What, you mean apart that it’s barking?

So the question is what is the problem with making progress on this?

The thing, today, that is barking is that carbon accounting idea:

Last, changing the metric is the answer. And the relevant metric is financial viability. We have to show now which companies can make it through to be carbon net zero and which cannot. It is as simple as that. Only with data on that can rational decisions on the allocation of capital within financial markets take place. Mark Carney’s TCFD disclosure plan does not meet this criteria because it does not put the costs of climate change on a balance sheet upfront, but instead allows those costs to be delayed for as long as possible, off the balance sheet. That is the exact opposite of what is required.

My sustainable cost accounting does put that cost on the balance sheet upfront. Of course it will be an estimate, and of course it will require revision over time. But it requires a company to say how it will be net carbon neutral without permitting unsupported assumptions on offset or unproven technology, and it requires that the full provision for eliminating the cost of carbon be accounted for upfront. That way the information that a market requires to appraise future risk would be available now. And that is what markets need.

What would be the effect upon the balance sheet of Tax Research LLP of insisting it become carbon neutral over Scope 1, 2 and 3 emissions? That Scope 3 would, for example, have to include the energy used – from whatever generation mix, on whatever form of machine – to download pages from the Tax Research website.

How could that even be calculated?

5 thoughts on “What, you mean apart that it’s barking?”

  1. I rather like Spud’s suggestion. In order for the liability to sit on the balance sheet, the cost must pass through the P & L. This should reduce Corporation tax nicely!

  2. ‘So the question is what is the problem with making progress on this? And, as ever, it is vested interests trying to maintain as much as possible of the status quo whilst appearing to make change. That’s going to be a deadly approach in this case. The sooner we realise it and go for real change the better.’

    A more arrogant view would be hard to summarize. Effectively we should listen to a man whose ignorance of economics, science, history and politics is without end? Good luck with that.

  3. So it’s little more than finger in the air estimates, with enormous margin for error and myriad unknowns, but it’ll be used to asses the viability of a business? The mans a loon?
    Plus of course AGW is bollocks.

  4. Ducky McDuckface

    NN – yeah, I was thinking the same thing – with the whole thing upfront, it’s a sort of negative goodwill, so no CT.

    I suppose that as technology improves over time, then the impairment would reduce, but still no CT as credits roll forward.

    Cracking stuff.

  5. I do wonder at Spud’s need to actually lie about things. He’s claiming that accounting for his bollocks idea would be easy and

    “as the head of technical accounting at a Big 4 firm put it to me, intensely auditable and relatively easy to do”

    The idea that he’s in conversations with the ‘head of technical accounting at a big 4 firm” and that they are agreeing with him is ludicrous. Of course, he hides behind not saying which big 4 firm, thinking this gives his lie some protection but, I don’t know, he’s claiming ONE of them has supported his ideas. A bit like claiming ONE of four people assaulted you but not naming which one. It would be a claim that actually affected all four. I wish I was in contact with one of these people. No doubt they know the other three. It would be nice to pin Spud down on an outright lie.

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