In this paper we explore how carbon markets have entered the world of financial accounting. The advent of the European Union Emissions Trading System (EU ETS) in 2005 provided the opportunity for global climate change concerns to be translated from policy into something that could, and should, be recognised within financial accounting. That is, the EU ETS provided a mechanism whereby greenhouse gas emission allowances acquired a financial value, simultaneously creating an obligation (or liability) on certain European organisations when they emit greenhouse gases. Prima facie, this process created the need for financial accounts of companies covered by the EU ETS to reflect the new commodity of carbon. Disagreement amongst accountants about how to treat emission allowances has arisen, with the initial international accounting guidance issued in late 2004 subsequently being withdrawn, and not yet replaced. Taking this absence of guidance as a starting point, we undertake an empirical project (through a survey, consultation analysis, and interviews) to establish what financial reporting practices are being adopted by participants in the EU ETS, and the level of momentum for standardisation. We draw on sociological theories about accounting, measurement, and markets. © 2013 Pion and its Licensors.

Item Type:	Refereed Article
Research Division:	Human Society
Research Group:	Sociology
Research Field:	Sociology and social studies of science and technology
Objective Division:	Expanding Knowledge
Objective Group:	Expanding knowledge
Objective Field:	Expanding knowledge in human society
UTAS Author:	Lovell, HC (Professor Heather Lovell)
ID Code:	99567
Year Published:	2013
Web of Science® Times Cited:	19
Deposited By:	School of Social Sciences
Deposited On:	2015-03-27
Last Modified:	2017-11-14
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