The main sources of anthropogenic global warming, in order of importance, have been identified as electricity generation, land-use changes, agriculture and transport . In the fight to reduce the greenhouse gases attributable to these human activities the development of accurate systems of measurement of these emissions has acquired great importance.In the field of accounting there have been abundant attempts to measure and value the impact of human activity on climate change. For example, sustainability accounting aims to provide stakeholders with a set of tools for addressing environmental,social and economic concerns ; full cost accounting seeks to capture more fully the social and environmental consequences of economic activities; and, carbon accounting provides procedures for calculating the amount of carbon emitted by different sources or the amount stored .However, evaluating the impact of human activities on climate change represents a considerable challenge in accounting given the absence of a globally accepted scheme capable of measuring systematically the interconnection between nature and economics.
In the traditional accounting framework the environmental impacts of human activities are considered as “externalities” , their exclusion resulting in biased information. The expenses recorded in financial databases appear too low as some costs are passed on to external parties, and so artificially low costs and prices are disclosed .In short, measuring greenhouse gases attributable to human activities is a way of reducing human impact on climate change. But emissions and other environmental impacts are still given no consideration in traditional accounting and,therefore, any related costs are valued at zero in traditional financial statements.One way of demonstrating that zero is not the right value for externalities is to analyse how they interrelate with economic performance. Despite considerable advances over the last twenty years in integrating economics and environmental issues, the valuation and association between their respective performances remainin conclusive .For instance, some authors report a positive influence of a firm’s environmental performance on its financial performance,claiming that a sustained improvement in environmental performance enhances financial outcomes.By contrast, others report just the opposite, with a better financial performance being associated with a poorer environmental record.
Finally, a third group of researchers argues that no clear pattern emerges in the relationship between economic and environmental performance.These differences can be attributed to at least three reasons. First, the field lacks, as discussed above, a globally accepted system for measuring the environmental impact of human activities, with previous research relying heavily on firms’ financial data and failing to provide a true account of the economic impact of the environmental externalities of their activities.Second, these studies have applied an array of different measures of environmental performance that are prone to give a variety of results and conclusions.Additionally, most use proxies of environmental impact rather than a specific measure. For example, Henri and Journeault built indicators from firms’ survey responses while Déjean and Martinez and Jacobs et al . constructed them from firms’voluntary disclosures, the weakness being that these disclosure are typically made so as to influence stakeholders via biased, rather than reliable, information.Wahba,on the other hand, considered compliance with ISO 14000 or ISO 14001 as a proxy for good environmental performance; however, obtaining these certificates does not necessarily reflect the firms’ true environmental impact rather they serve only as an indication that they adhere to certain rules of eco-efficiency. Third, the conducting of studies at the macroeconomic scale involves a high level of complexity since while environmental impacts are barely comparable at the interregional level they are even less so at that of macroeconomic blocks. Moreover, macroeconomic databases are prone to miss regional ecological differences that might be significant in the evaluation of environmental impact and they also tend to aggregate firms from different sectors, thus resulting in heterogeneous samples.
The contribution of this study is to analyse the incidence of anthropogenic climate changes on economic performance by adopting a different approach to those taken by previous studies. Thus, the paper takes a microeconomic approach,drawing on a homogeneous sample of rice farms, and evaluating environmental performance by applying measures of actual environmental impacts,focusing not only on the externalities resulting from the firm’s immediate productive stage, but also those arising in the earlier productive stages of the inputs required by the farm. Additionally, we use a widely accepted methodology for measuring a firm’s environmental impact.Conventional farming is concerned above all with achieving short-term economic targets with the use of environmentally aggressive inputs across the whole agribusiness cycle to enhance economic performance.