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How one tech startup aims to disrupt the market for illegal rhino horns

AILSA CHANG, HOST:

In business, the million-dollar question is how to get people to buy stuff, right? But in wildlife conservation, the challenge is how do we get people not to buy stuff. Juliana Kim and Darian Woods from NPR's The Indicator report on one tech startup's efforts to disrupt the market for illegal rhino horns.

DARIAN WOODS, BYLINE: The top markets for real rhino horn are in China and Vietnam. Some buyers use the horns as sculpting material to make art. Others grind up the horn and consume it, believing that it can cure cancers or hangovers.

JULIANA KIM, BYLINE: Yeah, that's not true.

WOODS: Right.

KIM: Either way, it's illegal to sell rhino horns internationally. So all of this is happening in the black market, and it's kind of a hot commodity.

WOODS: Matthew Markus is the CEO of a biotech firm, Pembient, that was hoping to disrupt those markets with rhino horn made in a lab.

MATTHEW MARKUS: We wanted our horn not to be its own separate market. We wanted our horn to invade the illicit market and collapse it.

WOODS: Matthew's company emerged in 2015, around the same time as other lab-grown products were taking off.

KIM: People who are optimistic about lab-grown horns bring up a specific economic concept. When a prospective buyer is confused about the quality of a product, it can actually discourage them from buying it at all.

FRED CHEN: That's exactly what I'm talking about in terms of creating confusion in the market for rhino horns using the synthetic horns.

WOODS: That's Fred Chen, an economics professor at Wake Forest University in North Carolina. And Fred says that the confusion caused by synthetic rhino horns could bring the value of the real horns down.

CHEN: Or maybe if I do decide to buy something because I'm not certain it's the real thing, maybe I don't want to pay as much.

WOODS: And that sounds to me a lot like what happened with another commodity that scientists figured out how to grow in the lab - diamonds.

KIM: I mean, look at De Beers, one of the biggest diamond distributors. Last year the company cut the prices of some of their stones by nearly half at least in part because of the growing popularity for lab-grown diamonds.

WOODS: And that was Matthew's pitch as well. Initially, he made some headway. He had funding, some lab space and even some prototypes.

MARKUS: We started also have certain legal challenges, too, to what we were doing and people saying maybe we shouldn't be doing this.

KIM: Many conservationists were saying that lab-grown horns will only signal to people that it's OK to buy horns.

WOODS: And there's precedent for this when it comes to how the legal trade has affected poaching. In 2008, China and Japan were allowed to buy elephant ivory from Africa in this one-off sale, and a study by researchers at Princeton and Berkeley suggests that there was a 66% increase in illegal ivory poaching.

KIM: Some studies on rhino horn trade reached this conclusion, too. One researcher from the University of Iceland interviewed rhino horn buyers and found some who spent more than $40,000 for them.

WOODS: In 2018, Matthew's company was probed by Washington state, where his company was based, and although those inquiries didn't result in any charges or fines, Matthew said the ordeal drove away potential investors. But he hasn't given up on his idea.

MARKUS: I don't think that this should never be done or nor that it will never be done. I think at some point in time, reason will prevail, and these will come into fruition.

KIM: It's been years now, and we're not any closer to knowing how copycat horns would do in the market or how they would impact rhinos. Considering all the regulation and pushback around the idea, there's a chance we may never know.

WOODS: Darian Woods.

KIM: Juliana Kim, NPR News.

(SOUNDBITE OF 9TH WONDER'S "TAO TAO LOVE") Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Juliana Kim
Juliana Kim is a weekend reporter for Digital News, where she adds context to the news of the day and brings her enterprise skills to NPR's signature journalism.
Darian Woods is a reporter and producer for The Indicator from Planet Money. He blends economics, journalism, and an ear for audio to tell stories that explain the global economy. He's reported on the time the world got together and solved a climate crisis, vaccine intellectual property explained through cake baking, and how Kit Kat bars reveal hidden economic forces.