The zero sum game – from biodiversity to emissions

A game for mugs or a magic pudding that just keeps giving?

By David Salt

Zero net emissions by 2050! It’s the goal proclaimed by many countries around the world*, and it’s aimed at stemming the tide of climate change.

Zero net emissions is the recipe for enabling business as usual (ie, strong economic growth) while supposedly dealing with the externalities resulting from business as usual (ie, civilisation-ending climate change).

And it’s a political winner because governments aren’t targeting specific economic sectors (ie, the fossil fuel industry). Indeed, this far away from 2050, they aren’t being pegged down by too many specifics on how it will be achieved. The generic solution, implicitly and explicitly rolled out everytime, is that technology will save the day.

The magic in the pudding

So where is the magic that drives this ‘zero-net’ proposition? It’s in the ‘net’ bit. This framing means you don’t have to be ‘zero’ in your emissions in any specific activity, like burning coal if that’s what tickles your fancy.

But you do have to be zero in your cumulative effort. If you produce carbon emissions in one area then you need to do something somewhere else that removes that carbon so the cumulative impact (the net effect) is zero.

How do you remove carbon from the atmosphere? The traditional way has been to plant trees or do existing activities in ways that emit less carbon, a good example being using renewable energy instead of fossil fuel energy.

It works as a political solution because it means you don’t have to explicitly say who is going to bear the burden of reducing their emissions. At some point, however, someone, somewhere is going to have to change their behaviour – after all, sustainability bites!

Experience so far with zero sum policy games suggests they are tricky to establish and easy to work around (ie, cheat).

Offset this

What, you weren’t aware of other zero-sum games? They’re actually quite popular and one place where it’s really taking off is in the arena of biodiversity conservation. The name of this specific game is called biodiversity offsetting.

When it comes to any economic activity with impacts on biodiversity there are many rules and regulations to prevent the loss of species and ecosystems.

To begin with, the proposer of a new economic development must demonstrate their proposal isn’t adversely impacting any native species or ecosystems. If it does, the developer is required to state what they will do about it to remove that impact.

Indeed, developers are expected to apply a mitigation hierarchy to their proposal (see the South Australian Government for an example) in which they need to show how they will first:
1. avoid the negative impacts of their development but doing it in a different way. But if there is still impact, they need to then demonstrate how they will
2. minimise the size of the impact of the development; and then
3. restore the area to make up for the impact.

However, if the developer can’t avoid, minimise or restore the impact they create, they can now offset the damage of the development by doing something good for the environment somewhere else. If you clear a stand of native trees over here for a shopping centre, you might offset this impact by planting the same species of tree somewhere nearby.

The aim is to achieve ‘no net loss of biodiversity’ over time. See, it’s a zero-sum policy game.

The trouble is, in many places it’s been seen by developers as a green light for development and has resulted in many perverse outcomes.

A green light for decline?

For starters, many developers don’t even bother with the mitigation hierarchy (because avoiding, minimising and restoring all cost considerable resources and regulators often don’t check to see whether the impact can be mitigated) and jump straight to some form of offset proposal. But proposing offsets for developments are usually quite complex and there’s a lot of research around to show they often don’t actually offset the impacts of the development (in space or time).

In some cases, the development impact is on something that is irreplaceable like the potential loss of threatened species. In these situations it’s impossible to offset the potential loss and the development should be blocked. Instead, the developer is sometimes asked to do something that might be ‘equivalent’ to a direct offset, like contributing money to an education awareness program that may help save the species. Such indirect offsets are not actually offsets at all but they do give cover for economic development to proceed.

The overall outcome is that while there is a goal of no net loss of biodiversity, biodiversity is lost anyway. Around the world we are seeing a mass extinction event taking place and biodiversity offsetting does not seem to be making any difference.

The devil is in the detail

The lesson here is that great care needs to be applied to the establishment of any zero sum policy game. It needs to be transparent, accountable and enforceable. And it cannot be applied merely as cover for business as usual to proceed without any checks and balances.

Economic activity that generates positive carbon emissions (ie, above zero) needs to be accountable for matching these emissions with activities elsewhere that generate negative carbon emissions (ie, activities that remove carbon).

Governments oversee this process and need to establish robust and transparent frameworks that keep track of these activities and their emissions, and report this tracking in a clear and simple way so everyone has faith in the system. To sustain this faith, the monitoring and measurement will need to be independent of government; something along the lines of what Zali Stegall recommended in her climate bill.

A lot of thought will need to go into how you trade emissions across time (eg, savings emissions today to pay for extra emissions in the future) and space (eg, buying emissions savings from another country for an emission heavy activity in our own backyard).

While the law surrounding such net zero policies will be enacted at the national level, it’s likely this game will involve the trading of positive and negative emissions between countries so the net zero frameworks will need to operate with agreed international norms.

The System of Environmental-Economic Accounts is one existing framework that might help with all of these issues.

Maybe net zero emissions is a policy pathway that might engage opposing political forces, something that efforts to date have failed to do. However, to transform the call for zero net emissions by 2050 into workable and effective policy, much effort will need to go into creating intuitions that will hold governments to account and prevent them from fudging the figures.

Image: the cover of the UN Emissions Gap Report for 2019

*According to the UN Emissions Gap Report for 2019, most emissions — 78%— come from the top 20 economies, the G20. Of these, only five had pledged to long-term zero net targets (and this did not include the three big emitters: China, the US and India). Around 70 countries worldwide have made pledges of being carbon neutral by 2050.

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