...The Establishment of Emissions Trading Climate change is becoming an increasingly pertinent issue in Saskatchewan and can largely be attributed to high concentrations of greenhouse gas emissions. The province of Saskatchewan is especially vulnerable to a fluctuating climate given the dependence of its economy on the agriculture industry; therefore, an effective policy mechanism must be implemented as soon as possible in order to mitigate future harm. One third of Saskatchewan’s greenhouse gas emissions are produced by oil and gas extraction and refining, and by mining (1). The next leading producers of greenhouse gas emissions are the energy generation sector, the transport sector, and the agriculture sector. Coal and gas are the two main sources of energy production in Saskatchewan and are both responsible for a large portion of the province’s total emissions (1). Technological innovation is required in order to make alternative, less polluting sources of energy efficient enough to further develop. Saskatchewan’s economic dependence on the sectors that are largely responsible for its greenhouse gas pollution is the most sensible explanation as to why addressing the problem has proven to be such an arduous task. This paper will discuss the environmental risk associated with high concentrations of greenhouse gas and whether or not the establishment of emissions trading in Saskatchewan is a worthwhile pursuit for policy-makers as they attempt to address the pressures that are...
Words: 2085 - Pages: 9
...------------------------------------------------- Emissions Trading ------------------------------------------------- Assignment 2 ------------------------------------------------- Onesteel Prepared by: Wayne Andrews Student number: 41712986 September 2011 Subject Number : ECFS905 Lecturer : Julian Turecek Class : Sydney P. T. Company Selection Select an ASX200 company that is expected to have a carbon exposure equal to or greater than 2% of EBITDA at a $23/t carbon price. Question 1 Determine the company’s carbon exposure, including direct (Scope 1) and indirect (Scope 2) emissions and establish that its exposure is greater than 2%. The following table summarises Onesteel’s actual and estimated for FY10, FY11 and FY12 emissions and imputed carbon cost under the currently proposed Carbon Tax, relative to reported EBITDA. Table 1 – Implied impact of carbon pricing imputed to 2010 results | Company Guidance | Fixed Price imputed for comparison | Fiscal year commencing | FY10 | FY10 | FY11 | FY12 | Carbon Price (FY10/11 theoretical) | 23.0 | 23.0 | 23.0 | 23.0 | EITE Assistance Rate | 94.5% | 94.5% | 94.5% | 94.5% | EBIT DA $Mil | 619.0 | 619.0 | 638.0 | 717.6 | Type 1 Emissions | 2.55 | 2.55 | 2.66 | 3.05 | Type 2 Emissions | 1.34 | 1.34 | 1.40 | 1.60 | Total Emissions Type 1 & 2 MtCo2e | 3...
Words: 4880 - Pages: 20
...Emission Trading-Introduction Good afternoon everyone, today we are going to present on the topic of Emissions trading or what people always refer to as cap and trade. The purpose of this mechanism is to to make it cheaper for companies and governments to meet emissions reduction targets so as to alleviate environmental problems caused by pollution, like global warming. Unlike traditional environmental regulations, which are based solely on the threat of penalties, emission trading is a market-based approach which attempts to provide economic incentives for achieving reductions in the emissions of pollutants. As to how does it actually works, a central authority, usually a governmental, or intergovernmental body sets a limit or cap on the amount of a pollutant that may be emitted. The limit or cap is allocated to firms in the form of certain amount of emissions permits which represent the polluting property right. Firms that keep their emission levels below allowed level may sell their surplus permits to other firms and vice versa, if a firm wants to emit more pollutants than they are allowed, they have to buy emission permits from other firms in the market, this is the trading of permits. There are some several important and significant examples of the application of the emission trading concept. First, It is the central element of the Kyoto protocol in the form of the Clean Development Mechanism (CDM). Second, it is the cornerstone policy of the European Union Emissions Trading...
Words: 310 - Pages: 2
...Boston College Environmental Affairs Law Review Volume 39 | Issue 2 Article 7 6-1-2012 Accounting for Emissions Trading: How Allowances Appear on Financial Statements Could Influence the Effectiveness of Programs to Curb Pollution Laura E. Souchik Follow this and additional works at: http://lawdigitalcommons.bc.edu/ealr Part of the Environmental Law Commons Recommended Citation Laura E. Souchik, Accounting for Emissions Trading: How Allowances Appear on Financial Statements Could Influence the Effectiveness of Programs to Curb Pollution, 39 B.C. Envtl. Aff. L. Rev. 475 (2012), http://lawdigitalcommons.bc.edu/ealr/vol39/iss2/7 This Notes is brought to you for free and open access by the Law Journals at Digital Commons @ Boston College Law School. It has been accepted for inclusion in Boston College Environmental Affairs Law Review by an authorized administrator of Digital Commons @ Boston College Law School. For more information, please contact nick.szydlowski@bc.edu. ACCOUNTING FOR EMISSIONS TRADING: HOW ALLOWANCES APPEAR ON FINANCIAL STATEMENTS COULD INFLUENCE THE EFFECTIVENESS OF PROGRAMS TO CURB POLLUTION Laura E. Souchik* Abstract: Cap-and-trade programs to curb carbon emissions frequently rely on the use of tradable emissions credits known as “allowances.” To date, companies' presentations of their usage of these allowances on their financial statements has not been uniform. Cap-and-trade programs will be most effective when presentation of allowances on...
Words: 11507 - Pages: 47
...English 1- Freshman Composition 5 November 2012 Solutions to Increasing Emission Rates Global warming and greenhouse gases have become a very popular topic among environmentalists. According to National Geographic, the increasing use of carbon emissions in human activities like driving cars, flying planes, conducting power plants, and the burning of fossil fuels in the last 150 years, has led to higher carbon emissions levels than ever recorded in the hundreds of thousands of years before this. As a result, National Geographic says that the smog levels have increased, especially in the United States’ biggest cities such as New York and Los Angeles. That should be pretty obvious given the fact that New York and Los Angeles are the densest and second densest populated cities in the US, respectively (Hawthorn). For years, people have spent countless hours studying and researching trying to design the most innovated solution to reduce emissions. Driving and flying less seems like the most obvious cure to emissions, but it is easier said than done. Everyone claims to have the best solution, the right solution, or even better, the absolute only solution that will forever reduce emission rates. Some have suggested worldwide building upgrades to increase insolation to help lower energy costs and ultimately reduce emissions since worldwide buildings contribute to thirty-three percent of all carbon emission (Biello). Some others include moving closer to work, consuming less and even...
Words: 2232 - Pages: 9
...Energy & Resources Accounting for Emission Rights Introduction Accounting for greenhouse gas emissions remains a challenge, and market participants continue to wait for clear guidance from accounting standards setters. Formative efforts on the part of those standards setters have proven unsuccessful. The International Financial Reporting Interpretations Committee (“IFRIC”) initially took on this task, and issued IFRIC 3, Emission Rights. Unfortunately, considerable pressure from both the business community and European politicians, who objected to the financial statement consequences of applying that interpretation, led to its withdrawal by the International Accounting Standards Board (“IASB”) within a year of its issuance. In the US, the Emerging Issues Task Force (“EITF”) also attempted to address the related accounting issues in EITF Issue 03-14, Participants’ Accounting for Emissions Allowances under a “Cap and Trade” Program. However, it was never finalized, and ultimately removed from the EITF’s agenda. More recently, organizations have been advised of informal views from both the Financial Accounting Standards Board (“FASB”) and the Securities and Exchange Commission (“SEC”) on the appropriate accounting for emissions allowances held, especially since EITF 03-14 was tabled. As a consequence, many companies remain confused about the appropriate accounting treatments under both International Financial Reporting Standards (“IFRS”) and generally accepted...
Words: 4828 - Pages: 20
...Emission allowances and the related accounting issues Laura Chilian April 5, 2012 For many years, the Securities and Exchange Commission (SEC), and the International Financial Reporting Standards (IFRS), tried to establish a proper accounting treatment for emission allowances. The mechanism for these credits is based on a simple ‘cap and trade’ idea. The government issues a number of credits to each company based on the amount of greenhouse gases emitted. Issuing a lower number of credits than needed creates scarcity, which makes trade possible. Companies that emit more gases than they were allowed will pay a fine or buy more credits. Situations are reversed if companies use less credits than they should have. This creates a market-based system on an international level (“Emission Trading Schemes” 2). The first accounting conflict arises from the nature of these allowances. They could be considered assets held for use, grants from the government for the value of the allowances, or a liability/promise to deliver allowances equal to the emissions that have been made. Considering this, emission allowances can not be categorized as either net assets or net liabilities. Due to the lack of authority, accounting practitioners create diversity (“Emission Trading Schemes” 5). Two models or treatments are developed to account for these rights. 1) The inventory model: when...
Words: 1173 - Pages: 5
...Research Articles Emissions Trading and Carbon Credit Accounting for Sustainable Energy Development With Focus on India A. N. Sarkar Senior Professor (International Business), Asia-Pacific Institute of Management, New Delhi, India Abstract Global climate change is inextricably linked with the enhanced build-up of greenhouse gases. Emissions- trading in the form of carbon credits or CERs is opening up a new vista of trade opportunities with prospect for gradual reduction of emissions particularly by the developed nations under Annexure-I categories. Various national and international programmes undertaken by the government and voluntarily by the non-government agencies have positively impacted on progressive reduction of emissions in many parts of the world. The paper highlights the emerging issues linked to the modalities of emission-trading, together with scope for developing sound accounting procedures for trading carbon credits. Paper discusses the opportunities for developing a sound marketing system of carbon credits with built-in efficiency in transactions, accountability and transparency in reporting systems with focus on India. Paper also GMJ,VOL 4,ISSUE 1 & 2, JANUARY - DECEMBER 2010 underlines the need to comply with the Global Accounting Standards, Tax Planning, access to Multi-commodity Exchange Market, certification, verification and enforcement procedures for proper execution of emission-trading initiatives aimed at achieving carbon neutrality. The aspects...
Words: 19274 - Pages: 78
...Abstract: This dissertation examines the Australian ‘Emissions Trading Scheme’ (ETS) and why it is such a fiercely debated topic in politics, industry, community groups and the general public alike. It explores the ways in which the topic of global warming and climate change has significantly altered Australia in numerous aspects and particularly investigates the Rudd Governments’ decision to introduce an emissions trading scheme. The emissions trading scheme came on the back of The Garnaut Climate Change Review which presented its draft report on 4 July 2008 (with the final report submitted in September 2008). Upon receiving the draft report, Climate Change Minister, Penny Wong, issued the Government discussion paper on emissions trading, titled Carbon Pollution Reduction Green Paper. Since this paper was released, and the recommendations stated, turbulent times for all involved has ensued. With the ETS to be made effective sometime in 2010, the government has had to fight tooth and nail in the Senate to get it (the ETS) passed in time for the scheduled deployment. In this piece, both sides of the case will be looked at and a decision on whether the proposed ETS is an effective measure to combat global warming and climate change will be presented. Is an emission trading scheme the right path to alleviate global warming for Australia? Global warming and climate change. Two terms that are constantly thrown around in the Australian media but what do they actually mean?...
Words: 1712 - Pages: 7
...Compare carbon taxes with emission trading schemes as government policy tools. Introduction Why do we need environmental control Over the last century and a bit the world have added 40% more CO2 to the Earth’s atmosphere. Every year the World collectively add more again than we did the year before. The Earth is on an accelerating drive to change our planet’s atmosphere. The main source of this additional CO2 is the burning of fossil fuels. There is a common consensus that global warming is an effect of increased carbon emission and only a few groups still hold on to the belief that there is no connection between emissions of greenhouse gases (Carbon) with the effect of global warming. The leading scientist have predicted Australia has 5 years to reduce its carbon emission to prevent dangerous climate change which may cause average temperate to increase on average by 2 degrees. For the benefit of Australian farmers, grazers and fisherman to enable them to have the best chance to feed the world, and Australian’s primary industry to have the best opportunities for sustainable growth, measures must be undertaken to reduce carbon emission. Government initiatives is required to correct because environmental control, air quality and climate change are all public goods. Public goods are those that everyone can enjoy and no one can be excluded from enjoying the goods. Since it is a public good, everyone can enjoy but no one actually pay for anything to enjoy the good. Public...
Words: 1577 - Pages: 7
...In nowadays, we are facing some global issues regarding the area of environmental and economic. Energy usage and carbon dioxide emission are the largest problem in the global community. Householders use energy in the house consumes the most in the level of emission the total use of energy. The aim of this essay is to define factors that easily affect householders on making decision of the types and source of energy they use. And how they decide on the use of energy efficient appliances. Background Energy is an important element in our global world. It plays a necessary role in our daily life. PJ growth % 2011-12 2010/11- 2011/12 Agriculture 95.8 1.5 Mining 536.2 1.7 Manufacturing and construction 995.2 -3.9 Transport 1512.4 2.0 Commercial 311.2 8.8 Residential 453.2 0.3 Other 58.5 -11.4 Total 3962.5 0.5 (2013 AES Table B) According to the chat above, energy usage in Australia can normally divided into seven parts. Transport is the largest consumption of energy whether manufacturing and construction is the second large. The amounts of mining, residential and commercial in energy usage are quite similar. Residential energy usage is the fourth high of the energy usage of Australia. The most commonly types of residential energy are natural gas and electricity. It include for heating, cooling, cooking…etc. Residential energy usage is 453.3PJ during 2011 to 2012, constitute 11.4% out of the total usage. And the level of residential energy...
Words: 1084 - Pages: 5
...alternative and indicate which alternative you believe is best and why. In regards to the information given in the Polluter case, there are several ways the company can classify the $3 million purchase of emission allowances (“EAs”) from Clean Air Corp. First, it is important to understand the Polluter’s intention for the EAs and nature of their ‘business.’ In order to understand what are the “feasible alternative classifications in the statement of cash flows” for the $3 million purchase, Polluter will determine what type of asset they will classify the EAs as on their balance sheet. Following are three alternatives Polluter can consider as outlined in Deloitte’s “Accounting for Emission Rights” paper: 1. The EAs are intangible assets as defined under SFAS No. 142, Goodwill and Other Intangible Assets, because they lack physical substance but do not meet the definition of a financial asset under SFAS 140. 2. EAs are listed as financial assets because markets and exchanges for the trading of EAs provided evidence that they qualified as financial assets as the allowances would be readily convertible to cash. 3. An alternative view is that they are listed as inventory, as they are part of the necessary costs to comply with environmental regulations and emissions reduction schemes. Polluter currently has significantly high levels of greenhouse gas pollution, which are emitted throughout their normal course of business operations. As stated in the case, Polluter purchased...
Words: 437 - Pages: 2
...Yleana G. Gobal Emission USA vs China Emission: Is defined as the act of producing or sending out something, such as energy or gas, from a source [1]. In order to determine how countries such as China and the United States can reduce emission, we must first discuss the factors that are causing these two particular countries to be the world's top emitters. The two key greenhouse gases emitted by human activities are: (1) Carbon dioxide (CO2) - Fossil fuel use is the primary source of along with deforestation and (2) Methane (CH4) - Agricultural activities, waste management, energy use, and biomass burning all contribute to CH4 emissions [2]. Full responsibility for emitting these two key greenhouse gases cannot be pinned to just one country. It all comes down to basic supply and demand: the relationship between demand and supply underlie the forces behind the allocation of resources [3]. In efforts to play a role in controlling emission, too many consumers (i.e. USA, European Union, among others) want these emission-reducer recourses--causing the primary supplier (China) to not only attempt to supply more but also face its own increase in emission. This report will discuss the following sections: (a) economic & population growth, (b) greenhouse technologies, (c) human exploitation, and (d) conclusion. Economic & Population Growth Despite a growing economy and growing population, the energy consumption in the United States is not expected to rise at a high...
Words: 1090 - Pages: 5
...the 1850’s, people started to use fossil fuels as energy sources. Fossil fuels create tons of CO2 emissions that get stuck in the atmosphere. These emissions could negatively impact both wildlife and humans alike. CO2 emissions are a big problem in today’s society, and emissions need to be reduced to protect the environment. Some people say CO2 emissions are a myth, and these emissions don’t cause global warming. In the past the Earth heated up to end the Ice Age, and they argue the same cycle is happening today. While the Earth did heat up in the past, it has never reached this kind of global temperature. According to NASA’s climate change graph that shows the Earth’s temperature before fossil fuels and after fossil fuels, the temperature after fossil fuels were used is much higher than before, so this proves CO2 emissions rise global temperature and cause global warming. This creates big problems for the environment. CO2 emissions heat up the Antarctic ice caps causing them to melt. The Antarctic ice caps has been on a slow decline ever since 1992. According John Cook, “Between 1992 and 2011, the Antarctic Ice Sheets overall lost 1350 giga-tonnes (Gt) or 1,350,000,000,000 tonnes into the oceans, at an average rate of 70 Gt per year (Gt/yr).” Even though the Antarctic ice cap gained some of the lost ice from 2011 to 2014, it has lost so much ice due to a rise in CO2 emissions, and the Antarctic ice cap is currently on another decline. The wildlife in both land and sea are...
Words: 629 - Pages: 3
...REDUCING EMISSIONS Policies in Reducing Emissions Centoria Robertson AIU Online Abstract A policy maker can have concerns with the effects of the amounts of gases and particulates that are being released into the environment. Their concern turns into wanting a resolution to correct the issue. There are many government policies and systems created for resolving problems like a local power plant emitting gases and particulates into the air. This paper will discuss a policy that can be effective in correcting the problem and benefits from it. Title of Paper When it comes to the local power plant and the pollution emitted into the air, there are many policies that can be set forth to reduce the amount of emissions. One policy that can be very effective in reducing the pollution at a local power plant is the government setting a cap on how much pollution can be emitted into the air. International Emissions Trading Association (IETA) states “the cap and trade system is the best means to establish a quantifiable, legally enforceable limit on emissions…” (IETA, 2014). This result is the cheapest and the most beneficial to the economy. What is the Solution? If the government could set a cap on how much pollution that can be emitted into the air this would be great for the environment. It would reduce the amount of emissions and global emissions reductions will move faster. The cap and trade system allows the private sector the flexibility to reduce emissions and work...
Words: 562 - Pages: 3
