[thesis home]

Accounting for environmental decision making:


The aim of this thesis was to look at ways that accounting can be used to help solve environmental problems. Traditional accounting systems do not include environmental values and can undervalue the worth of environmental resources. This can lead to the loss of environmental capital and unsustainable resource use.

Accounting systems are embedded in social structures of decision making. To see how accounting systems can be changed to include environmental values, it is necessary to look at the decision structures.

The problems of calculating environmental values is complicated by the uncertainty of our knowledge of the environment. Our actions also have effects on environmental processes, changing the worth of particular resources. This allows a division of uncertainty into external or internal uncertainty. External uncertainty allows a problem to viewed as external to the actions of a decision maker. Internal uncertainty means that the actions of the decision maker also have to be taken into account.

The division of uncertainty into these two definitions is dependent on the scope of the problem (spatially and temporally) and the degree to which the actions affect the environment.

System of valuation limit the range of responses of a social system. External uncertainty may allow a single system of value to be used, if the range of responses covers all areas of uncertainty. The use of single systems of value in internally uncertain situations fatally limits the ability of the social system to respond to changes brought about by its own actions. These changes take time to manifest allowing a new system of value to replace the old. We can look at the weaknesses of systems to areas of uncertainty. I have produced a model that can be used to compare simple systems against limited external uncertainty.


Finished 13/9/96
Created 18/9/98