Considering the financial implosion happening around the globe, I can’t help but feel a little strange writing about carbon offsets. With stock markets down up to 50%, banks evaporating, and whole countries going bankrupt, who has the time or money to think about carbon emissions?

But the Earth hasn’t stopped turning and we haven’t stopped pouring carbon into the atmosphere. Nor have we stopped burning up our fossil fuels. At best we’ve slowed down a little.

I’d take things a step further. The capitalist system depends on constant economic growth. We expect interest rates above the rate of inflation. This allows us to get richer, in terms of real-world goods, simply by lending out money. But the economy depends on a finite planet. What happens when we run into the limits of this planet, like depleted oil reserves or climate-induced shrinkage of the agriculture base? How can we keep growing then?

Was ecology, in fact, one of the underlying causes of the financial meltdown? Were oil prices of $150 per barrel, with corresponding gas and food price hikes, the last straws for suburban America? Families squeezed on fuel, food and mortgage payments started defaulting on the latter, and the system came tumbling down. During the 2000s, the only way to sustain the building binge was through sub-prime mortgages, dutifully funded by China and others, yet with little hope of being paid back. Is this a sign that America’s suburban sprawl, so wasteful of energy, is coming to an end?

Only time will tell. I can’t claim that oil and commodity prices were the primary cause of recent events. Looking at the history of the ratio between property prices and incomes, houses had become massively overvalued throughout the past decade, way before the oil spike. Nonetheless the constant growth in debt, house size and oil consumption do have something in common - unsustainability.

Things can’t keep getting bigger and better unless we remove any obstacles lying along the way. In the case of energy and the environment, upon which so much depends, this means investing in renewables. Only by switching our main energy source from (finite and dwindling) fossil fuels to the (effectively infinite) sun - directly via solar power, or indirectly via wind, biomass and hydro - can we avoid the looming energy crisis and continue on a path of perpetual growth.

The transition is inevitable. As fossil fuels run out, the switch to renewables will undoubtedly occur. It’s just a question of when, and at what cost in human and economic terms. Now that the oil price has dropped, we have perhaps the last and best opportunity to build up renewable capacity on the cheap, and so avoid the nastier effects of the energy and climate crises to come.

Trouble is, the free market will be transfixed by the drop in energy prices. Private investors want to see returns within a decade, and when oil is cheap, this window is too narrow to motivate investments in renewable energy. That’s why we need government action, combined with consumer and corporate voluntarism, to spur the process on.

The carbon market, with all its shortcomings, is neatly tailored for this end. It can play a major role in allocating capital to the sustainable energy projects that will power our collective future. When the world pulls out of this financial crisis, be it 2 or 20 years from now, I believe oil prices will go far higher than anything we’ve seen before. Let’s hope we’re as ready as we can be.