Over 50 years, and especially the last 30 years, the CITES has faced a death by a thousand cuts.
It has taken until CITES CoP20 for some stakeholders to finally realise that ignoring the predicament of this critically important regulator has brought it to the brink of what could be ironically called extinction.
The CITES core budget hasn’t increased in 25 years, while the number of species regulated (on paper at least) has exploded. Celebrating adding more species for trade restrictions when it comes with no additional funding is insane. Particularly when there is an easy way of the CITES receiving $100 million in extra funding annually.
As many of our readers and supporters know, Nature Needs More believes that all trade in wild species should move to a reverse listing model, regulated by the CITES. As our 2021 report (that can be downloaded in all official UN languages) highlights, moving to a reverse listing model and requiring a business levy on all import values, up the full value chain, could generate billions of dollars annually for the CITES and conservation programs in its signatory countries.
Switching to a reverse listing model was first recommended (and rejected) in 1981, when only 700 species were listed for trade restrictions. The 1981 submission recommending the new model be adopted predicted all the problems that would arise under the ‘default to trade’ model adopted by the CITES at its launch and still in place today. This current model was flawed from the very start and it should come as no surprise that the CITES has failed in its stated objective of protecting endangered species from overexploitation through trade.
But while we wait for a real fix, such as moving to a reverse listing and full business pays model, what can by done right now to help tackle the CITES funding crisis? Let’s be clear, this isn’t about saving a regulator, this is about saving the 41,000 commercially valuable species that the CITES lists for trade restrictions. Continuing to sell out these 41,000 species should be seen as a wildlife crime when such a funding fix is available.
Given the hesitance shown to comprehensively modernise the regulator, in 2024 Nature Needs More wrote a report on how a small levy on selected imports could raise funds, even under the current CITES articles. In this short report we expanded on our proposal to put a 1% levy on the value of commercial imports of Appendix I, II and III listed species into the major import markets. This would create a secure and equitable funding stream for CITES monitoring and enforcement, which could be distributed to national authorities via the CITES External Trust Fund.
The question that was posed to us in relation to such a levy was “How much money could this realistically raise per year?”. The exercise below highlights what is immediately possible. We estimate how much money a 1% levy on commercially traded CITES species into the major import markets could raise.
This is a simple question and the information should be easy to find. It isn’t, because mostly it does not exist. The first thing to ask in these circumstances is, which shareholders benefit from the value of the trade in wild species being so opaque? The conservation sector can no longer naively ignore what has been allowed to happen in the name of a profit at all cost approach.
To guestimate what could be raised, we use the only data source that contains shipment values as declared to customs, the UN Comtrade database.
This Comtrade system uses HS (harmonized system) codes for the classification of good and services processed by customs. Unfortunately, there is rarely a clearly identifiable relationship between an HS code and a CITES listed species (or several). This means deriving an estimate is going to be fraught with both over- and underestimates, depending on what detail is available via HS codes.
In addition, many CITES listed trades will be impossible to pinpoint in the Comtrade data because they will be of derived products and manufactured goods.
Nevertheless, it is useful to obtain a rough estimate by focussing on HS codes that most likely substantially involve CITES listed species. We made a number of assumptions, which are detailed in the list below:
- We only used the US, EU, UK, China/HK, Canada and Japan as the major import countries that will raise the levy (it could be argued that at least India, Australia, the GCC countries, Singapore, Norway, and Switzerland should all be added to the list).
- We only picked HS codes that likely correspond to CITES listed species (which basically means sticking with raw materials only, excluding processed/manufactured goods. This will significantly reduce the estimate of funds that are raised by the levy.
- The levy will only be raised on goods traded with CITES purpose code ‘T’ (commercial). As there is no such distinction in the Comtrade data, for the purposes of the exercise we assumed that the other purpose codes do not constitute substantial trade.
- We assumed that obvious over-estimates (OE) will mostly cancel out under-estimates (UE). For example, for wood, there is an HS code for tropical woods other than merbau, meranti and a few others (440349). Not all of these will be CITES listed, leading to an over-estimate. But we did leave out HS codes for oak and ash and both of those include oak and ash species that are CITES listed and heavily traded.
Below is a screenshot from Comtrade with an example of how the data was obtained.
Using 2024 as the year, we can obtain the following data:
- Sharks/Rays: $170m (OE)
- Coral: $190m
- Eels: $1,000m
- Caviar: $120m
- Clams/Mussels/Sea Cucumber: $630m (OE)
- Exotic skins: $340m
- Tropical wood: $4,000m (both OE and UE)
- Orchids/Cactei/Live plants: $2,000m (OE)
- Live non-farm animals (pets/food): $740m
That gives us a total of about US$9 billion per annum. A 1% levy of which would yield US$90 million per annum for the CITES. As explained, this is not a precise estimate because the system doesn’t allow for precision; it is more of a ballpark number.
There are likely substantial overestimates in the tropical wood and live plants numbers. Whether or not those overestimates are offset by raw materials trades that we have not considered, is anyone’s guess.
The CITES World Trade Report from 2022 lists a number of very large trades by volume that are not part of our estimate: cactus stems, aloe stems, sago palm leaves, holy wood, Mongolian oak, Manchurian ash, snowdrops and others. We have also excluded the ornamental fish trade (which includes a growing number of CITES listed species, for example seahorses), as the corresponding HS codes are far too broad.
What is completely missing from the list above are manufactured goods that require CITES permits. They are impossible to identify in the Comtrade data, as they are classified as things like handbags or shoes, but include items made from python or crocodile skin. The same goes for furniture made from CITES listed wood species, perfumes and oils derived from CITES listed plants etc.
Within the current trade system, the only way of getting estimates for manufactured goods would be through matching CITES permits to actual waybill data, which is currently impossible, given that most countries don’t have their CITES permit system integrated with customs!
In addition, under the current CITES model, how exactly manufactured goods would be handled for the purposes of the levy will be subject to negotiation and likely some major disagreements. Some derived products and manufactured goods contain large amounts of CITES listed species by volume or weight whilst others may only contain comparatively small amounts. Questions like this would have to be resolved by a working group that includes WCO specialists.
The key thing here is that if the wealthy importing countries, whose companies make big profits from the trade in wild species, showed just the minimal commitment to an immediate, basic solution to the CITES funding crisis, a levy as described could raise around US$100 million annually.
This is 16 times more than the CITES core funding today and could make a huge difference to financing central functions that are currently unfunded (like the real costs of staging the Conference of the Parties, Committee meetings, Working Groups and enabling sponsored delegates to attend). It would also stop CITES from abandoning useful solutions – such as a central hub for e-permit exchange, which was dropped because the annual cost was going to be US$0.5 million.
Yet only a small percentage of the levy needs to go to central functions. The vast majority would be distributed to parties.
That alone will make a huge difference by giving parties access to a dedicated pot of funding to help with national CITES priorities. This would mean signatory countries would have access to funds implementing eCITES permit systems, financing prosecutions, properly funding non-detriment findings and so on.
A formula would need to be agreed at the CITES CoP to determine how funds raised by the levy would be allocated and what types of requests would be given priority.
No matter how difficult such agreements will be to come by, any formula that distributes tens of millions of dollars annually is better than having no funds at all, which is the present state.
Maintaining the status quo on the completely inadequate CITES funding model and financial crisis would continue the slow-motion suicide of the convention.
Anyone complicit in this, including academics and conservation organisations to afraid to challenge what is in place because of the fear of it only getting worse should be ashamed of their lack of courage.
Yes, we live in a time of crisis and turmoil, which are both guaranteed to get worse before anything gets better. The post-WWII governance model and power structures have run their course and will be replaced. That includes CITES. The time to attempt serious reform is now, to prevent further damage to and overexploitation of nature because of the weakness of institutions and governments at this point.
Doing something small, real and pragmatic could provide the CITES with an easy $100 million per year. Let’s hope there is some courage to take the first step, because continuing to sell out wild species for profit, with too few checks or safetynets, is a wildlife crime.