Green accounting
Part of a series about |
Environmental economics |
---|
Green accounting is a type of
It is a controversial practice however, since
Etymology
The term was first brought into common usage by economist and professor Peter Wood in the 1980s.[4]
Practice
Environmental responsibility is a potent issue among businesses in this modern age. It has become necessary for corporation to formulate methods of promoting green causes for the present and the future.[5] Green accounting helps promote a sustainable future for businesses as it brings green public procurement and green research and development into the big picture. Penalties for polluters and incentives (such as tax breaks, polluting permits, etc.) are also a crucial part of this type of accounting.[6]
The
NDP = Net Exports + Final Consumption (C) + Net Investment (I)
This is also a typical formula found in articles and texts about accounting.[7]
Green Accounting, however, uses the
Thus, the NDP is newly defined as Green NDP, or also known as EDP. The green accounting formula is:
EDP = Net Exports + C + NAp. ec + (NAnp.ec - NAnp.n)
Where:
EDP = Environmental Domestic Product,
C = Final Consumption,
NApec = Net Accumulation of Produced Economic Assets,
NAnp.ec = Net Accumulation of Non-produced Economic Assets,
NAnp.n = Net Accumulation of Non-produced Natural Assets.[7]
Challenges
Environmental protection and economic growth
The effect of environmental policies on the economy has always been a controversial topic. Many economists argue that sanctioned limits on pollution curtail economic growth.[2] For instance, between 1973 and 1982, the United States imposed stricter regulations on pollution, which led to a 0.09% decrease per year in the national output growth.[8] A study conducted in 1990 also analyzed the economic growth with during the time period between 1973 and 1980s. The result indicated that the government regulation reduced the annual GNP by 0.19% per year.[9] Other researchers argue that those number is insignificant compared to protecting and sustaining the priceless environment.[2]
Distributional impacts of environmental and natural resource policies
Not all industries pollute the same amount; chemical and paper manufacturing industries, for example, tend to pollute more than others. It is difficult to accurately measure the pollution level of each industry in order to categorize and to set up a fair set of policies. In particular, improved water quality might highly favor the higher income groups due to the fact that most improvements are done in the urban areas.[2]
Links between trade and environmental and natural resource policies
During the time of globalization and the rapid expansion of the international market, the US policymakers have come to realize the importance of what is happening in other countries. Before making any decision and submitting the final draft to Congress, the policymakers were concerned about the effects of the North American Free Trade Agreement on the environment.[9] National accounting systems that include environmental and natural resources could provide useful information during negotiations over the nations' commitments to restore or maintain natural capital.
Trade restrictions have not been used when a country's production and processing methods result in excessive discharges of pollutants (
See also
References
- ^ Sjak Smulders (2008). "green national accounting," The New Palgrave Dictionary of Economics, 2nd Edition\. Abstract.
- ^ a b c d e Rout, Himanshu Sekhar (August 2010). "Green Accounting: Issues and Challenges". IUP Journal of Managerial Economics.
- .
- ^ ISBN 1-874719-65-9
- ^ Account, Admin. "Accounting firms leading green change". AccountingWEB. Retrieved December 7, 2015.
- ^ Commission, The European. "Green Accounting as the Path to a Sustainable Future". GreenBiz. greenbizgroup.com. Retrieved December 7, 2015.
- ^ a b "Green Accounting: Need, Objectives, Problems and Other Details". YourArticleLibrary.com: The Next Generation Library. May 8, 2014. Retrieved December 7, 2015.
- ^ E F, Denison (1985). Trends in American Economic Growth 1929-1982. Washington, DC: Blockings Institution. p. 111.
- ^ JSTOR 2555426.