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Peter Letmathe: Assistant Professor, Ruhr-Uni Bochum, Bochum, Germany
Roger K. Doost: Professor, School of Accountancy, Clemson University, Clemson, South Carolina, USA
Introduction
The currently high consumption of goods and services falls short of the vital necessity for sustainable development. West European countries seem to be further ahead with regard to the environmental matters as compared to the USA. For example, the German Federal Environmental Agency (1997) emphasizes the following alarming trends:
- Increase in mean global air temperatures by 0.3 to 0.6[sup]-C since the end of the nineteenth century.
- Sea level rise of between 10-25 centimeters over the last 100 years.
- Depletion of the stratospheric ozone layer.
- Accelerating species extinction.
- Continued erosion and rapid loss of fertile soil.
- Pollution and overfishing of the seas.
- Gradual over-taxation of the earth system through anthropogenic loads.
- A change of the direction of the Gulf Stream which can result in chaos of the whole world climate.
The total estimated damage caused to the natural environment in one day according to the German Federal Environmental Agency (1997) is given by:
- the destruction of 55,000 hectares of tropical forest;
- the reduction of arable land by 20,000 hectares;
- the extinction of 100 to 200 species;
- emission of 60 million tons of carbon dioxide into the atmosphere.
Extension of traditional cost accounting systems to account for environmental impacts and their costs started towards the end of the 1970s in Germany. In 1979, two guidelines of the Bundesverband der Deutschen Industrie (1979) and of the Verein Deutscher Ingenieure (1979) were published which included rules on how to calculate the business costs of environmental protection. These guidelines helped companies to comply with their reporting requirements for public statistics in Germany. But this approach was not decision-oriented and, therefore, not suitable for systematic environmental management. Hence, many companies tried to achieve legal compliance and to satisfy the interests of their stakeholders mostly through self-designed management methods.
During the 1980s and 1990s, the German government introduced a number of new regulations in the environmental area. As a result, the legal compliance costs for waste water purification and for filtering emissions increased substantially. Further, the costs of many undesired byproducts such as hazardous waste and waste water...