Elon Musk Describes Carbon Pricing And Sustainable Energy at SXSW 2018

At his surprise Q&A session at SXSW on Sunday, Tesla and SpaceX CEO Elon Musk took time to reflect on the importance of sustainable energy.

Musk told drinking buddy Jonathan Nolan, co-creator of the HBO show Westworld, that clean energy solutions are here and already viable in 2018, but are being held back by distorted market conditions.

“Market economics work very well if things are priced correctly,” Musk explained. “But when things are not priced correctly and something that has a real cost has zero cost, then that’s where you get distortions in the market that inhibit the progress of other technologies.”

Musk argued that core technologies in sustainable energy are already here, naming wind and solar as key resources. However, the market’s treatment of carbon keeps alternative energy resources at bay.

“The fundamental problem is there’s an unpriced externality in the cost of CO2,” he said.

The SpaceX founder suggested that any equipment putting carbon in the atmosphere should be subject to a carbon price, including himself, of course.

“[This] includes rockets, by the way. I’m not excluding rockets from this!” he interjected, no doubt expecting some push-back on that suggestion. Musk continued to argue for a price that could start low but would be tethered carbon emissions and adjusted over time.

If the market were to take a larger role in encouraging sustainable energy, governments would presumably have to oversee this whole new world of carbon pricing. While Musk is not a fan of government intervention, he continues to make cases for government oversight in innovation, most notably in the safe development of A.I.

As a resource, carbon is harmful, finite, and frankly, unsustainable, but to Musk, its lack of pricing is what makes it the fundamental roadblock to more sustainable solutions.

“In the absence of a price, we sort of pretend that digging trillions of tons of fossil fuels from deep under the earth and putting it into the atmosphere, we’re pretending that that has no probability of a bad outcome,” he said.