Why we need environmental accounting
This article originally appeared in the August 2010 issue of The Bottom Line.
The need for consistent, decisive environmental accounting principles has been argued in professional circles for some time, but is perhaps never better illustrated than right now in aftermath of the Deepwater Horizon ecological catastrophe. This sad incident also reinforces the need to better account for the limits of nature's carrying capacity. The underlying issue is the why and how of putting a value on nature that will enable nature to effectively compete with the financial metrics of Return on Investment (ROI) in the global capital markets.Dan Rubenstein proposes a way of using new estimates of the dollar value of nature's services and incorporating these values in the traditional accounting model. Rubenstein's approach is unique in that it bridges the divide between ecological economics and traditional accounting for both business and government.