So they externalize the cost of their own incompetence and you’re suggesting it’s bad to internalize that cost.
replyFailing to predict cold winters is not incompetence in the normal sense.
replyCould they overproduce and keep unsold stock for next winter, and if unsold stock gets too high, stop producing more until it reduces?
replyThey mostly do keep unsold stock, only a fraction of it gets destroyed. See the EEA's full analysis from 2024 (https://www.eea.europa.eu/en/analysis/publications/the-destr...).
replyThey could, but it’s a tradeoff. Inventory costs money and if you cut production, that means laying off workers and possibly selling productive assets, at which point it becomes more expensive to scale production back up.
replyEvery business decision is a tradeoff. Smart government interventions in the economy add weight to that tradeoff to reflect externalities not otherwise accounted for; this is how cap-and-trade on SO2 emissions works. Hamfisted government interventions set hard and fast rules that ignore tradeoffs and lead to unintended consequences.
Do we really need warehouses full of "just in case" inventory? It's not life or death, it's just slightly more profitable for companies to overproduce than it is for them to attempt to meet demand exactly.
replyClimate change is coming, fast and brutal. I'm okay with these multi-billion-dollar revenue companies making a few points less in profits, if it means slowing climate change by even a fraction of a fraction of a point.
They don't need those profits. But our children need a viable planet.
Companies can't meet demand exactly, no matter what profit margin they take, because it's not possible to predict demand exactly. Biasing towards overproduction is how you minimize the risk of shortages when there's a bit more demand than you expected.
replyIt seems to me that is exactly what could be enabled by this law. It is forbidding the destruction of last year’s winter coats.
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