Regional environmental assessments for policy making and research and development planning

Abstract

Following a review of the content of classic management accounting texts and the accounting research literature, this paper concludes that corporate accounting in general, and management accounting in particular, have ignored a wide range of non-market activities that are associated with private sector organizations and their impact on the biophysical environment. The formal decision analysis invoked in traditional management accounting neglects the social cost and benefits of corporate activities. Integrating environmental concerns into accounting will come in part from focusing on developments in other disciplines, particularly the natural and social sciences, which have a much longer history of analysing environmental problems. In this paper an analysis of the concept of sustainability and its relationships with decision-making is used to illustrate the multidisciplinary issues that are often involved when considering the environment. Such an analysis points towards additional developments for management decision-making and education, for example, social cost-benefit analysis and non-market valuation techniques. At the same time, this analysis also raises the issue of the scale of economic activity in relation to ecosystem capacity, and challenges some conventional wisdom, such as the practice of project analysis. The paper introduces a framework of analytical approaches to environmental resources within which to view existing and future accounting developments.