Abstracts
Theme: WTO and Governance
Panel: Environmental/Green Accounting from Theory to Practice: The Way Forward
 Environmental Management Accounting (EMA): A Potential Decision-Making Tool for Environmental Management And Sustainable Development in Pakistan
Abid Shah*
Abstract
Sustainable development and social resposibility is becoming a goal for business corporations and private sector in Pakistan. This trend is new for the higher educational insitutions, which are also using the natural resouces in their operations. However, there is a change in focus due to social responsibility, stakeholders pressures, increased accountability and overall enviromental governance. The focus towards sustainable development is also realised through increased stakeholder pressure and enviromental regulations such as Pakistan Enviromental Protection Act 1997 and other quality assurances mechanisms. The cost of enviromental impacts has risen substantially for the communties, natural resources and future generations. The enviromental information and decsion making tools with full consideration of financial and physical impacts of business actvity on environment is gaining international importance.
Environmental Management Accounting (EMA) is management of environmental and economic performances through the development and implementation of appropriate environmental accounting system and practices. Enviromental Management Accounting is a decsion-making and reporting framework suggested in this paper which is appropriate for all levels of decision-makers in Pakistan. It considers the financial (MEMA) as well as physical aspects (PEMA) of enviromental impacts for internal decision-making. Environmetnal Impact Assessment, Cost Benefit Analysis, Life Cycle Analysis and Environmental Risk Assessment are useful tools of Environmental Management Accounting. Enviromental Management Accounting Tools can be effective tools for internal decesion-making and can also shared this through intranat. This paper proposes a conceptual model CEMAS for Higher Universities to insitutionalize the EMA.
EMA can be important tools for achiveing eco-efficiency as well as improving external and internal communication with all stakeholders. EMA can result in improving transparency, accountabilty and decsion-making. Environmental protection agencies, higher education insitutions and the corporate sector need to invest more in reserch and development of EMA as a decision-making tool through a software user-friendly program. It will not only improve their business proposition, but will also improve their green image, saving in cost as well as manage risks associated with environment .
*Abid Shah is a faculty member at Aga Khan University Institute for Educational Development AKU-IED, Pakistan, teaching and doing research in the area of Environmental Education, Gender and Education, Educational Project Management and Strategic Planning and Development to M Ed students from Africa, Central Asia, South East Asia and Middle East.
Environmental Accounting and Auditing
Muhammad Irfan Khan*
Abstract
Environmental Accounting (EA) is a broad term that is used in several different contexts; it focuses primarily on the application of EA as a management accounting tool for internal business decisions, i.e., EMA that can be defined as the identification, collection, estimation, analysis, internal reporting, and use of materials and energy flow information, environmental cost information, and other cost information for both conventional and environmental decision-making within an organization. Thus EMA incorporates and integrates two of the three building blocks of sustainable development-environment and economics-as they relate to an organization's internal decision-making. As more organizations come to recognize that many management decisions have potential environmental impacts and costs of various kinds, recognition of the value of EMA will grow. In the end, the distinction between conventional management accounting and EMA may blur, as the two approaches merge into a single broad management accounting approach that can better inform all decisions, environmental and otherwise.
Environmental costs and obligations are significantly growing and continue to grow as the world becomes more environmentally conscious. Public corporations are being held more responsible and accountable to be good environmental citizens. A number of environmental legislations have been enacted nationally and internationally to address the emergence of a worldwide ‘green movement.’ In some cases in years past, environmental issues were virtually ignored by both corporations and individuals. Hazardous waste and other such items were considered a cost of a growing economy. Times have changed as people now realize the effects of waste products that potentially could damage parts of the environment. Most people recognize that preserving clean air, water, and land is more important than lower-cost products for consumers or higher profits for business firms. Many people are willing to pay more for a product that is environmentally friendly. Many companies are now interested in being ‘green’, as many investors place a high value on environmental responsibility. Regulations have been developed to govern ‘waste management’ and to ensure that corporations are environmentally conscious.
Some corporations have had to pay to clean up their past environmentally ‘unfriendly’ behavior. However, some firms have established good reputations as ‘environment-friendly’. Environmental regulations have also grown in Pakistan. The industrial sector is moving towards obtaining ISO 14000 certifications. Now the accountants in industrial sector are learning to ensure that their firms are in compliance with environmental accounting standards. In industrialized countries several rules governing environmental disclosures have been developed in recent years. During the past two decades, corporations in developed world have significantly increased their voluntary disclosures of information about environmental matters and performance. A large number of companies have adopted environmental guidelines expecting to gain valuable public relations dividends and to attract more investment opportunities. This paper examines the scope and prospects of environmental or green accounting in Pakistan in the context of trade globalization under WTO on one side and sustainable development on the other.
* Dr. Muhammad Irfan Khan is head of Environmental Science Department, Allama Iqbal Open University, Islamabad. Dr. Khan is an environmental scientist involved in research and training in the field of environment since 1985, when he started his carrier as university lecturer. Dr. Khan has been a consultant to the World Bank, Government of Pakistan, Ministry of Environment, Ministry of Water and Power, the World Conservation Union (IUCN).
Economic Value of the Environment, Market Failure and Costs of Environmental Degradation: A Case Study of the Indus Delta Mangrove Forests in Sindh, Pakistan
Musharaf Ali Talpur*
The Indus Delta mangrove forests in the coastal areas of Sindh province of Pakistan provide a wealth of products and services to people who live and work among them. An estimated 1.2 million people depend on the mangrove forest resources for their livelihood and harvest its natural resources for various purposes such as fishing, camel browsing, buffalo grazing, timber extraction, fuel wood collection, etc. The greatest economic benefit of the mangroves comes from the fisheries they harbor. The fishing industry accounts for more than 0.8 % of Pakistan’s GDP and is the country’s sixth largest foreign exchange earning sector. A total economic value of the coastal and marine fisheries sector of Pakistan, which almost entirely depends upon the mangrove forests, is about US $ 125 million per year. Amongst others, one of the most important benefits of the mangrove forests is protecting the coastal infrastructure, villages, human lives, etc., from cyclone and ocean currents.
Importantly, the Indus delta mangrove forests assist in protecting and maintaining Bin Qasim and other ports in Karachi by reducing their dredging costs. Besides, mangrove forests protect and preserve natural environment and wildlife. Since these products and services are not sold in the markets due to market failure, their economic importance goes unrecognized at the policy level. Consequently, the expansion of industry in the coastal area, irrigated agriculture, and population have became major threats to the sustainability of the mangrove forests, which have resulted in a wide range of economic benefits forgone, including economic costs related to mangrove loss, declining fish stock, decreasing number of livestock, foreign exchange loss, etc.
This paper thus explains a wide range of direct and indirect products, functions and services, attributes and diversity provided by the mangrove forests, and uses market data to estimate the minimum economic value of a few selected direct and indirect products. The results of valuation suggest that mangrove forests natural resources are of significant economic importance to the regional as well as national economy. It then argues that economic costs of environmental degradation of these forests resources may significantly affect the economic growth rate of the country. It is concluded that if the mangrove forests were managed in a sustainable manner, then it would help policy makers in reducing poverty among people who directly and indirectly depend upon their natural resources.
* Musharaf Ali Talpur is Assistant Professor, Sindh Development Studies Centre (SDSC), University of Sindh, Jamshoro, Hyderabad, Pakistan.
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