Nudging on Donations

Mostly Economics points to the new working paper by Dean Karlan and John List that suggests an innovative way for charities to signal their credibility nudge donors into increasing their donations. Karlan and List write,

We develop a simple theory which formally describes how charities can resolve the information asymmetry problems faced by small donors by working with large donors to generate quality signals. To test the model, we conducted two large-scale natural field experiments. In the first experiment, a charity focusing on poverty reduction solicited donations from prior donors and either announced a matching grant from the Bill and Melinda Gates Foundation, or made no mention of a match. In the second field experiment, the same charity sent direct mail solicitations to individuals who had not previously donated to the charity, and tested whether naming the Bill and Melinda Gates Foundation as the matching donor was more effective than not identifying the name of the matching donor. The first experiment demonstrates that the matching grant condition generates more and larger donations relative to no match. The second experiment shows that providing a credible quality signal by identifying the matching donor generates even more and larger donations than not naming the matching donor. Importantly, the treatment effects persist long after the matching period, and the quality signal is quite heterogeneous - the Gates’ effect is much larger for prospective donors who had a record of giving to 'poverty-oriented' charities. These two pieces of evidence support our model of quality signals as a key mechanism through which matching gifts inspire donors to give.

In this context, I have blogged earlier about studies by the same duo and others about how matching contributions and its magnitude can provide signals that can increase the amounts of donations made by prospective donors. Quality signals are powerful mechanisms to "crowd-in" funds from donors.

But there is nothing surprising about this finding since this underlying premise underpins much of modern financial markets. If Warren Buffet invests in a particular stock or fund, the chances are that it will attract a herd of investors! In fact, hedge funds raise private capital by playing up the credibility of their prior investors and using that to encourage prospective investors. Start-up firms which have atleast one big angel investor will find it much easier to raise additional capital.

This also has important longer-term lessons for the aid and philanthropy businesses. The powerful impact of credible lead donors, like Bill and Melinda Gates, should be leveraged to multiply the amounts of money that can be raised. For example, the Gates Foundation could work with a series of smaller non-government organizations (NGOs) within sectors where the Foundation is already active, provide small seed capital, and then encourage those NGOs to leverage it to solicit additional funds from other donors. I am sure this model is already being used by the larger foundations and their donees, though the share of their funds routed through such partnerships may be small.  

In fact, this is what multilateral agencies like the World Bank and the UNICEF have been doing for years. They provide the first tranche or seed funding for new initiatives and projects,, which is then leveraged to raise additional capital, both from private sector and other non-government agencies. The presence of the Bank or UNICEF provides the necessary reassurance to these lenders and donors that necessary due diligence has been done and the project is worthy of support and their investments and donations are less likely to go down the drain.

Therefore, is it time that the larger and more reputed private donor agencies leverage their brand name and reputational value to help smaller organizations raise more capital and thereby multiply the amount of money that can be mobilized to serve the same causes espoused by the larger donor?

On rights-based development and populist quick-fixes

Pranab Bardhan has a brilliant essay in Boston Review that strikes an immediate chord with development discourse in India. Instead of commenting, let me reproduce portions.

He appreciates the concern among civil society groups and activists at the extreme poverty and vulnerability of the marginalized and their enthusiasm for a rights-based approach (as against the dole-based approach of traditional welfare state). However, he cautions against the prevailing craze for it,

"It (rights-based approach) serves to raise consciousness among the poor and the vulnerable about their entitlements, and remind them that they are not mere supplicants to politicians and bureaucrats. In a weak administrative and institutional context, however, the NGO approach of uncompromising support for citizen’s rights can cause more harm than good. If the structure for implementing some of these rights is weak and corrupt, then the rights are hollow and promoting them breeds cynicism."

In the context of India where courts have joined civil society groups in taking up the cause of the poor and vulnerable, he strikes a much-needed but politically incorrect note of caution,

"India is already littered with hundreds of unenforced or spasmodically enforced court injunctions, some of them on the implementation of rights. This proliferating judicial activism, egged on by the rights-based movement and the media, may end up, for all its good intentions, undermining the credibility and legitimacy of the judiciary itself."

Prof Bardhan hits the nail on its head when identifying the real limitation of civil-society activism driven rights-based approach to development in societies where the ability of governments to deliver is severely constrained. He writes,

"The social activists share with left-wing unions a preoccupation with redistribution, and a lack of concern for generating enough surplus to enable it. There are obvious trade-offs here between incentives for private enterprise and the need for social justice... When real capacity to create wealth is missing, social activism is often reduced to mere populism, which in the long run can be wasteful and counterproductive."

This is the biggest problem with the dominant development policy discourse in India - too much of wealth re-distribution and too little of wealth creation!

Again, in light of the political drama surrounding anti-corruption activists and their populist quick-fixes, Prof Bardhan questions their right to appropriate the mantle of popular legitimacy in democratic societies,

"In the policy arena... such non-party organizations cannot and should not threaten to replace the role of traditional party organizations in a democracy. Voluntary groups, as single-interest advocacy lobbies, lack the mechanism of transactional negotiations and give-and-take among diverse interest groups that large party organizations, representing and encompassing those varied interests, possess.

This kind of give-and-take is particularly important when resolving controversial issues and requires complex trade-offs and balancing of diverse interests. Those who speak for the poor usually underplay the diversity among the poor and sometimes romanticize their traditional way of life. A dam may benefit thousands of small farmers in hitherto parched land, even as it displaces thousands of others; a development project may displace some from their ancestral land but provide jobs and more productive livelihoods for others; and so on. Each such case involves complex trade-offs and demands negotiated compromises and compensations across groups and over time. Such deliberations should take place within a party forum where diverse interests and stakeholders are represented."

Finally, this message for those opposing capitalism on the grounds that capitalist exploits the poor, is extremely relevant,

"Activists who romanticize the pristine life of the poor and the indigenous, and ignore a great deal of misery and stagnation, should keep in mind that the horrors of capitalism fade in comparison with the horrors of pre-capitalism."

Social enterprises in development

Here is my op-ed in today's Mint on social enterprises.

What If Greenpeace Ran China?

Though I am very often at loggerheads with positions that Greenpeace takes, a significant part of the following makes sense to me at least. As we all know, China's rise to becoming the world's second largest economy has been accompanied by becoming the world's most polluting economy in terms of carbon emissions and likely much else. My general belief is that while the PRC leadership expresses concern over these facts, it is reluctant to offend export lobbies in resource-intensive manufacturing industries. Moreover, it is not so easy of breaking away decisively with what, for the most part, can now be considered a "tried and true" growth strategy.

As a remnant of Soviet-style central planning, the Politburo still prepares five-year plans, basically blueprints for running the country. While the likes of William Easterly and those of a libertarian bent pooh-pooh these plans, it is remarkable how the major emerging economies China and India still engage in them. Though environmental overtures were already evident in the 11th and indeed the 10th five year plan, Greenpeace suggests the difference with the forthcoming document may be that it will have more teeth. So it can wish; let's see. In the meantime, if Greenpeace ran China, it would probably implement its following suggestions:

“In the last 30 years, China’s rapid economic development has astounded the world, but it has also exacted a heavy price on the environment and natural resources. Severe industrial and agricultural pollution is already taking a toll on public welfare and economic development. Meanwhile, climate change not only exposes China to increasing international pressure, but also has dire threats to the country’s water resources and food security,” says Greenpeace Campaign Director Sze Pang Cheung. “China urgently needs to transform its development model, which currently prioritizes economic growth, and instead embark on a healthy, sustainable path of green development.”

Thus, building on its over ten years of experience in China, Greenpeace has prepared some comments and suggestions on the forthcoming 12th Five-Year Plan:

1. We suggest that the government improves its energy efficiency target and ensure that they are met. Regarding the highly possible 16% target reduction in energy intensity (energy used to produce each unit of GDP), Greenpeace believes that this is not ambitious enough and will not sufficiently pressure local governments to put forth the fullest effort to meet the increasingly difficult challenges of improving energy efficiency. Learning from its past experiences, the Chinese government should establish higher energy savings targets, and implement more ambitious action plans and supporting polices to ensure their fulfillment.

2. We recommend that the government clearly define the strategy to adjust China’s energy mix, to halt the rapid growth of coal-fired power plants and gradually decrease the country’s over-reliance on coal. We hope that the environment tax can be implemented in the early phase of the 12th Five-Year Plan, and that it will include carbon dioxide so that the price of coal fully reflects its true environmental cost. At the same time, we recommend that government set bold targets for the development of renewable energy and actively solve bottlenecks – such as grid access – that are constraining the further expansion of renewable energy.

3. We understand that the 12th Five-Year Plan will include “invisible pollutants” such as heavy metals for the first time, as well as a comprehensive approach to pollutant management and control, including the key concept of prevention at the source. This marks historical progress in both the types of pollutants covered and the approach to pollution management. We recommend tracing back the control of heavy metals to industrial demand for these elements in their production chains. We also suggest setting limitations on the use of heavy metals in certain products and processes. At the same time, we call for greater information disclosure and public participation to make it fully possible to achieve pollutant control targets.

4. We recommend that the government establishes more detailed and more comprehensive policies and laws to regulate agricultural non-point source pollution. We call for the decreased use of pesticides and fertilizers to reduce and control agricultural pollution, an end to the commercialization process of genetically engineered crops (especially rice and corn), and the implementation of long-term plans to promote the development of ecological agriculture. Through these various policies, China will be gradually freed from its over-reliance on chemical agriculture.

Sze Pang Cheung says, “We believe that the Chinese government will continuously increase the strength, scope, and depth of its policies on energy savings and emissions reduction, environmental management, and adjustments of the economy and energy mix. At the same time, it will become the trend to implement more policies, expand environmental technologies, and support the growth of renewable energy and clean production. In such a historic transformation, we expect that local governments and industries will be farsighted enough to place energy intensity and pollution reduction targets over GDP growth. If they can seize this opportunity, then China can occupy a prime position in the race to green development.”

The full PDF is also available online. Considering that NGO activity in China is highly regulated, it is remarkable that Greenpeace is quite sanguine on the prospects for greening China. Then again, you would naturally think that it would be more sympathetic to a socialist regime than its typical bogeyman--the capitalist multinational firm.

Applying CSR Pressure on Indonesia's Sinar Mas

Clear-cutting rainforests is perhaps the environmental issue confronting Southeast Asia. Not only is deforestation blamed for increasing the severity of floods during the monsoon season, but it is also feared that irreversible biodiversity loss may result from disturbing these unique ecosystems. A new cause celebre among environmental activists is the Indonesian conglomerate Sinar Mas. While it has many different activities, that which it is increasingly known for is clearing prime rainforests in alleged contravention of Indonesian law to grow palm oil used by multinationals in food preparation and to grow trees for pulp paper. A few days ago, Burger King joined a long list of MNCs that have cut off business ties with Sinar Mas:

Environmentalists on Saturday praised Burger King's decision to stop buying palm oil from an Indonesian company accused of destroying rainforests. The U.S. hamburger chain giant — which recently sealed a deal to sell itself for $3.26 billion to 3G Capital — said Friday that it was canceling its contract with PT Sinar Mas Agro Resources and Technology over concerns it had not adopted sustainable farming practices.

It cited an independent audit that found the company's plantations had violated several regulations, including planting in some peatland swamps and secondary forests. "These practices are inconsistent with our corporate responsibility commitments," Burger King said in a statement on Facebook as it joined a growing list of multinationals that have broken ties with Sinar Mas.

Burger King did not say what its alternate source of palm oil — used for frying — would be. The environmental group Greenpeace, which has accused Sinar Mas companies of tearing down forests that are home to orangutans and other endangered species, welcomed the move. Bustar Maitar, the group's regional forest campaigner, urged other major corporate consumers like Cargill, Pizza Hut and Dunkin' Donuts to do the same.

Jatna Supriatna from Conservation International Indonesia sees the move as a lesson for Sinar Mas and others companies that have destroyed the tropical forests that are home to endangered wildlife and act as a filter to absorb carbon dioxide, a key cause of global climate change. "They should not just be aggressive in expanding plantations without allotting their revenues for the forest restoration," Supriatna said Saturday. "The government has to stop them."

Indonesia is the world's largest producer of palm oil, a cheap commodity used to manufacture cooking oil, margarine, cosmetics and biofuel. Sinar Mas said in a statement it was disappointed with Burger King's decision, but would work hard to convince the U.S. company that it was committed to sustainable practices. Unilever, Nestle and Kraft Foods also have recently broken ties with Sinar Mas.

And speaking of Cargill, the Ecologist recently commented that it is not committing to severing business ties with Sinar Mas:

The billion-dollar agribusiness giant Cargill is refusing to cut its ties with an Indonesian palm oil supplier who has admitted illegally clearing forest...Nestle, Kraft, Unilever and Burger King have stopped trading with the Sinar Mas group after an independent audit of its operations found it broke Indonesian law by clearing land before any assessment had been made of its conservation value.

[Sinar Mas] has also been accused of trying to cover-up the critical report by initially claiming it cleared them of destroying peatlands or forests of high conservation value in Indonesia...

[Cargill] said it was encouraged by the group's commitment to 'taking corrective actions and to strengthening its standard operating procedures'. It also says it is aiming to buy 60 percent of its palm oil from Roundtable for Sustainable Palm Oil (RSPO) certified growers by 2010. Sinar Mas is currently aiming for all its existing growers to become a RSPO certified by 2015.

Greenpeace has criticised such commitments as unforceable on the ground. It said Cargill would now become the focus of its campaigning against the illegal forest and peatland clearance undertaken by Sinar Mas. 'We will not stop until Cargill has stopped trading with Sinar Mas,' said Greenpeace Indonesia forest team leader Bustar Maitar.

Aside from this episode occurring in my backyard, I hope that keener readers familiar with American business notice the difference between the likes of Nestle and Burger King on one hand and Cargill on the other: Cargill is privately held, and hence more able to withstand pressure applied by activists from organizations such as Greenpeace. Lessons here cut both ways: NGOs may need further strategizing when aiming to achieve compliance by those whose ownership is concentrated and less likely to bow to public pressure. They don't scare as easily. At the same time, firms doing business with questionable CSR implications may be better off not listing on the stock exchange.

Qadhafi's Son Speaks @ LSE; Brawl Erupts

Once more during this very eventful week, it's interesting times on the LSE lecture circuit. It may not be known to many outside of (or even in) the UK, but the favoured son of Moammar Qadhafi by his second wife, Saif al-Islam Alqadhafi, completed his PhD in global governance here at the LSE. His thesis concerned The Role of Civil Society in the Democratization of Global Governance Institutions: From ‘Soft Power’ to Collective Decision-Making? Many believe that Alqadhafi is the likely successor to Moammar Qadhafi. Given the emphasis of his research, you will not be surprised to find out that he is broadly reformist in outlook. The London Times even combed through his thesis in search of clues about the future of Libya (assuming he takes the mantle of leadership). Let's just say his doctoral studies were more eventful than mine:

While other doctoral students struggled to survive with occasional lecturing, the multimillionaire Libyan was also negotiating the release of the Lockerbie bomber and $1.5 billion compensation for his victims, opening up his country’s oil and gas fields to international businesses and restoring diplomatic links with the US.

Dr Gaddafi, 37, introduces his work by writing: “I shall be primarily concerned with what I argue is the central failing of the current system of global governance in the new global environment: that it is highly undemocratic.” The comments will be read with interest in Libya, where his father has ruled since a military coup in 1969 and where opponents are still ruthlessly suppressed. Dr Gaddafi says that his dissertation “analyses the problem of how to create more just and democratic global governing institutions”, focusing on the importance of the role of “civil society”.

“Citizens in undemocratic states emphasise that they are not represented in the decision-making process of the IGO [intergovernmental organisation],” he writes. “Even if their governments are represented in some capacity, because their governments are authoritarian, abusive and unrepresentative of their people’s real interests. Others emphasise that even democratic states fail to consult adequately with their own citizens regarding their positions in international negotiations.”

In light of his favourable impression of the LSE, he also made a gift of £1.5 million to our sister Global Governance programme. From our school paper, The Beaver (our mascot):

The LSE has accepted a donation from a Libyan non-governmental organisation headed by Saif Al Islam Al Gaddafi, LSE alumnus and son of the Libyan leader Muammar al-Gaddafi. The donation from Gaddafi International Charity and Development Foundation (GICDF) amounted to £1.5 million and was intended to support LSE Global Governance.

In a press release from the School, it was stated that LSE Global Governance “has produced pioneering work on global governance, shifting debate away from the role of individual governments in global affairs to far-reaching analysis of the framework of principles, rules and laws necessary to tackle global problems”.

“This donation will support us as we work to increase understanding of global problems and to encourage interaction between academics and policy makers,” said Professor David Held, a co-director of the centre along with Professors Mary Kaldor and Danny Quah in the press release. “It is a generous donation from an NGO committed to the promotion of civil society and the development of democracy.”

The GICDF “carries out developmental and humanitarian activities in the social, economic, cultural and human rights fields”, as described on their website. It has been praised in particular for its work in supporting human rights for Libyan citizens.

In 2004 Amnesty wrote that the “organisation has made strong calls for long-term human rights violations, including deaths in custody, to be addressed.” This appears to tally with arguments made by Professor David Held in the Council meeting on the Foundation’s donation where he argued that the Foundation’s stance on both democracy and human rights had sometimes led to disagreement with the Libyan state but nonetheless had enjoyed success in areas such as penal reform.

Despite his reformist orientation (and the foundation being independent of the government), Saif al-Islam Alqadhafi perhaps cannot just yet escape the shadow of his father. Indeed, he has not distanced himself fully despite his doctoral work, especially by helping secure the release of the convicted Lockerbie bomber al-Megrahi. Indeed, things came to a head just this Tuesday as scuffles broke out prior to the talk between pro- and anti-Qadhafi forces. Like in many other places, Libya has a fairly sizeable diaspora community here in the UK:

One man was injured during scuffles between pro- and anti-Libyan government groups last night outside a London School of Economics building during a speech by the son of Libyan leader Colonel Gaddafi. Police were called to the incident, in Lincoln's Inn Fields, after angry exchanges between the placecard waving demonstrators and a pro-Libyan government group. No arrests were made. The injured man was treated by ambulance officials, but was not taken to hospital.

The Washington Post has a profile of its own of Saif al-Islam Alqadhafi. Take your pick: you can listen to Alqadhafi speak via podcast or video. I myself haven't had the opportunity to do so as I went to another event but will do so shortly. As I said before, there is just so much happening that you cannot attend them all.

Brazilian Megadam: US Celeb Activists 1, Gov't 1

The construction of megadams has long been controversial and has served as constant fodder for those interested in IPE, development, and/or the environment. In the seventies and eighties, the World Bank was constantly criticized for promoting the construction of megadams from voices in civil society. The arguments against these megadams are well-rehearsed: (1) they are costly and not particularly efficient means of generating energy; (2) they disrupt indigenous peoples' lives by removing their sources of livelihood (like fishing) or forcing relocation; and (3) they cause significant ecological damage by disrupting river flows, industrializing irreplaceable rainforests, and so on. Civil society has played a role in drawing attention to the ecological consequences of these megadams. In particular, the World Bank has since soft-pedalled their construction and reduced funding for them accordingly. If you're interested, Susan Deakin had a neat article a couple of years back in the Journal of International Relations and Development on how this change of heart came into being that I much recommend.

An important thing to keep in mind, however, is that at the tail end of the megadam era, two came on to the drawing board. The first was China's Three Gorges Dam that I have covered in some detail in the past [1, 2]. The other is the main topic of today's post, Brazil's proposed Belo Monte Dam. FYI, Three Gorges Dam is by far world's largest dam; when it is fully operational it will produce 22,500 megawatts. The second is an earlier Brazilian project that is still very massive, Itaipu Dam, which puts out 14,000 MW. My cultured readers and classical music snobs (they aren't always the same ;-) are aware that composer Philip Glass was suitably awed by the scale of Itaipu as to compose excellent music about it. If constructed, the estimated output of Belo Monte will be 11,233 MW, making it the world's third largest dam in terms of output.

While it has proven to be effective to pressure the World Bank for funding these projects--it eventually decided against funding Three Gorges Dam as well as Belo Monte Dam--the governments of these countries have continued with plans to bring them to fruition. China's Communist Party being essentially immune to criticism, Three Gorges is there despite flooding historically rich areas and the rest of it. However, a drama is still playing out in Brazil over Belo Monte. The indigenous peoples have long been against this project as they are the ones who will be worst affected. In the 1990s, Belo Monte also became something of a cause celebre as none other than Gordon "I'll Be Watching You" Sumner (aka Sting) brought it to the world's attention [see this footage]. He's even made an analogy that if some banks are too big to fail, what more the rainforest? What is interesting now, of course, is that Brazil is now led by a former labour activist, President Lula, who one would expect to be more sympathetic to the voices of the poor.

Yet fast forward a decade and we have debates falling under similar divides. In early February, the Brazilian government's environmental analysis concluded that the project could go ahead and set the stage for bidding among construction firms. Yes, they have inserted all sorts of environmental qualifiers and other guidelines that must be followed, but at the end of the day, the government declared that the show must go on.

Enter our new batch of celebrity activists James Cameron (director of Titanic and Avatar) and Sigourney Weaver (the heroine of his Alien franchise). Not having seen the former two movies, I gather that Avatar deals with indigenous peoples being subject to the questionable mores of "development." There's even footage of Cameron visiting the site of the planned dam, the Xingu River. Now we have more recent news of yet another monkey wrench being thrown into this long-running saga as the judicial branch seems to have issues with Brasilia. From Reuters:

Brazilian judicial authorities have delayed an April 20 auction for the construction of the massive Belo Monte hydroelectric dam in northern Brazil, an official statement said late on Wednesday. The auction was put on hold by a federal judge in the state of Para where the dam is to be built, in order to examine petitions submitted by the public prosecutor which claim provisions for environmental protection at the site are inadequate.

The 11,000 megawatt project is expected to cost around 20 billion reais ($11.44 billion) but interest by the private sector has waned. Two major Brazilian firms said they no longer intended to bid as it was not financially attractive. The government is likely to appeal against the decision at a federal tribunal in the country's capital, Brasilia.

The injunction was issued after the first of two petitions submitted to judges was accepted as valid for consideration. "The (prosecutor's office) argues specifically that the construction of the (dam) will violate various provisions of environmental legislation, including lack of conclusive scientific data," the statement on a justice ministry website said. If the decision is upheld, Brazil's environmental agency Ibama will also be required to issue a new license for the project whose first phase is expected to be completed by 2015.

For now it's a draw. Having opened the project to bidding, the government has been stymied by concerned parties. And who will bid on this project now? More importantly, will the builder be able to stand up the civil society and environmental scrutiny this project will invariably bring? We'll see. In the meantime, Amazon Watch has a lot of information of use for those mulling where they stand on this important debate.

Shark Tales: Int'l Institutions Fail Overfishing

In some ways, I am a reluctant environmentalist. If we lived in a world of infinite fish stocks and immediate replenishment, there would be no problem. However, I must draw the line when overfishing threatens extinction and collective action fails to do anything about it. A few days ago, I discussed how motions to limit overfishing of bluefin tuna--an increasingly affected species as the popularity of sushi and sashimi increase worldwide--failed before the UN Convention on International Trade in Endangered Species (CITES) in the face of Japanese opposition in tandem with source countries like Libya. Now we receive news that another proposed measure to limit the fishing of sharks has met a similar fate due to the objections of countries led by (surprise!) Japan. And don't forget the whales as it believes "domino theory" is operative in endeavours to limit fishing.

As with the bluefin tuna objections, these measures were voted down by those with vested commercial interests. The popularity of Japanese cuisine doesn't need much elaboration here. However, some of you may be less familiar with the popularity of shark's fin soup--an expensive delicacy served in Chinese restaurants. In China and Chinese diaspora communities, shark's fin soup is a prestige dish often served during wedding banquets and other important events to indicate the graciousness of the hosts. The economic rise of East Asia has meant greater demand for shark's fin from middle class consumers. However, environmentalists have long bemoaned fishing sharks for this dish as the fins are basically cut off and the rest of the shark is discarded. Here is a description from Reuters of its rising popularity:

One of the world's most expensive food products, a bowl of shark fin soup can cost $100, with a single fin worth more than $1,300. Up to 10 million kg of shark fin is exported annually to Hong Kong by nearly 87 countries, according to Oceana, a marine conservation group. Demand for the soup has exploded in Asia, where an expanding middle class can now more easily afford a delicacy once reserved for the wealthy. Japan, Indonesia, Malaysia, Taiwan, Thailand and China are big shark fin consumers.

The net result is a noticeable decline in shark populations. Agence-France Presse has the post-mortem on how three out of four species marked for conservation have not made the grade; the only one making it is, to no one's surprise, that whose fin is not valuable:

The UN wildlife trade body slapped down a trio of proposals on Tuesday to oversee cross-border commerce for sharks threatened with extinction through overfishing, sparking anger from conservationists. The only marine species granted protection at a meeting of the Convention on the International Trade in Endangered Species (CITES) was the temperate zone porbeagle, a shark fished for its meat...

The shark species left exposed to globally unregulated commerce were the scalloped hammerhead, the oceanic white tip and the spiny dogfish. Millions of hammerhead and whitetip are extracted from seas each year, mainly to satisfy a burgeoning appetite for sharkfin soup, a prestige food in Chinese communities around the world. The US proposals were rejected by a narrow margin, opening the possibility that one or both could get a second hearing on Thursday when the 13-day conference ends.

Only decades ago, the two species were among the most common of the semi-coastal and open-water sharks. But incidental catch and demand for fins have slashed populations by 90 per cent in several regions. The fish are often tossed back into the water after their precious fins have been sliced away.

The scalloped hammerhead is listed by the International Union for the Conservation of Nature (IUCN) as "vulnerable" globally, while the whitetip is "critically endangered" in the north-western Atlantic, and "vulnerable" elsewhere. Once the highest level of biomass in the Gulf of Mexico, the whitetip is 99 per cent depleted there today, marine biologist Julia Baum said.

Japan led opposition to the four measures, arguing that management of shark populations should be left to regional fisheries groups, not CITES. Conservationists counter that fishing for sharks is unregulated. "The problem today is not there is serious mismanagement of trade in sharks, as for tuna, but that there is no management at all," said Sue Lieberman, policy director for the Washington-based Pew Environment Group.

The proposals called for listing on CITES' Appendix II, which requires countries to monitor exports and demonstrate that fishing is done in a sustainable manner. The scientific panel of the UN Food and Agriculture Organisation (FAO) recommend protection for all the species except the spiny dogfish which, along with the porbeagle, was also voted down at the last CITES meeting in 2007...

And if you haven't figured out the arch-villain yet -

Many NGOs said that intensive lobbying by Japan played a critical role in the measures being shot down. "We see clearly now the Japanese motivation for opposing all these marine species proposals," said Anne Schroeer, a Madrid-based economist with Oceana. "For the whales, they say we are catching it traditionally. For the bluefin tuna, they say we are eating it. But for the sharks, there is nothing but pure economic interest." All told, a third of the world's 64 species of pelagic, or open water, sharks face extinction, according to a report issued last June by the IUCN's Shark Specialist Group.

It is all quite sad, really. While Japan always says it is interested in conservation, it always leads movements to thwart efforts designed to prevent overfishing. It's not very self-enlightened, methinks, and will ultimately backfire in the long run as doing nothing and fishing these species to extinction or near-extinction is a solution acceptable only to the Bjorn Lomborg set.

The issue here comes down to one familiar with limiting trade in controlled substances--reducing demand. Consuming and producing nations will, in the final analysis, go for their interests. Fortunately, there are recent efforts such as Shark Savers and WildAid's ongoing high-profile campaign in China to increase consumer education about the hazards associated with overfishing:

During 2007-08, WildAid developed and expanded its work to reduce demand for shark products, primarily in China. This campaign included television and billboard campaigns featuring leading Olympic stars pledged not to eat shark fin soup. The advertising featured the main stars of the Olympics Opening Ceremony, Yao Ming, who carried the Chinese flag for the Chinese team, Li Ning, who lit the giant torch and musician Liu Huan, who sang the official theme song of the 2008 Olympics.

In 2009, WildAid and Shark Savers have come together to amplify the impact of this awareness and education campaign in China to reduce consumption of shark fin soup. This campaign will utilize cultural, athletic, and business heroes of China, including basketball legend Yao Ming, to deliver a message proven to make shark fin soup socially unacceptable...

We, at Shark Savers, are very excited to be working with WildAid on this campaign. No where in the world can we affect as big a change in shark consumption habits than in China. We think that, together, we have the right skills, message, and elements to 'close the sale' with the Chinese public. It is an urgent time as shark populations continue to dwindle, but we think that there are signs of real hope. With the athletic and cultural heroes and prominent businessmen that are coming together for this cause, and the already-proven message, we think we may be at a tipping point in China on the issue of shark fin soup.

You can say that marketing led us into this mess, so (social) marketing should help lead us out of it. Ultimately, there is nothing culturally ingrained about having to consume this dish and there are substitutes for it using similar recipes. There is still a chance of limits being placed before CITES wraps up later today, but if not, curbing appetite for the dish is really the way to go in the absence of collective action.

And no, I don't eat shark's fin soup.