Seriously stupid

The essence of sustainable cost accounting is simple. It would require that every large business prepare a plan to show how it would manage the consequences of climate change. That plan would have to state how it might become net carbon-neutral by a specified date, both within its own business and within its supply chain.

We don’t actually want each part of the system to become carbon neutral.

The desire is that the system as a whole becomes carbon neutral.

Think slightly differently about the wider sustainability idea. Say, the use of metals – as the Club of Rome did.

So, do we want washing machine makers to be recycling steel so that washing machine manufacturing is using a closed loop?

Nope, we don’t. We’re overjoyed that there is a system to recycle the steel in washing machines of course. Meaning that the wider world of steel use is at least getting closer to being a closed loop system.

But we’d be mad to insist that each and every player in the system had to recycle their own steel. For the division and specialisation of labour is a real thing.

So too with this narrower idea of carbon neutrality. Division and specialisation. An airline doesn’t need to be growing algal jet fuel, or planting trees, or iron fertilising the ocean. Nor retrofitting gas boilers to equal the plane’s emissions.

We want reductions and reversals of emissions to be made where they’re easiest, by those who are best equipped to do them.

Standard, basic, economics. In fact, that damn pin factory again. The divisions and specialisation of labour means we don’t want to try to force every business and or organisation to be carbon neutral. Even as we desire the system as a whole to be so, we still don’t want that from each component.

And as ever if you can’t even understand Adam Smith then you’re not going to have much useful to say about economics.

40 comments on “Seriously stupid

  1. There’s really no need to go beyond “Seriously stupid”. It’s like shooting fish in a barrel.

    Which sort, do you think? A coelacanth?

  2. I wonder how we persuade the big counties; China,India,USA,Russia; to go carbon neutral. Because without them on board nothing will change. Except for our impoverishment of course.

  3. Carbon has very little to do with climate change. They are talking about CO2. Anyone who can’t make the distinction should be disqualified from participating in the discussion as they are either ignorant or malevolent. Then again, it’s pretty standard for the left to tweak meanings of words

  4. That plan would have to state how it might become net carbon-neutral by a specified date, both within its own business and within its supply chain.

    Would there be any time to actually manufacture anything in the Fat Comptroller’s world of reporting and what plans does he have for his train set to be carbon neutral?

  5. Would “negative carbon supplier” be a viable business? You pay X and you get -N tonnes of Carbon Dioxide. They use the money to plant trees and stuff. Isn’t somebody already doing this?

  6. If the inclusion of this cost in the accounts of a company resulted in it being shown to be insolvent then the company would have to address that issue so that their solvency might be restored. For example, it could end dividend payments to shareholders and retain profits over time to fund the change to being net carbon-neutral. Alternatively, solvency could be achieved by raising additional capital. In either case the plan would have to be deemed credible by the company’s auditors. We stress: we think that all the sustainable cost accounting data would require financial audit since the intention is to include it in financial statements.

    This is marvelous on so many levels. First, he is proposing an accounting system that would declare an otherwise profitable company insolvent because it isn’t “carbon neutral”. Second, he is proposing the forced retention of profits from shareholders. Third, he actually thinks that investors would consider investing in a profitable company that has been declared “insolvent” because of its carbon footprint and cannot pay a dividend or expend existing capital in the manner deemed most advantageous by management. Fourth – and this is the kicker – he’s relying on auditing firms to enforce all this nonsense… The same auditing firms he routinely excoriates as the corrupt lackeys of big business!

  7. Dennis

    As inventor of the concept, Spud would of course be required as chief overseer of climate auditing.

  8. “hello Mr Murphy, I’m from the department of averting climate catastrophe. I’ve come to check how you are achieving carbon neutral status” Murphy “ooh err”.
    “I notice that there’s are car sitting outside the property that’s powered by an internal combustion engine, Is it yours ?” Murphy – “it might be, but I need it” – “Well Mr Murphy I’ afraid that the lads are loading onto a low loader to take it to be crushed” Murphy ” Oh dear”
    “I Notice that this is a 4 bedroomed house but only you live here. is that correct?” Murphy – “but I need the space for my train set!” “That may be so Mr Murphy but it’s not very environmentally friendly, so tomorrow a minibus of EU citizens will be arriving to take up residence” Murphy “that’s not fair!” -“But Mr Murphy , I thought you loved the EU. Anyway they’ll provide some body heat , as we’ve disconnected your gas supply to stop you using your central heating”
    “We’ve also noted that you like flying” Murphy -“but I need to fly for my business!” – “and what business is that Mr Murphy?” Murphy “telling everyone else to cut their carbon emissions” – “Well Mr murphy that won’t be a problem for you, as we’ve put you on the no fly list and as an added precaution cancelled your passport” – “what’s that Mr murphy ? – yes I know who you are. Please stop shouting as the next step is to cancel your credit and debit cards so that you stop buying meat” “Have a nice day”

  9. Actually, the most serious flaw in the SCA system is that there are no markets available to provide the pricing/costing necessary to make the system work accurately and efficiently. The SCA would have to rely on a bureaucracy of some sort to provide costs for all activities or products that cannot be costed via an existing market.

    Anyone who has read (and understood) Hayek really think that will work?

    And it’s worth noting that the one thing Murphy hasn’t done is provide any information on how SCA pricing/costing would actually be done at the corporate level.

  10. In his hamfisted way, he seems to have realised that I’m a 18-th century textile manufacturer, banker, and philanthopist. Hand on heart I can state that I’ve never travelled powered by any means other than wind or horse, and went out of my way to ensure my workers and tenants were adequately housed. What has Mr Murphy done?

  11. ‘It would require that every large business prepare a plan to show how it would manage the consequences of climate change. ‘

    We have no way of being able to predict how the various multiple climates around the Planet will change under any circumstances and therefore we cannot know what the consequences will be, and not knowing that makes it impossible to know what to do to manage the unknown.

    People who yap on about climate change which anyway is an abstraction, are barking mad… St Greta of Asperger comes to mind.

  12. “We don’t actually want each part of the system to become carbon neutral.

    The desire is that the system as a whole becomes carbon neutral.”

    That’s only your desire if you actually want our civilization to continue functioning.

  13. ‘sustainable cost accounting’

    Next will be cost accounting justice.

    Then social cost accounting?

    _______ cost accounting. Insert buzzword of the day. Would “flatulent” work there?

    UN cost accounting a good one today. Murph would blame the auditing company for their insolvency.

  14. The SCA would have to rely on a bureaucracy of some sort to provide costs for all activities or products that cannot be costed via an existing market.

    Excellent, bureaucracy given the power to make or break businesses depending on what its ‘estimates’ of costs are, on a staggering number of things of which they know next to nothing.

    Vast opportunities for graft there, putting businesses the bureaucracy dislikes out of business, etc.

  15. I’m sure he thinks that Management Accountants are still referred to as Cost and Works Accountants
    A while back I asked him about some of his claims about CbC reporting and if he had experience or understood Managment Accounting and he claimed to be an expert because it’s was part of his accounting syllabus

  16. Dennis

    And it’s worth noting that the one thing Murphy hasn’t done is provide any information on how SCA pricing/costing would actually be done at the corporate level.

    ‘It’s pedants like yourself and Worstall that are responsible for the state we’re in today. That’s your last contribution here’

  17. The Meissen Bison

    there really is no limit to his ignorance nor apparently any beginning to his understanding. It’s as though contemporary North Korea or the USSR are countries/ concepts which, even in passing he has never encountered. I don’t think I have ever seen anyone less able to understand second order consequences or fail to take account of variable possible responses. For me SCA joins C by C Reporting and the Fair Tax Mark as the intellectual equivalent of the Sinclair C5 – practically useless.

  18. John B, I’m fond of the work that Clive Best has done, which shows thas the climate of the UK has not changed substantially in 200 years, apart from a small increase in minimum temperatures in autumn and winter. Even on a global basis, there has not been much change until you reach the polar regions. What climate change?

    http://clivebest.com/blog/?p=7603

  19. A while back I asked him about some of his claims about CbC reporting and if he had experience or understood Managment Accounting and he claimed to be an expert because it’s was part of his accounting syllabus

    The maths behind Fast Fourier Transforms was part of my electronics syllabus, doesn’t mean I understood it.

    What’s the pass mark in accounting exams? My HND was a minimum of 50% across all exams, because the Royal Signals reckoned that 40% showed 60% ignorance of a subject and that wasn’t good enough for them.

  20. And, if a company could not show how it could fund the cost of the transition, or it could not estimate the cost of completing that process, or it concluded that it simply could not make the transition, then it is suggested that it would have to be declared ‘carbon insolvent’. This would not mean that it was financially bankrupt. But it would make clear that the company was not going to survive into the era that we are going to have to live in. As a result an orderly winding up of its affairs would be required, and carbon insolvency administrators would have to be appointed to achieve that goal. But it is stressed: this is not about an immediate winding up of the reporting entity’s affairs: it is instead about managing an orderly transition for all involved including, most especially, its employees.

    There it is… Murphy’s would destroy financially viable companies and existing jobs because those companies have been deemed to be “carbon insolvent”.

    Not even AOC – on her worst day ever – has sounded this insane.

  21. ‘It’s pedants like yourself and Worstall that are responsible for the state we’re in today. That’s your last contribution here’

    I was banned as both Dennis the Peasant and my Own True Self years ago when I gently (and we all know just how gentle I can be) pointed out that he didn’t know shit about basic financial accounting. If memory serves, it was Timmy himself who asked me to help destroy whatever stupidity it was Murphy carrying on about at that moment.

  22. The SCA would have to rely on a bureaucracy of some sort

    LOL. “Details to be decided at a later date by fine, upstanding, selfless government bureaucrats”.

    They’re not even trying anymore, are they?

  23. every large business prepare a plan to show how it would manage the consequences of climate change

    Four word plan: “We’ll Adapt or Close”

    .
    @Emil October 16, 2019 at 12:14 pm

    +1

    @moqifen October 16, 2019 at 2:25 pm

    Excellent

    Unfortunately beaten by Lewis Hamiltongoing vegan is the ‘only way to truly save our planet’.

  24. “… the climate of the UK has not changed substantially in 200 years, apart from a small increase in minimum temperatures in autumn and winter. Even on a global basis, there has not been much change until you reach the polar regions.”

    @Diogenes: ages ago I looked at a fair number of early Global Warming papers. (So long ago that their problems seemed more to be a matter of incompetence rather than dishonesty.)

    Their predictions were that warming would show up at high latitudes, in winter, at night. Which seems to be what yer man says he’s observed.

    Anyway, there’s probably not much money in that. Far better to cry “Repent and atone or ye will all roast in hell!”

  25. As any fule no, climate catastrophe will cause the earth to melt, then explode in exactly 10 years time, with no warning. Unless we go vegan and stop using energy tomorrow.

  26. OT but we haven’t had a Brexit thread for a few hours.

    This is getting ridiculous:

    Jo Maugham QC
    @JolyonMaugham
    I intend to lodge an immediate petition for an injunction in the Court of Session preventing the Government from placing the Withdrawal Agreement before Parliament for approval. We expect that petition to be lodged tomorrow and to be heard on Friday.

    He’s not insane, though, he’s crowd funding it to get the rest of the deranged Remaniers to pay for it. (Anybody got a spare bride we can use?)

    On top of that:

    (((Dan Hodges)))
    @DPJHodges
    Understand Labour/SNP/LD MPs are going to try and block a Saturday sitting. Remember when these same MPs were parading around saying it was time to get back to work to solve Brexit…

    Apparently they’re scared that Boris’s WA might pass in Parliament. To be on the safe side Labour is rumoured to be threatening any MP that votes for it with deselection.

    Oh to be alive in 50 years when historians start analysing this with all the various cabinet and personal papers.

  27. So let me get this right, there’s a real life QC going around claiming he wants the courts to stop the govt from presenting something to Parliament for a vote?

    Surely that level of duplicity or failure to understand the legal system merits some form of professional censure or misconduct.

  28. I can’t see any deal that works for Boris electorally getting through this current Parliament, but wonder if it does open up a flaw in the Benn act.
    If Boris has a deal with the EU, but it hasn’t yet been voted on by Parliament then he could claim that sending the letter would be acting in bad faith with the EU as they have a deal and he can’t comply with both sides, as the Benn act is dependent on if a deal is approved or not then it’s a solid argument that delaying the letter by a day or two is a reasonable course of action and it’s not his fault the authors of the bill didn’t envision this scenario and once the deal has been voted on by parliament he’ll act accordingly

  29. The worst thing they could do for Boris electorally is accept it then go for a GE. That takes Brexit off the table as far as Labour, well Corbyn anyway, and then they can campaign on what they think is their best position of improving the lives of ordinary Brits. (I did say what they think, not what I think)

  30. The lunacy knows no bounds:

    EXTINCTION REBELLION is paying its campaigners up to £400 a week to cause chaos on the streets of the UK, it has been revealed.

    Protesters have received payments of more than £200,000 since the beginning of the movement. The demonstrators are demanding urgent action on climate change claiming “the government has failed to protect us”. The documents, seen by the Mail on Sunday, revealed activists have been paid more than £200,000 since the start of the scheme, the cost of the payments is increasing by at least £40,000 a month and activists are targeting high net worth individuals for more funds.

  31. I was surprised when they appealed for tents, food (vegan food only of course) and warm clothing for the protestors that the homeless charities didn’t kick up a fuss

  32. Bloke in North Dorset said:
    “EXTINCTION REBELLION is paying its campaigners up to £400 a week”

    Wonder if they’re minimum wage compliant? Or Working Hours Directive compliant? Real Time PAYE?

    I wouldn’t normally suggest going in heavy to a small business, but any group that’s calling for more government regulation deserves to have regulations enforced against them to the letter; it might even be a learning process about government action.

  33. “Wonder if they’re minimum wage compliant? Or Working Hours Directive compliant? Real Time PAYE?”

    They’d probably call the payments ‘grants’. Which as any potato will tell you are totally tax free!!!

  34. At some stage idiots like the potato are going to have to explain to a town full of unemployed people that it was for their own good that there main employer has shut up shop and moved production to China/ Vietnam etc because they couldn’t meet the arbitrary targets of co2 imposed on them by idiots like him. I suspect that he will cry crocodile tears and blame it on the Tories/austerity/ pensioners rather than accept responsibility being a coward as well as a hypocrite.

  35. I wonder if spud’s new found interest in climate politics has anything to do with this sudden surge in money from luvvies flooding into the area?

    If XR are splashing the cash he will be sniffing around for sure. If you’ve noticed, he hasn’t criticised their tactics……and talking of shutting down industries will appeal to them.

  36. For those of you out of the UK or haven’t seen this: pic.twitter.com/Oio8sCiAEy behaviour from XR activists.

    Proving
    1 – Don’t protest about climate change on an electric high density mass transit system
    2 – Don’t fuck with Londoners trying to get to work
    3 – Don’t do this in the East End/Docklands

    As always with lefty protests, what starts out as well meaning rapidly goes too far and erodes any original sympathy the cause could elicit. Taking over St Paul’s cathedral a couple of years ago was similar. Started off with a protest about homelessness IIRC then mutated into a permanent camp self policing with rapes and using the walls of the cathedral as a toilet.

    Sorry about the random formatting!

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