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Compensation doesn't undo the damage.

>Builders would make a loss on projects that caused lots of environmental harm, so wouldn't build in the first place.

I doubt that. They would create companies for removing forrests and after they lost in court they would file bankruptcy.

The damage is done and the compensation is void. And even if they pay, money doesn't consume carbon dioxide.



A few hundred billion dollars (or euros) does buy a lot of CO2 scrubbing and environmental remediation though.

Though this would effectively mean only a few companies who can afford hundreds of billions in surety bonds can risk building anything big.




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