Postgraduate Course: Carbon Accounting (CMSE11151)
Course Outline
| School | Business School |
College | College of Humanities and Social Science |
| Course type | Standard |
Availability | Available to all students |
| Credit level (Normal year taken) | SCQF Level 11 (Postgraduate) |
Credits | 15 |
| Home subject area | Common Courses (Management School) |
Other subject area | None |
| Course website |
None |
Taught in Gaelic? | No |
| Course description | The course aims to provide students with an understanding of the range of measurement, calculation, reporting and auditing - in short, accounting - requirements and challenges imposed by climate change and the policy responses to climate change, in particular, market-based emissions trading schemes. Students will come away from the course with specific skills in the calculative practices associated with carbon accounting. |
Entry Requirements (not applicable to Visiting Students)
| Pre-requisites |
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Co-requisites | |
| Prohibited Combinations | |
Other requirements | For Business School PG students only, or by special permission of the School. Please contact the course secretary. |
| Additional Costs | None |
Information for Visiting Students
| Pre-requisites | None |
| Displayed in Visiting Students Prospectus? | No |
Course Delivery Information
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| Delivery period: 2013/14 Semester 1, Available to all students (SV1)
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Learn enabled: Yes |
Quota: None |
Web Timetable |
Web Timetable |
| Course Start Date |
16/09/2013 |
| Breakdown of Learning and Teaching activities (Further Info) |
Total Hours:
150
(
Lecture Hours 25,
Summative Assessment Hours 2,
Programme Level Learning and Teaching Hours 3,
Directed Learning and Independent Learning Hours
120 )
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| Additional Notes |
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| Breakdown of Assessment Methods (Further Info) |
Written Exam
70 %,
Coursework
30 %,
Practical Exam
0 %
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| Exam Information |
| Exam Diet |
Paper Name |
Hours:Minutes |
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| Main Exam Diet S1 (December) | | 2:00 | | |
Summary of Intended Learning Outcomes
INTENDED LEARNING OUTCOMES
After completing this course, students should be able to:
* Understand the range of measurement, calculation, reporting and auditing - in short, accounting - requirements and challenges imposed by climate change and the policy responses to climate change, in particular, market-based emissions trading schemes.
* Understand the main drivers for carbon accounting, and have an appreciation for how they may change over time
* Appreciate the relationship between conventional accounting and carbon accounting
* Appreciate the ethical questions raised by carbon accounting, and the risks associated with different accounting practices
Cognitive Skills
After completing this course, students should be able to:
* Critically evaluate carbon accounting statements, whether in the financial accounts, footprinting reports, carbon disclosure reports etc
* Critically evaluate alternative approaches to carbon accounting
* Conceptualise key strategic considerations associated with carbon accounting
* Cooperate with others from different professional, educational and cultural backgrounds to produce group analysis and present the results of group work
Subject-Specific Skills
After completing this course, students should be able to:
* Undertake a firm, project or product/supply chain carbon footprint
* Use climate change reporting standards and protocols to report on carbon emissions and benchmark performance
* Understand new developments in carbon accounting, and evaluate the implications for business
* Be able to evaluate the pros and cons of carbon accounting alternatives
* Be able to understand, speak and write the language of carbon accounting
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Assessment Information
Group presentations - 30%
Exam - 70% |
Special Arrangements
| None |
Additional Information
| Academic description |
Not entered |
| Syllabus |
Week 1
Introduction to Carbon Accounting: why does carbon accounting mean different things to different people? Explanation of the ways in which carbon accounting is interpreted by different actors. We will discuss why this matters, and how disagreements in carbon accounting affect carbon markets and carbon disclosure, and hence carbon finance and investment. The elements of course assessment and group projects will also be outlined.
Week 2
Carbon Management Accounting at the Firm Level: in this session we will consider carbon as an environmental management accounting issue (itself a sub-set of broader management accounting). We will discuss its relationship with other environmental management accounting problems, such as accounting for energy and waste, and explore some of the key standards that have emerged to guide organisations in preparing inventories of their greenhouse gas emissions, in particular the WRI/WBCSD Greenhouse Gas Protocol and ISO 14064-1:2006. We will also discuss how various governments and regulators now require companies to measure their emissions according to these or other standards, for various purposes, including emissions trading and public reporting.
Group exercise: doing a firm-level carbon footprint.
Week 3
Carbon Accounting at the Project Level: in this session we will move on to the way in which greenhouse gas emission reductions are measured, typically at the project level. We will discuss the evolution of carbon offsetting, from its voluntary market origins through to institutionalisation in the Kyoto Protocol Clean Development Mechanism (CDM), and how a complex set of principles, procedures and standards for project-level carbon accounting has emerged, such as ISO 14064-2:2006, the CDM rules and procedures, the Voluntary Carbon Standard and the Gold Standard.
Group exercise: doing a project-level baseline analysis and emission reduction calculation.
Week 4
Carbon Accounting for Products and Supply Chains: in this session we will discuss the concept of Life Cycle Assessment and how it has been applied to product and supply chain carbon accounting, including consideration of emerging standards such as PAS-2050 and the GHG Protocol Product and Supply Chain Initiative.
Group exercise: doing a product-level carbon footprint.
Week 5
Carbon Auditing: third-party auditing of carbon accounts can provide an important quality assurance role, which assumes greater importance as the measurement of emissions or emission reductions becomes more 'public' and/or material. Standards for the conduct of carbon audits such as ISO 14064-3: 2006, ISO 14065:2007 and the CDM Validation and Verification Manual will be discussed.
Group exercise: validating an emission reduction project design document (PDD).
Week 6
Carbon Disclosure and Reporting: we turn now to the wider question of how companies should report "information about climate change-related risks and opportunities, carbon footprints, carbon reduction strategies, and their implications for shareholder value" (CDSB, 2009). This will first be placed in context with a discussion of social accounting and accountability. We will then discuss specific initiatives, in particular the Carbon Disclosure Project, Global Reporting Initiative, and UK carbon reporting requirements under the Climate Change Act 2008.
Group exercise: preparing a model disclosure report for a given company according to the Carbon Disclosure Standards Board's Reporting Framework.
Week 7
Reading Week: (No classes)
Week 8
Carbon in the Financial Accounts: should carbon allowances/credits and obligations to surrender allowances be treated as assets and liabilities? Intangible assets (IAS 38) or financial instruments (IAS39)? Free allocation as government grant (IAS 20) and obligations as provisions (IAS 37)? IFRIC 3 and why it was withdrawn and a discussion on the ongoing work of IASB and FASB on emissions trading.
Group exercise: preparing a company's financial statement based on annual report and CDP data.
Week 9
Benchmarking Performance: an introduction to carbon benchmarking and ways in which investors and other stakeholders may use benchmarking information. How to choose appropriate indicators and normalise emissions data across companies within a sector.
Group exercise: benchmarking the performance of two firms.
Week 10
Tax treatment: the tax treatment of both abatement costs and emissions permits, credits or allowances can affect the economic efficiency of carbon markets by introducing distortions. This lecture will discuss the applicability of VAT and corporation tax in key emissions trading jurisdictions and the case of EU ETS VAT carousel fraud.
Week 11
Accounting for Stored Carbon: in this lecture we will explore some of the challenges involved in accounting for stored carbon, in forms such as afforestation and reforestation, reduced emissions from deforestation and forest degradation (REDD), carbon capture and storage (CCS) and biochar. These include choices between atmospheric flow and stock change methodologies; longevity and impermanence, liability for reversals and the need for 'double crediting' for stored bio-carbon - illustrating some of the conflicts between the different types of carbon accounting covered in the course.
In-class discussion: Carbon Accountability and Ethics: are carbon credits the next CDOs? Innovation, ENRON and ethics.
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| Transferable skills |
Not entered |
| Reading list |
ESSENTIAL/RECOMMENDED READING
Note: the following is provisional; all reading will be updated prior to course commencement and on the advice of guest lecturers; including division into essential and further reading for each week.
Lecture Outlines and Readings
Week 1: Introduction to Carbon Accounting & Carbon Management Accounting at a Frim Level
Essential reading:
Ascui, F. and Lovell, H. (2011) As frames collide: Making sense of carbon accounting. Accounting, Auditing & Accountability Journal 24 (8): 978-999.
World Resources Institute (WRI)/World Business Council for Sustainable Development (WBCSD) (2004) The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard. Revised edition. Pages 6-33. Available at: http://www.ghgprotocol.org/standards/corporate-standard
Gray, R. and Bebbington, J. (2001), Accounting for the environment, 2nd ed., Sage Publications, London. Chapters 5 (environmental audit and management systems), 6 (accounting for energy) and 7 (accounting for waste).
Further reading:
Bebbington, J. and Larrinaga-González, C. (2008), ¿Carbon trading: Accounting and reporting issues¿, European Accounting Review 17 (4): 697-717.
MacKenzie, D. (2009), ¿Making things the same: Gases, emission rights and the politics of carbon markets¿, Accounting, Organizations and Society 34: 440-455.
Week 2: Carbon Disclosure and Reporting (Part 1)
Essential reading:
Kolk, A., Levy, D. and Pinske, J. (2008), ¿Corporate responses in an emerging climate regime: The institutionalization and commensuration of carbon disclosure¿, European Accounting Review 17 (4): 719-745.
World Resources Institute (WRI)/World Business Council for Sustainable Development (WBCSD) (2004) The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard. Revised edition. Pages 34-85. Available at: http://www.ghgprotocol.org/standards/corporate-standard
Further reading:
International Standards Organisation (ISO) (2006) ISO 14064-1: 2006: Greenhouse gases: Part 1: Specification with guidance at the organization level for quantification and reporting of greenhouse gas emissions and removals.
Week 3: Carbon Disclosure and Reporting (Part 2)
Essential reading:
Carbon Disclosure Project (2011) CDP Global 500 Report 2011: Accelerating Low Carbon Growth. Read the executive summary and browse the remainder of the report. Available at:
https://www.cdproject.net/en-US/Pages/global500.aspx
Carbon Disclosure Standards Board (2009), The Climate Disclosure Standards Board (CDSB) Reporting Framework: Exposure Draft, Carbon Disclosure Project, London.
PricewaterhouseCoopers (2009) Typico plc Greenhouse Gas Emissions Report. This document is an example of reporting GHGs according to the CDSB.
Week 4: Benchmarking Performance
Essential reading:
Graafland, J. J, Eijffinger, S. C. W. and Smid-Johan, H. (2004) ¿Benchmarking of corporate social responsibility: Methodological problems and robustness.¿ Journal of Business Ethics 53 (1): 137¿152.
Tucker, F. G., Seymour, M. Z., and Camp, R. C. (1987) ¿How to measure yourself against the best.¿ Harvard Business Review 65 (1): 8-10.
Carbon Disclosure Project (2011) CDP Global 500 Report 2011: Accelerating Low Carbon Growth. Examine one sector within the report. Available at:
https://www.cdproject.net/en-US/Pages/global500.aspx
ENDS Carbon (2009) 2009 UK Supermarkets carbon benchmark. Available at:
http://bit.ly/supermarketscarbon-presscopy
Week 5: Group Presentations
Week 6: Reading Week
Week 7: Carbon Accounting for Products and Supply Chains
Essential reading:
Gray, R. and Bebbington, J. (2001), Accounting for the environment, 2nd ed., Sage Publications, London. Chapter 9 (LCA).
British Standards Institution (BSI) (2008), PAS 2050:2008. Specification for the assessment of the life cycle greenhouse gas emissions of goods and services, British Standards Institution, London.
WRI/WBCSD (2011) Corporate Value Chain (Scope3) Accounting & Reporting Standard. Available at: http://www.ghgprotocol.org/standards/scope-3-standard
WRI/WBCSD (2011) Product Life Cycle Accounting & Reporting Standard. Available at: http://www.ghgprotocol.org/standards/product-standard
Week 8: Tax Treatment
Essential reading:
Kane, M. A. (2009) ¿Tax and efficiency under global cap-and-trade¿, in Stewart, R. B., Kingsbury, B. and Rudyk, B. (eds) Climate Finance: Regulatory and Funding Strategies for Climate Change and Global Development, NYU Press, New York and London, pp. 300-304.
Margoliath, Y. (2009) ¿Tax consequences of carbon cap-and-trade schemes: Free permits and auctioned permits¿, in Stewart, R. B., Kingsbury, B. and Rudyk, B. (eds) Climate Finance: Regulatory and Funding Strategies for Climate Change and Global Development, NYU Press, New York and London, pp. 305-310.
Further reading:
Ainsworth, R. T. (2010) ¿CO2 MTIC fraud ¿ technologically exploiting the EU VAT (again)¿ Boston University School of Law Working Paper No. 10-01
(January 7, 2010), available at: http://www.bu.edu/law/faculty/scholarship/workingpapers/2010.html
Week 9: Carbon in the Financial Accounts
Essential reading:
Cook, A. (2009) ¿Emission rights: From costless activity to market operations¿, Accounting, Organizations and Society 34: 456-468.
Lovell, H. et al. (2010) Accounting for Carbon. London, UK: The Association of Chartered Certified Accountants.
Further reading:
IASB. (2008), "International Accounting Standards Board (IASB) - Information for Observers: Emissions Trading Schemes; Board meeting 20 May 2008", available at:
http://www.iasb.org/NR/rdonlyres/92B01EDC-E519-431F-915F-0F33505D7DFD/0/ETS0805b03obs.pdf (accessed 3 October 2008).
KPMG (2008), Accounting for carbon: the impact of carbon trading on financial statements, KPMG, London.
PricewaterhouseCoopers and IETA (2007), Trouble-entry Accounting ¿ Revisited, PricewaterhouseCoopers (PwC), London.
Week 10: Accounting for Stored Carbon
Essential reading:
Fogel, C. (2005), ¿Biotic carbon sequestration and the Kyoto Protocol: The construction of global knowledge by the Intergovernmental Panel on Climate Change¿, International Environmental Agreements 5: 191-210.
Further reading:
Grönkvist, S., Möllersten, K. and Pingoud, K. (2006), ¿Equal opportunity for biomass in greenhouse gas accounting of CO2 capture and storage: A step towards more cost-effective climate change mitigation regimes¿, Mitigation and Adaptation Strategies for Global Change 11: 1083-1096.
Week 11: Carbon Auditing
Essential Reading:
UNFCCC (2009) Clean Development Mechanism Validation and Verification Manual (version 01.1).
Available at: http://cdm.unfccc.int/Reference/Manuals/accr_man01.pdf
Further reading:
European Commission (2007) Answers to Frequently Asked Questions on Greenhouse Gas Emissions Monitoring and Reporting under the EU Emissions Trading System Pursuant Directive 2003/87/EC. September 2007. Available at:
http://ec.europa.eu/environment/climat/emission/pdf/mrg2faq_sep_2007.pdf
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| Study Abroad |
Not entered |
| Study Pattern |
Not entered |
| Keywords | CA |
Contacts
| Course organiser | Mr David Brotherton
Tel: (0131 6)51 5323
Email: David.Brotherton@ed.ac.uk |
Course secretary | Miss Ashley Harper
Tel: (0131 6)51 5671
Email: Ashley.Harper@ed.ac.uk |
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