If your chief financial officer is the last person you would think of to take charge on climate change, think again. Today, smart organizations are shifting their sustainability responsibilities toward the finance function....The focus needs to be on true cost accounting. Economic calculation doesn't work when markets are not dealing in terms of true cost owing to socialization of negative externality.
The simple fact is that the Green New Deal and profit maximisation are incompatible with each other, and this is of massive importance and is an issue that cannot be ducked if the Green New Deal is to work. This is the idea behind my work on what I call sustainable cost accounting (SCA).
The core idea within SCA is that existing accounts treat the supply of finance as the constraint on corporate activity and as such the return to financial capital is considered to be the focus of financial reporting, without any consideration being given to the use of that financial capital and who might benefit from it. Quite explicitly, externalities such as environmental cost are ignored in this framework, which accepts the standard neoclassical line that natural capital is a ‘free gift of nature’. This is inappropriate in a world where we face the reality of climate crisis. The capital constraint that businesses now face does not come from finance - which is readily available to most of them at almost no real cost in the case of larger companies - but from natural capital, whose use we have to limit.
Sustainable cost accounting does, then reject the reporting structure of current accounting, which is no longer fit for purpose, and in the process effectively imposes a new reporting requirement, and so corporate objective, on all companies in place of profit maximisation. This new requirement is the obligation to maintain their business on behalf of all stakeholder groups in society within the constraints that the climate crisis will impose upon them. Unless this is done the Green New Deal cannot deliver the transformation in the way in which we manage the economy that the Common Wealth think tank describe in their report. But when this is understood the ramifications are also much bigger than they appear willing to embrace.…Tax Research UK
The World Health Organization (WHO) on Thursday classified outdoor air pollution as a leading cause of cancer in humans.
“The air we breathe has become polluted with a mixture of cancer-causing substances,” said Kurt Straif of the WHO’s International Agency for Research on Cancer (IARC).
“We now know that outdoor air pollution is not only a major risk to health in general, but also a leading environmental cause of cancer deaths.”
The IARC said a panel of top experts had found “sufficient evidence” that exposure to outdoor air pollution caused lung cancer and raised the risk of bladder cancer.
Although the composition of air pollution and levels of exposure can vary dramatically between locations, the agency said its conclusions applied to all regions of the globe.
Air pollution was already known to increase the risk of respiratory and heart diseases.The Raw Story
Natural Gas Damage Larger Than Its Value Added For Even Low CO2 PricesCoal does more harm than good.Okay, public health experts have known this for a while — see Life-cycle study [Epstein et al]:Accounting for total harm from coal would add “close to 17.8¢/kWh of electricity generated.”But now we have some of the leading (center-right) economists in the country — Nicholas Z. Muller, Robert Mendelsohn, and William Nordhaus — making this case in a top economic journal, the American Economic Review. Their article, “Environmental Accounting for Pollution in the United States Economy” [akaMMN11], models the impact of emissions of six major pollutants (sulfur dioxide, nitrogen oxides, volatile organic compounds, ammonia, fine particulate matter, and coarse particulate matter) from the country’s 10,000 pollution sources.Nobel Prize-winning economist Paul Krugman summarizes the core conclusions in his post, “Markets Can Be Very, Very Wrong.”"Consumers are paying much too low a price for coal-generated electricity, because the price they pay does not take account of the very large external costs associated with generation. If consumers did have to pay the full cost, they would use much less electricity from coal — maybe none, but that would depend on the alternatives."At one level, this is all textbook economics. Externalities like pollution are one of the classic forms of market failure, and Econ 101 says that this failure should be remedied through pollution taxes or tradable emissions permits that get the price right...."
