Market Environmentalism

How Markets Cope With Disappearing Bees

You may have read about Colony Collapse Disorder, the mysterious condition in which honeybee colonies abandon their hives (and, presumably, die somewhere in the wild). No one knows what causes it, though the leading candidates currently seem to be pesticides, some sort of imported parasite, or both. But it's obviously a big problem for beekeepers--and by extension, for the billions of dollars worth of crops that rely on pollination services from commercial beekeeping operations.

However, a new paper from PERC argues that it actually isn't as big a problem as the media coverage has suggested. Despite the problems, the number of hives hasn't fallen since CCD first showed up in 2006. In fact, it's risen slightly.

Why? Because beekeepers have responded to the loss of hives by creating new ones. This isn't free--the cost of pollinating some crops has definitely risen. But these are not crippling price increases. In fact, they're rather modest compared to increases that occurred before CCD reared its ugly head. The market has taken a big shock entirely in stride, adjusting prices to help keep pollination services flowing with no interruption.

That's not to minimize the problem of CCD; it would be very important to know what was happening to all those bees, even if they weren't a vital component of our agricultural production. But it's a good reminder that we should be careful when we start throwing around big numbers about the cash value of the crops that get pollinated by bees--with the implication that all those crops might disappear. The larger the amount of money at stake, the less likely it is that all those crops will be allowed to go unfertilized. If there's enough money to be made, beekeepers will work very hard to build more hives.