“Preserving – rather than burning – stockpiles is the inefficient choice. Maintaining a stockpile is administratively and operationally expensive – and often pointless”
Kenya has decided to destroy its entire stockpile of elephant ivory. More than 100 metric tons of “white gold” – both illegally harvested (confiscated from poachers or traders) and naturally accruing (from natural mortality) – went up in smoke last weekend. In China – where the majority of the world’s ivory is consumed or stockpiled – the recently reported price is $1,100 per kilo, putting the total value of the material burned at roughly $110 million.
To most economists, the idea of destroying something with so much value is anathema. But there are good reasons for a country – even one as poor as Kenya – to surrender its ivory wealth to the flames.
For starters, stockpile destruction fortifies the credibility of demand-reduction campaigns in East Asia, without which the poaching problem will never be solved. Demand reduction aims to weaken the market for the product by changing consumer tastes. As prices drop, so does the incentive for poachers to kill elephants.
When countries keep their stockpiles, however, they signal that they anticipate being able to sell ivory in the future. This undermines the credibility of demand-reduction efforts; if the trade is likely to be legalised one day, any stigma associated with ivory consumption will be eroded.
Proponents of a regulated, legal international ivory trade argue that demand-reduction efforts can coexist with a limited legitimate supply. But this line of reasoning has a dangerous weakness: It assumes that a legal cartel – one proposed model for regulating supply – would crowd out illegal suppliers by providing ivory to the market at a lower cost.
This assumption is dubious at best. The quantities traded through a legal mechanism would be insufficient to flood the market and suppress the price. Indeed, with legalised trade undermining demand-reduction efforts, the price of ivory is likely to remain high, ensuring that poaching continues.
Some southern African countries argue that they should be allowed to sell their ivory in CITES-permitted, one-off sales to fund conservation efforts aimed at maintaining healthy elephant populations. But, aside from the low probability in some countries that the revenue would be directed to that end, it is not clear that much money would be made.
Under CITES regulations, governments are permitted to sell only to other governments. But what other governments are willing to pay may be as low as one-tenth of the illicit value. And even then, governments can sell only naturally accrued ivory, not what was confiscated from poachers or illicit dealers.
China and the United States are in the process of formulating bans on domestic ivory trade, so it is not clear which governments would be interested in purchasing African stockpiles. Vietnam and Laos are likely candidates, but they are also part of the infamous “golden triangle,” where illegal trade in wildlife and wildlife products continues to thrive. The possibility of the legal ivory trade shifting to poorly regulated markets calls for a concerted international response, spearheaded by African governments through coalitions like the Elephant Protection Initiative, together with countries such as China.
Preserving – rather than burning – stockpiles is the inefficient choice. Maintaining a stockpile is administratively and operationally expensive – and often pointless. Inventory