A Case Study Of Environmental Cost Management Based On Optimization Of Production Process

With the continuous development of the industrialization and modernization, the social wealth is growing in multiples. However, while enjoying the great convenience that the modernization and industrialization had brought us, we also paid a heavy price:over-exploitation of natural resources, environmental pollution and severe derangement, global "greenhouse effect", deforestation caused by acid rain area expanding, the destruction of the ozone layer, as well as the "Chinese characterized" fog and haze, heavy metal pollution, water pollution and other problems have become increasingly serious. The nature is alarming the human beings that resource and environmental issues have been so urgent and couldn’t be delayed any more.Government has already aroused great attention to environmental issues. In this year’s annual political sessions in Beijing, proposals on the environmental issue was a top priority. Representatives of the two conferences (npc and cppcc) have offer suggestions and advice to the environmental issue,, while the 2014 government work report also give clear guidance based on the environmental problems. In this year’s annual work report, Li Keqiang pointed out that we should give emphasis on the prevention of environmental pollution, He also put forward specific goals and plans on the air pollution problem, and the water pollution problem. He said that, "We must fight for the war of pollution as we fight for the war of poverty". This indicates that the government has had a clear understanding on the current environmental problems, and it will increase penalties and supervision on the pollution issue. The period of relying on high energy consumption and high pollution to stimulate economic growth in rough economic growth model has passed away.Based on the externality theory, every man, every enterprise is pulled by a invisible hand to positively or negatively affect the external interests around them while they realize their own interests. The externality theory believe that the environment existed as an unavoidable external interest in the process, should follow the principle of "who damage, who take the responsibility", the environmental issue should allocate responsibility to the individual and enterprises who caused the damage and resource waste. Enterprises have creating so much social wealth, and at the same time creating so much damage to the environment. So companies should take the responsibility of the environmental issue. However, although the government has adopted a series of policies, such as sustainable development, low-carbon economy, circular economy, green GDP and other policies to call for attention to environmental issues while developing the economy, the companies have been always behaving passively on the environmental issue. The root of this problem may lie in that companies always view the environment development as the opposite of their economic development. Particularly for China’s building materials industry, the economic benefits were mainly promoted by energy consumption and high pollution. Therefore, to enhance environmental benefits often means damaging the economic interests of the companies. Corporate are often "felt helpless about the environmental issues, after all, the first step to survive and develop in the fierce competitive market is to foothold in the market, and when they consider environmental problems, they would do nothing but delay.Nowadays, the material flow cost accounting theory put forward to solve the conflicts of economic and environmental benefits of the enterprise. The investments on environmental issues are no longer based on the damage to their economic interests, and the economic development and environmental development are closely linked. It can help companies identify high-energy consuming and heavy polluting processes in the production. It can help the managers to propose effective measures to optimize the production process, therefore enable enterprises to reduce costs while reducing the pollution emissions. In the long term, the introduction of material flow cost accounting made companies promote environmental protection into part of its long-term strategy. It’s of great significance for the transformation of China’s rough economic growth model. Especially for high pollution and high resource consuming industry such as the industry of building material production to optimize the production process and promote the energy saving and emission reduction work, then finally realize the sustainable development.In this paper, we mainly use the literature and case studies and the quantitative and qualitative analysis to explore the practice of environmental cost management by the introduction of the material flow cost accounting in a ceramic enterprises when facing the challenge of environmental and resources issues, and then we also discuss the future direction and practice of the theory. It provides an important theory basis and reference methods for building material industry to face the problem of resource and environment and promote the energy saving and emission reduction work.The overall structure of this paper is as follows:The first part is the introduction. It mainly elaborates the background and significance of this topic, and introduce the research methods and research routes, and clear the innovation and the insufficiency as well as the framework. The second part is the literature reviews and the theoretical basis. It retrospect the present research on environment cost, environment accounting and material flow cost accounting, and elaborates the sustainable development theory, external theory and low carbon theory which lays the foundation of the following case study. The third part is the case analysis. This chapter is the main part of this paper. In this part, the writer discussed in details the background, the process, the result, and summarize the experience on the environment cost management, that is the introducing of the material cost flow accounting. The fourth part is the conclusion. In this part, It draw the conclusion based on the former theoretical study and case analysis, and then put forward the suggestions on the future.