How can we save the Siberian tiger?
Living in the frozen forests of southeastern Russia, the Siberian tiger is the largest of the great cats of Asia, but the decline in its population also makes it the most scarce. Poached for fur, meat and other body parts which are used in traditional Chinese medicine, there are only 350-450 left in the world making them an endangered species. Examining this situation from an economic perspective, the cause for the disconcertingly low population of Siberian tigers roaming the Sikhote-Alin mountain range is twofold: the economic incentive presented to poachers of these tigers and the market’s effect on wood prices which incentivizes loggers to deforest the tigers’ natural habitat. I will examine the problem and then propose government policies to address it.
As to the first threat, incentives are like motivation — the incentive to poach a single tiger is the potential profit of up to $50k for the animal’s parts on the international market.
Such high prices result from the tigers’ scarcity which leads poachers to decide the opportunity cost (earning $50k) outweighs the cost of the risk to poach (small fines). Compare this to the average monthly salary of locals, which equates to about 383 USD a month and it is clear why people are willing to risk poaching (Aris). The tigers are sold at such a high price because the demand for tiger bones, meat and fur is high (due to the voracious wants of humanity) while the supply is low (scarcity because they are an endangered species), driving up the price, further incentivising poaching. In addition, demand is fairly inelastic due to the prestige and multitude of uses for the tiger’s parts rooted in 3000 years of Chinese tradition and the fact that no substitute exists.
The second challenge the tigers face is the threat imposed by economic pressures on their geographic location. Loggers in the region face an economic crisis as prices of the wood they used to cut (oak and ash) have dropped as a result of decreased demand. This has forced the loggers, whose income is based on the price of the wood, to look for wood that is in higher demand to provide better marginal benefit for the cost of time spent cutting.
They discovered Korean Pine, which is in higher demand and earns them more money on the market — increasing their benefit to cost ratio. In 2010, the Rusian government made it illegal to harvest and sell Koerean Pine, however the laws have not been heavily enforced and Japan and China are still buying, driving up demand which makes loggers continue to cut illegally (Actman). The Korean Pine shares a habitat with the Siberian tigers, who require vast roaming land to be healthy. As loggers cut the Korean Pine, they encroach on the tigers’ habitat, restricting roaming areas, a negative externality. The logging not only harms the tigers, but it has a spiraling effect that is exponentially bad for the tigers known as a positive feedback loop: the new logging roads created by deforestation make it increasingly easier for poachers to hunt and kill the tigers.
To address this dire situation, I propose that the Russian government foster the creation of a new commercial safari business in the Sikhote-Alin mountain range.
Attracting tourists to see the tigers in their natural habitat. The business can use logging trails, repurposing the harm that has already been done. The loggers will return to legally logging oak and ash and receive generous payments from the safari business for renting their trails covering lost revenue from cutting Korean Pine. The new business will create demand for oak and ash. The infrastructure to support the industry and to provide lodging and other buildings to accommodate the tourists will be built from oak and ash wood sourced from the area. The government should direct more resources towards enforcement. When poachers are caught, they should be offered the choice to avoid paying fines by playing a role in the safari business as tour guides and trackers. I believe the poachers will welcome the opportunity for a steady, legal job as it is more reliable and the better opportunity cost, providing similar opportunity without legal repercussions.
One might wonder whether this business will make enough money to satisfy the loggers with the trade off. I am confident that this business will be lucrative enough to satisfy the loggers by looking at other business plans such as in Costa Rica which faced a similar deforestation problem. When they set aside some of their land for tourism, that market exploded and now accounts for 11 percent of national income (Naked Economics). Costa Rica’s tourism industry brings in about $1 billion a year; Russia has similar potential. To protect the new businesses, Russia can declare the area a national park and require permits for any tourism related business, requiring companies to be Russian owned and use a percentage of natives to conduct tours. These businesses will enjoy inherent market power as there is no other place in the world to see these tigers in their natural habitat.
Overall, I think that this business model has the potential to make Russia and her people much profit, while saving the Siberian tigers and their ecosystem. This new industry could capitalize on their rarity to attract tourists, thus creating new businesses and jobs for Russians. This creates potential for positive externalities as these new tourists may visit other Russian attractions, creating revenue in other parts of the country. Finally, this solution makes sense not only from an economic perspective but also from a normative one. The tigers will be saved, the native people will gain a way to earn a fair and legal wage, and this will reflect positively on Russia and her environmental policies.
Written by Peter Lena
1. Wheelan, Charles J. Naked Economics: Undressing the Dismal Science: Fully Revised and Updated. New York, New York: W.W. Norton & Company, 2019.
2. Actman, Jani. “From Trees to Tigers, Case Shows Cost of Illegal Logging.” National Geographic, November 10, 2015.
3. Aris, Ben. “Wages in Russia’s Regions Are Well behind the National Average.” bne IntelliNews. Accessed October 24, 2020.
4. The Moscow Times. “Half of Working Russians Earn Less Than $550 a Month.” The Moscow Times, October 24, 2020.