Living Economics

Some animals compete with people for land-based resources. If people are prohibited from killing the animals without any compensating benefits, they will be tempted to eliminate the animals altogether. For example, Kenya banned all hunting in 1977. Instead of achieving the desired effect of preserving wildlife, between 1/3 and 1/2 of them disappeared in the last 20 years. On the other hand, Zimbabwe granted property rights over wildlife to landowners in 1982 and allowed hunting. As a result, its elephant population increased by more than 25%.

Wildlife is a constant source of nuisance to African villagers by eating their crops and invading their village compounds at night. Without any financial gains from preserving wildlife, villagers see animals as objects for elimination. But when hunting rights for a limited number of animals were granted to the villagers in Zimbabwe, the villagers have an incentive to preserve the animals as a source of income by selling the hunting rights to safari operators. In one village, the proceeds from the hunting rights helped build an electric fence that reduces animal-human clashes.

In the U.S., endangered animal species present a similar headache to landowners on whose property the animals are found. Very often, government regulations have made it nearly impossible to use their land for commercial purposes for the sake of protecting the animals. There is every incentive for landowners to make their land inhospitable to endangered species before they are officially discovered.

Fortunately, Defenders of Wildlife, an environmental group, has come up with an incentive program to reward landowners for protecting endangered wolves. Defenders will pay a private landowner $5,000 if the landowner can show that wolf cubs can successfully be raised on his property. In addition, the program pays ranchers for any loss of livestock caused by wolves.

In Greenland, a program funded partly by a U.S. grant buys fishermen's North Atlantic salmon quota for a percentage of what they might have earned. Besides compensating the fishermen, the money could be used to start a new life in other businesses or jobs. So both jobs and salmon could be saved.