environmental-accounting.html

Environmental Accounting

<accounting>

Feb 14, 2013

Accounting is much more than just keeping track

purpose is to create a system to create information that can be used in the decision process

• it is a good method for addressing "information" problems - see problem types
• information collection is not a value-neutral process
• may collect information that is not useful
• not useful for dealing with surprises - see gross-2012.html

the process has these components

• a real event happens
• that is perceived and filtered by the accounting method to create an observation
• multiple observations are processed to create a report
• the report is interpreted by the decision makers
• accounting deals with what is observed, reported and frames how this information is interpreted

Accounting has several objectives to help make good decisions

completeness

• the process should capture all the important information
• may be a judgement call as to what is significant and insignificant

non-overlapping "accounts'

• the information in each bin should not overlap with other bins
• takes experience to create the accounts so that there is not overlap

create accounts, indexes and indicators

• the data has to be processed to support decisions
• the information pyramid from large amounts to key points
  • sorting into categories (accounts)
  • combining meanful data into indexes
  • creating meaningful indicators that are easy to follow
• see accounting indexes

quick example for water types of water - sources and flows (account for all water - completeness) quality of that water (drinkable, swimmable, fishable/recreation, agriculture, low-grade industry, polluted, toxic) information you need to make a decision what is the decision you are going to make how do you need to present the information to support ongoling monitoring

 

Accounting is different than economics

• models used by economics need solid accounting practices for the data
• some of the issues in accounting lead to weaknesses of the economic models
  • these need to be addressed before we can rely on economic forecasts
  • these challenges seem to be accepted by the environmental accounting community as worthy challenges but "assumed away" by many economic models
• examples:

• preferences are very difficult to infer from the data that is collected
• quality measures are probably non-linear with respect to environmental parameters and economic value

Examples of environmental accounting projects

see link

REDD

issues with transboundary leakage in Bolivia? (or Ecuador?)

Palm oil plantations - spatial variation

Tir Gofal - Welch land holdings

Tualatin River and CWS - need the ability to sell bonds for green treatments