The FT has an article in it this morning from Natasha Landell-Mills, who is head of stewardship at Sarasin & Partners. In it she argues that:
What gets measured gets managed. The climate impact of business and consumer decisions is not being fully measured and thus not being properly managed.
I wholeheartedly agree. And I also agree that a carbon tax is not the solution to this issue – because a tax at $75 a tonne has consequences that are unmanageable in the rest of the economy.
Natasha actually says that politics isn’t ready for a carbon tax. Snippa goes on to say that it would be unmanageable elsewhere in the economy.
Yet Nordhaus and Stern and Weizman and all those economics types say that a carbon tax is the most efficient method. That is, the one which has the least effects upon the rest of the economy for the same reduction in warming – that’s what efficient means here. At which point Snippa insists we use less efficient methods thereby increasing what he already says is unmanageable.
This is where we really agree. I rather hope that Landell-Mills is referring to sustainable cost accounting. I am well aware that she is familiar with it: she chaired a session when I presented the idea to the Local Authority Pension Fund Forum in December. And she is right: Paris-aligned accounting would be catalytic.
Of course it is not all that matters: the other recommendations Landell-Mills makes are also important. She calls on auditors to address climate change issues (but that has to be linked to proper accounting); for shareholders to take on companies; for asset managers to do the same and for credit rating agencies to embrace the issue.
But when it comes down to it all need climate change accounting. And right now sustainable cost accounting is the only proposal there is for putting climate change on the balance sheet. And COP 26 needs to take note.
At which point we get to Snippa’s real opposition. If we had a climate tax at that $75 then of course carbon would be embedded in the accounts of every economic actor. That’s rather the point of it of course. But if that is so then there’s no room for Snippa, grants for Snippa nor carbon accounting.
Thus the opposition to what works.