Blithering stupidity

There is, of course, a problem with that attitude. Unless business goes green then there is no chance of net-zero carbon targets being met. But business won’t go green until it is a bottom line, profit and loss issue. And it will not become a bottom-line issue until climate change is forced onto a businesses’ balance sheet and into its profit and loss account.

The Corporate Accountability Network, which I direct, has come up with the only proposal there currently is to make this happen. What we propose is that the full potential cost of a corporation meeting its net-zero carbon goals is reflected as an up-front provision for those costs within its accounting system, and so in its financial reporting.

It’s not just blithering stupidity it’s also bollocks.

The answer is a carbon tax. Which is one – one – of the reasons all economists recommend a carbon tax.

So, the carbon tax is a Pigou Tax. It corrects market prices to reflect third party osts. That is, third party costs are now reflected in market prices.

ac counts are drawn up at market prices. A carbon tax means all company accounts now include climate change.

Done, dusted and finished. Which is why all economists recommend a carbon tax of course. That’s why Stern, Nordhaus, Quiggin, The IPCC, Tol and everyone else recommend a carbon tax. So that the costs of carbon are now in market prices. Are in everyone’s incentives, accounts and decision making processes.

The problem is already solved. Meaning both that the Corporate Accountability Network isn’t the first group to suggest a solution and also that we don;t need the one Snippa is proposing.

33 thoughts on “Blithering stupidity”

  1. I’d reckon it’s the economists are the blithering idiots. Pigou taxes are supposed to be revenue neutral, no? ” It corrects market prices to reflect third party costs. ” it says on the tin. And nothing but third part costs. Care to provide an example of a ‘Pigou’ tax that has ended up being revenue neutral? Certainly not the Adam Smith Institute’s prized London Congestion Charge brain fart. What actually happens is government just sees it as another source of revenue. And they treat it like all sources of revenue. They’ll extract as much as they can before the squeals pain from the taxpayer turns into a lynch-mob. Of all the daftest ideas, this has to be the daftest. You want to pay higher taxes?

  2. So if it’s a provision then say some approved person comes along and says your charge for the year is X can I then look at green initiatives and say look I cut down on paper and brought new fuel efficient vehicles blah blah so reduce the provision and if govt has spent y% of taxes on green initiatives can I reduce the provision by y% of my tax bill?
    Has to be a release mechanism for provisions or do we get to 2050 and say problems all solved and write back the provisions across the board. If not what’s the point of storing up a load of money in balance sheets indefinitely.
    Basic accounting principles alone make this a bust.

  3. You’re looking at this from the wrong direction, BniC. Spud’s just looking around for another mug to fund his life style. It doesn’t matter if it would work or achieve its stated aims. The only question is whether someone will pay him to waffle about it. Further than that, he’s not in the slightest concerned about actual or supposed climate change. To him it’s just another potential cash cow to milk. In other words, like 100% of politicians & 99.9% of the climate change lobby.

  4. Bloke in North Dorset

    I was listening to Mike Shellenberger* talking about his new book, Apocalypse Never, the other day and he talked about how children are suffering anxiety about climate panic, including his own daughter and her friends, and the long term harm its doing them. He mentioned that they think plastic straws cause global warming – its that screwed up.

    Perhaps we need a Pigou Tax on climate alarmists instead?

    *A genuine environmentalist and realist who pushes for nuclear power who has little time for the likes of Greenpeace.

  5. @bis – you are correct. If he was genuine about climate change he wouldn’t be living in a 4 bedroom house, he’d get rid of his central heating and car and stop being a hypocrite. I amazed that he can find suckers to fund his schemes, but then again they don’t care because it’s not their money and it gives a bit of greenwash.

  6. Getting rid of your pet dog would make a bigger difference than losing the car (based on a QI programme about this when S Fry was the chair).

  7. His proposal is that someone types a new line in the Report and Accounts that they publish every year – not that anyone takes any action that will reduce CO2 emissions.
    Yes, blithering stupidity sums it up.

  8. We cannot put a price on any third party costs, we don’t know what proportion of climate change is due to human influences (likely to be very low on a global scale, more noticeable on a local scale, e.g. Kilimanjaro) and we don’t even know that the costs outweigh the benefits. Currently, with no increase in extreme weather events discernible outside of computer models and with ever increasing crop yields and forest growth, one would say benefits are winning.

    This is a good paper when confronted by people claiming wild fires are increasing:

    https://royalsocietypublishing.org/doi/10.1098/rstb.2015.0345

  9. ‘So, the carbon tax is a Pigou Tax. It corrects market prices to reflect third party osts. That is, third party costs are now reflected in market prices.’

    You are so fvcking dense, Timmer.

    Let’s say that ‘third party costs are now reflected in market prices.’

    So fvcking what?

    The alleged problem is human emissions of CO2. Charging some taxes increases government revenue. Government makes out well. Nothing else changes.

  10. ‘Unless business goes green then there is no chance of net-zero carbon targets being met.’

    False dichotomy. Even if business ‘goes green,’ there is still no chance for Net Zero.

  11. @Mr Gamecock.
    No, that side of Tim’s argument’s sound. Carbon tax raises the cost of emitting carbon, so encourages people emit less carbon dioxides. Either by not using energy or adopting more efficient methods. It’s the revenue side that stinks. Unless taxes elsewhere on the economy are reduced to compensate it’s just handing government more revenue. One way would be to use the revenue to specific things will reduce carbon emissions. The subsidies for clean energy, say. But then what is being funded must accommodate a progressively falling revenue stream. Because if your carbon taxes are doing what it says on the tin, people will emit less CO2 & pay less tax. In whose dreams? Government sees revenue dropping it’ll raise taxes.
    And that’s if the revenue from a carbon tax was linked to something in particular. Governments don’t like doing that. The history of taxes being collected for specific purposes is a history of the revenue being incorporated in general revenue. Road fund license, pensions, NI…
    What would happen with a carbon tax is that it would join all the other taxes are paid. Why do you think governments have embraced the wholoe climate change boondoggle so widely & completely? It’s the goose that lays the golden egg. They can sell environmental taxes as a “popular” taxes. Raises the pain threshold on people paying them. All a carbon tax does is give them another excuse.

  12. “No, that side of Tim’s argument’s sound. Carbon tax raises the cost of emitting carbon, so encourages people emit less carbon dioxides. Either by not using energy or adopting more efficient methods.”

    [citation needed]

  13. I did like it when the Aboriginal tribes complained that had their traditional land management been in place it would have been better for Australia, greens vs indigenous rights puts them in a tricky spot

  14. Corporate Accountability Network Limited have filed their first accounts for the period January 2019 to June 2020.

    Turnover – £9,287.
    Director’s remuneration (let me guess) £7,000

    Income received in advance of being earned is £11,667. They’ve received the money but done nothing to earn it.

    You’ll recall the fat twat is a fierce critic of ‘limited liability’. The company has no share capital but is limited by guarantee – the members liability is limited to £1 each.

    Another stunning success from the mighty serial entrepreneur.

  15. I’ll begin to take this ‘we must stop using fossil fuel’ crap seriously when the people shouting about it stop using it. Totally. No petrol, no diesel, no gas, no plastic etc. etc. Revealed preference and all that (H/T Tim).

  16. CO2 emissions are a net benefit, they make crops grow and make it nice and warm (possibly). I demand my petrol-guzzling car be subsidised because of the good I do driving it.

  17. Prof Neil Ferguson’s prediction of imminent covidaclypse unless we kill freedom of movement and the economy bear a more than passing resemblance to climate models designed to stop flying by the pleb class and killing the economy. Just a coincidence…

  18. @gamecock
    [citation needed]

    Any economics text you care to pick up. Raising a price tends to reduce demand at the margins.

    What I will give you is this is only true when the supply side is potentially unlimited & it’s possible to satisfy all buyers. Which wasn’t true of the London Congestion Charge. Before the LCC, what limited the number of cars on the road was the congestion itself. Time spent stuck in traffic has a cost & the higher an individual values their time, the higher they will see the cost. What happened when the LCC came in was as the people couldn’t afford the charge were pushed of the road, those who valued the convenience of using a car higher than the charge replaced them. True, in economics terms, the value of each space on the road rose so increasing utility. But that’s using the valuation of the individuals. The wider public might value a painter & decorator heading to work higher than than a City slicker being able to take his Porche to the office.(Or London mayor his two cars) Particularly if you’ve just had 500 quid slapped on the cost of repainting your flat.
    You’d have though all those bright economists would have seen this coming but….

  19. https://www.mylondon.news/news/local-news/sadiq-khan-considering-350-greater-19441739.amp

    The congestion charge is all about the revenue raised. As I said when it first came in, there is been an immense investment in tech to collect the tax. If it achieves the stated objective of reducing traffic then this investment is wasted. They hope that people will continue to drive. They need people to continue to drive. The cost of the infrastructure will probably never defray the “estimated” environmental benefits, if any.

    I think after the first year, they produced some stats about road use reduction , but they didn’t pass the smell test. I don’t think they bother any more. They are just milking the cow. The recent tax rises have nothing to do with saving the environment

  20. @Diogenes
    “I think after the first year, they produced some stats about road use reduction , but they didn’t pass the smell test.”

    I was operating in London over the period the original CCZ came in & the western extension. At the time of the central area introduction I was commuting in from North London to a big project in Whitechapel High Street. The run up to it, they’d put all sorts of road works & other traffic disrupting stuff causing the biggest jams we’d ever seen. It was taking an hour & a half to cover about 8 miles. Morning of the introduction, they’d all magically disappeared. Took about 20 minutes. Then it just built back up over a period until it was the same as before.
    When the western extension came in we were doing a project in Bayswater. I suppose the traffic reduction lasted a couple of days. By the end of the week it was back to normal. But I’d say the average value of vehicles driving on Westbourne Park Road rose about 5 grand

  21. “Any economics text you care to pick up.”

    Now that’s funny, bis. I challenge the bandwagon fallacy, and you respond, “Everybody knows it.”

    “Raising a price tends to reduce demand at the margins.”

    You are stuffing words into Pigou’s mouth.

  22. There’s nothing wrong behind the economic theory of Pigou taxation, Gamecock. It’s entirely logical. It’s the practise isn’t going to work. Even if you trusted a politician to make its introduction revenue neutral, it wouldn’t. That would be returning the tax savings to the people paying the Pigou tax in a way preserves the incentives. They won’t. The tax savings will go to one of the politician’s favoured groups. So a transfer of wealth to the politician’s advantage. It is what politicians do. Ignoring it is ignoring reality.

  23. Prof Neil Ferguson’s prediction of imminent covidaclypse unless we kill freedom of movement and the economy bear a more than passing resemblance to climate models designed to stop flying by the pleb class and killing the economy. Just a coincidence…

    Since all these models are, at heart, simply a spreadsheet with a geometric series, no coincidence is required.

  24. Gamecock, just follow the chat. If people have to get to Central London to work, they will travel. If the alternatives to self-driving don’t increase in scope (as they didn’t) and alternative employments outside the zone don’t increase (as they didn’t), then traffic will not decrease. People just suck up the charge. But, since a lot of people inside the zone are wealthy with increasing need for gardeners, plumbers, carpenters, decorators, then traffic will increase and the tradesmen will be at least as well off, by adding the congestion charge to the bill

  25. In the jargon it’s about calculating where the dis-benefit of the congestion charge meets the marginal revenue of doing the job. I wonder how many tradesnen asked for an extra 10 quid for mowing the lawn or cleaning the windows… “Congestion charge, ma’m”. Ie setting marginal revenue above the marginal cost of the tax.

  26. It’s a nice theory, Diogenes but it doesn’t work out like that. Apart from essential non-optional repairs, most people have a budget. Stick a congestion charge in there & something else has to go. The customers get less of a job done, the tradesman earns less money.,

  27. But did that happen, BIS? Pimlico Plumbers seem to be doing OK. I have no idea if other trades suffered but, I guess not. The marginal effects might have been on new builds but, just based on the de Walden estate at Marylebone, activity stepped up since the congestion charge got levied. It all goes into rents and house prices. And demand has been buoyant until covid shut down.

  28. As far as I’m aware, Pimlico Plumbers don’t do project work. And of course it happened. A project budget’s going to be worked out long before a start. And the LCC was introduced without much lead time. So the CC cost ends up as one of the contributing factors to a budget over-spend. So it’s either more money or trim the project. Amazingly, there’s not an infinite amount of money available to do this sort of thing. If costs rise, somebody suffers.

  29. A carbon tax cannot work for two reasons.

    Firstly, what is the correct level? Is that agreed by everyone, or is there variation so that it introduces international variations that distort the marketplace? If one country decides that a product deserves $10 in carbox tax, but another country thinks it should be $30, the second country will get very angry that people in the first country are getting away with destroying the climate. Even if a country thinks the correct level is $20, what stops them from settin the tax at $10 to gain an unfair advantage?

    Secondly, it will fail for the same reason Road Tax failed in 1937 – the government will quickly see it as just another source of income to be set at a level convenient for raising money which is not related to the level actually needed for environmental reasons.

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