Abstracts Economics

Hard questions, concrete solutions: mitigating the ecological impacts of the global infrastructure boom

by Sophus Olav Sven Emil zu Ermgassen

By 2060, an estimated >230 billion m2 of additional built floor area will be added to the global building stock, equivalent to the built area of Japan each year. Effective tools are urgently required to mitigate the ecological impacts of this global infrastructure boom. In this thesis I explore the effectiveness of one of the most high-profile tools, biodiversity offsetting. I review the implementation and outcomes of biodiversity offsetting around the world, and identify large evidence gaps around its effectiveness. To address these I then evaluate the outcomes of one of the world's oldest biodiversity offsetting systems (Victoria, Australia), and pre-emptively evaluate one of the world's newest compensation systems ("Biodiversity Net Gain", England). Both evaluations indicate that these compensation systems are unlikely to fully mitigate the ecological impacts of development. In Victoria, we find preliminary evidence of self-selection bias undermining the additionality of offsets, and in England, we identify serious governance gaps that leave the majority of the policy's biodiversity benefits unenforceable. Both of these systems implement regulatory offset markets, so I then explore the economics of offsetting regulatory markets, and identify one barrier to their successful implementation may be contradictions between the way that biodiversity needs to be treated to create effective market-like mechanisms, and effective ecological outcomes. Recognising that there may be systemic barriers to biodiversity offsetting fully mitigating the impacts of development, I finally explore whether it is possible to create economies in which the rate of infrastructure expansion is fundamentally slowed. I use the case study of the housing crisis in England to explore whether the projected rates of infrastructure expansion are compatible with national carbon and biodiversity targets, and identify policies that might dampen the drivers behind rapid infrastructure expansion and its ecological impacts. Slowing the rate of infrastructure expansion without sacrificing human wellbeing appears possible, but it faces a daunting political economy.