The real costs of illegal logging, fishing and wildlife trade: $1 trillion–$2 trillion per year

[caption id="attachment_305" align="alignnone" width="300"] The Selangor State Customs Director Dato' Azis Yacub with its largest ever seizure of ivory in transit through the country, finding 1,500 pieces of tusks hidden in wooden crates purpose-built to look like stacks of sawn timber. The ivory, stashed in 10 crates which were divided between two containers, were shipped from the port of Lomé in Togo and were headed to China. © Elizabeth John/TRAFFIC[/caption] The statistics are grim: an elephant is poached for its tusks about every 30 minutes, an African rhino for its horn every 8 hours, one in five fish is caught illegally, and in certain countries, particularly in Africa and South America, 50% to 90% of timber is harvested and traded illegally. As much as 35% of the value of all illegal trade is estimated to come from rosewood. Last week we issued a new report—Illegal Logging, Fishing and Wildlife Trade: The Costs and How to Combat It—that tallied the annual cost of these illegal activities at a staggering $1 trillion to $2 trillion. More than 90 percent of these losses are from ecosystem services that forests, wildlife and coastal resources provide, and that are not currently priced by the market, such as carbon storage, biodiversity, water filtration, and flood retention. This market failure poses a major policy challenge for global biodiversity conservation efforts. Governments in source countries must capture financial benefits for conserving global ecosystems, and promote legal and sustainable logging and forest management, legal fishing, and wildlife trade to improve local livelihoods and increase their fiscal revenues. Conserving these services is critical for advancing the Sustainable Development Goals (SDGs). Illegal activities undermine our ability to achieve many of the SDGs—especially those goals dependent on conserving biodiversity and limiting climate change. This includes goals on poverty, hunger, health, water and sanitation, sustainable cities and communities, climate action, life below water, and life on land. This is especially the case in low-income countries where livelihoods disproportionately depend on natural capital. In these countries, governments forego an estimated $7 billion to $12 billion in potential fiscal revenues per year, according to the latest report. Besides the market failure problem, illegal logging, fishing and wildlife trade is facilitated by systematic corruption and weak governance across the public and private sectors. This multibillion-dollar transnational illegal trade is operated by international criminal organizations and is on par—in scope and revenue—with human and drug trafficking. Despite targeted and often successful efforts, initiatives to combat these activities pale in comparison to efforts to fight other transnational crimes. For example, a 2019 World Bank study found that roughly $260 million a year is spent to combat illegal wildlife trade in 67 African and Asian countries whereas the U.S. federal government alone spent $30 billion on drug control efforts in 2017. So, what will it take to tackle the illegal trade of the world’s precious natural resources? The report provides a helpful road map for coordinating actions locally, nationally, and globally to address the root causes of these illegal activities. It also suggests measures to help countries strengthen their national capacity to address these crimes and to elevate efforts to protect their natural resources. For example, countries can consider threats, vulnerabilities, and consequences of environmental crimes when conducting their national risk assessments for money laundering and terrorist financing. Other suggested measures include:

• Recognizing that large-scale illegal trade in natural resources is as serious as transnational organized crime.
• Changing the incentives and behaviors that drive demand for illegally traded wildlife, forest products, and fisheries.
• Scaling up funding and enabling public-private partnerships to tackle the illegal natural resource trade.
• Strengthening governance and establishing a trade, legal and fiscal environment that supports legal trade of non-endangered species of wildlife, fisheries, and trees to promote sustainable livelihoods.
• Putting local communities, notably indigenous peoples, at the center of the design and implementation of solutions to share the benefits from managing natural assets and combating Illegal activities.
• Adopting national strategies for dealing with illegal activities across the supply chain.
• Capturing the benefits from global ecosystem services such as carbon storage and biodiversity.

Above all, we need to all work together—the public and private sectors, non-governmental and civil society organizations, local communities and indigenous peoples—to fight these illegal activities and record the true value of natural resources through natural capital accounting. Together we can make a difference in protecting these irreplaceable biodiversity resources upon which we all depend. Please read the report here. The Global Environment Facility (GEF)-funded Global Wildlife Program (GWP) funded the research and development of Illegal Logging, Fishing and Wildlife Trade: The Costs and How to Combat It. The GWP/World Bank Group (WBG) team that authored the paper consisted of Juan Jose Miranda Montero, Elisson Wright, and Muhammad Najeeb Khan. The paper is dedicated to the memory of Claudia Sobrevila—mentor, friend, and a leading voice for biodiversity, indigenous peoples, local communities, and women in conservation. We are forever grateful for her outstanding leadership of the Global Wildlife Program and Amazon Sustainable Landscapes Program. This blog was originally published by the World Bank.