Citation:

Campbell, Dan. Emergy Accounting: A Unified, Comprehensive Triple Bottom Line. EcoSummit 2016, Montpellier, FRANCE, August 29 - September 01, 2016.

Impact/Purpose:

This talk will demonstrate a new way to perform environmental accounting using emergy. A method for producing closure on the emergy and money balance will be illustrated through the application of the emergy of educational attainment of the US workforce to support for the U.S. GDP from 1948 to 2014. This work will open the way to unified, comprehensive accounting of environmental, economic, and social aspects of any system to yield a true triple bottom line , which is the sustainablilty of any system.

Description:

Development of the concept of emergy established a medium for accounting that made it possible to express environmental, economic, and social work of all kinds on a common basis as solar emjoules. Emergy accounting can be used to combine both emergy and money accounts on a single income statement and balance sheet. Closure on the emergy-money balance sheet can be obtained by calculating an emergy equivalence between the work done by people for which money is paid and the unpaid work of the environment. The emergy equivalence of the work done by people in the United States economy was determined by quantifying the emergy of educational attainment of the people over the period from 1948 to 2014. In this accounting method, the emergy of knowledge in educational attainment of the workforce delivered to the U.S. economy in a given year is considered to be part of the emergy basis for the nation along with the emergy of renewable energy, fuels, minerals, etc. This method allows the establishment of a direct equivalence between the money paid to people, i.e., the dollars flowing in the GDP of a nation, and the emergy supplied by environmental sources. In this approach there is no longer any need to use the combined emergy-money unit the emdollar to estimate the emergy equivalence of dollar flows. Instead the internalities of the economic system are externalized so that all kinds of flows are expressed directly as emergy. The environmental emergy flows used by the system can now be denominated in constant dollars for a given year, equivalent to the dollars flowing in the economy in that year. Effectively externalizing the internal money flows expands the balance sheet denominating the environmental emergy used to support the national system in emdollars where one emdollar equals a constant dollar in the given base year. This insight allows the well-known methods from financial accounting and bookkeeping to be used as a template for the further development of emergy-money accounting methods. The development, testing, and adoption of environmental accounting tools based on unified and comprehensive emergy-money accounting methods will allow governments and managers to finally determine the true solvency of their systems (i.e., the ability to pay or service economic, social and environmental debt) and therefore the sustainability of the systems for which they are responsible

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