docs/additional-notes.md

The Social Cost ... But Of What, Exactly!?

The idea of trying to integrate environmental data into financial reporting is anything but straightforward.

This is unfortunate, because the idea of doing this has important ramifications for public policy, financial policy, and the question of how our economic systems should be structured. It should be added: the idea of investigating what effect monetized emissions may have on companies profitability is not an attempt to be punitive. But rather to open the door to what this type of policy might look like in practice. If the purview of the analysis were widened to considering both companies environmental and social impacts, positive impacts could be added to move the analysis away from a framework that only estimates degrees of harm.

Although obvious, it's important to highlight the following, too:

Greenhouse gas emissions are often used for this purpose for a plurality of reasons, but chief among them is probably the fact that they are relatively widely available as a datapoint. To calculate what monetized environmental emissions would look like in practice, two things are necessary: Firstly the quantitative data about those emissions and secondly the multiplication factors to convert those to monetary units. To call the latter merely multipliers is also to greatly oversimplify what these are. In reality, to the extent that a simple number is ultimately proposed, the number is the result of a extensive modeling process underpinned by detailed scientific information.

The broad idea behind proposing a social cost of carbon at all is to fix a number on the extent to which companies emissions have effects that could be monetized. However, there are two large deficiencies in even this approach. The first is that while it might be the most prominent gas in companies emissions profiles, carbon dioxide is but one of several gasses they may be emitting in their overall GHG emissions basket that have been demonstrated scientifically to have damaging effects on the environment (express, numerically, through their GWP values). One approach arround this is to consider for calculation a social cost of greenhouse gasses or SC-GHG.

The second is the point made previously, that while companies greenhouse gas emissions, even if considered collectively, are relatively easy to document, monitor and report upon, together, they only consider one part of a company's environmental impacts. The Global Value Factors Database released by the International Foundation for Valuing Impacts l(IFVI) in 2024 considers a wide variety of environmental impacts, including in areas such as air pollution, waste management and land use displacement.