Speaking to students at the Sorbonne University in Paris, Elon Musk said we need a price on carbon similar to the one abolished in Australia to halve the time it will take to transition to renewable energy—a crucial step in addressing climate change.

We have to "remove the effective subsidy of not pricing the damage done by carbon pollution," Musk said. "By putting a price on carbon, we are fixing a pricing error in the market," he said. "Any price will be better than the close to zero we have right now."

Musk has advocated for a price on carbon to drive investments in renewables for years. He told students that governments need to “set the rules of the game” to help start-ups grow into mid-size companies and eliminating the $3.5 trillion "hidden carbon subsidy" is a good place to start.

“To make it neither a left nor right issue we should make it a revenue-neutral carbon tax—increasing carbon tax and reducing tax in other areas like consumption taxes or VAT [value-added tax] and in order to give companies time to react it should be a phased-in approach,” said Musk.

“If countries agree to a carbon tax and it’s real and it’s not super watered-down and weak, we could see a transition [to clean energy] that has a 15- to 20-year time frame as opposed to a 40- or 50-year time frame," the Tesla CEO said. "We could probably cut it in half and that would have a huge impact on the … welfare of the world … It really matters whether we do this transition sooner or later."

“For developing economies they could leapfrog the fossil fuel situation with power lines, you could have remote villages with solar panels and a battery pack, just like mobile phones, a lot of countries just didn’t do the landlines, they skipped right over landlines,” said Musk.

The billionaire businessman also expressed his concern over fracking. “Fracking has elevated my concern about the carbon problem dramatically … I always thought the scarcity of oil would drive up the price … Unfortunately some smart inventors, I wish they could have invented something else … the net result is the accessible oil and gas reserves are dramatically higher, maybe by a factor of 10, and that is crazy for the climate,” he said.

Though Musk struck a note of optimism when he said, "we are going to exit the fossil fuel era. It is inevitable." He added that it's not a matter of if, but when, and world leaders meeting at the COP21 climate talks in Paris right now could expedite the process.

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