I think the way to look at it would be to imagine that you are optimizing some utility function which incorporates some mean and some variance.<p>The risk of going for a clean energy project is massive. It can fail completely, it could work but not return much profit, there are lots of ways it can go wrong.<p>However - the problem here is that the &#x27;do nothing&#x27; state is not static utility. Do nothing results in everything going to shit, with very little variance.<p>Our capitalist systems aren&#x27;t really set up to deal with that, it&#x27;s a tragedy of the commons. That&#x27;s why you need things like taxes on oil - to force the utility function to accommodate bad things.