Further, the global financial system is based on the notion of perpetual and steady (if volatile) growth. That's the core tenet of the entire system, underpinning everything from inflation to basic employment.
By implication, this requires an infinite human population on Earth on an infinite timescale.
The still very young global financial system and everything in it is and always has been a Ponzi scheme.
Exactly this. There needs to more understanding about the negative consequences of inflationary monetary system. Absolutely scarce money, i.e. bitcoin, is the only solution to this problem. Scarce money forces to innovate in order to grow.
I do see your point, and I've thought about this consequence a lot.
I sincerely don't think it would cause a financial collapse, as ridiculous as that might sound.
200% plus 10% compounding per annum is the lowest I think we could reasonably go in order to be in with a chance of reaching peak carbon by 2030.
It forces deeply painful changes on the world, but no more painful than is necessary to avoid the collapse of civilisation.
The problem until now is that people haven't been given the justification to go along with the astronomical task being asked (i.e. Stop burning fossil fuels immediately or we all die).
If COVID, and the 2008 crisis, have taught me anything it's that the economy is unbelievably fragile to shocks. Trying to levy huge taxes in a democracy is DOA for that reason. Most Americans will do just about anything to avoid another recession -- that's food off their tables.
One interesting question: say we tried that MIT economist's plan where you have a hefty carbon tax but give the entire thing back as a tax rebate[1]. That'd get a direct deposit/check arriving (hopefully frequently) and send a message that the faster you lower your emissions, the more other people are giving you free money. People don't like paying taxes but they allow love to get the better side of a deal.
This is exactly how Canada's federal carbon tax is structured.
Citizens get rebates based on income, so poorer individuals get larger rebates as a percent of income and can actually come out ahead even with rising prices due to the carbon tax.
More wealthy citizens will (due to lifestyle differences) pay more in taxes than they get back, but they also have the means to change their lifestyles/make different choices, so they could end up in a spot where they use less carbon and so also come out ahead.
It's a very simple mechanism to modify behaviour and does do in a relatively equitable way.
Quite frankly, that is why democracy will fail us. Most Americans will do just about anything to avoid their income falling for 10-20 years but do just about nothing to avoid the global climate from torpedoing the world's biomes, food production systems, weather patterns, coastlines and coastal cities, decimating species diversity, etc. over 10-100 years.
We could be saved by technological or business breakthrough from an individual, or we could be saved by authoritarianism, but the preference you just described is why we're probably fucked if we hope for a political solution in western democracies (at least the US).
The so-called "invisible hand" has already gotten the US on the right trajectory, with the government nudging it along. That's all we can hope for, along with 330 million people making better decisions.
