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Grant McDermott

Economics.
Environment.
Data science.

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A few months ago, I discussed the staggering increase in rhino poaching that is plaguing Southern Africa. According to the Dept. of Environmental Affairs, a record 448 rhino were poached last year in South Africa alone. Even that record is now under threat, as 159 of the country's rhino had already suffered the same fate within the first four months of 2012.

Source: Business Day

My preferred, economic solution would involve overturning the CITES ban on rhino trade, which has not only failed to stop poaching, but has rather encouraged the reverse. The ban has simply succeeded in limiting the supply of rhino horn, thereby driving up the price and making them more valuable to would-be poachers. I'd like to see this perverse set of incentives replaced with something more reasonable. As I wrote wrote back in 2011: "[T]he ability to legally farm and 'harvest' these animals generally would bring the same positive effects that hunting does for wildlife conservation. That is, it establishes a profit motive that incentivises the preservation of valuable animal species."

Ethical considerations notwithstanding, I did have some lingering concerns over the practicals implications of farming these animals, and whether doing so would actually lead to a collapse in poaching. Breeding rhino remains a very expensive business and poachers would still be able to capture substantial "resource rents" as long as they don't bear the burden of the investment costs. In the same way that cattle theft hasn't stopped despite our massive consumption of beef and dairy products. Of course, the potential gains \(-\) i.e. the rents \(-\) are also far higher when it comes to rhino. That being said, it seems unquestionable to me that the economic incentives for sustainable populations are much better aligned under a system of legal trade.

Thus far, the SA government is pretty tight lipped on the legalization of farmed horn. They are, however, considering the sale of horn stockpiles, which have been accumulated from thwarted poaching operations over many years. I maintain that the farming option is necessary to ensure ultimate sustainability. Nevertheless, we could think of the stockpile sale as akin to the auction markets for organ donors and other "ethical repugnant" goods. The pioneer in this area is the economist, Alvin Roth, whom I briefly discuss here.
Anyway, I've been thinking about how I might turn this rhino question into a legitimate research topic and, possibly, one of my dissertation essays. Trouble is, the basic concept is so simple that any of the standard bioeconomic models would suffice i.t.o. providing a theoretical framework. In other words, you probably wouldn't be making enough of a theoretical contribution for it to be considered worthy of publishable (i.e. doctoral) research.

To be considered of suitably high standard then, you'd need to supplement standard theory with empirical evidence. And here we run into another problem. What data could one use, beyond basic descriptive statistics? Moreover, how would you control for all the problems that typically come with empirical research \(-\) identification, causation vs correlation, establishing a counterfactual, etc? In short, turning this into an original and insightful research project probably requires the use of some kind of natural experiment. Perhaps a policy change that affects some countries in the region, but not others. Hmmm...
Zimbabwe, Botswana, Zambia, Namibia and Angola are heading for a collision with rhino conservationists after it emerged that their governments had agreed to the sale of rhino horn powder in clinics and pharmacies. 

The governments of the five states that form the Kavango-Zambezi Transfrontier Conservation Area (Kaza) met in Namibia last week and resolved to sell rhino horn powder in their fight for the survival of the species which is fast heading for extinction.
Okay, it's probably not quite what you're looking for. Most obviously, legalizing the sale of powdered rhino horn in these five African states would have a negligible impact on satiating overall demand. The situation will probably only improve once the reform reaches the major Asian markets, such as Vietnam. Still, I'm very tentatively going to call this a step in the right direction.

For more on this whole rhino debate, here is a recent article worth reading.