Call of the wild

An interesting lesson/case study in economics.
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Is the prohibition of trade saving wildlife, or endangering it?

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TWIN dragons sit high above the bustle of Grant Street, marking the ceremonial entrance to San Francisco's Chinatown. Up a steep hill, the cheap souvenirs give way to more exotic wares: antique figures carved in the Japanese netsuke style, statues of monkeys and roosters, delicate earrings and necklaces. They are ivory. There are lots of them. And they shouldn't be there.

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In 1989 the signatories of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) agreed to ban trade in ivory. Last year CITES, which now has 172 member countries, extended this ban for a further nine years, having sanctioned but two sales from stocks, of which only one has taken place. A stroll in Chinatown suggests that trade is thriving nonetheless. A forthcoming report by researchers for Care for the Wild, a British animal-welfare and conservation charity, says that around half the ivory in this market comes from illegally killed elephants. Other studies reveal similar stories elsewhere in the West.

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A sharp increase in ivory seizures in recent years also points to a flourishing trade. Meanwhile, rising wealth in Asia is raising the returns from poaching. Prices have leapt from $200 a kilo in 2004 to $850-900. New ivory is appearing: you can encase your mobile phone in it if you like. Some scientists think poaching may be as prevalent as it was before the original ban.

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The point is not that bans never work. They can, especially in the short term or when species are in dire danger. But their longer-term success depends on three factors. First, they must be coupled with a reduction in demand for the banned products. If a ban helps to shift people's tastes, so much the better. Second, they must not undermine incentives to conserve endangered species in the wild. Third, they have to be supported by governments and citizens in the countries where these species live. If these conditions are not met, bans are unlikely either to reduce trade or to maintain endangered species. They may even make matters worse.

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In essence, there are two sorts of possible response to the question of how to conserve endangered species—apart, that is, from doing nothing. One is a command-and-control mechanism: trade bans are examples of these. They can work, but they tend to be inefficient because they fail to take into account the response of human beings to economic incentives. The alternative is to try and harness the incentives that command-and-control ignores. Economic incentives may include removing subsidies for conversion to agricultural land, differential land-use taxes, conservation subsidies, individual transferable quotas and communal property rights. They are all part of a growing economic toolkit for encouraging conservation while minimising the cost of doing so.