Flooding the market with fake rhino horns

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By 2017-11-21

By Jeremy Berke

Rhinos are among the hardest hit by the illegal wildlife trade. The horns fetch high prices on the black market — up to $60,000 per pound, far more than the price of gold.
They're used to make elaborate carvings across East Asia and are also believed to have curative properties in some traditional Eastern medicine practices.

Pembient, a two-year-old Seattle-based biotech startup, is trying to solve the rhino poaching crisis with a 3D printer and some clever economics. The idea is to "bio-fabricate" rhino horns out of keratin — the same material that fingernails and hair are made of — using 3D printing to undercut the horn market.

The horns are genetically identical to real ones on the "macroscopic, microscopic, and molecular" level, Matthew Markus, Pembient's CEO and cofounder, told Business Insider. The fabricated horns, once perfected and market-ready, will look and feel so real that distinguishing them from the natural ones will be impossible.

People won't know whether they're buying real horns or fake ones.
Rhino poaching in South Africa, a global hotspot, has declined in recent months, but the problem is still dire: 1,054 rhinos were killed in the country in 2016, up from just 13 in 2007, according to the nonprofit Save the Rhino.
The art and antiques market in China largely drives the problem, according to a paper published in the journal Biological Conservation. Most buyers in China purchase high-value rhino-horn carvings as investments and collectible items, the study's lead author Yufang Gao wrote.

Pembient's fabricated horns will eventually be sold as raw material to traditional carvers in Asia, and used to produce high-value goods like bracelets and combs that fetch exorbitant prices on the black market.
By pushing fabricated horns into the supply-chain at various points, Markus explained, people won't know whether they're buying real rhino horns or fake one.

Because the fake horns are much cheaper to produce, they could be sold at a lower cost and push prices down across the board. (Because Pembient is still in its early stages, however, exact prices for the fabricated horns aren't set yet.) Ideally, the market will end up charging less for every horn, since there won't be a reliable way to tell the difference. Pembient borrowed this idea from a concept in economics called Gresham's Law, according to Markus, which states that if a low-value good, like a fake rhino horn, is passed off as the real thing, it drives down the value of all such items on the market.

"If you cordon rhino horn off, you create this prohibition mindset, Markus said. "And that engenders crime, corruption, and everything else that comes with a black market."
Markus hopes his plan will eventually lower incentives for poachers to slaughter rhinos.
A different approach to conservation
Pembient's strategy is a radical departure from the traditional demand-reduction approachespoused by conservationists. Reducing demand for rhino horns is "infeasible," Markus said. "And it's not really ethical either.

"These practices are based on thousands of years of cultural tradition — they're a lot older than Thanksgiving," he added. "We can't just tell them to stop."Some conservationists, however, don't agree. The International Rhino Foundation and Save The Rhino International, two NGOs dedicated to rhino conservation, have pointed out that many rhino horns fetching astronomical prices on the black market are already fake.

"More than 90% of ‹rhino horns' in circulation are fake (mostly carved from buffalo horn or wood), but poaching rates continue to rise annually," the organizations wrote in a joint statement.
The statement also argued that developing and marketing synthetic horns diverts attention from efforts to end rhino poaching, which is the "real problem."

But other groups are more open to the novel approach.
"It would be rash to rule out the possibility that trade in synthetic rhinoceros horn could play a role in future conservation strategies," TRAFFIC, a nonprofit that monitors the wildlife trade, wrote in a 2015 paper.
Another anti-poaching strategy involves park rangers and veterinarians surgically removing rhino horns (they grow back) to protect the animals from being hunted. But that also brings up ethical issues.

The path ahead for rhino conservation
Markus has attended numerous conservation conferences around the world, and readily acknowledges the stark difference between his approach and that of most traditional conservationists.

"While we both have the same goals," he said. "There's been a lot of friction."
Pembient is now pursuing some novel funding strategies to get its horns on the market.
In August, the company introduced a cryptocurrency via an initial coin offering, called Pembicoin. The coin offering is an effort fund research into the bio-fabricated horns and gauge consumer demand, according to the company's website.
For every coin purchased now earns the buyer one gram of biofabricated rhino horn once they become available in 2022.

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