Sue Hrasky (RIP:In Memoriam) University of Tasmania Mike Jones University of Bristol

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Sue Hrasky (RIP:In Memoriam)
University of Tasmania
Mike Jones
University of Bristol
Introduction I
" If we can revise our attitudes toward the land
under our feet, if we can accept a role of steward,
and depart from the role of conqueror, if we can
accept the view that man and nature are
inseparable parts of the unified whole - then
Tasmania can be a shining beacon in a dull, uniform,
and largely artificial world. “
- Olegas Truchanus (1923-1972)
Introduction II
 Role of accounting in environmental decision-making is
complex intertwined with social, economic and political
factors
 Traditional accounting captures financial information, but
not natural assets
 Flora, fauna and ecosystems thus have no monetary value
 However accounting used to make operational and
strategic environmental decisions
Introduction III
 Accounting is a partisan mediator that privileges
economic value point
 But seen to be neutral, objective, rational
 This article looks at the use of accounting in the Lake
Pedder Decision in the late 1960s in Australia
 Caused political controversy; leading to world’s first
environmental movement
 At heart Lake Pedder an ‘economic and political decision’
 Obvious modern parallels eg dams across Mekong.
Contributions
Role of Accounting in a previously
unstudied environmental decision
Accounting in an Advocacy Role
 Shows limitations of Accounting
Background
 Lake Pedder a 242sq kilometre wilderness
 Declared a National Park 1955
 Need for Energy; Lake Pedder the solution
 Select committee endorses it in 1967
 1972 Dams built
 1973 A Commonwealth Committee of Inquiry, main
source of evidence
1835
1940s
1953
1955
Timeline
Pedder discovered
First visitors arrive
HEC installs flow recorder on the Gordon
Lake Pedder National Park declared
1965 , Reece announces “some modification” to the National Park
1965 Interdepartmental Committee for South West established
1966 State seeks special financial assistance for the Gordon Project
1967 (April)
1967 (June)
1967 (August)
1972
1973
Interdepartmental Committee
Select Committee appointed
Select committee endorses, Authorisation Bill passed two days later
Pedder drowned
Federal Committee of Inquiry recommends federally funded moratorium
(Reece rejects)
Impression Management 1
Impression management wide concept embraces
creative accounting
Serves the interests of preparers rather than users.
Fails to provide a true and fair view
Consists of omission, bias and selectivity
Omission means the total exclusion of information
Bias means information that is distorted or enhanced
Selectivity means partial disclosure.
Impression Management II
Draws on the non-neutral role of accounting eg
Anthony Hopwwood(1992).
Creates a false impression of technical
rationality and objectivity
Accounting used in political advocacy eg
privatisation, closure, downsizing etc
Accounting used in accounting narratives and
graphs
Accounting in the Pedder Decision?
Our sources
 Archival and secondary data
 Key archival sources:
 1967 State Legislative Council Select Committee
 THEC’s 1967 Report to Parliament
 Transcript of evidence given to the 1973 Federal Select
Committee of enquiry
Criticism of Decision-Making Process I
 Inadequate and flawed political process
- Fait accompli, no independent evaluation; lack of transparency
 Lack of consideration of alternatives
- HEC’s alternative plans not made public
 Lack of Impact assessments
- No comprehensive ecological survey
 Narrow financial criteria manipulated
- Sole agenda cheap power
- No detailed costings or underpinning assumptions
- Inappropriate Discount Rates
- Biased cost estimates
Criticism of Decision-Making Process II
 Conventional Accounting inappropriate for environmental
decision-making (e.g. Capitalist orientation, business
focus, reliance on neo-classical economics; numerical
quantification; monetary orientation and technical
accounting practices)
 Vast majority of biosphere not determined by price
 Traditional accounting does not privilege environment
Inability to handle intangibles
Seven Values by Holmes Rolston.

Aesthetic
- Aesthetic and mystical value, a natural masterpiece
- Comparisons with Sydney Opera House, Ayres Rock and Great
Barrier Reef

Religious
- A spiritual quality

Therapeutic
- Psychological value

Historical
- no fight to deprive future generations (Reminiscent of
Inability to handle
utilitarianaspects
Seven Values by Holmes Rolston.
 Recreational
- e.g. swimming, canoeing, camping
-e.g. tourism, walking
 Educational
- school trips
- a unique attraction
 Intrinsic value/genetic diversity
- Unique flora and fauna
Inability to handle intangibles –
Anthropocentric Value
 Priceless
 Miss Dunn:
“ Why do you keep asking me questions of money? I don’t think cost comes
into it. I know its an impractical thing to say, of course, it is, but if you
relate it to the future and future generations – how do we have the right to
deprive them of this?”
In Favour of Development
 Fishing Lobby (Brown Trout)
 Renewable Energy
 Local Politician “ People are heartily sick
of the Inquiry”
Discussion and Conclusion I
 Early example of an important clash between economic
and environmental values
 Accounting not a neutral technology
 Information was omitted, biased and selectively used.
 Commentators criticised decision on 3 grounds
1.
2.
3.
Inadequate disclosure of detailed costs and benefits
No informed disclosure of alternatives
Selective use of long-term discount rate
Discussion and Conclusion II
 Limitations of Accounting
1.
2.
Fails to take into account a whole range of intangible
environmental attributes eg aesthetic, therapeutic, religious,
historical .
Fails to reflect utilitarian benefits such as recreation, education,
tourism, walking and timber.
 Accounting and economic considerations also fail to take
intrinsic value of biodiversity
Discussion and Conclusion III
 Would Lake Pedder have been dammed if the accounting
calculations had been more accurate and he environment
considered?
- Impossible to say, but probably NO!!
 Have we advanced any more in environmental decision-
making
- Not really, environmental valuation still in infancy
 WAY FORWARD
- If an environmental asset is priceless, then it
should be invaluable
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