Biodiversity conservation & markets

1. Biodiversity conservation & markets Source: The Onion (satire). Oct. 21, 1998

2. Biodiversity conservation & markets • Biodiversity loss • Markets are: • Part of the problem • Part of the solution • All of the above

3. Non-market based approaches to conservation • Centralized / command and control • Endangered Species Act • Biological reserves • Marine reserves (extraction prohibited) or marine protected areas (regulated for a specific objective) • “Framework incentives” (Perrings et al. 2009, Tbl 17.1) • Support for voluntary or collective action (recall Ostrom): • Information provision • Scientific and technical capacity building • Institution-building and stakeholder involvement source: Green Renaissance/WWF

4. There have been various market-based approaches proposed for protecting biodiversity • Tradeable property rights • Transferable development rights (cap development and trade rights) • Tradeable quotas (for extraction of resources [e.g. fish, whales]) • Mitigation banking • (e.g. Clean Water Act requires mitigation in certain cases of habitat impact from development—developers buy credits from a third party specializing in restoring habitat) [EPA] • Mkt friction reduction: allow conservation to pay for itself • ecotourism, bio-prospecting • benefit sharing (e.g. in dev. countries, provide local communities with a stake in conservation) • Price instruments • payments for ecosystem services (e.g. Costa Rica: carbon, hydro-, biodiversity, beauty) • auction contracts for conservation

5. Conservation/mitigation banking • gopher tortoise • ESA listing: threatened (USFWS; AL, LA, MS) • drivers: habitat loss, habitat fragmentation, human predation, and declining density • goal: self-sustaining pop • tool: gopher tortoise conservation banks (USFWS 2009; photo: Westervelt Ecological Services)

6. Pre-existing habitat for a threatened/endangered species:

7. To allow for future development, mitigation banks create additional (+) habitat + +

8. Those credits can then be sold to landowners who want to develop (D) their land in a way that compromises their habitat. D + + D

9. In practice, for each unit of habitat that is developed (D), more than one unit of additional habitat (+) typically must be provided in the mitigation bank D + + + + D

10. (Westervelt Ecological Services)

11. Cost-effective payments for ecosystem services through auctions: conservation of shorebirds and water birds in the Central Valley

12. The vast majority of natural wetlands habitat in the Central Valley has been destroyed Yolo (Reynolds/TNC 2015)

13. Flooded rice fields can provide habitat but farmer’s lack the incentive to supply this habit when and where it’s needed. (Reynolds/TNC 2015)

14. A reverse auction is being used to obtain commitments for services (flooding fields at particular times) at the least possible cost for TNC. Mark Reynolds (The Nature Conservancy): “We were trying to get the most habitat for our very scarce conservation resources” • Auction cost (2014) • 25% less than uniform price • <1% of the cost of conservation easement (Reynolds/TNC 2015)

15. (Robbins/NYT, 2014)

16. (Reynolds/TNC 2015)

17. Wildlife trade and trafficking Mike Shanahan / IIED

19. November 2013 China and France follow suit, Hong Kong approves plan to destroy massive stockpile over next two years (NPR, 2/17/14)

20. November 2013 USA Today/9 News, 2013

21. “Illegal wildlife trafficking—the unlawful slaughter of endangered animals to trade their valuable parts—has risen alarmingly in recent years.  • > 30,000 elephants killed in Africa in 2014 for their ivory • 1,000 rhinos killed in South Africa alone  • increasing evidence linking illegal wildlife trading with corruption, terrorist groups and organized criminal networks.” ivory stock seized recently in Lome, Togo (west Africa) Emile Kouton, AFP/Getty Images / February 4, 2014 (Paramaguru, Time 2/14/14)

22. White House moved to strengthen enforcement of laws and extend bans on trade in 2/2014 (i.e. there’s an emphasis on restricting markets) • extend ban on the commercial trade of elephant ivory • “All commercial imports/exports of ivory products will be prohibited” (with a few exceptions). • “Sales of any ivory products within the U.S. will also be severely restricted.” • “strengthening domestic and global enforcement of wildlife trade laws • working with international partners to combat the global poaching trade” (Walsh, Time, 2/11/14)

23. Feb. 2014: Leading nations met in London for highest-level talks ever on illegal trade in wildlife products. • Outcome London Declaration: “countries agreed for the first time to renounce the use of products from species threatened with extinction. • eradicate market for illegal wildlife products • ensure effective legal frameworks and strengthen law enforcement • trafficking in illegal wildlife products in the same category as trafficking in drugs, arms and people.” Photo: Dan Kitwood/Getty Images. Protesters outside Conference (Paramaguru, Time 2/14/14)

25. A mixed history of bans and intermittent legal sales • 1989 ban on int’l trade in ivory via: Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES)[est. 1975, ext. to ivory 1989] • Effective in the west • Less effective in Asia (cultural and medicinal use) • 1999: Botswana, Namibia, and Zimbabwe permitted to sell to Japan about 110,000 pounds from existing legal stocks of raw ivory • Stocks from animal deaths from natural causes or control programs • Raised $5M for elephant conservation. • Sales followed from Botswana, Namibia, and South Africa. (Fischer, 2003/2014)

26. Do the sales of legal stockpiles help or hurt conservation? • Empirical evidence is mixed: Did the 1999 sales encourage on poaching? • Yes: Environmental Investigation Agency (nongovernmental UK org) • No: UN Environment Programme and the TRAFFIC network (monitors wildlife trading) • Issue  interactions between segregated/separated markets: legal and illegal trade. (Fischer, 2003/2014)

27. Do the sales of legal stockpiles help or hurt conservation? • Sales of legal stockpiles: • Rationale: adding supply  decrease prices in the market for ivory decrease return to poaching (figure) • Hope: satisfy some illegal demand without triggering resurgence in legal demand. • two crucial assumptions: • illegally produced goods and legally sold confiscated goods are truly interchangeable • consumers are indifferent to both wildlife populations and the nature of the market (Fischer, 2003/2014)

28. Do the sales of legal stockpiles help or hurt conservation? • Sales of legal stockpiles: • Unintended consequences: increase legal ivory supply  decrease stigma of ivory ownership  increase demand for new ivory  increase prices and the return to poaching. • More likely if • demand is malleable: consumers care about the source of their ivory, the state of the elephant population, or just how others perceive it. (Fischer, 2003/2014)

29. Do the sales of legal stockpiles help or hurt conservation? • Sales of legal stockpiles: • unintended consequences: • decrease stigma for existing consumers (previous slide) • laundering may bring illegal goods to legal markets; legal sales may lower the costs of illegal supply by making monitoring more difficult (Fischer, 2003/2014)

30. Hsiang and Sekar (2016): We find that international announcement of the (2008) legal ivory sale corresponds with an abrupt ~66% increase in illegal ivory production across two continents, and a possible ten-fold increase in its trend.

32. Optional additional slides

33. Similar dynamics are at play for other goods • “blood” diamonds from war-torn areas like the Democratic Republic of Congo • stigma in demand; laundering in supply. • Other products with segregated markets • GMO-free (genetically modified organisms), cruelty-free, or organic produce; • certified, sustainably harvested timber; • drugs; and guns. • (whale meat under a conservation market) (Fischer, 2003/2014)

34. Global development and biodiversity. “Some of the world's least developed countries are located in hotspot areas of high importance for biodiversity. This map displays Human Development Index (UNDP) by country and hotspot regions overlaid on that.” UNEP/GRID-Arendal, Global development and biodiversity, UNEP/GRID-Arendal Maps and Graphics Library, http://maps.grida.no/go/graphic/global-development-and-biodiversity (Accessed 9 March 2010)