e-journal

Biodiversity valuation and the discount rate problem

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Purpose – The aim of this paper is to demonstrate that the application of standard environmental
accounting practices for estimating long-term discount rates is likely to lead to the rejection of
biodiversity-sensitive projects that are in the greater societal good.
Design/methodology/approach – The authors combine estimates of marginal ecosystem damages
from two forestry case studies, one local, one global, with ten different term structures of discount
rates taken from both the academic literature and policy choices to calculate present values.
Findings – Standard environmental accounting approaches for estimating the long-term discount
rate result in the under-valuation of projects that are sensitive to biodiversity conservation.
Research limitations/implications – This paper is set within a full cost accounting (FCA)
framework, and therefore has the limitations that generally follow from taking this approach to
biodiversity problems. Recommended extensions include looking at broader ranges of biodiversity
costs and benefits.
Social implications – Unless environmental accountants engage with environmental economists
over the issue of intergenerational discount rates, then it is likely that socially responsible managers
will reject projects that are in the greater societal good.
Originality/value – The paper introduces both normative discount rates and declining discount
rates to estimates of shadow environmental provisions within FCA and contrasts these with current
environmental accounting practices. It also provides two detailed case studies that demonstrate the
extent to which biodiversity-sensitive investment choices are likely to be undervalued by managers
who follow current accounting recommendations concerning the appropriate choice of discount rate.

Keywords Biodiversity accounting,Ecosystemservices, Valuation,Declining discount rates,Normative,Positive, Accounting, Sustainable development

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Informasi Detail

Judul Seri

Accounting, Auditing & Accountability Journal

No. Panggil

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Penerbit

: Emeral Group., 2013

Deskripsi Fisik

Accounting, Auditing & Accountability Journal Vol. 26 No. 5, 2013 pp. 715-745

Bahasa

English

ISBN/ISSN

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Klasifikasi

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Tipe Isi

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Tipe Media

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Tipe Pembawa

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Edisi

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Subjek

AKUNTANSI

Info Detail Spesifik

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Pernyataan Tanggungjawab

Asmawati/Syahrial

Versi lain/terkait

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