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.