In early 2021, the journal Ecological Economics published a theoretical economic model of legal markets for synthetic wildlife goods, authored by Frederick Chen of Wake Forest University and Michael 't Sas-Rolfes of the University of Oxford's School of Geography and the Environment. The paper is one of the few attempts in the peer-reviewed literature to model rigorously the central question that had been argued at the level of opinion since 2015: does a legal market for synthetic rhino horn or synthetic ivory reduce poaching of the wild animals, or does it provide cover for laundering wild product into the legal supply chain?
Chen and 't Sas-Rolfes show that the answer depends on the elasticity of demand. When demand is relatively inelastic, as previous studies have indicated for rhino horn (Milner-Gulland, 1993; Brown and Layton, 2001) and elephant ivory (Do et al., 2020), the price effect of a synthetic substitute dominates, and introducing the substitute reduces poaching overall. When demand is elastic, the laundering effect can outweigh the price effect, and introducing a substitute increases poaching.
The model also identifies a policy lever the conservation NGOs had not been emphasizing publicly. Any certification mechanism that increases the cost or difficulty for poachers to obtain a permit to launder wild product into the legal market reduces the laundering effect, in direct proportion to its strictness. The conservation benefit of synthetic substitutes, the authors argue, scales with the quality of the certification regime built around them. That is a different argument from "synthetic substitutes will not work," which had been the position of much of the NGO sector for the previous six years.
"Any certification mechanism that makes it harder for poachers to launder the real wildlife products would only enhance the conservation benefits of introducing synthetic substitutes into the market."
Chen & 't Sas-Rolfes, Ecological Economics, 2021
The paper is one of the first published peer-reviewed defenses of the strategic logic Pembient had been articulating publicly since 2015. It does not endorse any particular company or product. It models the market.
