Management accounting and global greenhouse gas emissions. (Rants and Raves).

As part of his administration's strategy for curtailing carbon dioxide emissions, President George Bush has proposed tax incentives for the planting of trees. Duke University scientists say trees and shrubs that grow with abundant rainfall are less effective storehouses for carbon than native grasslands they have steadily replaced across much of western United States.

In Canada, the clock is running on the adoption of the Kyoto Protocol, which calls for a drop in emissions of six greenhouse gases, including carbon dioxide, to a point 5.2% below 1990 levels by 2012. That protocol was signed by 34 of the most industrialized countries but leaves out the nations in the developing world that have no binding commitments in this regard.

The United Nations conducted a series of studies in advance of a World Summit on Sustainable Development (WSSD), which commenced on August 26, 2002, in Johannesburg. One of the studies is entitled Project Asian Brown Cloud and a recent release was accompanied by the following comments by the Executive Director of the UN Environmental Program, Klaus Toepfer:

* A heavy brown cloud covering South Asia to a depth of three kilometres is disrupting seasonal monsoon weather patterns, damaging agriculture, and risking the lives of hundreds of thousands of people in the region.

* Initial findings clearly indicate that this growing cocktail of soot, particles, aerosols and other pollutants are becoming a major environmental hazard for Asia.

* There are also global implications not least because a pollution parcel like this, which stretches three kms high, can travel half way round the globe in a week.

* The concerns will intensify over the next 30 years as the population of the Asian region rises to an estimated five billion people.

* Sulphur dioxide emissions in Asia now are greater than Europe, USA and Canada combined and, by the year 2020, will grow by an amount equal to nearly the current emissions in Europe, USA and Canada while emissions in those areas of the world remain unchanged.

So how is all of this of particular concern to the management accountant? Why should the management accountant, engrossed in the affairs of an employer, look up and consider some of the broader global issues and determine how to contribute to efforts to redress concerns raised?

Management accounting is (according to International Management Practice Statement #1 -- "Management Accounting Concepts") "...a label commonly given to the management processes and technologies focused on adding value to organizations by attaining the effective use of resources." The management of global greenhouse gas omissions is going to involve massive allocation of resources. It is fairly apparent that the nature, shape and form of the response to manage the issue have yet to be clearly established. The UN study strongly recommended that additional studies be undertaken, along with field studies and collaboration with regional scientists to gain a better understanding of how air pollution is transported and how it impacts the region. Then it proposes similar studies be undertaken in other parts of the developing world, such as Africa and South America.

It is clear that the discipline and competencies of the professional management accountant are sorely needed in this setting so that wise and effective allocation of resources are made. For the developed nations to blindly move forward to attain the Kyoto targets would be a major allocation of resources to what would appear to be a smaller part of a much bigger problem. What has not been tested is how much more progress could be made to reduce global greenhouse gas emissions if the focus was on the developing nations, rather than the developed nations. The sorting out of alternatives, the process of gathering, analysis and interpretation of a myriad of information all are facets of the workplace of the management accountant.

The voice of the management accountant in the current public outpouring of concerns and debate regarding this issue would be useful. The active involvement of the management accountant at the job, through involvement in trade or professional organizations, service clubs or political organizations could be of great help in shaping national decision making on the best way to apply resources to address these concerns.