Green Accounting

The term, green accounting, has been around since the 1980s,
and is known as a management tool used for a variety of
purposes, such as improving environmental performance,
controlling costs, investing in cleaner technologies, developing
"greener" processes and products, and forming decisions
related to the business activities.


GREEN ENVIRONMENTAL ACCOUNTS
Green accountants are held responsible to identify and
track green costs often times working with site, research
and development, and production managers when
planning their budgets. In the past, such costs were
buried in overhead preventing a clear picture of the cost
savings and benefits to the product, process, system or
facility responsible for the green initiatives.

Green accountants help management recognize that the
tax benefits, rebates and lower costs of being
environmentally friendly add up to a real bottom-line
reward for doing the right thing. Green accounting is
also called sustainable accounting. Green or
sustainable accounting incorporates environmental


assets and their source and sink functions into national
and corporate accounts. It is the popular term for
environmental and natural resource accounting.


A CORPORATE ENVIRONMENTAL
POLICY
Develop and use nonpolluting technologies,
Minimizing wastages
Increase recycling
Design products and processes with environmental
impacts as a critical factor.
Raise all employees awareness for environmental
responsibilities









Green accounting measures




The Advantages

Provides useful information regarding decision making
for: level and structure of production, value of
investment, environmental costs, etc.
identifies and analyzes the environmental costs and
afferent debts; identifies and manages the ratio
between the environmental expenses and its afferent
debt;
identifies, collects and analyses data about raw
materials, energy and other information about the
environmental impact of the business, that will lead to
more informed decision-making, with consequent
implications for improved profitability and
environmental protection;
contributes to a better management of energy and
water costs
provides information regarding the performance of an
economic entity which leads to a better relationship
between partners and the external environment (brings
new clients, a better image of the society
Leads the managers to purchase materials that will
minimize the costs.








Global Environmental Accounting

MEANING
Global Environmental accounting is an accounting methodology
that deals with energetic, ecology and economics at a global
scale. It takes into consideration "worldwide" concept.

NEED FOR GLOBAL ENVIRONMENTAL ACCOUNTING

Where faulty economic treatment of environmental
changes is likely to be associated with large-scale
misallocation of national resources.

Ecosystem services, such as water and soil protection, are
often under greatest threat in developing countries and
countries often have fewer resources to cope with loss of
ecosystem services

To support implementation of environmental accounting
and to advance environmental accounting in several


critical areas such as accounting for ecosystems is
necessary if countries are to develop sustainably.
The SWOT analysis of the organization of environmental accounting.
STRENGTHS WEAKNESSES



GLOBAL INITIATIVE IN GREEN ACCOUNTING

the economic entities are interested in
getting involved in activities concerning
the environment;
it is a current field which has a special
dynamics;
the selective collection of the waste,
the prevention of the pollution could
create financial resources for the
economic entities;
There is a strong competition on the
cleanliness (sanitation) services market.
the manager does not understand the
importance of the environmental accounting
yet;
there are untrained personnel in this field of
environmental accounting;
the personnel for the financial - accounting
department does not have enough information
about the environmental accounting, does not
know how the aspects connected to the
environment reflect in the environmental
accounting and what impact they have upon
the economic entity and environmental politics;
there is not a system concerning the
environmental accounting which is to be
applied at economic entitys level;
The technologies that are used to recycle and to
take value from waste or to prevent pollution are
old.

OPPORTUNITIES


THREATS


the entire legislation of the European
Union concerning the environmental
accounting is applicable also in Romania
so it can be applied also at the level of
economic entities;
the perspective of the need of a greater
number of workers in the environmental
accounting in a very coming future
recycling, capitalization, and remediation;
the possibilities to bring new and
advanced technologies and equipments;
The possibility to attract foreign
investments.
there are several difficulties in introducing an
information system;
is needed a significant budget in order to apply
environmental accounting and the benefits are
not obtained immediately, which attracts a
resistance of the economic entity;
The correspondent legislation is very little and
treated tangentially.



Support implementation of environmental accounts, and the
indicators and policy analyses based on environmental
accounts that are comparable across countries.

An interdisciplinary policy research program to address critical
issues in the SEEA.

Build sufficient awareness and support for environmental
accounting so that it is accepted, as it should be, simply as a
more thorough way to compile national accounts.

GREEN GDP

CONCEPT
Green GDP methodology is an adjustment to traditional
measures of a country's output of goods and services taking
pollution and waste of resources into account.
the concept of green GDP was raised by the United Nations
and the World Bank, which can be traced back to 1970s
Goal-to provide a better measure for guiding public economic
policy and thereby contributing to a more welfare rich outcome
than could be achieved using traditional measures.



Green GDP

The environmental cost includes the
Following four aspects
The defensive expenditure in the environmental damage;
The loss in resources environment;
The expenditure expenses of the restoration of the
resources environment; and
The expenses of maintaining resources environment.


Types of Green GDP

Divided into three types:
Green GDP based on resources depletion,
Green GDP based on environment degradation for
environment protection,
Green GDP based on expenditure for pollution control.


The formula of the Green GDP


Green GDP=Final output of traditional industrial sectors-
Damage to the resources and environment cost+ total new
value created by environmental protection organizations.

Problems with Green GDP
Lack of Consensus on Component of Green GDP.
Problem in Pricing Natural resources.
Lack of Clarity about Current Stock of Natural Resources.