TY - CHAP
T1 - Environmental Management Accounting and the Opportunity Cost of Neglecting Environmental Protection
AU - Schaltegger, Stefan
AU - Burritt, Roger
PY - 2002
Y1 - 2002
N2 - Reflections on how much voluntary expenditure a company should make on environ-mental-protection measures are dominated by the discussion of relevant direct internalcosts. Compulsory spending on environmental protection (e.g. expenditure forced byregulations) is not taken into account here, because compliance with environmentallaws and regulations is a minimum requirement in order to continue in operation. Whenmaking decisions on future investments, a comparison of the direct and indirect costsof corporate environmental protection with other potential commercial investments is,without doubt, economically highly relevant. However, from an economic point of view,a comparison based on opportunity costs is even more important (see, e.g., Hirshleifer,1980, p. 265; Kreps, 1990). Economists consider that the economic cost of undertakingany activity should be interpreted as being the cost of the best alternative opportunityforegone. This paper addresses the question of why environmental managementaccounting is anecessary foundation in order to obtain opportunity cost informationas a foundation for making an informed choice on whether a business should pursueor neglect environmental protection.
AB - Reflections on how much voluntary expenditure a company should make on environ-mental-protection measures are dominated by the discussion of relevant direct internalcosts. Compulsory spending on environmental protection (e.g. expenditure forced byregulations) is not taken into account here, because compliance with environmentallaws and regulations is a minimum requirement in order to continue in operation. Whenmaking decisions on future investments, a comparison of the direct and indirect costsof corporate environmental protection with other potential commercial investments is,without doubt, economically highly relevant. However, from an economic point of view,a comparison based on opportunity costs is even more important (see, e.g., Hirshleifer,1980, p. 265; Kreps, 1990). Economists consider that the economic cost of undertakingany activity should be interpreted as being the cost of the best alternative opportunityforegone. This paper addresses the question of why environmental managementaccounting is anecessary foundation in order to obtain opportunity cost informationas a foundation for making an informed choice on whether a business should pursueor neglect environmental protection.
KW - Sustainability sciences, Management & Economics
KW - Umweltbezogenes Management
KW - Management Accounting
KW - Umweltökonomie
KW - Environmental Impact
KW - Marginal Cost
KW - Opportunity Cost
KW - Environmental Cost
KW - Management Accounting
UR - https://www.mendeley.com/catalogue/e1953248-e74f-3a20-99c8-dbed06026744/
U2 - 10.1007/0-306-48022-0_21
DO - 10.1007/0-306-48022-0_21
M3 - Contributions to collected editions/anthologies
SN - 978-1-4020-0552-7
SP - 265
EP - 277
BT - Environmental Management Accounting
A2 - Bennett, Martin
A2 - Bouma, Jan Jaap
PB - Kluwer Academic Publishers
CY - Dordrecht
ER -