CITES (Convention on International Trade in Endangered Species of Wild Fauna and Flora)

Summary - Bursting the Elephant Ivory Bubble

1. Poaching and illegal ivory are the most severe immediate threat to the African elephant.
2. The 2013 Proportion of Illegally Killed Elephants (PIKE) level in Central Africa is greater than any of the other African sub-regions and is estimated to be above the 0.5 threshold which is the limit for sustainability; the population of elephants in Central Africa is diminishing.
3. Important message - 'Ultimately, the illegal killing of elephants for ivory is driven and sustained by demand from buyers who are willing to pay for illegal ivory. However the illicit nature of the international trade in ivory makes it difficult to quantify demand for the product.’. The second sentence may reduce the impact of the first if quoted.
4. The demand for mammoth ivory, the international trade in which is legal and reliable data on which is therefore more easily obtainable, would serve as a better predictor and better proxy for elephant ivory demand than general consumer demand, the previously accepted indicator.
5. There is a relationship between mammoth ivory import price and PIKE levels.  
6. The amount of ivory imported into China, including Hong Kong SAR, has been increasing in direct proportion to price, apparently violating the conventional law of supply and demand.

Supporting Information

p14 - African elephants 

'While poaching and the illegal ivory trade are currently the most severe immediate threat posed to the African elephant, range and habitat loss remain a significant long-term threat to the species’ survival.’

p16 - MIKE (Monitoring the Illegal Killing of Elephants)

'MIKE aims to inform and improve decision-making on elephants by measuring trends in levels of illegal killing of elephants, identifying factors associated with those trends, and building capacity for elephant management in range States. MIKE operates in a large sample of sites spread across elephant range in 30 countries in Africa and 13 countries in Asia. There are some 60 designated MIKE sites in Africa, which together hold an estimated 30 to 40% of the continental elephant population, and 27 sites in Asia.’

'MIKE evaluates relative poaching levels based on the Proportion of Illegally Killed Elephants (PIKE), which is calculated as the number of illegally killed elephants found divided by the total number of elephant carcasses encountered by patrols or other means, aggregated by year for each site. Coupled with estimates of population size and natural mortality rates, PIKE can be used to estimate numbers of elephants killed and absolute poaching rates.'

p17 - 'Despite the decline since 2011, poaching levels overall remain alarmingly high, with nearly two thirds of dead elephants found in 2013 deemed to have been illegally killed. Overall, the elephant population at MIKE sites is likely to have continued to decline in 2013, as poaching rates exceed likely intrinsic population growth rates. In some areas, a decline in PIKE may be the result of a substantial decline in the elephant population, making it more difficult for poachers to find suitable targets in such areas. However, without recent and reliable elephant population estimates from such areas, it is difficult to verify the impact of poaching on such populations.’

p18 - Figure 3 Central Africa Note: PIKE levels above the horizontal line at 0.5 (i.e. where half of dead elephants found are deemed to have been illegally killed) are likely to be unsustainable.

p21 - 'Ultimately, the illegal killing of elephants for ivory is driven and sustained by demand from buyers who are willing to pay for illegal ivory. However, the illicit nature of the international trade in ivory makes it difficult to quantify demand for the product. Previous MIKE analyses have used trends in household consumption in China as a proxy for demand for ivory, which is a strong predictor of PIKE. However, as household consumption expenditure is a measure of general consumer demand for goods and services, and not a specific measure of demand for ivory, a more specific proxy measure was sought with a view to replacing it in MIKE analyses.'

'To that end, it was hypothesized that demand for mammoth ivory—the international trade in which is legal and reliable data on which is therefore more easily obtainable—would serve as a better predictor and a better proxy for elephant ivory demand. In order to test this idea, time series data on mammoth ivory imports were obtained from Comtrade, the United Nations’ international trade database (http://comtrade.un.org).'

p22 -  'When tested against models developed in previous analyses, the time series of mammoth ivory import values per kg for China (including Hong Kong SAR), as derived from customs import statistics, was indeed found to be a better predictor of PIKE than the Chinese household consumption expenditure variable used in the past. In other words, mammoth ivory import prices do appear to be a better proxy for demand for ivory than household consumption expenditure. It is important to note that no claim is being made that mammoth ivory imports cause elephant poaching. It is rather more plausible that high demand for ivory results in both high raw mammoth ivory prices and high levels of poaching in Africa.’

p23 - Figure 6.

'The relationship between PIKE and the main covariates discussed in this document, including mammoth ivory import price, are shown in Figure 7. The three main factors identified by MIKE analyses — poverty, governance and demand — explain nearly two thirds of the variation observed in PIKE levels across African sites. Poverty and governance explain spatial patterns in poaching levels, while demand accounts for the temporal trend. Whilst the empirical relationships demonstrated by the MIKE analyses are not necessarily directly causal, they do provide a good basis from which to investigate causation. At the very least, the factors identified in the MIKE analysis are likely to facilitate or to provide incentives for the illegal killing of elephants and the illegal trade in ivory.’ 

p11 - 'The relationship between mammoth ivory import price and PIKE levels identified by the MIKE analysis is also noteworthy, as is the fact that the amount of mammoth ivory imported into China, including Hong Kong SAR, has been increasing in direct proportion to price, apparently violating the conventional law of supply and demand. There are two possible explanations for this pattern. One is that mammoth ivory is currently subject to a speculative price bubble, similar to those experienced in housing markets in several Western countries prior to the world financial crisis. The other possibility is that mammoth ivory in China, including Hong Kong SAR, is what economists term a “Veblen good” (named after American economist Thorsten Veblen). Veblen goods are usually those marketed as exclusive or which confer status to their owners, such as expensive watches, luxury cars and designer jewellery. A decline in price of a Veblen good can actually cause demand for that good to decrease, as the high prices of Veblen goods enhance their appeal to the status-conscious. While mammoth ivory prices seem to be a useful proxy measure, wholesale price data on legal domestic ivory sales would be needed to investigate whether elephant ivory follows a similar pattern. The provision of such data by Parties in whose territory legal ivory markets exist, and its integration into analyses of MIKE and ETIS data, could improve understanding of the dynamics of the ivory supply chain.’