Moanin' and whalin' – Why markets aren't the answer to whale conservation

Posted on January 19, 2012 · Posted in Blog

An article came out in Nature last week, titled “A market approach to saving the whales”.  We’re always interested in whale-economics, having written reports such as Whale Watching Worldwide and What’s a Whale Worth, both commissioned by IFAW.

The Nature article proposes that a quota for whale hunting should be set by the International Whaling Commission (IWC).  Shares to this quota would be tradable, creating a market for whales either for hunting or for conservation.  Both whaling groups and conservation groups could participate.  This market would be:

Economically, ecologically and socially viable for whalers and whales alike.  Because conservationists could bid for quo­tas, whalers could profit from whales even without harvesting the animals. A market would therefore open the door to reducing mortality without needing to battle over whether whaling is honourable or shameful.  

Such an elegant, market-based solution should make an environmental economist happy, but I’m not happy for a number of reasons.

Firstly, I think the authors have misunderstood the value of whaling.  Whaling (or at least Japanese whaling) isn’t about making a profit.  As they point out, it has been subsidised for years, a WWF/WDCS report details how Japanese whaling is “unambiguously loss making”. Other reports have shown that whaling is alheavily subsidised in Norway.  If it was up to markets, whaling wouldn’t have existed for some time.

The real value of whaling is a question of political economy.  There are politicians, organisations, companies, etc, that gain political value from whaling, or fighting for the right to it, or being seen to fight for it.  I can’t see these organisations abiding by an IWC-administered whale quota auction, certainly not if they were bid out of it by conservation organisations.  Australia has seen this week how hard it is to enforce rules on whaling groups.

More importantly, I think taking a simplistic approach to a complex problem does a disservice to market-based approaches to natural resource management.  Well designed, market-based mechanisms can make a great contribution to conservation.  Victoria’s BushBroker is a good example relating to native habitat offset markets and hopefully Australia’s attempts to put a price on carbon will also be successful.  But a simplistic “international whale market” type approach, that is bound to fail, leads to public scepticism about market-based approaches.

In particular, it leads to “economists-think-they-can-value-anything-aren’t-they-stupid” lines of thought.  This was best shown by British writer George Monbiot, who last year showed his lack of understanding of environmental economics in an article which somehow linked environmental service values with economists trying to value love and kisses.  I sent him this email but never got a reply.  Maybe I should have left out the bit about “sanctimonious wanking”.

I confess I don’t have a better, faster solution to the whale-wars, though I do feel economics has a role to play.  Reports that point out the uneconomic nature of whaling, like this report from WWF-WDCS, and others that point out the value of whale watching tourism, will help inform the public.  More likely, demand for whale meat will continue to decrease and whaling will become politically irrelevant as demographics change and younger voters no longer support fat subsidies to hunt whales.