sue hrasky (rip:in memoriam) university of tasmania mike jones university of bristol
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Sue Hrasky (RIP:In Memoriam)University of Tasmania
Mike Jones University of Bristol
Introduction I" If we can revise our attitudes toward the land under our feet, if we can accept a role of steward, and depart from the role of conqueror, if we can accept the view that man and nature are inseparable parts of the unified whole - then Tasmania can be a shining beacon in a dull, uniform, and largely artificial world. “
- Olegas Truchanus (1923-1972)
Introduction IIRole of accounting in environmental decision-making is
complex intertwined with social, economic and political factors
Traditional accounting captures financial information, but not natural assets
Flora, fauna and ecosystems thus have no monetary value
However accounting used to make operational and strategic environmental decisions
Introduction III Accounting is a partisan mediator that privileges economic
value point
But seen to be neutral, objective, rational
This article looks at the use of accounting in the Lake Pedder Decision in the late 1960s in Australia
Caused political controversy; leading to world’s first environmental movement
At heart Lake Pedder an ‘economic and political decision’
Obvious modern parallels eg dams across Mekong.
ContributionsRole of Accounting in a previously
unstudied environmental decision
Accounting in an Advocacy Role
Shows limitations of Accounting
BackgroundLake Pedder a 242sq kilometre wilderness
Declared a National Park 1955
Need for Energy; Lake Pedder the solution
Select committee endorses it in 1967
1972 Dams built
1973 A Commonwealth Committee of Inquiry, main source of evidence
Timeline1835 Pedder discovered1940s First visitors arrive1953 HEC installs flow recorder on the Gordon1955 Lake Pedder National Park declared
1965 , Reece announces “some modification” to the National Park1965 Interdepartmental Committee for South West established1966 State seeks special financial assistance for the Gordon Project
1967 (April) Interdepartmental Committee 1967 (June) Select Committee appointed1967 (August) Select committee endorses, Authorisation Bill passed two days later
1972 Pedder drowned1973 Federal Committee of Inquiry recommends federally funded moratorium
(Reece rejects)
Impression Management 1
Impression management wide concept embraces creative accounting
Serves the interests of preparers rather than users. Fails to provide a true and fair viewConsists of omission, bias and selectivityOmission means the total exclusion of informationBias means information that is distorted or enhancedSelectivity means partial disclosure.
Impression Management II
Draws on the non-neutral role of accounting eg Anthony Hopwwood(1992).
Creates a false impression of technical rationality and objectivity
Accounting used in political advocacy eg privatisation, closure, downsizing etc
Accounting used in accounting narratives and graphs
Accounting in the Pedder Decision?
Our sourcesArchival and secondary data
Key archival sources:
1967 State Legislative Council Select Committee
THEC’s 1967 Report to Parliament
Transcript of evidence given to the 1973 Federal Select Committee of enquiry
Criticism of Decision-Making Process IInadequate and flawed political process
- Fait accompli, no independent evaluation; lack of transparency
Lack of consideration of alternatives- HEC’s alternative plans not made public
Lack of Impact assessments- No comprehensive ecological survey
Narrow financial criteria manipulated- Sole agenda cheap power- No detailed costings or underpinning assumptions- Inappropriate Discount Rates- Biased cost estimates
Criticism of Decision-Making Process II
Conventional Accounting inappropriate for environmental decision-making (e.g. Capitalist orientation, business focus, reliance on neo-classical economics; numerical quantification; monetary orientation and technical accounting practices)
Vast majority of biosphere not determined by price
Traditional accounting does not privilege environment
Inability to handle intangiblesSeven Values by Holmes Rolston.
Aesthetic- Aesthetic and mystical value, a natural masterpiece
- Comparisons with Sydney Opera House, Ayres Rock and Great Barrier Reef
Religious- A spiritual quality
Therapeutic- Psychological value
Historical - no fight to deprive future generations (Reminiscent of
Brundtland Commission, 1983)
Inability to handle utilitarianaspects
Seven Values by Holmes Rolston. Recreational
- e.g. swimming, canoeing, camping -e.g. tourism, walking Educational
- school trips
- a unique attraction Intrinsic value/genetic diversity
- Unique flora and fauna
Inability to handle intangibles – Anthropocentric Value
Priceless
Miss Dunn: “ Why do you keep asking me questions of money? I don’t think cost comes into it. I know its an impractical thing to say, of course, it is, but if you relate it to the future and future generations – how do we have the right to deprive them of this?”
In Favour of Development
Fishing Lobby (Brown Trout) Renewable EnergyLocal Politician “ People are heartily sick
of the Inquiry”
Discussion and Conclusion IEarly example of an important clash between economic
and environmental values
Accounting not a neutral technologyInformation was omitted, biased and selectively used.
Commentators criticised decision on 3 grounds1. Inadequate disclosure of detailed costs and benefits2. No informed disclosure of alternatives3. Selective use of long-term discount rate
Discussion and Conclusion IILimitations of Accounting
1. Fails to take into account a whole range of intangible environmental attributes eg aesthetic, therapeutic, religious, historical .
2. Fails to reflect utilitarian benefits such as recreation, education, tourism, walking and timber.
Accounting and economic considerations also fail to take intrinsic value of biodiversity
Discussion and Conclusion IIIWould Lake Pedder have been dammed if the accounting
calculations had been more accurate and he environment considered?
- Impossible to say, but probably NO!!
Have we advanced any more in environmental decision-making
- Not really, environmental valuation still in infancy
WAY FORWARD- If an environmental asset is priceless, then it
should be invaluable
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