Currently, a variety of CO2 tax systems and other complementary CO2 reduction measures are being implemented by nations around the world. Although the national initiatives are similar in their approach to providing an economic signal for the reduction of CO2, they are based on incompatible and largely non-binding systems. Even in their entirety, they will not be enough to reduce emissions quickly and sustainably.

I therefore propose a levy on the production of hydrocarbons. The levy on every unit of oil, gas and coal produced would be a real cost element for producers when they extract fossil fuels. The CO2 levy needs to be harmonized globally and reconciled with the future marginal cost of carbon. It is collected by the World Bank to finance infrastructure investments and to prevent and mitigate climate change damage.

Such a system can be justified as climate protection must be based on globally regulated measures, while the intervention presented here follows a liberal approach. A "global commons" carbon license fee would not only be a very transparent signal that mankind is experiencing the true (marginal and future) costs of burning fossil fuels. It would also accelerate the transition to a carbon-neutral world. This is a critical success factor.