Modern accounting techniques are amazing and super effective, barely unchanged since their codification in the 1490s by an Italian scholar named Luca Pacioli. The biggest weakness of accounting though is its inability to capture externalities. How does one company record the cost of their employees commute? How do you even begin to calculate that? How do you measure the cost of extra leukemia cases in a town ten years after a train derails nearby? How do you record that in your books? How do you calculate and record the distress these huge noisy shipping vessels cause whales? It’s just so subjective and impractical.
In the city of Seattle, for example, every year, companies over a certain number of employees are required to participate in an annual transportation survey. The employees are surveyed. The questions ask how far the employee commutes to work, how long it takes, and by what method (private vehicle, car pool, public transportation), how many days a year they work from home, or take off, etc. The effort is to assess the impact on environment, parking infrastructure, public transportation, roads, etc.
Obviously, there isn’t a 100% response rate so the data is extrapolated from the responses to the total number of employees employeed at that site (probably why they only poll companies of a minimum size and larger).
If they wanted to implement something like this in seattle, then the next step would be to take the data they already have and start sending those companies a new bill for a new annual tax based on the assessment.
Lots of taxes work off of an estimated assessment rather than having to account for every nut snd bolt of the thing (property taxes, for example).
So how do you do it? That’s how you do it. This isn’t rocket science, and you don’t need to invent new accounting methods or worry about the accounting-sky falling to accomplish it.
Regarding commuting specifically I meant how do you determine the cost of each extra pound of co2 in the atmosphere. It’s inherently incalculable because the effects of climate change are insanely complex. That’s my point about externalities. How do you price the value of standing in an open meadow at dusk?
The point of my earlier comment was that the inability to account down to the last carbon atom isn’t a valid reason not to start with more generalized high-level estimates and work just from those until/if a better way of doing it is either becomes available or becomes a necessity.
It’s like arguing that we might as well not accept the existence of circles because we can’t calculate to the final digit of pi…when really, for most things, we don’t need that level of precision to still do a good job discussing roundness.
Pi can be rounded. It’s infamously difficult to compute externalities in any meaningful sense. Even more difficult to implement a fair and actionable policy for it. You can google “accounting for externalities” and read a bunch f articles and academic papers on the subject, which has been debated for decades.
Beyond fines for dumping chemicals in rivers, and carbon taxes, etc, stronger EPA, etc, I don’t really have any good ideas for codifying a real actual plan into law. Probably easier to raise corporate tax rates up a few points from 21% to whatever and use it to fund green energy and cleanup projects etc, rather than change accounting methods to try and capture the costs that way.
Modern accounting techniques are amazing and super effective,
Hmm
The biggest weakness of accounting though is its inability to capture externalities
Oh so you mean it’s actually dog shit then, if you can’t properly look at external risks outside the clearly defined formulas and can game said fomulas to cook books to one’s liking.
How does one company record the cost of their employees commute? How do you even begin to calculate that? How do you measure the cost of extra leukemia cases in a town ten years after a train derails nearby? How do you record that in your books? How do you calculate and record the distress these huge noisy shipping vessels cause whales? It’s just so subjective and impractical.
You act like these are difficult tasks in the modern era. Commute is pretty simple, what type of vehicle, what are its maintenance costs at certain mileages, what are the crash statistics, etc. Once you have a general fomula you can add an increased payout to cover ireegular externalities to properly hedge against the edge cases. Same shit for the others. It’s not subjective and impractical, it’s just not the going to be perfectly effiecnt as you need to create a bigger financial bubble to account for edge cases. The problem is hyper fixation on extracting the most captial possible from a business. Stop trying to be the most clean cut business and focus on aiding your communities, working to better infrastructure and stop interference with local governments for tax benefits. Then progressive changes can be beneficial to both and reduce external unmitigated risks as we have a more nuanced model to work with.
Lol, call out your bullshit and you have nothing but a reductionist argument, but sure bud I’m the one not playing with a full deck. Go lick some more boots if you can’t engage in constructive conversation.
Come back when you can codify your point into something that can actually be recorded on a balance sheet and P&L. Until then it’s not even wrong, it’s just…word salad…
Modern accounting techniques are amazing and super effective, barely unchanged since their codification in the 1490s by an Italian scholar named Luca Pacioli. The biggest weakness of accounting though is its inability to capture externalities. How does one company record the cost of their employees commute? How do you even begin to calculate that? How do you measure the cost of extra leukemia cases in a town ten years after a train derails nearby? How do you record that in your books? How do you calculate and record the distress these huge noisy shipping vessels cause whales? It’s just so subjective and impractical.
In the city of Seattle, for example, every year, companies over a certain number of employees are required to participate in an annual transportation survey. The employees are surveyed. The questions ask how far the employee commutes to work, how long it takes, and by what method (private vehicle, car pool, public transportation), how many days a year they work from home, or take off, etc. The effort is to assess the impact on environment, parking infrastructure, public transportation, roads, etc.
Obviously, there isn’t a 100% response rate so the data is extrapolated from the responses to the total number of employees employeed at that site (probably why they only poll companies of a minimum size and larger).
If they wanted to implement something like this in seattle, then the next step would be to take the data they already have and start sending those companies a new bill for a new annual tax based on the assessment.
Lots of taxes work off of an estimated assessment rather than having to account for every nut snd bolt of the thing (property taxes, for example).
So how do you do it? That’s how you do it. This isn’t rocket science, and you don’t need to invent new accounting methods or worry about the accounting-sky falling to accomplish it.
Regarding commuting specifically I meant how do you determine the cost of each extra pound of co2 in the atmosphere. It’s inherently incalculable because the effects of climate change are insanely complex. That’s my point about externalities. How do you price the value of standing in an open meadow at dusk?
The point of my earlier comment was that the inability to account down to the last carbon atom isn’t a valid reason not to start with more generalized high-level estimates and work just from those until/if a better way of doing it is either becomes available or becomes a necessity.
It’s like arguing that we might as well not accept the existence of circles because we can’t calculate to the final digit of pi…when really, for most things, we don’t need that level of precision to still do a good job discussing roundness.
Pi can be rounded. It’s infamously difficult to compute externalities in any meaningful sense. Even more difficult to implement a fair and actionable policy for it. You can google “accounting for externalities” and read a bunch f articles and academic papers on the subject, which has been debated for decades.
Beyond fines for dumping chemicals in rivers, and carbon taxes, etc, stronger EPA, etc, I don’t really have any good ideas for codifying a real actual plan into law. Probably easier to raise corporate tax rates up a few points from 21% to whatever and use it to fund green energy and cleanup projects etc, rather than change accounting methods to try and capture the costs that way.
Hmm
Oh so you mean it’s actually dog shit then, if you can’t properly look at external risks outside the clearly defined formulas and can game said fomulas to cook books to one’s liking.
You act like these are difficult tasks in the modern era. Commute is pretty simple, what type of vehicle, what are its maintenance costs at certain mileages, what are the crash statistics, etc. Once you have a general fomula you can add an increased payout to cover ireegular externalities to properly hedge against the edge cases. Same shit for the others. It’s not subjective and impractical, it’s just not the going to be perfectly effiecnt as you need to create a bigger financial bubble to account for edge cases. The problem is hyper fixation on extracting the most captial possible from a business. Stop trying to be the most clean cut business and focus on aiding your communities, working to better infrastructure and stop interference with local governments for tax benefits. Then progressive changes can be beneficial to both and reduce external unmitigated risks as we have a more nuanced model to work with.
That rant is unhinged, you’re not playing with a full deck. Not gonna engage with you if you can’t have a reasonable conversation in good faith.
Lol, call out your bullshit and you have nothing but a reductionist argument, but sure bud I’m the one not playing with a full deck. Go lick some more boots if you can’t engage in constructive conversation.
Come back when you can codify your point into something that can actually be recorded on a balance sheet and P&L. Until then it’s not even wrong, it’s just…word salad…