One of the first ever economics books I ever read, when I was still in the sixth form in about 1975, was E J Mishan’s ‘The cost of economic growth’. My copy of ‘Small is beautiful’ by E F Schumacher was bought at around the same time. So too, although I can’t find my copy now, was the Club of Rome report, ‘The Limits to Growth’. The temptation to say that the catastrophe we now face was predicted long ago is high.
I do recall that at least my copy of Schumacher had a long chapter on how Britain should power itself from coal. Which, given he was the chief economist of the National Coal Board seems reasonable enough. It’s just not all that consistent with modern greenery though, is it?
Limits to Growth of course got the whole thing entirely wrong by thinking that mineral reserves were a useful guide to the quantity of minerals available. This one single mistake entirely driving their conclusion.
Mineral reserves, they said, will last about 30 years. That’s about right too, they always do. They then also said that total availability was about 10 times reserves. Which is poppycock. But from that assumption alone they tell us that all minerals will run out in 300 years.
Entire bollocks solely driven by a nonsense assumption.
What will sober the world enough to persuade it to address this? Given that we live in a market economy, which most believe the most effective communication mechanism for societal preferences that we have, I persist in the view that putting climate change on the balance sheet of companies the best thing that we can do. I describe this as sustainable cost accounting.
And there’s another error. Assume that all the rest is true. Then the solution is a carbon tax.Because once it’s in all prices then it is also in all incentives and, also, magically appears in all balance sheets. Because they are composed of market prices.
And it is business that must account for climate change in that case. Not by pretending it is off balance sheet, or that by disclosing emissions it had done enough. Business has to account now for how it is going to stop its emissions. It has to do so or we have no identifiable future. But this is not on the COP26 agenda.
My question is a simple one. Why not?
Because P³’s idea is bolloxy nonsense.