Reaching the Net Zero 1.5°C goal now requires Direct Air Capture. With US climate action under siege, how can public bodies, corporations and individual engineers keep on track towards decarbonisation? We propose a virtual ‘loss and damage’ based carbon price that reflects the current and future economic impacts of extreme weather and extreme heat. By accounting for the effects of actual and hidden emissions in every project, engineers and others can make impactful choices in their designs.

Dealing with climate change is now an infrastructure challenge. To keep economies on track, to keep the world habitable, we must within the next 30 years switch our energy generation from fossil fuels to renewables. And our global transportation network and built spaces will need to be transformed.

Engineers - the agents of change

If the US Government, and those that follow suit, cannot be relied upon to act in line with the Paris Agreement consensus, then who or what are the agents of delivery? Many sub-national bodies, including most cities and enlightened corporations for sure. Yet, most of all, it is the engineers who every day must weigh the issues of design, cost, safety, compliance and environmental impact – it is this cohort of talented people who are the real agents of change.

In A virtual global carbon price is essential to drive rapid decarbonisation (UCL Open Environment, vol 6), we ask the engineers, their professional bodies and planners, educators and architects, to employ virtual carbon pricing in every decision they make. This needs to be done at scale, so the methods need to be transparent and straightforward to use. In our paper we propose further refinements that could be used to incentivise change (carbon intensity weighting) and a method that ensures appropriate pricing in each country. Most countries need to increase their ambition, although China and India and South Africa are almost on track.

Carbon intensity weighting

Applied to groups of actors, such as energy firms or sectors, the weighting would reward progressives. Country level pricing reflects the local realities of a post-colonial world, where those who come late to a better life should not be penalised by those who were fortunate to industrialise early. No one price fits all, and the alternatives – market prices, carbon taxes or the Social Cost of Carbon – are fickle and/or complex to use.

Unavoidable is the fact that the world’s economies have grown rich through their cumulative carbon emissions (see diagram, below). We show how these ‘carbon liabilities’ – the environmental debt – and ‘carbon inheritances’ – the long-term benefits – can be used to track how well, or not, countries of the world are doing at decoupling their economic growth from fossil fuel emissions.

Carbon inheritance and liability

The interrelationship between the inheritance and the liability shows, profoundly, how fossil fuels have propelled many countries away from their agrarian and barren pasts (see How To Save Our Planet by Mark Maslin). Yet no country has fully decoupled themselves from CO₂ emissions, let alone repay their debt by removing historical emissions from the atmosphere, if even that is possible.

For the United States, right now in 2025, we estimate that the ‘loss and damage’ carbon price to be around $100 per tonne. Supposing the world stays on track to a more realistic 2°C, by 2050, the US price will need to be above $200, and the global average would be around $60. The virtual carbon prices we propose are in line with those put forward by leading economists who have advised on how to make the energy transition succeed.

These carbon prices have teeth. They are being paid, for real, by many countries including the US – the economic impact of the Los Angeles fires alone, although not all climate related, is around $250 billion. That is a typical year's worth of 'loss and damage' or, put another way, it is about 1% of the US economy and one third of the country’s economic growth in 2024. Soon, without massive decarbonation, many countries’ economies will flatline and decline. That will further reinforce a regressive political-climatic doom loop.

Design for the future

The choices engineers need to make are very challenging. Whole new design philosophies will be needed. For example, that mainstay of steel production, the air separation unit (ASU) makes a big impact on baseload electricity consumption. What if ASUs could adapt their power usage in line with real time pricing? This kind of thinking could be applied to other chemical processes too. And, following the impressive Finch v. Surrey County Council (UK) court decision, it is vital that lifecycle emissions are accounted for. We say they must be priced in. The cost of emissions should be included in a company’s bottom line, not just in the environmental, social, and governance (ESG) reporting. This would create an alternative form of carbon intensity, a Carbon Intensity of Operations if you like, and that could be used to advise policies with regards to VAT or corporation tax.

We think if engineers were enabled to be more focused on the transition, towards decarbonisation that would spur the interest of young people we so desperately need to encourage into engineering the transition.

Publishing in UCL Open Environment

Professor Maslin introduced Richard Clarke to UCL Open Environment in 2022. We had been discussing a broad, carbon pricing piece for a while by then and submitted our manuscript 'A virtual global carbon price enabling engineers to drive essential and rapid decarbonization' for open peer review by the end of the year. The methods were considered rather radical or unconventional by some other, well-known outlets, so it was refreshing to be able to develop the ideas in an open science journal, with publicly available reviewer reports. There has been a good response to the piece as it developed, and it has benefitted from having a formal review and editing process. Given recent developments, we think this article is timely.

A virtual global carbon price is essential to drive rapid decarbonisation by Richard Clarke (Ortec Finance) and Mark Maslin (University College London) is published in UCL Open Environment, volume 6.

climate change carbon carbon price net zero engineering loss and damage