...Research Articles Emissions Trading and Carbon Credit Accounting for Sustainable Energy Development With Focus on India A. N. Sarkar Senior Professor (International Business), Asia-Pacific Institute of Management, New Delhi, India Abstract Global climate change is inextricably linked with the enhanced build-up of greenhouse gases. Emissions- trading in the form of carbon credits or CERs is opening up a new vista of trade opportunities with prospect for gradual reduction of emissions particularly by the developed nations under Annexure-I categories. Various national and international programmes undertaken by the government and voluntarily by the non-government agencies have positively impacted on progressive reduction of emissions in many parts of the world. The paper highlights the emerging issues linked to the modalities of emission-trading, together with scope for developing sound accounting procedures for trading carbon credits. Paper discusses the opportunities for developing a sound marketing system of carbon credits with built-in efficiency in transactions, accountability and transparency in reporting systems with focus on India. Paper also GMJ,VOL 4,ISSUE 1 & 2, JANUARY - DECEMBER 2010 underlines the need to comply with the Global Accounting Standards, Tax Planning, access to Multi-commodity Exchange Market, certification, verification and enforcement procedures for proper execution of emission-trading initiatives aimed at achieving carbon neutrality. The aspects...
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...Emission allowances and the related accounting issues Laura Chilian April 5, 2012 For many years, the Securities and Exchange Commission (SEC), and the International Financial Reporting Standards (IFRS), tried to establish a proper accounting treatment for emission allowances. The mechanism for these credits is based on a simple ‘cap and trade’ idea. The government issues a number of credits to each company based on the amount of greenhouse gases emitted. Issuing a lower number of credits than needed creates scarcity, which makes trade possible. Companies that emit more gases than they were allowed will pay a fine or buy more credits. Situations are reversed if companies use less credits than they should have. This creates a market-based system on an international level (“Emission Trading Schemes” 2). The first accounting conflict arises from the nature of these allowances. They could be considered assets held for use, grants from the government for the value of the allowances, or a liability/promise to deliver allowances equal to the emissions that have been made. Considering this, emission allowances can not be categorized as either net assets or net liabilities. Due to the lack of authority, accounting practitioners create diversity (“Emission Trading Schemes” 5). Two models or treatments are developed to account for these rights. 1) The inventory model: when...
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... we are assigned the topic “Carbon Accounting” by our course teacher for accomplishing our report. 1.2 Objectives of the report ➢ To attain the skill of report writing. ➢ To achieve deep knowledge about Carbon Accounting. ➢ To fulfill the partial requirement of our course of Accounting for Managers. 1.3 Methodology of the report This study was a descriptive research where we have been analyzed mainly secondary data to understand the Carbon Accounting and its application. All the data has gathered for report writing during term. Information collected to furnish this report is mainly from secondary in nature such as related books, journals, periodicals and Websites etc. 1.4 Limitations of the report We have tried our level best to find out the opportunity of work for overcoming the limitation but due to shortage of time, official compulsion and lack of availability of required data it was not possible to collect huge information about the topic. Other limitation is our report is mostly text based. 1.5 What is Carbon Accounting? Carbon accounting refers generally to processes undertaken to "measure" amounts of carbon dioxide equivalents emitted by an entity. It is used by nation states, corporations and individuals. It is the process of measuring, monitoring, benchmarking and reporting an organization Greenhouse Gas Emissions in a defined reporting period. Carbon Accounting is not is a greener form of financial accounting. 1.6 What is the Issue? The recognition...
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...Resources Accounting for Emission Rights Introduction Accounting for greenhouse gas emissions remains a challenge, and market participants continue to wait for clear guidance from accounting standards setters. Formative efforts on the part of those standards setters have proven unsuccessful. The International Financial Reporting Interpretations Committee (“IFRIC”) initially took on this task, and issued IFRIC 3, Emission Rights. Unfortunately, considerable pressure from both the business community and European politicians, who objected to the financial statement consequences of applying that interpretation, led to its withdrawal by the International Accounting Standards Board (“IASB”) within a year of its issuance. In the US, the Emerging Issues Task Force (“EITF”) also attempted to address the related accounting issues in EITF Issue 03-14, Participants’ Accounting for Emissions Allowances under a “Cap and Trade” Program. However, it was never finalized, and ultimately removed from the EITF’s agenda. More recently, organizations have been advised of informal views from both the Financial Accounting Standards Board (“FASB”) and the Securities and Exchange Commission (“SEC”) on the appropriate accounting for emissions allowances held, especially since EITF 03-14 was tabled. As a consequence, many companies remain confused about the appropriate accounting treatments under both International Financial Reporting Standards (“IFRS”) and generally accepted accounting principles in...
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...Energy & Resources Accounting for Emission Rights Introduction Accounting for greenhouse gas emissions remains a challenge, and market participants continue to wait for clear guidance from accounting standards setters. Formative efforts on the part of those standards setters have proven unsuccessful. The International Financial Reporting Interpretations Committee (“IFRIC”) initially took on this task, and issued IFRIC 3, Emission Rights. Unfortunately, considerable pressure from both the business community and European politicians, who objected to the financial statement consequences of applying that interpretation, led to its withdrawal by the International Accounting Standards Board (“IASB”) within a year of its issuance. In the US, the Emerging Issues Task Force (“EITF”) also attempted to address the related accounting issues in EITF Issue 03-14, Participants’ Accounting for Emissions Allowances under a “Cap and Trade” Program. However, it was never finalized, and ultimately removed from the EITF’s agenda. More recently, organizations have been advised of informal views from both the Financial Accounting Standards Board (“FASB”) and the Securities and Exchange Commission (“SEC”) on the appropriate accounting for emissions allowances held, especially since EITF 03-14 was tabled. As a consequence, many companies remain confused about the appropriate accounting treatments under both International Financial Reporting Standards (“IFRS”) and generally accepted...
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...change and deliver the economic reform[1]. Australia needs to move to a clean energy in the future. As per the announcement, the carbon price commences on 1 July 2012, subject to the ability to negotiate agreement with a majority in both houses of Parliament and pass legislation in 2011[2]. The corporations with the highest levels of pollution will have a very strong motivation to reduce their pollution. As a result, it will incur additional expenses a lot for the corporations. However, it seems that currently, carbon tax is the only assessable way to control the pollution and to protect our environment. An initial fixed carbon price will provide businesses with a stable and predictable platform to transition to a ‘cap and trade’ emissions trading scheme that will be linked to international carbon markets[3]. This will give businesses time to understand their carbon liability and begin the transformation in a prospectus way. The following sections of this report will review some significant strategies and effects of carbon tax on Stockland. In addition, the study also examines about the impact of ETS on the company’s income statement and financial statement position (also known as B/S). The final part of the report will focus on the necessity of the carbon tax in respect of the government. 1.1Company overview Stockland is one of the largest Australian property development groups, which was founded in 1952 as a residential developer. It was listed on the Australian Stock...
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...profit An Interactive Research Project Report Submitted to the Faculty of AMITY BUSINESS SCHOOL AMITY UNIVERSITY UTTAR PRADESH by Aamir Malik(B 43) Anuj Dubey(B 55) MBA (G) 2013-2015 October 2013 __________________________________________________ INDEX S.No | Topic | Page No. | 1. | Acknowledgement | 4 | 2. | Abstract | 5 | 3. | Introduction | 5-6 | 4. | How carbon credit Trading works | 7 | 5. | Global Scenario | 8 | 6. | Analyzing Indian Scenario | 9 | 7. | Benefits for India | 10-11 | 8. | Financing Up port in India | 11-12 | 9. | Business Mechanism and Carbon exchange | 12-13 | 10. | CDM process and carbon Trading | 14 | 11. | Accounting and Tax treatment In different Countries | 15-17 | 12. | CASE 1: Buddhil Hydro Electric Power Ltd. | 18-20 | 13. | CASE 2: Greenply Industries Ltd. | 21-22 | 14. | CASE 3: Reliance Power | 23 | 15. | Future Of Carbon Trading | 24-25 | 16. | Conclusion | 26 | 17. | References | 27 | ACKNOWLEDGEMENT I have taken efforts in this project. However, it would not have been possible without the kind support and help of many individuals and organizations. I would like to extend my sincere thanks to all of them. I am highly indebted to Ms. Lakhwinder Kaur Dhillon Mam for their guidance and constant supervision as well as for providing necessary information...
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...million barrels of oil per day supplying 14,725 service stations. TOTAL is organized into three business segments: Upstream, Refining and Chemicals and Marketing and Services. Upstream includes oil exploration and production as well as activities involving natural gas and new energies such as solar power and biomass. Refining and Chemicals compromises refining, petrochemicals, base chemicals, fertilizer, specialty chemicals and oil and gas trading and shipping activities. Marketing and Services covers the supply and marketing of petroleum products as well as new energies. TOTAL’S APPROACH TOTAL’s financial statements are presented in EUROS and have been prepared on the basis of International Financial Reporting Standards. TOTAL’s financial reporting is in complete accordance with IFRS accounting standards in nearly all aspects of its financial statements. There are also a few accounting maneuvers conducted by TOTAL that have yet to be covered by IFRS. The following are a few ways they are in accordance with IFRS as well as two accounting assumptions made by TOTAL. In accordance with IFRS TOTAL’s management has to make estimates that affect the reported amounts of assets, liabilities and contingent liabilities at the date of preparation of the financial statements and reported income and expenses for the period. Management of TOTAL has to review these estimates continuously to form the basis of the...
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...Project Title: Realization of Green Cloud Computing ~ Green EDI collaborating with Financial EDI ~ Project Leader Name: Youichiro Kojima Organization/Company: Kojima Press Industry Co.,Ltd., Japan Nominated by: Japan Association for Simplification of International Trade Procedures (JASTPRO) Abstract: This Green Cloud Computing project has achieved the significant reduction of Cost and CO2 through the cloud computing while realizing EDI for SMEs, REACH and Financial settlement. Executive Summary: Our approach toward Green IT started with internal activities under the slogan of “CO2 reduction through Green IT” in 2005. Our group companies achieved significant results by integrating hardware and using common software. To produce further effects, these activities need to be practiced in society as a whole. For that purpose, we have developed “Green Cloud Computing,” a social action program focused on the automotive parts industry and small and medium-sized businesses outside the framework of a single company. With the spread of the Internet, web-based EDI (electronic data interchange) systems have been increasingly used as a means to exchange information between individual companies. In the automotive parts industry in among SMEs, where no industry-standard EDI system has been established, many different terminals and screens must be used, due to the lack of system integration between companies. In addition, not many small and medium-sized businesses have introduced computer...
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...Climate Change and Corporate Environmental Responsibility Dewan Mahboob Hossain (1) Jahangir Alam Chowdhury (2) (1) Dewan Mahboob Hossain Assistant Professor Department of Accounting & Information Systems University of Dhaka, Dhaka, Bangladesh Email: dewanmahboob@univdhaka.edu (2) M. Jahangir Alam Chowdhury, PhD (Stirling, UK) Professor, Department of Finance, and Executive Director Center for Microfinance and Development University of Dhaka Dhaka - 1000, Bangladesh. Email: mjac_dubd@yahoo.com Introduction Abstract Climate change, as an international environmental issue, is getting a lot of attention. The negative effects of climate change have become one of the most talked about issues among Governments, scientists, environmentalists and others. It is said that business activities are affecting the climate negatively. In order to minimize the negative effects of climate change, the activities of the businesses should be controlled and encouraged to perform in a socially responsible manner. The article focuses on the responsibilities and the responses of businesses on climate change issues. The article first highlights on two prominent issues: Corporate Social Responsibility and Corporate Environmental Responsibility. Then the article introduces climate change as an international environmental concern. Then, by going through several published literature, the article highlights various responsibilities of business towards climate...
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...Climate Change and its Effects on Accounting Practices William Conder Accounting 5233 November 26, 2013 Abstract in Climate change is a subject that invokes many different opinions and reactions from different people in different regions. Although there is a general consensus in the scientific and environmental advocate communities as to that the worldwide climate is changing, specifically warming, and that the activities of man are the primary cause, as for the degree of change and the possible effects, there is anything but a consensus. There is a fairly new concept that is taught in many businesses, colleges, and universities called the triple bottom line. This is referring to the three things that businesses should concern themselves with and strive to achieve excellence in if they wish to be sustainable; they are “profit, people, and the planet” (Elkington, 1995). The purpose of this research is to find out and explore some different ways that businesses today are utilizing good sustainability practices, and dive into some other areas like accounting for carbon emissions, and also seeing how accounting for predicted outcomes might work in the business environment. The environment affects us all and any sort of change, contingency, or preparation has to be accounted for, so this work is designed to find out how it is being done, and things that could be done to improve business. The triple bottom line The age old practice of businesses being concerned strictly with...
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...BURNING OF FOSSIL FUELS NAME:- NAME OF PROFESSOR:- DATE:- BURNING OF FOSSIL FUELS The burning of fossil fuels is the major contributor to human caused climate change. Once taken out of the ground and burned , coal, oil and gas add to the amount of carbon cycling between the atmosphere and the oceans, soil, rock and vegetation. On human time scales, this transfer is irrevocable, once mined and burned, fossil carbon cannot be locked away safely underground again in the form of new deposits of coal, oil and gas, or in the form of carbonate rock, for millions of years. The transfer is also unsustainable: there is simply not enough “space” in above-ground biological and geological systems to park safely the huge mass of carbon coming out of the ground without carbon dioxide building up catastrophically in both the air and the oceans. At the most fundamental level, therefore, the climate solution revolves around initiating a new pathway away from fossil fuel dependence. Industrialized societies locked in to fossil fuels need to turn to structurally different, non-fossil energy, transport, agricultural and consumption regimes within a few decades to minimize future dangers and costs. Infrastructure, trade, even community structure will have to be reorganized, and state support shifted from fossil-fuelled development toward popular movements constructing or defending low-carbon...
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...BURNING OF FOSSIL FUELS NAME:- NAME OF PROFESSOR:- DATE:- BURNING OF FOSSIL FUELS The burning of fossil fuels is the major contributor to human caused climate change. Once taken out of the ground and burned , coal, oil and gas add to the amount of carbon cycling between the atmosphere and the oceans, soil, rock and vegetation. On human time scales, this transfer is irrevocable, once mined and burned, fossil carbon cannot be locked away safely underground again in the form of new deposits of coal, oil and gas, or in the form of carbonate rock, for millions of years. The transfer is also unsustainable: there is simply not enough “space” in above-ground biological and geological systems to park safely the huge mass of carbon coming out of the ground without carbon dioxide building up catastrophically in both the air and the oceans. At the most fundamental level, therefore, the climate solution revolves around initiating a new pathway away from fossil fuel dependence. Industrialized societies locked in to fossil fuels need to turn to structurally different, non-fossil energy, transport, agricultural and consumption regimes within a few decades to minimize future dangers and costs. Infrastructure, trade, even community structure will have to be reorganized, and state support shifted from fossil-fuelled development toward popular movements constructing or defending low-carbon means of livelihood and social...
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...Carbon Trading Jason Sagginario, Perla Plange, Blaine Moran, Daniel Santiago DeVry University With the threat of global warming at our door steps one way that organizations felt they could offset the amount of pollution they produce is to invest into carbon emissions trading. This is done by buying and selling environmental services of greenhouse gases (GHG) from our earth’s atmosphere which is done by eco consulting firms around the world. This trade is done with carbon credits with one credit being equal to one ton of carbon. “This idea is to reduce the amount of carbon an industrial or commercial company processes lowering their overall emissions or carbon footprint.” (Souchik, 2012 This form of trading is a global process where individuals, industries, and countries all over the world share in the fair market trade of carbon. As nations and society progresses in technology and industrial advances we produce more carbon polluting gases that are negatively affecting the earth’s atmosphere. With carbon being the driving force in polluting gases and what to be said as the main cause for global warming, this is where companies felt they could make an impact in the world and also an impact in their pockets. “The main reason for climate change is the increase in greenhouse gases (GHG) emissions cause by anthropogenic activities (IPCC, 2007).” (Smyth, 2013) Greenhouse gases are commonly known as carbon dioxide. This comes from the burning off of fuels. Then from...
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...Carbon Emissions Trading Market: Opportunities and Challenges in Creating A Market to Reach The Political Goal Authors: Class: Date: Module: Lecturer Institute Doreen K., Hari M., Lamberte I., MBAPT2011 26 March 2012 Managerial Economics The Hague University - Confidential This document is confidential. Neither the document nor any of the information contained in this document may be reproduced or disclosed to any parties without the written permission of the authors. Introduction Climate change is widely known to be the most important environmental problem for humankind on this Earth. As we know there is a limit with our atmosphere and the world’s economies are connected through trade and capital flows, and based on this situation, an international cooperation to control greenhouse gases is essential. Can each individual be relied upon to make decisions that influence the Earth’s carbon-dioxide concentration in the social interest? Must governments adjust the incentives we face so that our self-interested choices are also in the social interest? How can governments adjust the incentives? Parkin (2011) has argued that sometimes it is possible to reduce the inefficiency arising from an external cost by establishing a property right where one does not currently exist. Property rights are legally established titles to the ownership, use, and disposal of factors of production and goods and services that are enforceable in the courts. Since the Kyoto Protocol1 was signed...
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