The Recognition And Measurement Research On The Environmental Cost

With the pace of the global industrialization, the environment that we relies on has been heavily damaged. The pollution issue is becoming more and more serious in recent years. The incisive contradictory between economy development and environmental protection has led to the three major crises of our society: shortage of natural resource, environmental pollution and damage to environment. And it has been the focus of the whole world on how to establish a system to keep a sustainable development on society, economy and environment as well as to enhance the environment law system. Being the element of the social economy, company is responsible to the damage and pollution to environment. We should control and limit the company behaviors to achieve "Green Economy", which requires heath industrial structure, economic development and consumption pattern to save and protect natural sources. In 2010, on the meeting of the Third Session of the 11th National People’s Congress, Premier Wen Jiabao proposed the policy and measurement of conserving energy, combating climate change, accelerating the transformation of the economic development as well as enhancing the adjustment of its structure, which reflects the determination of the government to enforce the sustainable development and the protection of the environment.To reach this purpose that we mentioned above, we need to probe into various fields including economy, ecology, law, environmental science, technology, sociology, etc. and try to find a way to relieve the damage to environment caused by our social development. In this case, the unlimited consumption of resources should be stopped and the cost of its is required to be counted within the budget. Natural resource is valuable. And it is time to think about how to cherish and moderately use the resources we have. Under this circumstance, Environmental Accounting was established in 1970s, and the research and practice work of it has begun. China also brought in the relative conceptions in 1990s, but it has not been put into practice as a result of the time limit as well as the developing level of both economy and productive forces.In the study of environmental accounting, it is the key point, which is also one of the difficulties to confirm, evaluate and effectively control the cost of natural resource. There is not a standard to measure this kind of cost, both domestic and overseas. Considering that the environmental accounting has not been widely carried out in China, it is difficult to propose accurate methods for application to certain fields. However, this paper focuses on analyzing existed measurements and methods, and hopes to summarize a practical theory from multiple aspects to do a comprehensive research on environmental accounting.This paper falls into five parts. Chapter one is introduction. It firstly briefs the background information of the environmental accounting research. Since the development of global economy has damaged the environment heavily, it is necessary for the government to consider the whole costs in the process of making policies and developing economy. Relative introduction about the current environment situation of China is also been covered.Chapter two is the overview of several concepts of environmental accounting. It firstly discusses the four basic ones including sustainable development theory, accountability theory, environmental value theory and externality theory. Then it describes the foundation of environmental accounting from a theoretical perspective and discusses the following questions:what is environmental accounting, what is the definition of it, what is the content of it, what is its characteristic, and how can we categorize it from different perspectives, etc.Chapter three is about the measurement of environmental accounting. Based on the existed accounting system and the relative research, this chapter focuses on the key point of measuring environmental accounting, which relates to environmental protection, reducing the damage to environment as well as making profits for the enterprise. Generally speaking, definability, reliability, relativity and accountability are regarded as four theoretical standards of measuring environmental accounting. And the most difficult and important part in the measuring process is:which cost should be capitalized, and which part should be put into expensing cost. In consideration of that there has not a clear definition about these problems yet, this thesis tends to propose some ideas in this field, combing the matching principle and United Nation’s Handbook of National Accounting:Integrated Environmental and Economic Accounting.Chapter four is about the measurement of environmental cost. According to relative analyses, it is proposed that environmental accounting should take currency as the main unit of measurement, while taking other non-currency factor into consideration as well. Meanwhile, twelve possible measurement methods are presented and their principles and concrete operations are expounded. Nevertheless, the environmental accounting research is just beginning. The limited technology and laws usually impede the practice of measurement. Since the present purpose is to confirm and measure the internal environmental cost, it is appropriate to use the direct market methods as terms of settlement.Chapter five concludes the present situation and problems of domestic environmental accounting and put forward some suggestions. To carry out the environmental accounting, we need the support from government, enterprises and the public. To promote and improve the environmental accounting research, it requires multi-scientific efforts, which includes well-educated accountants with multidisciplinary knowledge, establishing and improving relative laws and accounting system. Only by doing so would we protect the environment and keep a sustainable development of our country.In a word, this thesis proposes some ideas of confirmation and measurement methods after relatively thorough analyses. It states the theoretical principles and concrete operations of these methods and makes further comparisons of them, giving the scope of application at the same time. However, with the limited time, the author could not make a fully work in this field and certain problems still need to be worked on:1. Considering that environmental accounting has highly requirement to certain knowledge of mathematics, economics, etc., the author found it difficult to establish related mathematical model within her own professions.2. Confirmation and measurement of environmental accounting require relative practices. Since environmental accounting has not been widely carried out, the author could not put forward an effective way to resolve this problem.Anyway, the author will try to make further study on environmental accounting and hopes to justify and enrich her own knowledge in this field in future research.