In the August issue of Rolling Stone (“Global Warming’s Terrifying New Math”), Bill McKibben provides clarity about the amount of carbon dioxide in the coal, oil, and gas reserves currently owned by companies and countries worldwide. The key number is the 2,795 gigatons of carbon dioxide that will be emitted by burning these existing reserves over the next decades.

In the August issue of Rolling Stone (“Global Warming’s Terrifying New Math”), Bill McKibben provides clarity about the amount of carbon dioxide in the coal, oil, and gas reserves currently owned by companies and countries worldwide. The key number is the 2,795 gigatons of carbon dioxide that will be emitted by burning these existing reserves over the next decades. That number is five times higher than the 565 gigatons of carbon dioxide that would increase the Earth’s temperature by 2 degrees Celsius, and five times higher than what is required to prevent climate catastrophe, preserve our habitat, and sustain our way of life.

In fact, all 2,795 gigatons of carbon dioxide now scheduled for release into the atmosphere would likely warm the Earth to an astonishing 11 degrees Celsius higher than is considered safe for human societies as we currently know them. These numbers, while only estimates, do help focus the mind on the essential problem: The world’s fossil fuel industry has five times as much coal, gas, and oil on their books as climate scientists think is safe to burn.

These known reserves are considered to be current assets by the companies that own them and, at today’s market value, are estimated to be worth about $27 trillion. No wonder the industry is so keen to prevent any interference in the fossil fuel energy business — they have a lot to lose if they’re not permitted to turn these reserves into profits. If the industry left 80 percent of reserves underground to meet carbon-emission goals for a healthy planet, companies would have to write off some $20 trillion in assets.

But there is something compelling about knowing the value of an asset — even one as vast as the world’s known fossil fuel reserves. It places a price on the harm-producing substances and leads to a simple question: If the known reserves of climate-damaging fossil fuels are valued at $27 trillion, why not just buy them from the oil and coal companies and keep them underground? Yes, 27 trillion of anything is a large number, but, when compared with the value of the lives lost, the biodiversity and other ecosystem services damaged, the agricultural business failures, and the island countries that will drown, $27 trillion may not be that much.

For example, the 2006 Stern report estimated that the harm from climate change to the environment, property, industrial production, and human health would likely cost about 5 percent of world gross domestic product per year forever, or a bit over $3 trillion per year in 2010 dollars. Currently, energy inefficiencies and energy-subsidy distortions cost governments at least $250 billion (and perhaps as much as $500 billion) per year. As McKibben writes, it would cost about $20 to $30 billion per year to stop deforestation around the world, and at least $5 billion per year to create and sustain an effective system for capturing and sequestering carbon dioxide once it has been released into the atmosphere.

So, what if we used the money that we would have had to spend dealing with the damage from carbon emissions anyway and instead use the funds to keep carbon dioxide from being released into the atmosphere in the first place?

How would such a scheme work? A back-of-the-envelope sketch has governments purchasing assets from firms that are ready and willing to jump into developing alternative energy sources. The firms would then use the payment to transform their businesses from oil, gas, and coal companies into manufacturers of sustainable energy sources like solar, wind, and algal biomass, for example. That is, they would transfer their fossil fuel reserves to the government to be held in perpetuity, foregoing any further development and sales of large carbon-emitting products, and they would use the money paid to them to develop technologies for a new energy future. If some companies were not ready to take the deal, that would be fine; they’d continue to develop their reserves to supply the current fossil fuel system as it tapers off.

The incentives to sell coal, oil, and gas reserves at current market value are already obvious. Fossil fuel reserves are finite, and, it’s not at all clear when a company will finally run out. Those who make the transition too late will be saddled with assets that will decline in value as the new energy economy unfolds. As in many economic transformations, early adopters will be rewarded. Government buyouts would simply accelerate the transformation, and those who sold their assets to invest in new and sustainable technologies would be the winners.

Then there is the continuing uncertainty about future political change. If a carbon-emission tax finally is imposed, the current asset value will be reduced — perhaps dramatically. Rather than dealing with these uncertainties, companies could receive a sure and fixed market price for their existing assets to develop energy technologies that have a much brighter future because they are renewable.

So, to avoid the problems of stranded assets and political uncertainty, selling a company’s assets at a fair price now and using the cash to invest in transformative energy technologies that are more likely to sustain profits into the future has the added benefit of being a very wise business decision.

It will take creative economists and industry financiers to answer a host of questions and work out mechanisms to make such a system work. For example: How will the world deal with the moral hazard created by buying up fossil fuel reserves? After all, if governments buy these reserves, companies and countries will have an incentive to discover and acquire even more of them to sell. It’s a possibility, and restricting such future actions with legislation alone may not meet with success; the current failure to impose carbon taxes is pretty clear evidence of the difficulties faced when trying to legislate climate-favorable policies.

Yet, once the cycle of investment in new energy technologies on a trillion-dollar scale begins to take hold, a “fly-wheel” effect could take over. Erstwhile fossil fuel energy companies would seek new technologies and markets with the same competitive drive that turned them into such dominant forces in the 20th century — but this time with decidedly less harm to the Earth’s atmosphere and climate. And refocused energy companies with new innovations could even pose an increasingly vigorous threat to outdated fossil fuel-reliant companies, who might actually be driven out of business by cheaper and safer renewable energy technologies. The significance of the idea proposed here is that it rewards businesses for keeping carbon emissions in the ground, preventing further disruption of the climate, and it simultaneously rewards them for creating sustainable energy technologies. With a major infusion of capital that would have been needed for repair of climate change-induced damage, this plan instead would harness business acumen and market incentives to induce a pivot — in fact, a 180 degree turn — in the world’s energy path. This would be a win-win-win for everyone.