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Well, no, not really, Arthur Cecil got there in 1911

The idea of carbon insolvency etc etc:

Sustainable cost accounting is a mechanism to bring the costs of managing climate change onto the balance sheets of companies so that these costs might be included within their financial statements for the sake of appraising which companies are likely to be most impacted by the transition to a sustainable economy.

OK. Someone in comments doesn’t like it. OK:

First, there are those in the ICAEW who think I am ahead of the game, and since no one else has a plan to pit this on the balance sheet I clearly am. That puts your last comment in context, and suggests that all the rest is likely to be misinformed.

Professor Pigou did get there over a century ago. Stick on a carbon tax. That changes market prices to include those carbon costs. That also, by definition, then changes everyone’s P&L and balance sheet. Job done.

But then Pigou only had the one professorship so what did he know?

9 thoughts on “Well, no, not really, Arthur Cecil got there in 1911”

  1. That post on Twat Research is a classic. Neatly skewered by Julian

    I’m not sure how you can put this forward as an accounting framework as the rules are so vague they could not be implemented, you have not actually tested it and you don’t give clarity on how it would work.

    I’d also add you are about 20 years behind – various bodies have been looking at this over the last 20 years. It is a very complex problem and I’m not sure 11 pages with little real detail is going to cut through.

    To which the vast edifice of Elysian blubbery responds

    How do you calculate that number for costing net zero?

    That’s for the company to decide – and for its auditors to agree. The cost is that of eliminating carbon. It will be different for every company.

    He really is at the intellectual level of Sooty.

  2. So he really believes that a company is going to start up and immediately book a £60 million liability for its carbon liability? What investor would give money to such a company only for a big slug of the investment to be spunked up the carbon wall?

    He even admits in his worked example that innovation might eliminate part of the carbon liability. So, the sensible thing to do would be to leave the carbon liability on the balance sheet and hope (as seems reasonable) that a future innovation will extinguish it. Why pay cash to reduce your liability now when it might be eliminated in the future? Especially given that Spud won’t let you discount the liability.

    If one of my accounting students produced this drivel, I would give them a failing grade. Lord knows why Sheffield want to be associated with this fucking madman.

  3. If and when a private company is legally responsible for halting climate change we shall renumber the calendar to 1984.
    A private company controlling how much CO2 each of us may produce? And responsible for controlling the 30+% of global CO2 emitted by China (it was 28.8% in 2019 but the rest of the world has reduced GDP by c10% while China is only down 5%).
    Perhaps Murphy wants the right to impose CO2 limits arbitrarily on every company in the UK, knowing it will make zilch difference to Global Warming as the UK only generates 1% of world CO2. Still a 1984-type vision but scaled down from Uncle Joe as Big Brother to Richard M as “carbon warden”

  4. Ecks has the most cogent position here. Millions of words, trillions of dollars spent, and never ever any proof that the hypothesis is true or that it would represent a problem if it was.

  5. First, there are those in the ICAEW who think I am ahead of the game,

    The rest of the ICAEW think he’s a first grade fuckwit.

  6. aaa

    You’ve nailed it completely (As have many others here ad nauseam) – the lack of even a fundamental understanding of basic accountancy principles is a feature of the imbecile’s witterings. Various commentators on here point out it is almost impossible to get ‘struck off’ (or the equivalent) by the ICAEW and I’m guessing there’s no more obvious proof of that than Murphy. His utterances would be embarrassing if they came from a first year undergraduate, let alone a man nearly in his 60s with (Allegedly) a professional and then an academic career. I don’t think I’ve ever seen a more stupid individual extant in Cyberspace and given I’ve been on Twitter for a decade that’s saying something. A ‘pornbot’ has more economic understanding

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