Sustainable Cost Accounting

Once more into the logical breach here.

The chance of global warming temporarily reaching the 1.5C mark in the next five years has risen to more than 40 per cent after new monitoring data from the Arctic, according to the World Meteorological Organization.

1.5 doesn’t actually matter. Yes, it’s a political target but that’s all it is. But still, leave that aside:

Some people will have noticed the furious opposition that sustainable cost accounting gets on this site any time that I mention it.

For good reason. It’s an idiot idea. Or, to be less aggressive, something that has not been thought through.

As a recent opponent made clear, his real objection was that business becoming net-zero carbon will require changes to consumption patterns, and he did not like that idea. Everything else he said had to be read in that context.

No, that’s not what was in fact said. Rather, in an idea I suspect picked up from here, holes were picked in the arguments being used.

Sustainable cost accounting demands that a company work out how much it will cost for it to become net zero. This is to include Scope 1, 2 and 3 emissions. As a logical construct I asked, well, could Tax Research LLP become net zero given Scope 3 emissions? The company produces a website, Scope 3 would include the emissions from the energy consumption of those downloading a web page from that site. Given that Tax Research LLP cannot control the energy mix used to do that then we cannot insist they be responsible for it. Nor put the cost of eliminating emissions from this source on their balance sheet.

There was no adequate answer to this from the P³. But then, you know, P³.

There’s a much larger error in the logic here though:

And that is why I think sustainable cost accounting matters. And that it matters now. And that pussy-footing around business becoming net-zero carbon is not something we can afford.

Even if we are alarmist about matters we do not desire business to become net zero. We do not desire any sector, part or component of the economy necessarily become net zero. We desire that the world as a whole become net zero – well, OK, alarmists do at least. This means that there is still significant room for certain individual actors to be emitting. Which is nice – that means we can all continue exhaling now and again. For yes, human physiology does produce CO2 emissions.

We might well want some other process, something over there, to be inhaling that CO2 but we’d like to carry on breathing. The same is true of an industry, a sector, even an individual business. It is the balance of all the emissions that matters, if any do at all, not those from any one or another source.

The base idea that every and each business must become net zero is as stupid as demanding that each lung does so.

But then, you know, P³ and the grift for grants……

7 thoughts on “Sustainable Cost Accounting”

  1. Dennis, CPA to the Gods

    The first thing to note is that Sustainable Cost Accounting does not actually exist. There is no system, no framework, no rules, no nothing. There’s just this THING – an idea and nothing more – called SCA. Even if I bought into the bullshit and decided to implement SCA I couldn’t… There’s nothing to implement. And Richard Murphy, while expending much energy promoting and defending, has shown no inclination to roll up his sleeves and actually develop this idea of his. You can say that’s because he’s looking to grift a grant, and I won’t argue that with you. But we shouldn’t overlook the obvious: Richard Murphy doesn’t have the intellectual/professional chops to actually develop a system, a framework or a set of rules. It’s well beyond him.

    Next he’ll be hawking the idea that climate change can be managed through R&D… All we need to do is develop an internal combustion engine that uses air as fuel. Nice idea, but the devil is in the details.

  2. Sustainably accounting can be abridged to “I’ll pass on any extra costs to my customers, just like every other business” so the impact to my business is zero.

  3. Dennis, Noted Non-Economist

    Sustainably accounting can be abridged to “I’ll pass on any extra costs to my customers, just like every other business” so the impact to my business is zero.

    Doubtful. You can make the case that not much would be passed on to customers. It would be passed on to workers (you know, the folks Murphy cares so deeply about)… In the form fewer positions and lower wages. See Tax Incidence.

  4. It’s typical Spud.

    “All companies must include in their Articles a plan to end racism, save baby seals and ensure that all people live happily ever after and must close if they cannot guarantee it will happen within 6 months”

    – “That’s ridiculous and unworkable”

    “So you want racism, dead baby seals and unhappy people. You are a fascist.”

  5. Well, I for one think sustainable cost accounting is a FAB idea.

    Look, if European Jewry in the ’30s, Cambodians in the ’70s or Tutsis in the ’90s had known what was about to befall them, things would have been different.

    So, seeing in detail the economic and social holocaust we will experience after the Year Zero Spud, Colin Hines, Caroline Lucas and Greta Thumberg are planning wil be a great thing, just great.

  6. I believe we’ve eliminated rickets, but rackets seem to thriving. I wonder how long it will be before the latter reintroduces the former?

  7. “Given that Tax Research LLP cannot control the energy mix used to do that then we cannot insist they be responsible for it. Nor put the cost of eliminating emissions from this source on their balance sheet.”

    No. We can and do insist that Tax Research LLP be responsible for its emissions and that the cost is put onto its balance sheet, right now.

    It’s outrageous that the fat fvcker can demand compliance with his bonkers scheme (designed to hoover up more money in grants and fees for Tax Research LLP) and yet not do it himself, immediately, to demonstrate the “benefits”, “methodologies” and compliance costs.

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