There are three parties in such contracts. Look at their incentives.
* The company who wants a certificate saying they offset their carbon usage - the certificate being useful for publicity, and possibly tax breaks/subsidies. They care just about the certificate, not about offsetting carbon.
* The tree planting (or whatever way they are offsetting) company. They just want to claim they planted the tree. Nobody else is really checking to see if they planted the trees, if these trees were only planted for one offset contract, and five years later if the trees hit maturity.
* The company handing out the certificates. They match a claim from a tree-planting company with a certificate buying company. They don't really care that the carbon was offset. In fact, the larger their record of past projects, the bigger clients they can score in the future. So they have every incentive not to look too closely at the tree planter. Just to print out a certificate with minimal oversight.
> From 1978 to 2021, CEO pay grew by 1,460%, adjusted for inflation, versus just 18.1% for the typical worker.
Why has the supply of CEOs not kept up with the demand for them? Surely, with the improvement in education and in increase in MBA programs, there must be far more CEOs today than in 1978. Why has the ratio of CEOs to Companies fallen by 14x for their wages to rise this much? /s
As many argue, wages are only set by supply and demand. And if workers are underpaid, then it is because they are replaceable. Use the same framework to explain CEO pay.
Lets take a very particular variable. Every month or so, central/state banks in every country have a meeting to decide the policy rate. They look at some data and the output of some models, then wave some political magic wand over it and make a decision about which direction to move the rate. Then they make a statement like, "our decision will decrease inflation over the next three quarters by this much."
The data they use is usually publicly available, the models used by these must not be very secret. Is it not possible to hook this all up into a nice package, where I can go in and tune some knobs to my liking (there will always be knobs) to get a prediction on the inflation over the next three quarters.
Then, I can publicly claim, "Given this data, and this model, and my knob settings, here are my prediction." Then some other economist can come and dispute the data, model and the knob settings. They select a different data source, model and their own knobs.
Then three quarters later we check who made the right prediction.
Notice, I am not asking for the correct model of reality. Only a playground where people can argue using concrete data, models and knobs.
Any model has some precision associated with it. I am not asking for 5 sigma level of precision. But if the economists are fighting about what will happen to a particular macroeconomic variable, they are making a prediction even if it is a log_2(3) bit prediction [1]. There must be some math that is backing that. I want to see it explicitly put into a computational model that runs on live data. Otherwise is there any real content to the arguments that economists are having?
> Especially because it's not possible to create true controlled experiments
Cosmology has zero-experiments. It is a completely observational science [2]. And in fact, has very bad data. Basically a time-frozen snapshot of the universe from a particular point in space. They can't even make predictions about the future, only about what some new dataset of that same time-frozen universe will say. Economics on the other hand has the benefit of lots data about interventions and their consequences. There is so much opportunity to develop models by making predictions and checking what happens.
[1] variable goes up or down or stays the same.
[2] The fact that the roots of modern science lie in a purely observational no-experiment discipline of astronomy is lost on many.
OT: I see economists of various ideological tilts constantly arguing about how macroeconomic variables will respond to specific government policies. You know: "this new tax will increase inflation; no it will not, it will increase unemployment".
What I don't get is why there are no readily available online macroeconomic simulators with real world data that make these sort of predictions. For a lot of countries, up-to-date macroeconomic and demographic is readily available.
Surely, economists of every ideological tilt have their own standard model of macroeconomics [1] which they use to make rough predictions? If not, how complicated is it really?
[1] Much like the standard model of particle physics or of cosmology. Fairly dirty and complicated models with lots of tunable parameters.
* The company who wants a certificate saying they offset their carbon usage - the certificate being useful for publicity, and possibly tax breaks/subsidies. They care just about the certificate, not about offsetting carbon.
* The tree planting (or whatever way they are offsetting) company. They just want to claim they planted the tree. Nobody else is really checking to see if they planted the trees, if these trees were only planted for one offset contract, and five years later if the trees hit maturity.
* The company handing out the certificates. They match a claim from a tree-planting company with a certificate buying company. They don't really care that the carbon was offset. In fact, the larger their record of past projects, the bigger clients they can score in the future. So they have every incentive not to look too closely at the tree planter. Just to print out a certificate with minimal oversight.
In such a market, is the TFA result surprising.