Apr 03, 2008

The Challenges of Using Markets for Good

by Tim Ogden

Harnessing global markets for the common good can result in benefits for all. Two recent stories show creative thinking, and the challenges, around such an approach.

One is eco-fur, described in the Wall Street Journal‘s “On Style” column. Fur products have become increasingly controversial as activists point out the terrible living conditions imposed on animals raised for their pelts. On the other hand, many regions suffer environmental damage from invasive animal species who destroy local flora and fauna. New Zealand faces this problem with the brushtail possum (an Australian relative of the koala; no relation to North American possums) which threatens the survival of many birds unique to New Zealand, including the Kiwi. The New Zealand government is actively engaged in trying to wipe out brushtailed possums. Several New Zealand companies have taken to marketing furs and fur-blend products made from the possums’ pelts. The idea is that those who want fur, but deplore the conditions under which most are made, can have their cake and eat it too. These fur products actually benefit the environment and the possums are going to be killed regardless.

The market so far has failed to pick up on possum fur. The Journal story quotes a retailer describing the problem: “the people who will buy this kind of product don’t care [about its environmental impact].“

Meanwhile, the Economist notes that the Cameroonian government has been trying to use market mechanisms to fund protection of a national forest. The government has offered the forest, part of a network of untouched old-growth forests that are crucial to survival of many species of animals. Rather than lease the forest to loggers, the government has been trying to find a conservationist to take on the lease. Of course, the government expects to be compensated for the value of land to loggers. Thus far, major conservation groups have declined, believing the price is too steep (and probably that the government will turn a blind eye to illegal logging anyway).