Q. & A. on Rhino and Tiger Economics

Note: Michael 't Sas-Rolfes is a 2011 PERC Lone Mountain Fellow researching international wildlife trade policy. This interview by Shawn Regan first appeared on PERC's blog.

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

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 in Russia. Unfortunately, however, wild tiger numbers have continued to decline. When I wrote the PERC Policy Series paper, the most recent 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.

Interestingly, during this time the Chinese government also announced plans to investigate the feasibility of using farmed tigers to provide a legal supply of tiger bone medicines to their domestic market, citing my PERC Policy Series as a partial justification for this. Conservation NGOs (and the World Bank) reacted in a very hostile way to these proposals and the Chinese have not pursued them any further.

Q: In your paper you wrote, “Tiger conservation is, ultimately, an issue of incentives.” What are the incentives and who faces them?

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.

I believe that the main challenge for tiger conservation is that people living next to wild tigers are the ones who actually control their destiny, and right now those people typically don’t benefit much from the presence of wild tigers. The people who do benefit are mostly far away and don’t have much real control over what happens to tigers. 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: For something to be an asset, it has to be owned by someone. 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. Those people are typically rural subsistence farmers and poorly paid government employees. 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 “adopt-a-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: Should conservationists look toward tiger farming as a viable solution to the decline in wild tiger populations?

A: Tiger farming is one of a range of options to consider. It has the potential to satisfy some of the persisting demand for products such as tiger bone, thereby competing with the black market, which currently provides the only channel of supply. It is not a panacea, but it is also not the threat that some conservation groups claim it to be. The Chinese captive tiger population already exceeds the world’s wild tiger population, and conservation groups worry that some products are ‘leaking’ illegally into the marketplace. However, if market demand for these products persists, it would be a bad idea to try to stop this leakage, because it will simply drive up the value of poached tiger products and stimulate poaching even further.

Q: You have also done similar work on protecting wild rhino populations in Africa. You recently launched a website called Rhino Economics. What is the purpose of the website?

A: Rhino Economics provides an information source to a wide audience on all of the economic issues relating to rhino conservation, especially the rhino horn trade. The public tends to be poorly informed on this issue. Most people still think that rhino horn is used as an aphrodisiac and that the rhino horn trade ban is a good idea. My research over the past 22 years shows that the smartest way to protect rhinos is to create strong property rights and market incentives, and the example of the southern white rhino success story provides concrete proof. My research also suggests that the greatest threat to rhinos today is in fact the ban on rhino horn trade. The ban is causing an artificial supply shortage that is driving the price up to outrageous levels and thereby attracting highly-sophisticated organized crime syndicates into the trade.

The website aims to provide information at three different levels: 1) a quick overview of the issues for the general public, 2) a more detailed explanation of the issues for those who are more interested or involved in rhino conservation and 3) a comprehensive listing of past academic and policy work I have done for students and practitioners of wildlife policy.

Q: What are the challenges facing wild rhino populations in Africa?

A: In Africa there is still abundant rhino habitat so the principal threat is from poaching for rhino horn. Rhino horn is still highly sought after in some Asian markets, where it is used for medicinal and ornamental purposes. Rhino horn has been used as a key ingredient in traditional Chinese medicines to treat toxicity, inflammation, and fevers for several thousand years. Medicinal demand in Asia persists and appears to be deeply entrenched in the culture, causing demand to be price-inelastic (i.e. relatively insensitive to price increases). This means that the rhino horn trade ban simply drives up prices and therefore raises the incentives for poaching.

Q: In some African countries, rhino hunting is legal. What role does hunting play in the 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 (and only a few more outside). 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. Hunting has played a pivotal role in saving the white rhino, which is now the most common of all the rhino species.

Q: What is CITES and what has its effect been on rhino and tiger conservation? Is it time to legalize the trade of rhino horns or tiger bones?

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. Rhinos and tigers have received endless attention and supposed protection (by way of trade bans) under CITES, yet their numbers continue to decline. 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. This is similar to the problem experienced with alcohol prohibition and bans on drugs such as marijuana – they appear to be unenforceable. 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 for effective wild rhino or tiger conservation?

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 to account 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: Your home is in South Africa. What implications does your work on tigers and rhinos have for wildlife management in Africa? Are market-based solutions emerging?

A: Market solutions have been emerging naturally in South Africa for some time. In other parts of Africa they are resisted. It is especially interesting to contrast the experience of South Africa versus Kenya. South Africa had almost no wildlife in1900 — 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. 23% 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: While at PERC you are working on a paper on international wildlife trade policy. Can you summarize this study?

A: I’m actually looking at the issue of commercial captive breeding (i.e. farming) of endangered species. This is a very contentious and interesting issue. Both tigers and rhinos are threatened by poaching for the traditional Chinese medicine market. The Chinese have proposed farming as a solution and have started breeding captive stocks of tigers and rhinos in China, but this is fiercely opposed by Western environmental groups. Animal welfare groups raise some legitimate concerns, but conservation groups are also opposed to farming on grounds that it would threaten wild populations. They may be correct on this, but they may also be wrong. There is evidence to suggest that farming could be helpful under certain conditions, if it could satisfy some of the demand and reduce the market price for products that would otherwise be poached from the wild. It is a complex issue and deserves further careful investigation.

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. 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.

Q: What’s your favorite part of being at PERC in Bozeman, Montana?

A: I find PERC to be a great working environment! The support staff members are awesome and PERC attracts a very high caliber of diverse visitors with an interest in intelligent, practical solutions to resource management. It is an incredible place to learn and engage in stimulating exchanges of ideas. It also helps that Bozeman is surrounded by fantastic natural scenery and outdoor opportunities. PERC is a great place to get serious work done without it feeling like work.

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PERCOLATOR
Michael ’t Sas-Rolfes is a sustainability economist, with unique experience and understanding of the role of markets for biodiversity conservation.For the past 25 years, he has been actively involved in various private conservation initiatives, starting as a financial manager of a private game reserve in South Africa. Mike conducted pioneering...
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