Accounting for emission rights: an environmental approach



Publication Details

Zhang, E., Moerman, L. C. & Kaidonis, M. A. (2008). Accounting for emission rights: an environmental approach. In R. Burritt (Eds.), 7th Australasian Conference for Social and Environmental Accounting Research (A-CSEAR) (p. [25]). Adelaide, Australia: Centre for Accounting, Governance and Sustainability, University of South Australia.


Emissions trading schemes are an emerging phenomenon in global economy in the 21st century. It is Australia's response to the effects of climate change from increasing greenhouse gases. As a mechanism to achieve carbon pollution abatement, it will use a cap and trade scheme, whereby participants of an emissions trading market are able to trade emission rights across markets and countries. Whether or not such emission rights can be successfully implemented into a market is dependent on an accounting system that can facilitate such transactions. This paper aims to evaluate the IASB Framework and its ability to promulgate an accounting treatment for emission rights. It aims to explore and challenge the appropriateness of accounting recognition and measurement of emission rights in a wider social and environmental context by using the lens an environmental ethics perspective, social ecology. This paper argues that a paradigm shift is necessary in order to address our environmental crisis, and that the IASB conceptual framework alone would be insufficient in addressing accounting for emission rights. This paper (1) raises issues that need to be taken into account in accounting for emission rights; (2) contributes to the current debate on emissions accounting, (3) highlights the implication of the proposed accounting for emission rights in a wider environmental context.

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