No matter what your view on climate change, pricing CO2 is harmful... Why?
Lars Schernikau
Energy Economist, Entrepreneur, Commodity Trader, Author, Investor & Strategic Advisor (also trade finance, sustainability, and tech) - ex BCG /…
Published Jan 21, 2023
No matter what your view on climate change, pricing CO2 is harmful... why?
One-sentence answer: … because pricing one externality but not others leads to economic and environmental distortions… causing human suffering.
Growing up in Eastern Germany, I was taught in school that – in so many words – money is the basis of all evil, particularly if it is made in the Western free-market system. Having spent now 20 years in commodities and energy markets, I concluded otherwise and find that distortions of artificial incentives, rather than those that arise freely, are the source of much perversion.
Among these distortions of markets is the pricing of carbon dioxide, which harms not only people – especially the poor – but also the environment. This is obviously contrary to what we commonly read and certainly inconsistent with what my children are taught in school.
Let me start with the usual disclaimer that I (and most knowledgeable scientists) agree that (1) Earth’ climate is changing, (2) the world has been warming since the 1800s, the Industrial Revolution and the end of the Little Ice Age, (3) Humans have contributed to this warming, and – also – (4) human CO2 emissions have contributed.
https://www.linkedin.com/pulse/matter-what-your-view-climate-change-pricing-co2-why-lars-schernikau-1f
