You are here:
USING FINANCIAL ACCOUNTING METHODS TO FURTHER DEVELOP AND COMMUNICATE ENVIRONMENTAL ACCOUNTING USING EMERGY
Campbell, D E. USING FINANCIAL ACCOUNTING METHODS TO FURTHER DEVELOP AND COMMUNICATE ENVIRONMENTAL ACCOUNTING USING EMERGY. Presented at University of Florida 3rd Biennial Emergy Conference, Gainesville, FL, January 29-31, 2004.
The idea that the methods and models of accounting and bookkeeping might be useful in describing, understanding, and managing environmental systems is implicit in the title of H.T. Odum's book, Environmental Accounting: Emergy and Environmental Decision Making. In this paper, I propose that a strong analogy can be made between emergy accounting and commonly used methods of financial accounting that will strengthen the methodology and facilitate its communication to a broad audience. Acceptance of the concept of environmental liability by society and the quantitative documentation of these liabilities will be key factors in proving this analogy. Society incurs environmental liabilities through the removal and use of energy storages, e.g., coal, timber, biodiversity, and/or the appropriation or diminution of ecosystem power flows, e.g., river flow, fish production, and plant growth. Environmental accounting using emergy provides a methodology for quantifying environmental liabilities. An environmental emergy debt or liability incurred as the result of economic or social activities would be entered on the emergy balance sheet as both a debit to environmental accounts and a credit to the economic or social account. Existing debts are incremented annually by the amount of unrealized empower in the modified environmental system. If each year ecosystem functions are restored in an amount equivalent to the annual empower loss, the debt would be serviced. If double-entry bookkeeping using emergy is sanctioned by society, it may force those responsible for damaging environmental systems to explicitly recognize the magnitude of the debt and the obligation to repay or perpetually service that debt. Society depends on the use of nonrenewable resources for its existence and the debts incurred in this way cannot easily be repaid. Once all empower credits and debits are known and recorded, the political process can be used to address questions of equity and feasibility.