This book is for executives who genuinely want to help end global warming and who believe in the power of markets.
Executives understand the difficulties in ending global warming. Policymakers haven’t been able to make the necessary global deal for 50 years, because making the deal is too hard. Carbon pricing mechanisms are weak and partial. The market for carbon removal is fragmented, complex, and rife with moral hazard.
Executives with sustainability objectives must use annoying internal carbon accounting or pricing as poor substitutes for economy-wide carbon pricing. Suppliers are subject to different regulations, complicating supply chain sustainability goals. Executives spend time and money to buy carbon offsets in good faith, only to discover – sometimes in the headlines - that their offsets are fraudulent.
This book proposes a brave roadmap for a coalition of companies to solve these problems. The coalition can start a new institution, the Global Emissions and Offset Exchange (GEO-X). GEO-X would operate a unified two-sided market for emissions permits and carbon offsets. GEO-X would enforce those offsets with contracts and a standing cadre of scientists and lawyers. It has powerful incentives for participation. And it would use the most efficient cap-and-trade mechanism ever designed, with the ability to put a deadline on global warming.
The book draws on classic economic principles, market design, game theory, and supply chain management. If you want to help end global warming and if you believe in the power of markets, get this book for your next plane flight.