in illegal ivory production across two continents, and a possible ten-fold increase in its trend.” And corresponding with this finding is “an estimated ~71% increase in ivory smuggling out of Africa.”

Their research provides strong evidence that legalizing ivory trade aided illegal ivory laundering, removed stigma attached with ivory consumption and stimulated consumer demand—a painful nightmare I had personally experienced for years at ground zero:

  • Many consumers took market availability of ivory for the legality of trade. Chinese consumers who previously had no knowledge about ivory all of a sudden saw ivory touted on the market as “white gold” for collecting, speculating, gift-giving and a fashion “must have.”  
  • Chinese investors even found a new “investment asset class” in endangered species, attracted by the sky-rocketing prices of ivory and rhino horn carvings. As this 2011 China Central Television program on “art investing” shows, stores could not keep enough ivory pieces. Consumers bought up every piece of ivory the moment they were put on the shelves.
  • To meet rising demand for ivory in China, carving factories replaced hand tools with electric drills, mass producing ivory trinkets that demonstrate neither artistic value nor exquisite skill, shifting consumer appreciation from ivory carving to ivory as a material.
  • As IFAW’s 2011 report “Making a Killing” shows, ivory stockpile sales have helped create a deadly new currency in China. The rising prices of ivory in China gave illegal traders more incentives for the smuggling of ivory from outside of the country where illegal ivory could be sourced cheaply. And not surprisingly, Chinese smugglers have found an ivory sourcing haven in Japan, where illegal ivory trade had flourished
  • The paper cites IFAW’s warnings in 2006 that a second ivory sale would unleash a torrent of demand since the first ivory trade experiment—a sale of 50 tons to Japan in 1999—already confused consumers and caused an increase in illegal ivory traffic.

Sadly, our advice was not taken and the precautionary principals were cast aside.

The ivory sales decisions “backfired in a very bad way,” one of the paper’s authors, Solomon Hsiang, who used to be a proponent of legalization of trade but has changed his views, told the Guardian.

The policy makers who made the trade decision relied on a faulty assumption that allowing legal ivory trade would saturate the market, collapse the price, thus make poaching less profitable.

Based on a simple supply and demand model, they assumed that “when the supply is scarce, the price would rise, but when the supply can meet the demand, then the price will drop,” as if talking about a widget.

But, this is not the case.

I wrote about this in a guest-blog for National Geographic’s Voice for Elephants titled, “Elephants are not widgets.”

We simply cannot apply an economic theory to long-living, slow-breeding species like elephants.   

When wildlife trade policies are made solely based on textbook economic theory, devoid of any understanding of on-the-ground social, cultural, political and economic realities, catastrophic effects ensued.

CITES countries will meet again in Johannesburg, South Africa in September.  In addition to proposals to trade elephant ivory and rhino horn, a discussion to set up a mechanism for future ivory trade experiments is on the agenda.

Haven’t we learned the lesson from these repeated lethal experiments?

As human beings, don’t we have an ethical and moral obligation to never put endangered species in trade experiments?

-GG

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