Well, yes…..

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.

13 thoughts on “Well, yes…..”

  1. Earlier this year I found a copy of Schumacher at the phone box book swap. I snapped it up, thinking it was an iconic tract. Boy was I disappointed. It has obviously dated.

  2. “Given that we live in a market economy, which most believe the most effective communication mechanism for societal preferences”

    … let’s monkey around with it. Oh yes, well done that man.

  3. If the cost of carbon, like any other price, increases with increased supply, then a carbon tax will need endless tweaking because the correct level for the tax will depend on the amount of carbon consumed.

    The two “big” solutions, ie carbon tax and cap-and-trade, both get you weird supply curves, in that one is horizontal and the other vertical.

    What you want is a normal supply curve where the more carbon emitted, the more each ton of carbon costs. How you get that out of a regulatory regime is another matter, but that is what we have clever economists for.

  4. If the cost of carbon, like any other price, increases with increased supply . . .

    Eh? Decreases?

    . . . then a carbon tax will need endless tweaking because the correct level for the tax will depend on the amount of carbon consumed.

    Tim explained it very recently, can’t find the page though. I think it’s supposed to be set based on the level of damage predicted, or something. The actual emissions not mattering.

    The reality is that a carbon tax will be constantly tweaked upwards according to the need for diversity officers and such.

  5. “Tim explained it very recently, can’t find the page though. I think it’s supposed to be set based on the level of damage predicted, or something. ”
    Or something. You’re not going to know the “cost” of climate change until the bill comes in. There may not even be a bill. The advantages may outweigh the disadvantages. If it ever happens

    There’s a bleating piece on Unherd blaming the Greek fires on climate change.
    https://unherd.com/2021/08/who-set-greece-on-fire/
    Ignores that land management will have changed over in Greece as it has here. There’s a lot less goats about, for a start. So not keeping the vegetation down. And economic expectations. There’s a bit of land I notionally own up in the mountains. Was at one time marginally agriculturally productive, judging by the hut someone built on it. No one’s going to try & make a living off of it now. Not with the earnings opportunities in Spain’s grown economy. Or even Spain’s meagre social security benefits. I’ve never regularised the paperwork because I don’t want to be responsible for it. It should have the vegetation cut back to reduce the fire risk. I don’t fancy doing that over several acres of mountainside or having to employ someone to do it. What’s in it for me?
    And of course development. We get wildfires here threatening houses. But few of those houses existed 50 years ago. What there were wouldn’t have been threatened by wildfires because the livestock would have eaten anything near to them. Unless it was a crop. Why else would the house have been there unless the land around it had an economic purpose? Poor Spanish peasants didn’t build houses because they had a nice view.
    Also mentioned are olive groves. The Greeks are making money out of olive groves? I’ve had land with olive trees on it. The olives drop off & rot. Nobody’s interested in picking them. It’s not economically viable. The sort of olive groves make money are the one’s you see planted close together in neat rows & heavily managed. Not prey to wild fires. Same with the lemons. My land produced several tons of oranges a year. What didn’t get juiced in the kitchen rotted. Not economically saleable. Not compared with the closely planted mechanically harvested ones up in Valencia.

  6. Another thing is causes of fire. The people used to live in those places were careful about fire. In the home for cooking. Maybe the bloke smoked a pipe.
    I’ve actually seen this: Family in a car, steep climb up the valley, Pulled off the road onto a patch of grass. Got out to admire the view. Whoosh! Hot exhaust system ignited dry grass & the whole lot went up. The fuel tank going was pretty spectacular. Eventually the local fire brigade came up & put out the remnants.
    How many cigarette ends chucked out of car windows? Inexperienced barbecuers? There’s a bloke near Athens reportedly been nicked for setting wildfires.

  7. Because P³’s idea is bolloxy nonsense.

    True, of course, but no reason for it not to be on the agenda for COP26, which (AFAICT) consists entirely of bolloxy nonsense.

  8. All greenfreakery inc Tim’s carbon tax is bollocks.

    A Marxist powergrab and ploy to ruin the West while the CCP takes no notice.

  9. 61% of the forecourt price of petrol is already tax, externalisties are already priced in.

    But the people keep balancing costs with benefits and keep choosing to use petrol dammit, so we’ll just have to ban the bloddy peasants from using it at all.

  10. Yeah BiS. I visited Greece many many many years ago. The landscape seemed absolutely barren. I remember some old woman with a donkey scrounging a bit of wood as the bus drove up to Delphi.

    No doubt the Greeks are a lot richer these days, and nobody thinks it’s worthwhile searching for a few sticks to burn. In other words, the countryside is rewilding, and returning to the way it was before awful humanity interfered.

    Naturally the people who want this most fervently are the first to scream in outrage at the result.

  11. My A-level economics tutor from 1976-78 was a self-proclaimed Marxist and he thought Mishan was a woolly thinking twat. Perhaps that is why Spud is attracted

  12. Dennis, Bullshit Detector

    Does anyone else find the idea that Richard Murphy has read a book on economics laughable?

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