Daily Reading – 29/09/14

Yes, Yes, Yes: This is THE solution. We are all, in essence, subsidizing the carbon consumption of the heavy users. There is NO incentive to build alternative solutions today.


When valuing the worth of most assets today, most of the value lies in something called the “terminal value” – which is the value belonging to cash flows from the assets beyond a certain number of years (typically 10). When computing those cash flows, we assume a certain growth rate going on ad infinitum.

Climate change dramatically increases the risks to those cash flows, making todays assets worth a LOT less (say ~ 80% less). If the market were to price that in, mitigation and finding alternate solutions would begin to look very cheap indeed.

Again, those who are gaining in status quo are very few. A point on employment generated by polluting companies


A carbon tax would be beneficial here-and-now: benefits in terms of health etc. would counteract any costs, forgetting overall climate benefits. Also an additional source of revenue for the various governments:


And the truly excellent IMF paper on which the above is based:

Click to access wp14174.pdf

Very often, when we compare the costs of adapting to or reducing our contribution to climate change, we don’t account all the costs we are currently incurring or the increased risks of climate change. One such costs not  fully priced in is the loss in human productivity as the climate warms:


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