Just over five years ago, sanctioned auctions of ivory stockpiled in Botswana, Namibia, South Africa, and Zimbabwe raised more than $15 million for elephant conservation.
Now, Tanzania is set to destroy $50 million of ivory stockpile, following the lead of the US, France, Hong Kong, and China. The US is also taking steps to further restrict ivory trade, banning the import, export, and resale of ivory, and imposing more stringent guidelines for the sale of antique ivory.
Ivory poaching has continued to be a problem since the 1989 ban on international trade in ivory, codified in the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). Since then, we have seen several back-and-forths on the role of legal ivory sales, as of government stockpiles obtained through confiscation and natural wildlife management.
The competing ideas boil down to this question: do the sales of legal stockpiles affect demand more than supply? Governments today are making a big bet on the former.
Indeed, the effects go in opposite directions, as I explained in research a while ago. Basic economics says that adding more supply should drive down prices in the market for ivory, which in turn should drive down the return to poaching. However, there are reasons to think that demand for ivory isn’t the same as any other good; in fact, if consumers care about the source of their ivory, the state of the elephant population, or just how others perceive it, demand may well be malleable. In this case, restricting the legal ivory supply could increase the stigma of ivory ownership enough to actually reduce demand for new ivory, and thus drive down prices and the return to poaching.
The ivory ban itself was a major step toward stigmatizing ivory ownership. While effective in the West, it had less effect on consumption of ivory for traditional cultural and medicinal purposes in Asia. The hope of the previous legal auctions was to satisfy some of this illegal demand, without triggering resurgence in legal demand.
The recent announcements of an international effort to destroy ivory stockpiles reflects widespread frustration at the intransigence of illegal ivory trade, and a hope that the publicity will deter demand among even consumers who were willing to purchase illegally. However, it is a big bet. If the supply side dominates, destroying stockpiles sends a signal that the ivory resource is even more scarce—driving up prices and raising the value of illegal stockpiles. An additional risk is that in the absence of government stockpiles that could credibly enter the market at some point to keep prices down, organized criminals may actually have incentive to exterminate the species, to render their own stockpiles that much more valuable.
Thus, the entire effectiveness of this approach depends on how demand responds. As of now, we have already seen some indications that ivory prices have risen since the beginning of stockpile destruction, which indicates the supply response is taking effect first. The question is whether over time—but not too much time—consumer demand starts to respond by saying this is a product they don’t want anymore because the stigma is too great. Then we should see prices falling and organized crime looking for something more valuable to sell than elephant tusks.