In 2011, elephant
poaching in Africa reached the highest level on record and 2012 is expected to
be worse.[1]
Endangered elephants are being brutally slaughtered for their ivory, but the
damage done by poaching isn’t restricted to the elephants or even the
environment. Around elephant poaching, a rarely discussed war is developing and
becoming increasingly militarized. Hundreds of poachers and anti-poachers have already
died fighting each other in this war.[2]
The large profits associated with elephant poaching are drawing in organized
crime syndicates that work with corrupt government officials and, “some of
Africa’s most notorious armed groups including the Lord’s Resistance Army (LRA),
the Shabab, and Darfur’s janjaweed.”[3]
In this paper, I will first argue that the continued presence of elephant
poaching is inefficient by looking at the most obvious costs and benefits
associated with elephant poaching and comparing the welfare in a world where
poaching has been effectively curbed to a world where it has not. I will then discuss
why current regulation of elephant poaching has been unsuccessful and suggest a
way, through law, to correct this inefficiency.
First, let’s
examine the welfare of the world where poaching continues at its current rate.
Currently, poachers kill tens of thousands of elephants a year[4]
for their ivory. Upon selling the ivory, the poachers make a profit, and gain
utility. The people who buy the ivory also gain utility from poaching. Most of
the demand for ivory comes from China but there is also a high level of demand
from Thailand and the Philippines. In these countries, many people buy ivory
for religious reasons as many religions such as Catholicism and Buddhism cater
to the notion that ivory honors God.[5]
Ivory is also desirable as a collector’s item, investment[6],
or status symbol.[7]
While utility is
added to the utility functions of some members of society through poaching, it
is lost in many other utility functions. Elephants have value, and when they
are poached, there are inherent costs in utility. From a deontological point of
view, one could argue that the utility functions of elephants themselves should
be taken into welfare calculations. Elephants have innate existence value.
There is also evidence to show that elephants value each other. They form
familial structures, protect each other, and mourn their dead. A few missing
elephants can be detrimental for the young in a group.[8]
From an anthropocentric utilitarian point of view, elephants have passive value
because people value their existence. They also have indirect use-value that
can be seen in the increasing number of tourists who visit Africa to see
elephants, a value that is sustaining a portion of Africa’s economy.[9]
There is also bequest value in conserving any species for future generations
because members of future generations will value the species just as members of
the current one do and future generations may even find reason to value them
more. The more poaching there is in the world, the less elephants there are,
and less elephants means less utility for those who value the elephants. That
the elephants are poached brutally may also result in a loss of welfare for
those who gain utility in knowing that animals are treated with respect.
Beyond the death
of the elephants themselves, there is currently a violent war surrounding
elephant poaching which results in major losses in utility for national park
rangers, their families, and the poachers they fight. There is an obvious cost
associated with all the lives that have been lost, and will continue to be
lost, in the war between poachers and anti-poachers. Elephant poachers are
becoming increasingly well-armed and rangers are asked to fight them, even when
outnumbered, in order to protect the elephants at parks. Dozens of rangers have
been killed this year alone.[10]
In addition to the direct costs in
utility associated with elephant poaching, there are also incredible indirect
costs. Joseph Kony’s Resistance Army uses profits earned from elephant poaching
to fund its missions and purchase weapons.[11]
The LRA has murdered, raped, and kidnapped tens of thousands of people. They
have forced girls to be sex slaves and trained boys to be killers.[12]
All of the people who have been directly or indirectly hurt by the LRA have
lost utility, in part because of the continuation of elephant poaching and it
is reasonable to believe that even the majority of those not personally
affected by the LRA would be willing to contribute a nominal amount to stop LRA
violence. One also has to account for the cost of fear and sadness that people
near to this issue must deal with on a daily basis. Rangers must not only fear
for themselves, but for their children whom the LRA has been known to kidnap.[13]
The burden of constant fear is another loss in welfare.
One then has to
consider the direct costs to the poachers and the anti-poachers associated with
hiring men and buying weapons and technology to continue the war that is a
symptom of elephant poaching. The European Union along with different
governments, non-governmental organizations, and private associations have been
funding the rangers involved in this conflict since the 1980s.[14]
National parks are having to add military branches to their staff. The poachers
are even investing in helicopters to quickly kill elephants and escape with the
ivory.[15]
Then there are administrative costs associated with seizing illegally obtained
ivory and pursuing litigation against those who are guilty. Tons of labor and
resources are devoted to continuing the war around elephant poaching when
members on both sides of the issue would rather allocate their time and money
elsewhere if they could.
Another lost value
to consider is the utility people gain from knowing they have a government
which isn’t corrupt and which uses its country’s tax dollars to provide
democratically-agreed-upon goods and services to its people as well as form
productive relationships with other countries. It is reasonable to believe people
would be willing to pay a minimal amount to know they have the utility of
knowing these things. However, that utility is at risk because of elephant
poaching. The Ugandan military is believed to be responsible for a portion of
the poaching in Africa. This betrays Ugandan citizens, but it also betrays
Americans as the Ugandan military is one of the Pentagon’s closest allies in
Africa. The American government has used revenue from taxes to help train not
only the Ugandan military, but also the Congolese and South Sudan’s
military-all which have members who have been implicated in poaching-related crimes.[16]
Because of this, people who have a variable in their utility functions for an
honest government have less utility than they otherwise would should poaching
be eliminated.
Furthermore, if
poaching continues at its current rate, elephants will face the threat of
extinction. The continuation of elephant poaching at the rate of the status quo
will ensure that forest elephants will be ecologically extinct according to the
head of Gabon’s national park system. The Convention on International Trade in
Endangered Species of Wild Fauna and Flora (CITES) has reported that the number
of elephants in Africa, in general, have fallen to “crisis levels.”[17]
The loss of a species is a huge loss for societal welfare because it causes an
ecological cascade that may have myriad costs for the elephant’s environment as
a whole and may have indirect consequences in the lives of humans who in any
way depend on the ecosystem the elephant previously inhabited.
Let us now
transition to examining a world where elephant poaching is effectively
contained. In this world, there are many more elephants and those who value
elephants have more utility because of it. In order to protect the elephants,
there are administrative costs associated with finding and punishing those who
disobey the new laws that are effectively eliminating poaching. Those who value
ivory for religious purposes lose utility. Ivory has been replaced with some
other good as a popular status symbol and investment and criminal groups like
the LRA may have found other ways to fund their crimes. Even if criminal groups
have found a replacement for ivory in their mission plan, they still experience
a loss in utility from the previous world scenario unless they are able to find
a completely new funding method. We know this because if poachers currently
preferred to fund their work through an already-existing alternative avenue,
then they would be doing so. Because they are poaching, it seems reasonable to
believe that poaching is maximizing their utility so without poaching, these
criminal groups lose utility. This is preferable to most of society because
criminals use the profits they make to fund crime, so society doesn’t want them
to profit.
Without doing any
calculations, it should seem fairly obvious at this point that the costs
associated with elephant poaching dramatically outweigh the benefits to society
as a whole. One could imagine that with 6 billion people in the world, one
could find 5 billion that are willing to contribute $.50 to conserve the
elephant species and $1 to help curve LRA violence. This means that even when
some place outrageous value on elephant poaching, eliminating elephant poaching
would still result in a Kaldor-Hicks efficiency because those who benefit from
the disappearance of elephant poaching would benefit enough that they could
theoretically compensate those who lost. Eliminating elephant poaching actually
increases welfare while redistributing utility away from criminals to those who
value elephants. Most people wouldn’t actually believe that the losers in this
situation should be compensated, but the point is that from a utilitarian point
of view the welfare of society would increase if elephant poaching could be
stopped.
That elephant
poaching should be stopped isn’t a new concept, but despite this knowledge,
elephant poaching is on the rise rather than on the road to elimination. This
implies that the current laws do not provide sufficient incentives for poachers
to stop. In 1989, CITES banned the international commercial trade of African
elephant ivory, with a few exceptions.[18]
The Chinese government has done work to ban the online trading of ivory
products.[19]
Part of the problem with laws like these is administrative in that authority
figures are profiting from the illegal trade so they will not do their part to
stop it, and people with less authority are not in a position to challenge
them. Without strong enforcement of the laws, there is only a small probability
of being caught and punished for poaching which makes the expected cost (probability
of being caught * penalty) of poaching much lower than the law intended it to
be. Furthermore, that only ivory obtained after 1989 is illegal makes the law difficult
to enforce even when the authorities do their job. It is too easy to pretend
ivory was obtained before it actually was.[20]
Another problem
with the existing legislation is that the actual penalties for poaching are
hard to find and appear to be variable from region to region and case to case. This
indicates an information asymmetry problem Homes would find troubling. Homes
believed that to be effective, laws must be predictable and the public must
know them. It seems that, that is not the case in Africa. Because poachers may
not know the expected penalty for poaching, they cannot rationally decide
whether or not to poach with full knowledge of the potential private cost of
poaching.
Most importantly,
however, the existing penalties do not provide sufficient incentive to deter
poachers from poaching or retailers from selling illegal ivory. The private
benefits for poaching far outweigh the expected costs even with penalties
provided by the law. A single tusk from an adult elephant is worth 10 times
more than the average annual income in many African countries.[21]
An article on allAfrica says that the penalty for killing an elephant can be as
small as a year in jail and a fine of between $50-$100.[22]
As poachers consider it cost-effective to use helicopters to poach, it seems obvious
that $100 fine will create no real incentive to stop poaching.
This incentive
problem is further illustrated for retailers in an example case from New York
City. Two jewelers pleaded guilty for marketing over $2,000,000 of illegal
ivory. The ivory on display in the shops alone represented 25 poached
elephants. One jeweler, who had an inventory of $1,000,000 worth of ivory paid
a fine of $45,000. The other jeweler, who had an inventory of $120,000 worth of
ivory only paid a $10,000 fine. New York considers the illegal sale of ivory a
minor felony, and neither jeweler faced time in prison.[23]
Rather, they only had to forfeit their ivory. It is clear that since the
jewelers were able to keep the profit they made before getting caught, and
neither faced jail time, it would make economic sense to continue to sell
illegal ivory as the penalty for doing so is only a small portion of the
potential profits. Because of this incentive problem, if we want to deter
poaching, it would make sense to increase the penalty for poachers and
retailers so that the benefits of poaching are less than the potential penalty
for doing so. Having said that, raising the penalty for poachers is not enough
to effectively curb poaching because enforcement of any law in Africa will be difficult
as the governments involved in the poaching war are unreliable and often
corrupt.
In fact, some
people believe the only measure that will be enough to curb poaching, is a
measure that quashes the demand for illegal ivory. They have compared the
poaching war to the drug war in Mexico and noted that as long as demand for
ivory persists, poaching will not end.[24]
The current increased demand for ivory is thought to be a result of increased
wealth in the Asian economy which is allowing lower classes of people to afford
ivory when they couldn’t before.[25]
Understanding this, I posit that a successful law must also target those who
demand the ivory rather than solely those who are doing the poaching.
The solution I
propose is a higher penalty for poachers and sellers of ivory in conjunction
with a public and universal law that would make it illegal for anyone to
possess ivory of any kind. This combination of policy changes aims to function
like the Brown model in the sense that an action is deterred on both ends of
market transactions. The blanket illegality of ivory would eliminate the
problem of having shops pretend their ivory was obtained when it was still
legal to purchase ivory and if the penalty for possessing ivory was serious
enough, it would reduce the demand for ordinary citizens to possess ivory. If
the demand is reduced, the incentive to poach elephants for profit is also
diminished. Because the authorities of Africa, China, and Thailand are not
honest enough to consistently and reliably ensure that consumers do not have
ivory, the penalty assigned to being caught with ivory should be so awful that
simply the fear of being the one person caught is enough to deter anyone from
risking having ivory. This follows the reasoning that if probability of being
caught is low, than the punishment for being caught should be high in order to
have a high expected cost. An example punishment may be 10 years in prison. With
a normal good, such a high penalty would over-deter the efficient outcome but
in this situation the efficient outcome may be a society with close to no ivory
and the end to the elephant poaching wars. This can be argued because of the
high levels of mortality associated with elephant poaching and the large amount
of money the world as a whole would be willing to pay to save elephants and get
in the way of the LRA’s business. It is true that the utility of ivory
consumers will be severely reduced, but that sacrifice is made for the overall
good of society. This policy may appear to enforce a world completely void of
ivory, a corner solution which is rare to find in economics, however I argue
that if a wealthy person has sufficiently high demand, and with the probability
of being caught being relatively low, that person will still find a way to
attain ivory just as they break the law to do so currently. The result, in
actuality, results in reduced demand rather than completely diminished demand.
One warning about
applying this new penalty is that some retailers who sell currently-legal ivory
may regard the new law as a ‘takings’ because the government is preventing them
from making profit on legally bought goods in their business. While this
rational does make economic sense, it cannot be accepted in court. Doing so
would set a terrible precedent that might encourage further poaching on the
rational that retailers could pose their ivory as legally attained and ask for
compensation from the government for the taking. The court process that would
result would have high administrative costs and it would create grand problems
in trying to virtually eliminate ivory from the market place. For this reason,
clever lawyers must be ready to squash the ‘takings’ claim before it becomes a
problem using the same methods they’ve used in the past to deny other
economically rational claims.
I took a criminal
approach in finding a solution for the poaching problem because poaching is
against the law, intentional, and it does produce such extreme harm to society.
One might consider, however, taking a property rights approach to this problem.
They may argue that elephant poaching exists because nobody owns elephants and
so nobody is taking sufficient care to protect them. I would argue against this
point citing the millions of dollars from government and non-profit agencies
that support national African parks who do, in some sense, own the elephants in
their parks. The problem with the property right approach is that the owners of
elephants would face a lack of ability to enforce their right of exclusion as
the authorities who might normally be called when someone trespasses and
damages your property are largely corrupt and unwilling to help. Because of
this, no assignment of property rights will fix this situation.
In conclusion, the
welfare of the world will increase if society works to eliminate poaching. This
cannot be done with current legislation in part because the current penalties
associated with elephant poaching are not well-known, but also because the
incentives created by these policies fail to de-incentivize poaching. In order
to better attack the market failures associated with elephant poaching, public
laws must be targeted at both the poachers and the consumers of ivory and
penalties must be made severe enough to make up for inevitably poor enforcement
of the laws.
[1] Gettleman, Jeffrey. "Elephants Dying in Epic Frenzy as Ivory Fuels
Wars and Profits." The New York Times. The New York Times Company, 3 Sept. 2012. Web. 4 Nov. 2012.
<http://www.nytimes.com/2012/09/04/world/africa/africas-elephants-are-being-slaughtered-in-poaching-frenzy.html?_r=3&ref=world>.
[2] Lombard, Louisa. "Dying for Ivory." Editorial. The New York Times. The New York Times Company,
20 Sept. 2012. Web. 4 Nov. 2012.
<http://www.nytimes.com/2012/09/21/opinion/elephants-dying-for-ivory.html?_r=0>.
[3] Gettleman, Elephants Dying…
[4] Gettleman, Elephants Dying…
[5] Lombard,
Dying for Ivory
[6] Mullen, Jethro, and Dayo Zhang. "Booming Illegal Ivory Trade Taking
Severe Toll on Africa's Elephants, Groups Say." CNN. Cable News Network, 5 Sept. 2012. Web. 6 Nov.
2012. <http://www.cnn.com/2012/09/05/world/africa/africa-ivory-elephant-slaughter/index.html>.
[7] Dell'Amore, Christine. "In War to Save Elephants, Rangers Appeal
for Aid: Protectors Seek Protection from Armed Poachers." National Geographic. N.p., 9 Sept. 2012. Web. 4
Nov. 2012 <http://news.nationalgeographic.com/news/2012/09/120909-elephants-ivory-rangers-need-help/>.
[8] Janssen, Paul. "Elephant Facts." Elephant Facts. N.p., n.d. Web. 28 Nov. 2012.
<http://www.outtoafrica.nl/animals/engelephant.html>.
[9] Kamau, Scola. "Kenya: Wildlife Bill Proposes Stiff Penalties for
Poaching." AllAfrica. The East African, 3 Sept.
2011. Web. 07 Nov. 2012.
<http://allafrica.com/stories/201109051467.html>.
[10] Ibid.
[11] Gettleman, Elephants Dying…
<http://topics.nytimes.com/top/reference/timestopics/organizations/l/lords_resistance_army/index.html>.
[13] Gettleman, Elephants Dying…
[14] Lombard,
Dying for Ivory
[15] Dell’Amore,
In War…
[16] Gettleman, Elephants Dying…
[17] Dell’Amore,
In War…
[18] Gettleman, Elephants Dying…
[19] Mullen,
Blooming Illegal Ivory…
[20] Lombard,
Dying for Ivory
[21] Gettleman, Elephants Dying…
[22] Kamau,
Kenya: Wildlife Bill…
[23] Halbfinger, David M. "2 Manhattan Jewelers Admit Illegal Ivory
Trading." The New York Times. The New York
Times Company, 12 July 2012. Web. 6 Nov. 2012.
<http://www.nytimes.com/2012/07/13/nyregion/illegal-ivory-leads-2-to-plead-guilty-in-new-york.html?_r=0>.
[24] Kamau,
Kenya: Wildlife Bill…
[25] "About Elephants in Peril." Elephants In Peril. Save the Elephants, 2012. Web. 05 Nov. 2012.
<http://www.elephantsinperil.org/about>.
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This paper was written for 'The Economic Analysis of Law,' a course I completed at Stanford University.
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This paper was written for 'The Economic Analysis of Law,' a course I completed at Stanford University.
Go to this link to ask Congress to take a strong stance against the illegal ivory trade:
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