Climate policy picks the wrong target / How to resolve the green paradox

Commentary feature in which the author writes about he calls the green paradox: efforts to reduce carbon emissions in the future have the effect of accelerating climate change now.

To be effective, environmental policy has two options: either it uses the tax system to make it unattractive for resource owners to convert their fossil fuel wealth into financial investments, or it creates a seamless consumer cartel through the establishment of a global emissions trading system.

Environmental policy must shift its focus from fossil fuel demand to its supply. We should turn to the core question of how to induce resource owners to leave more carbon underground, writes Hans-Werner Sinn