With alternative coins flourishing and Central Banks designing their own digital currencies, there is a potential hard-backed currency which cannot be ignored: carbon. Using carbon to back a global currency would redistribute wealth, incentivize low carbon technology and avoid the environmental taxes which hit the world’s poor the hardest, writes Steve Keen.

Economists tell us that environmental problems are caused by the “tragedy of the commons”: because no-one owns the environment, no-one pays when they dump carbon dioxide into it. Their solution is carbon-pricing: put a price on things that generate carbon-dioxide—such as petrol consumption, or coal-fired power stations—and the market will do the rest. Demand for carbon-dioxide-generating products will fall, while the market will invent low-carbon products—such as electric cars, or solar power stations—to replace the high-carbon products that are causing Global Warming. Hey presto, problem solved.