Crazed on climate change accounting again

Still, you know, grifters gotta grift.

I suggest that this is a mistake. The assumption that underpins this logic is that of the microeconomic theory of the firm. This suggests that there are ‘free gifts of nature’ that a microeconomic entity is entitled to use without making compensation payment for the cost that is imposed upon society as a result. In accounting terms the assumption appears to be the costs of climate change does not need to be reflected in the financial statements that report profit or loss for a period, or upon a corporation’s balance sheet.

The “microeconomic theory of the firm” says nothing at all about free gifts of nature. It talks about why firms exist rather than networks of independents trading with each other. If only the P³ knew the economics he wished to critique.

What I then go on to explore is my version of climate change accounting, which I call sustainable cost accounting. There are more details here. This puts those costs in the accounts – which is where they belong. And only if they are included will we have efficient capital markets for the next thirty years.

If you actually wished to get climate change into accounts then you’d insist on getting climate change into prices. At which point all accounts would immediately reflect climate change costs – and, also, benefits.

For, of course, accounts are drawn from prices.

The answer to Ritchie’s mumblings is the carbon tax. Indeed, one of the reasons that Stern, Nordhaus, Quiggin, Tol, Uncle Tom Cobbleigh and all recommend a carbon tax is precisely so that it embeds climate change in prices and thus informs all decision making – including in corporate accounts.

But then agreeing with other people isn’t the way grifters grift, is it? Gotta invent something new that needs to be researched.

13 thoughts on “Crazed on climate change accounting again”

  1. Indeed, one of the reasons that Stern, Nordhaus, Quiggin, Tol, Uncle Tom Cobbleigh and all recommend a carbon tax is precisely so that it embeds climate change in prices

    And if you believe that I have a bridge you might be interested in purchasing.

  2. According to NASA (and they can’t possibly be wrong can they….), the global temperature in 1920 was 13.83c.
    As of today, the unadjusted temperature is 13.88c. Where is the global warming these people are spending so much time, energy and ALL OUR MONEY on?

  3. Increased CO2 has so far been a benefit to the planet. Satellite data show that the planet is greener. I propose tax breaks for high emitters of CO2.

  4. @Addolff
    And as anyone will practical experience of measuring temperatures will tell you, second decimal place temperatures don’t exist. They’re simply the result of averaging large numbers of coarser measurements & tell you nothing about the accuracy of each measurement. Basically, you’re describing noise.

  5. Even if increased CO2 at the recent rates has so far been a benefit to the planet and we want to encourage it, you’d still want to put the subsidy into prices. Not into micro-managing accounts and applying to government for handouts if you’re a big operator but not a small business or individual, and with government committees deciding who doesn’t get one – this being the sustainable cost accounting approach from what I can establish..

  6. Compared with volcanoes the human contribution of CO2 into an incompletely understood energy system, is a rounding error

  7. Addolff… Even that average is as much use as the famous Answer of “42”…

    People who use it are not asking the right questions.
    I always ask people who quote global average temperature if they’ve ever heard of a thing called “the Coriolis effect”.
    Most of them haven’t a clue. Which sort of ends matters, and their potential credibility in All Things Climate, right there.

  8. @Addolff – June 12, 2021 at 9:59 am

    As of today, the unadjusted temperature is 13.88c. Where is the global warming these people are spending so much time, energy and ALL OUR MONEY on?

    Adjustments…?

  9. I have never seen a convincing reason why I should be concerned about global average temperature

    It seems to me to be pretty meaningless statistic

    Especially as vast areas of the globe haven’t seen a thermometer in decades, if ever

  10. global average temperature. It seems to me to be pretty meaningless statistic

    Particularly when you consider the range of temperature on earth. At 1700UTC today (June 12th) the measured extremes of temperature were +48.8C in Iran and -75C in Antarctica – as near as dammit, a range of 125C.

  11. If the climate changers really believed in climate change, they’d have a global nuke building program on the scale of the Messmer plan. Concerns about radioactivity would be treated the same as those about blood clots from covid vaccines.

    Even if we’d just spent the money we’ve wasted on windmills and solar panels on building nukes, we’d still have drastically lowered CO2 emissions.

    Clearly their aim is simply to produce their splendid natural world powered solely by (my) human labour. If God had meant me to work, He wouldn’t have invented the steam engine.

  12. @Ljh
    Compared with volcanoes the human contribution of CO2 into an incompletely understood energy system, is a rounding error

    It’s the other way round – CO2 emissions due to vulcanism are <1% of those caused by humans. This doesn't justify 'the sky is falling' climate alarmism, of course.

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