Sunday, November 19, 2006

To Iceland we no longer "goeth"

I echo Gristmill's sentiment:
Ah, I love it when the market works! Bottom line: you want tourist dollars, then stop killing whales.

This is a follow on post from our "Buy a Whale: the Coase theorem in action" article where a whale was estimated to be worth $180,000. The idea was to raise this money on EBAY and pay Icelandic fishermen NOT to kill one whale - Coase in action.

I suspect the cost to Iceland will be a lot greater than any money raised by hunting whales. The problem is of course that those in Iceland that suffer (hotel owners etc.) are not those that are killing the whales. Coase (or problems with Coase) again.

The Resumption Of Whaling Hurts Iceland Tourism (New York Times).
The Icelandic government is getting a quick lesson in ethical tourism as a result of its decision last month to resume commercial whaling, despite a 21-year international moratorium on the practice. The airline Icelandair and several of the country’s leading whale watching companies have reported cancellations in response to the Fisheries Ministry’s policy, which maintains that the whales are a sustainable resource. The new rules allow the taking of 30 minke whales and 9 fin whales, like one killed last month, right, by the end of August 2007.

“We have had people canceling their reservations as a political gesture,” said Clive Stacey, managing director of Discover the World, a British company that sends on average 7,000 tourists a year to Iceland, and that has now added a travelers forum to its Web site ( As one tourist writes, “We had told all our friends to go and visit Iceland to see the whales, as well as the wonderful scenery, but how can we do that now?”

According to Asbjorn Bjorgvinsson, the chairman of the Icelandic Whale Watching Association, last year some 90,000 tourists went on whale watching trips — an industry begun in the early 1990’s following a Greenpeace-organized boycott that led to the government ban on whaling in 1989.

Mr. Bjorgvinsson and the managing director of Icelandair, Jon Karl Olafsson, who is also chairman of the Icelandic Tourism Association, are lobbying against the government’s decision, as are some 460 Icelandic companies worried about the effect on tourism.

“Travelers need to know that boycotting Iceland will only hurt the whales,” Mr. Stacey said. “The only people fighting for them are those in the tourist industry, and we need their support.”

The International Fund for Animal Welfare is also gathering protest letters from around the world at

I am not sure I buy the argument from Mr. Stacy that a boycott will only hurt the whales? Why? Will more whales be killed than are already being killed if tourism stops? Will the protests stop if the tourists stop? It could be argued that the tourist industry would protest a lot stonger if there were no tourists at all (at least before they all go bust).

Instead of using EBAY, one solution is for the Icelandic tourist industry to pay the whalers to stop hunting (with or without government support). Problem solved and Coase holds. The sufferers (hotel owners) pay the polluters (hunters).


Lars Smith said...

A similar solution has been used to buy salmon fishing rights on Iceland, see

cactus said...

"The problem is of course that those in Iceland that suffer (hotel owners etc.) are not those that are killing the whales. Coase (or problems with Coase) again."

One other problem... those killing the whales, and those that suffer, are both heterogeneous groups. The amount it is worth to each whale killer to cease killing whales, and the amount it is worth to each hotel worker to cease killing whales, is different.