Demand reduction campaigns can reduce prices, resulting in a decrease in elephant poaching
Between 2010 and 2012, we lost 100,000 elephants across central and eastern Africa. Though poaching rates have since declined, challenges remain. Poaching is increasing in Botswana, home to the world’s largest single remaining elephant population, numbering about 126,000 but with a growth rate of 1.3% – contrary to statements suggesting growth rates of upward of 6% and bogus reports of “over-population”. Recent reports estimate a carcass ratio of higher than 8%, which may portend sudden population collapse. And, despite significant global and local ivory price declines, 1.58 tonnes of ivory were seized in Vietnam on 27 March 2024.Two major wildlife traffickers were arrested in Nigeria in connection with this seizure. Nigeria has become a major trafficking hub in the wake of east African ports having improved law enforcement efforts and cracked down on organised crime.
Efforts to help elephants thrive need to be strategic – they require careful sequencing in anticipation of the expected response of organised criminal syndicates. I’ve argued in the past that we require a three-pronged strategy, each of which carries its own challenges; problems that need to be solved for other parts of the strategy to work. First, demand for ivory must be reduced. As an integral part of this effort, ivory stockpiles should be destroyed in elephant range countries, simultaneously and continuously. Second, anti-poaching strategies need to combine with intelligence efforts to disrupt transnational organised crime syndicates. Thirdly,domestic trade bans should be imposed to complement the existing international ban on trade in ivory.
Demand reduction drives down price, which disincentivises poaching. The means by which consumption preferences change differs by place. China was, until recently, a major domestic market despite an international ban since 1989. In 2008, the government declared ivory a major cultural heritage industry. By the end of 2017, it had implemented a complete ban on trade in ivory. Younger generations do not value the possession of ivory as much as previousones, and demand reduction campaigns appear to have had a positive result. Partly as a result, raw ivory prices across Asia have dropped from a wholesale price of $2,100/kg in 2014 (the height of elephant slaughter in Africa) to about $400/kg in 2024 (in Vietnam). The Chinese ban created a displacement effect in which the ivory market shifted to surrounding countries. Vietnam is now a major destination country for ivory and rhino horn. Either way, the 2015 domestic ban in the US and the 2017 ban in China precipitated a price plummet. Within African markets, ivory now fetches between $85/kg and $250/kg (in Nigeria).
Trade bans are controversial, but the 1989 effort to place elephants on Appendix I (no trade allowed) of the Convention for International Trade in Endangered Species of Wild Fauna and Flora (CITES) bore fruit. Elephant populations largely recovered up until 2006, though the presence of legal domestic markets was always an aberration, contradicting the logic of an international ban. The one-off sale of ivory in 2008 appeared to drive subsequent elephant slaughter, as it signalled to the market that ivory was again legally condoned.
Finally, burning existing ivory stockpiles credibly signals to would-be speculators that ivory is not worth stockpiling because range state countries are committed to stopping the supply of ivory supply. Like burning one’s ships in a war of conquest, it sends a strong signal to the defending nation that you are so confident of victory that you have cut off all recourse for retreat. However, all range states must commit to burning ivory at the same time to avoid displacement effects – simply making poaching and stockpile theft more attractive in other, non-burn countries.
Not everyone agrees with this combination of strategies. Some are of the view that bans simply create an artificial sense of scarcity, driving up prices and incentivising poaching and stockpiling. Still others believe that demand for ivory cannot be reduced or – if it can – this must be done independently of what one does with markets or stockpiles. Yet others believe that ivory should be stockpiled by elephant range countries so that they can threaten the market with future dumping, which would create price collapses. This option is strange and presupposes a legitimate channel through which the dumping (and presumably purchase) could occur. Nonetheless, many range-state governments (including Botswana, Namibia and Zimbabwe) want to be allowed to sell their ivory again on international markets, ostensibly to pay for wildlife conservation. This is also wrong-headed, though, as argued elsewhere.
A new paper called “Crush and Burn: How the destruction of ivory fails to save elephants”has been published in World Development, a high-profile scholarly journal. Author Emma Gjerdseth takes aim at the policy of burning ivory. She finds, through econometric regressions, that “the destruction of ivory does not reduce poaching rates. On the contrary, in African countries with elephants, ivory destructions increase poaching rates, with negative spillover effects from in-country events on the rest of the continent. This suggests the negative supply shock from the destructions dominate and incentivise poaching by increasing the (illicit) ivory price.”
Indeed, this finding was predictable using the game theory outlined earlier. Think of three countries, all neighbours. If country A burns ivory while its neighbour does not, neighbour Bbecomes a target. That neighbour, in turn, worries that if she burns and neighbour C does not, the strategy will not work, and she will be left both without ivory and have to contend with increased poaching in her country. Technically, if country B believes that country A will burn its ivory, it should go ahead and do the same thing to avoid the foreseeable displacement effect. However, if countries B and C believe that they can make billions from selling their ivory and can easily defend against increased poaching (or are prepared to tolerate some level of it), the collective action will fail, and burns will become merely symbolic. This is indeed what has transpired, despite raw ivory prices dropping. Kickbacks to individual officials from drip-feeding a stockpile to patronage cronies undermines the incentives for collective action.
Nonetheless, Gjerdseth’s work seems not to have recognised the massive decline in raw ivory prices in Asia and Africa since their 2014 peak. Indeed, the regression parameters start in 2003 and end in 2019. This does not provide sufficient time to estimate whether the initial negative spillovers (poaching in neighbouring, non-burn countries) are due to a temporary price hike, followed by later declines in poaching due to substantial price declines, thanks to effective demand reduction strategies and domestic trade bans.
The regressions also do not consider the influence of remaining elephant densities on poaching risk calculus. High elephant densities in southern Africa (whose elephants are on Appendix II of the CITES list, which allows trade under specified conditions) would seem to influence poaching risk-reward ratios at least as much as ivory burns in places like Kenya and Ethiopia. Of course, it makes intuitive sense that temporary supply reductions through burns would increase ivory prices and spike poaching. Southern African countries are neighbours B and C in the above example that opted to keep their stockpiles, which they now want to be allowed to sell.
Gjerdseth refers in her paper to me, Chris Alden and Yu-Shan Wu as “activists and scholars”. She cites our 2017 publication in Ecological Economics and writes that in contrast to our “belief…that the destruction of stockpiled ivory can be used as an elephant conservation strategy, the empirical results show that this measure does not discourage poaching. On the contrary, the destructions lead to increased poaching rates in Africa.” It emerges later in the paper that poaching rates in the country that burned its stockpiles does not change, but let’s put that aside for the moment. We have always argued that ivory destruction had to be collective and simultaneous (all countries at the same time) and complemented by effective preceding demand reduction efforts.
In that 2017 paper, we wrote: “We agree with Nadal and Aguayo that official stockpiles should indeed be destroyed, as we do elsewhere in Harvey (2016) and Alden & Harvey (2016). To make that an effective policy move in the battle against elephant poaching, we propose in this paper that comprehensive domestic ivory trade bans should be imposed with an indefinite timeline, particularly in China. The strongest reason for this is to encourage a sell-off of privately held large ivory stocks.” We were always clear that it was necessary to combine ivory destructions with other tactics as part of a broader strategy.
In prior work, I recognised that “range states within Africa have divergent interests regarding the management of existing and future ivory stockpiles. An associated problem is that African elephants are listed differently in the CITES appendixes, sending ambiguous supply signals to consumer markets.” Congruent with Gjerdseth’s work, we wrote that if range states “agree to put their ivory stockpiles beyond commercial use before demand has been eradicated, syndicates will have strong incentives to increase their current poaching efforts and (mis)appropriate ivory from existing stockpiles in advance of such disposal… for this reason, collective range-state stockpile disposal is a necessary commitment device for conservationists to defeat syndicates.”
We commended Kenya and Ethiopia for taking the lead in stockpile destruction but cautioned that “co-ordinating these actions across range states would have a stronger effect in terms of signalling to the market that the trade is truly over.” Again: “it would be in the interests of all range states to put their ivory stockpiles beyond commercial use simultaneously. If each is staggered, and syndicates figure out which countries will be putting their stocks beyond use (and when), they can strategise accordingly by attempting to access those stockpiles in advance.”
Gjerdseth has now empirically shown (notwithstanding the methodological questions about lag effects and elephant densities influencing poacher strategies) that ivory price spikes temporarily correlated with increased poaching in other range states (a negative spillover effect). As indicated above, this was game-theoretically predictable. My 2015 paper argued that “each respective disposal drives up the price of ivory, creating an incentive for riskier behaviour by syndicates… However, if each country disposes of its ivory simultaneously and continuously, syndicates will increase their efforts towards killing living ‘stock’ that is most vulnerable. But conservationists can anticipate this in advance and direct anti-poaching resources towards those elephant populations. This strategy is only likely to work if demand reduction campaigns are working to reduce the price at the same time.”
In 2016, Chris Alden and I elaborated on the reasoning above and noted the inefficiency of preserving stockpiles. “Given the low probability of being able to sell ivory in future, the cost of storing and protecting it is unlikely to be recouped. Meanwhile, criminal syndicates need only corrupt a handful of officials to make off with the goods.” In the same year, I wrote in Politikon that “the retention of legal stockpiles may also signal a lack of government’s credibility in supporting the CITES trade ban. If stockpiles are held as a backstop option, it suggests that governments expect to be able to sell this ivory legally at some point in the future. This may inadvertently spur demand, as consumers are confused as to whether the legal trade is suspended temporarily or permanently. With China and the US having announced their commitment to enact a ban on domestic trade too, stockpile destruction has a strong economic rationale, and it lends credibility to demand reduction campaigns by eliminating much of the available supply.”
Gjerdseth finds that the “average poaching rate (as proxied by PIKE) for sites in Africa is increasing with the tons of ivory destroyed.” But the fact that poaching does not increase in the country conducting the burn suggests that there are intervening variables that Gjerdsethmight not have sufficiently controlled for. For instance, as mentioned above, remaining elephant densities after the 2008 to 2014 slaughters in Central and East Africa, would have a large effect in determining poaching returns, combined with law enforcement (in)efficacy. Botswana started to witness an uptick in poaching following density reduction elsewhere, combined with declining law enforcement efficacy towards late 2018 and the announcement of a return to trophy hunting. Moreover, organised crime syndicates, given displacement effects, are likely to have infiltrated southern African after having been crowded out of East Africa. Like poachers, they follow elephant densities in conjunction with law enforcementand corruption weaknesses. We would also have expected to see a temporary spike in poaching ahead of China’s ban – a last-gasp effort around 2016 by those syndicates who speculated that the ban may only be temporary and wanted to increase their own ivory stockpiles.
Gjerdseth closes her paper by arguing that “previous literature on coca and poppy eradication strategies has shown that as long as demand exists destroying supply does not end the illicit trade, rather it may increase incentives for committing more offenses.” But this comparison fails because it is not analogous. Ivory is not coca or poppy that can be grown just about anywhere. Nor is ivory consumption physiologically addictive. Consumer taste for narcotics is far more inelastic than taste for ivory, which can be shaped by changing societal norms. Demand reduction campaigns, complemented by domestic trade bans and credible collective supply-side signals, can bring ivory prices down and thus slow poaching. This is precisely what has happened since 2015. Gjerdseth concludes that her work “shows that poaching rates exhibit a strong response to price effects, particularly in Africa, which suggests that strategies to suppress prices may be effective conservation approaches”. This is true but misses the point that collective and continuous ivory burns could be a crucial component of the strategy to suppress prices.
The fact that Gjerdseth showed a poaching displacement effect – poaching moving to countries that do not burn ivory – is not an argument against burning ivory. It is, rather, an argument for collective action in burning ivory to avoid the price spikes that were game-theoretically predictable. Also, had Gjerdseth’s model run up until 2024, the reported effects may have been far weaker, given the drastic price decline to $400/kg in Asian markets, and far lower than that in African markets. The key, however, is to come up with a credible commitment device for collective action across range states that overrides the incentives to maintain ivory stockpiles.
Harvey is director of Harvey Economics (Pty) Ltd, a research consultancy firm. The views expressed here do not represent those of any organisations with which he is affiliated.
Original source: 2024-10-08-why-we-should-burn-the-ivory