Friday, May 10, 2024

The Moloch Trap of Environmental Problems

A Moloch Trap is, in simple terms, a zero-sum game. It explains a situation where participants compete for object or outcome X but make something else worse in the process. Everyone competes for X, but in doing so, everyone ends up worse off.

It explains the situations with externalities or the preference for short-term gains at the sacrifice of the long-term future.

The problem is that it’s incredibly hard for any “player” to break the trap. If they do, they will lose out in the short term (and they might still be exposed to the downsides in the long term). Everyone is stuck in a “game” or “race” that they don’t want to be in, but it’s impossible to stop.

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The Moloch Trap explains almost every one of the world’s environmental problems. I struggled to think of one that doesn’t fall into this camp.

Environmental problems are caused by a fight for scarce resources, activities that push externalities and negative impacts onto others, and the sacrifice of long-term sustainability for short-term gains.

People overfish because they know that other fishermen are doing the same. If they don’t maximise their catch now, they’ll be left with none. This is not optimal for anyone in the medium to long term because the fish stocks will be depleted.

We cut down forests because there are economic gains – from using that land for something else, such as farming – to be made in the short term. If we don’t cut it down, then someone else probably will.

We burn fossil fuels because it offers us huge immediate benefits (energy) but at the expense of a stable climate in the medium-term. It’s in no single country’s interest to stop doing so because they will miss out on the short-term energy gains and will still have to deal with climate change if other countries keep polluting.

We deplete groundwater resources to irrigate our farms despite knowing that it will soon run out. If we don’t do it, someone else will, so we might as well make some money from what’s left while it’s still available.

Each of these is a classic “tragedy of the commons” situation.

The key question is how we can break the Moloch Trap and solve them?

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What’s key to breaking the Moloch Trap is turning zero-sum games into positive-sum ones. I think this is underrated in environmental discussions. I often see people pushing for solutions that are, inevitably, zero-sum. That won’t win widespread public support and definitely won’t allow it to be sustained for decades.

The good news is that I think we’re in a unique position today to generate more positive sum games than ever before. In the past, energy and agriculture were zero-sum games. There really was no way to increase agricultural productivity: yields were low and constant for thousands of years. There was really no way to make energy without burning stuff: either wood or fossil fuels. Technological innovation is what allows us to break out of these win-lose games. That’s the opportunity we have, and it’s up to us to use these innovations responsibly.

Technology won’t do it on its own: it relies on a social, political and economic ecosystem around it to guide it towards the outcomes we want. 

When focusing on environmental solutions, be on the lookout for win-wins. Switching from one win-lose to another is not going to get us there.

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