It also matters for another reason. These emissions are what are called Scope 3 emissions from the gas companies. They are responsible for them because they are the foreseeable emissions that result from their sale of gas. That’s what Scope 3 means – they are the emissions caused by what you sell rather than what you do yourself. They should as a result account for them and the cost of their removal within the supply chain they manage under what I call sustainable cost accounting. If they had to do so then they would be starting to sell heat pumps now. But they’re not required to do so, and the accounting standards that are likely to be adopted at COP 26 will not demand that of them, so this problem will continue.
The answer is simple, If only we changed the accounting rules and made the companies selling gas responsible for the emissions resulting from its use they would have to change their behaviour very rapidly. And that is exactly what we need.
OK. So, how much should the gas companies be charged?
The social cost of carbon, obviously, the damage being caused by their Scope 3 emissions. That’s $80 per tonne CO2-e. So, we charge the gas companies $80 per tonne CO2-e in the gas they sell.
That is, Ritchie has just reinvented the carbon tax. Which is, of course, entirely and wholly different from the neoliberal carbon tax – just so you know that.