Geology Reference
In-Depth Information
Given this situation, the burning question then becomes whether this void stems
from the thoughtlessness of individuals in the “soft” sciences or even from the
economists' disinterest in the “hard” sciences.
2.5 The accountants' view
To what extent have economists developed tools for accounting and managing na-
tural resources? Do environmental-economic accountants have a general method-
ology that can be applied in the assessment of the Earth's mineral endowment?
Do accountancy systems include tools that connect thermodynamic and economic
messages? Finding the answers to these is the ultimate aim of this section. But
beforehand, one must know what it is meant by cost accounting and how it relates
to the Second Law.
The costing process essentially consists of four steps: first, a search for the
causality of facts; second, the quantification of efforts and physical impacts; third,
the conversion of these efforts into monetary (or any other numéraire) equivalents;
and fourth, the reporting of all the previous steps, i.e. accountancy.
The Second Law clearly states that any activity performed entails the destruc-
tion of resources with cost quantifying this sacrifice. Life is an act of an organism
expending resources for eating, sheltering or defending itself and therefore life itself
carries an intrinsic cost. Yet one can still forget the transitive nature of costing.
If somebody acts, someone or something else loses. There is no such thing as a
win-win situation. Nature is typically (and sadly) the one that bears the greatest
cost, the one that always loses. Fortunately, in many cases, given time, the sun
sooner or later fixes the damage inflicted. In mining processes this is not the norm,
the sun is not a major replenisher. Therefore, accountancy and global governance
must play a key role in conserving Nature's endowment.
2.5.1 The SNA and the U.N. System of Environmental-Economic
Accounts (SEEA)
Perceived by environmental economists as the perfect infrastructure for accounting
environmental costs, the System of National Accounts (SNA) is an internationally
agreed system of concepts, definitions, classifications and norms of accounting. It
records how production is distributed among consumers, businesses, within the
national government and foreign nations. It is a macroeconomic tool that aligns
economic statistics with national accounts serving for the economic analysis and
policy design of countries
8
, with the Gross National Product (GNP) one of its most
popular outcomes. It operates in the same way as a private company's standardised
end of year balance sheet.
8
See http://unstats.un.org/unsd/nationalaccount/sna.asp. Accessed Feb. 2012.
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