The price of whales; how quickly we forget

Nature recently carried a Comment setting out A market approach to saving the whales. It got a fair bit of traction, which is nice.

The authors, Christopher Costello, Leah R. Gerber and Steven Gaines, admit that their proposal is complex and could be hard to administer. Rendered down, it is simple. Allocate quotas on whales and allow them to be traded. Whalers could choose to kill “their” whales, trade them with other whaling nations, or save them for another season. Non-whalers -- conservationist societies, for example, or whale-friendly governments -- could buy quota and save those whales forever.

Predictably, Greenpeace finds the idea “abhorrent”. If the whales are saved, what happens to their income stream? And other economists are not impressed either. Science quotes Martin Smith, an environmental economist. “The trading system could have unintended negative consequences. If fewer whales are killed but the demand for whale meat stays the same, he says, then prices will rise -- and that could stimulate illegal whaling.” Frankly, that would be the least of my worries.

I’m not impressed for a bunch of other reasons, some of which are purely peevish. The authors admit that the idea is not new. Indeed, it is not, having been put forward by Colin Clark and Roland Lamberson in 1982. Nature’s authors say it failed to take off “because the concept was ahead of its time”. They also give the distinct impression that Clark and Lamberson’s work has remained buried until they unearthed it. That’s almost true. The paper has been pretty well cited in the academic literature, and the quota idea was explored by, er, me in my 1988 book The Hunting of the Whale.

I confess I couldn’t put numbers on the potential price of a whale, back then, because the moratorium had only just been agreed, and the costs of saving whales weren’t as well known either, so my exploration wasn't nearly as thorough as that of Costello et al., and of course I don’t expect them to have read my book. What annoys me more about both the proposal and the response to it is that both ignore the one big fundamental truth about whaling, which we’ll get to in a minute.

Objections from anti-whalers have mostly been of the “they’re sentient beings too” variety, which doesn’t seem to acknowledge that these fine sentiments have so far failed to put a permanent end to commercial or subsistence whaling. Others have pointed out that there’s more to whaling than costs or profits; whaling continues because it is subsidised by governments and is directed at that government’s standing among its people and internationally. Having to buy a quota wouldn’t materially affect that.

So what’s the real problem? “Sustainable,” that's what.

Costello et al. refer repeatedly to the idea that for each population there is some “sustainable” number of whales that could be taken. Biologically, of course, they are correct, and it depends on the reproduction rate of the whales, among other things. I used to think that the big problem was agreeing on the correct quota, until Sidney Holt, a great fisheries scientist, set me straight by pointing out that “economics is against it”. How so? Holt referred me originally to Colin Clark’s papers, which in addition to floating the idea of a quota also point out that money multiplies faster than whales. In the real world, the reproduction rate of the whales runs smack into the reproduction rate of money, and money wins.

Oversimplifying, a whaler has to decide whether to milk or mine the stocks; to kill a whale, or leave it in the ocean to breed, for some future year. By not killing it, he is effectively investing in its future reproduction. Because whales reproduce relatively slowly, he actually loses money that way. He makes more profit by killing all the whales he can and investing the proceeds in some other venture, like razing tropical forests. As I wrote at the time:

This is a pretty pessimistic conclusion for anyone with a non-financial interest in whales. It means, in effect, that we cannot expect whaling nations to regulate their activities “rationally,” because in fact the rational approach is to exploit the stock as quickly as possible until it is exhausted. That may be disappointing, but it is true. All the so-called disasters of the history of whaling -- the system of Blue whale units, the depletion of the most valuable resources first, the excessive fishing capacity of the early heady days -- are in fact entirely rational responses to the motive of maximising profits. ¹

It would have been nice if Costello et al. had explored not only Colin Clark’s idea for a quota-selling World Whaling Authority, but also his explanation of why, in the case of slowly reproducing natural resources, conservation doesn’t pay. My own prediction, for what it is worth, is that it will probably never be worth investing in new whaling ships, and that most commercial whaling, especially far from shore, will stop when the last rust-bucket is beyond repair. I haven’t kept up with the state of the main fleets for some years now, so I don’t know how far gone they are, but I honestly think it is just a matter of time before commercial whaling does indeed grind to a halt. Quotas will only delay that day.