Fake Accounting Real Trouble

That is, in four words, the essence of global warming.

The trouble is not that fossil fuels emit carbon dioxide. Or that in turn that leads to heating up the planet and all kinds of real trouble. Of course it does.

But if burning fossil fuels came with Taking Responsibility for All Factors of cost, all emissions would be cleaned up in one way or another as the fossil fuels were burned. The offensive part lies in ignoring the cost for the necessary cleanup when burning the fuel. Consumers of that fuel are not paying for that.

That is fake accounting. It makes fossil fuels look cheaper as they are. And that is even before counting the fact that once you burn some, you need to wait hundreds of millions of years for new one to form.

It is not a coincidence what the first letters of the four words in the title read combined. I leave it as an exercise for the reader to figure out what that reads. And if I have a high opinion of this kind of selfish and greedy pushing the cost of the cleanup to someone else.

So, time to start cleaning up. There is a massive opportunity to suck up CO2 from the atmosphere, since there is already so much available.

Who is going to pay for that?

Well, for one, maybe we should not allow fake accounting any more. Anyone digging out fossil fuel and therefore responsible for the associated CO2 emissions should be required to pay for the removal of the CO2. Leave the stuff in the ground in the first place or remove all the CO2. Factor that cost in when selling the fuel. Stop the fake accounting.

We could get to net zero immediately by taking this simple step. Of course, fossil fuel would get more expensive that way. But the only reason it is cheaper now is that this big cost factor is ignored.

That would lead to at least stopping to make things worse. It would also give a major boost to the carbon removal industry, leading to economies of scale and the associated reductions in unit costs.

But stopping to make things worse is not enough anymore. The goal must be to remove more than is put in. It may be necessary to find funds apart from the cost of new fossil fuels.

In that case, fair accounting is essential. And that is where Bitcoin can shine.

Bitcoin does not require to trust anyone participating. But it does not prohibit trusted parties in the system either.

Combine the robust accounting possible with Bitcoin with some trusted parties that count, control, and account for the carbon removal. And we might get a winning formula that takes us way beyond not making things worse anymore.

Again, I leave it as an exercise for the reader to figure out how exactly such a system may work. With me one of the readers…

Published by kflenz

Professor at Aoyama Gakuin University, Tokyo. Author of Lenz Blog (since 2003, lenzblog.com).

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