In 2004, the IASB attempted to address the accounting for emissions credits and allowances in International Financial Reporting Interpretations Committee (IFRIC) and issued IFRIC 3, Emissions Rights (IFRIC 3). IFRIC 3 required GHG emissions and credits to be classified as intangible assets and recorded at fair value regardless of whether the credit or allowance was purchased or issued. However, IFRIC 3 was met with significant resistance from the accounting community who cited that it resulted in a mismatch between assets and liabilities. The mismatch occurred because the credits received would be recognized when obtained and the liabilities would be recognized as it is incurred. The standard was later withdrawn by the IASB in 2005. Currently under IFRS, companies generally develop an accounting policy based on International Accounting Standard (IAS) 8, Accounting Policies, Changes in Accounting Estimates and Errors (E&Y, 2010). In addition, there remains a number of existing standards that provide authorative guidance on relevant accounting on which companies can draw to form their policies for GHG related transactions such as IAS 2, 20, 37, 38, and 39 (KPMG, 2008).
The U.S. Cap and Trade Schemes: Acid Rain Program and NOx Budget Trading Program
In the United States, the EPA is currently monitoring sulphur dioxide (SO2), nitrogen oxide (NOx) and carbon dioxide (CO2) emissions. The Clean Air Act helped to establish a cap-and-trade system for electric power producers to trade SO2 and NOx. The two of the more successful cap and trade programs in the United States are the nationwide Acid Rain Program and the regional NOx Budget Trading Program in the Northeast.
The Acid Rain Program is a departure from the traditional c...
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...ounting.
E&Y (2010). Carbon market readiness. (100159), Retrieved from http://www.ey.com/Publication/vwLUAssets/Carbon_market_readiness/$FILE/0912-1118264%20Carbon%20market%20Readiness.pdf
Simnett, R, M Nugent and A Huggins (2009), “Developing an International
Assurance Standard on Greenhouse Gas Statements”, Accounting Horizons,
23(4), 347-363.
Simnett R., A. Vanstraelen and W.F. Chua. 2009. Assurance on Sustainability
Reports: An International Comparison. The Accounting Review, forthcoming.
Simnett R, W Green and A Huggins (2009), “GHG Emissions Standard on its Way”,
Charter, October, 64-66.
KPMG, (2008). Accounting for carbon: the impact of carbon trading on the financial statements. 3-15.
Olson, E.G. (2010). Challenges and opportunities from greenhouse gas emissions reporting and independent auditing. Managerial Auditing Journal, 25(9), 934-942.
[11]Reviewing Existing And Proposed Emissions Trading Systems. (2010, Nov). Retrieved May 18, 2014, from International Energy Agency: http://www.iea.org/publications/freepublications/publication/ets_paper2010.pdf
“North Americans have been smelting ore and burning fossil fuels for generations. In the past, the gases went up ordinary chimneys or small smoke stacks, to descend upon near by areas and pollute them,” states author, Robert Collins. Almost everyone knows what acid rain is and has a vague idea of the consequences that exist as a cause of it. Most people however do not realize the severity of acid rain. The essay “Acid Rain: Scourge from the Skies” by Robert Collins was very effective in showing the true severity of acid rain. By using excellent developmental devices, Robert Collins was able to write an effective essay that is appealing to today’s society, as well as informative especially for today’s constantly changing world.
Half of the estimated emissions were produced in the last 25 years alone. Well past the date when governments and corporations became aware that rising greenhouse gas emissions from the burning of coal and oil which is causing dangerous climate change. Many of the same companies are also sitting on substantial reserves of fossil fuel which if they are burned puts the world at even greater risk of dangerous climate change. Climate change experts said the data set was the most ambitious effort so far to hold individual carbon producers, rather than governments, to account for. 90 companies on the list of top emitters produced 63% of the cumulative global emissions of industrial carbon dioxide and methane between 1751 to 2010, amounting to about 914 gigatonne CO2 emissions, according to the research. All but seven of the 90 were energy companies producing oil, gas and coal. The remaining seven were cement manufacturers.
United States Environmental Protection Agency (US EPA) . "Tools of the Trade: A Guide to Designing and Operating a Cap and Trade Program for Pollution Control." (2003): Web. 24 Apr 2010. .
P = preliminary data.Note: Data in this table are revised from the data contained in the previous EIA report, Emissions of Greenhouse Gases in the United States 1998, DOE/EIA-0573(98) (Washington, DC, October 1999).Sources: Emissions: Estimates presented in this report. Global Warming Potentials: Intergovernmental Panel on Climate Change, Climate Change 1995: The Science of Climate Change (Cambridge, UK: Cambridge University Press, 1996).
Some people think that acid rain can burn skin if it lands on them. This however, does not happen. Acid rain can not burn skin, it still can causes damage to plants, animals, and even structures. Acid rain occurs naturally without human interference, but since humans started to make objects that contribute to the creation of acid rain, it happens more frequently than if humans would not be involved. People not only raised the amount of acid rain that falls, they can also be the ones to bring the amount back down to reasonable levels. In order to help, people must first understand what acid rain is.
David, Suzuki. “Carbon Offsets Are One of Many Solutions Needed for Global Warming.” Current Controversies: Carbon Offsets. Ed. Debra A. Miller. Detroit: Greenhaven Press, 2009. Print.
The GHG Protocol is the most widely used and international accepted accounting tool or methodology to quantify, and manage GHG emissions. It serves as the foundation for nearly every GHG standard and program in the world - from the International Standards Organization (ISO) to The Climate Registry - as well as hundreds of GHG inventories prepared by individual companies. The GHG Protocol also offers developing countries an internationally accepted management tool to help their businesses to compete in the global marketplace and their governments to make informed decisions about climate chang...
Young, Barbara. “Global Warming: An Issue Facing the Industry.” National Provisioner, vol. 222, no. 10, 2008, pp. 8. MasterFILE Premier, http://ez2.maricopa.edu:2048/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=f5h&AN=34706229&site=ehost-live. Accessed 24 September 2016.
...ment, United States of America. (2012). Managing sustainable development, 5-15. Washington, D.C: Commissioner of the Environment and Sustainable Development, United States of America.
Coral Davenport. “Large Companies prepared to pay price on Carbon.” The New York Times. 5 December 2013. Web.15 April 2014.
Emitters of GHG’s do not own up to the full costs for the consequences of their actions (IMF, 2008), thus causing an economic problem with climate change. Emitters face certain costs such as fuel used. However there are costs that are not necessarily included in the price of their products or services. These costs are known ad external costs (Halsnaes, 2007). These costs are referred to as ‘external’ because they are not faced by emitters. These costs may affect the welfare of others. The emission of GHG’s also affects the welfare of others and the natural environment (Toth, 2001). People living the future will have suffered because of the actions of the present GHG’s emitters. These external costs can be converted in a monetary unit, which can be added to their private costs. This way, GHG’s emitters can take full responsibility for their actions (IMF, 2008).
The most important action taken against the use of greenhouse gases internationally was formed in the Kyoto Protocol. The protocol consists of reducing carbon dioxide emissions but because of the economic effects the protocol would enforce many developed countries did not agree to it. These countries like the United States, China, and India ironically were the leading countries with the largest amounts in emission of greenhouse gases. Because of noncompliance the Kyoto Protocol created different approaches to reducing carbon dioxide emissions. A favorable approach was emissions trading which consisted of trading of greenhouse gases to reduce climate change. Companies would receive levels of how much they could emit and if they did not use all of their gas they could sell it to other companies that needed more gas.
Keeping in mind the drastic impact of industrialization on the environment, it is astounding to learn that in the last 50 years, only 90 companies have collectively caused two thirds of the worlds global warming green house gas emissions (Heede, 2014, pp. 1--13). A majority of the companies on the list belong to the oil, gas and coal sector. This may be attributed to extent of industry’s dependence on fossil fuels to sustain manufacturing and delivering of all types of commodities and services from construction and transport to pharmaceuticals and power. The media and government’s scrutiny has helped increase public awareness and led to a new era of socially driven vigilance and demand for accountability in regards to large organizations. At the same time many companies, realizing their responsibility towards sustainability, have begun devo...
The world’s greatest powers have shown a lack of interest in the way that they are destroying the environment around them. The rise of the climate through the years has been altering how different organisms have had to survive. The world’s use of fossil fuels and CO2 emissions is at an all-time high. The countries with the highest CO2 emissions are same countries with the largest economies. The United States, China, India, Japan, and Russia are the top five leaders in CO2 emissions. All together they account for around 60% of the total carbon emissions worldwide. In order to cut down on the amount of CO2 emissions counties need start regulating their larger industries that create the highest amount of carbon emissions.