Climate change is no more a future thing but a reality of the present. With adaption and mitigation, the reverse of the adverse effect of global warming can be expected. The phrase “carbon pricing” is now widely used to describe the external costs associated with greenhouse gas (GHG) emissions. By adhering to national and international climate agreements, the major objective is to reduce the use of fossil fuels and combat climate change. Clean technology and commercial innovation, also promote economic growth. Business executives and economists stress the importance of shifting to less carbon-intensive manufacturing and consumption, which will also help spread the cost of reversing climate change across all sectors.
On the one hand, a carbon tax protects the economic system’s carbon price from unpredictability in environmental outcomes. By establishing a price on carbon, a carbon tax determines the tax rate. Additionally, it specifies the tax rate applicable to carbon dioxide emissions or the carbon content of fossil fuels.
Accountants are becoming more aware of the importance of their involvement in accelerating climate action and how they can contribute to mitigating climate change by lowering emissions within the company according to the World economic forum, letting their representatives know about climate-smart policies, and supporting businesses and organizations embracing renewable energy.
The Paris agreement states that market-based measures like carbon taxes or cap and trade programmes must be implemented in order to meet the ambitious goal and contribute to emissions reduction at the lowest possible cost. The brand’s objective is to explicitly price carbon emissions and compel companies to develop affordable solutions.
Businesses do have the flexibility to select and adapt their own strategies to a company’s financial statements. It is important for businesses to know the social cost of CO2 emission and adopt strategies to reduce demand for carbon-intensive products and services. The business will regard this carbon tax or emission trading scheme expense as the same as any other operational expense.
There is a bigger need for action than for accountants to just prepare carbon prices. New sustainable models can help to tackle financial implications and risks to climate. Companies aiming to implement internal carbon pricing can improve their operational energy efficiency. For instance, Google has been carbon neutral since 2007, meaning that its emissions from fossil fuels are balanced out by investing in energy solutions that are renewable and lower carbon dioxide emissions.
Accountants should take part in the debate that helps to develop low carbon business models for sustainability and profitability as they have a significant influence in reducing climate emergencies.
AcoBloom International, an outsourcing firm, promotes activities that will lower climate risk using the low carbon business model as a member of the voice of the accounting profession.
Every company must regard the fight against climate change as an emergency and implement a three-level strategy for enterprises.