The Case for a Planetary Management Accounting Framework

Abstract

Because of the enormous effects that humans have on the ecosystem, there is a chance that the planet will no longer be friendly to humans but rather be hostile. Scientists have proposed nine Planetary Boundaries (PB) — the global environmental limits within which the risk of disrupting the current climatic and ecological equilibriums of the planet is low. PBs are meant to serve as an indicator of the scope and urgency of the issue, rather than serving as a roadmap for fixing the problem. They are, however, difficult to apply as quantitative, scalable objectives for personal or policy decision making. This article provides an overview of how the Planetary Boundaries can be converted into actionable measures through the Planetary Management Accounting Framework (PMAF) — a framework for managing the global environment. PMAF is an environmental management accounting model where planetary quotas (PQ), or global limits, are used to evaluate environmental consequences of human activities. Each PQ sets a limit for an "environmental currency," such as carbon dioxide emissions or reforestation, that may be scaled and compared to the outcomes of human activities. The PMAF can also be used to demonstrate how the PB can be used to reflect corporate strategy, individual acts, infrastructure at the local government level, and also national policy. It facilitates the communication and applications of the PB in various spheres of human activity.