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Can the financialised atmosphere be effectively regulated and accounted for?

Can the financialised atmosphere be effectively regulated and accounted for? Purpose – This paper aims to carry out a critical analysis of the proposed Australian emissions trading scheme (ETS) as a complex market solution to reduce greenhouse gases (GHGs). Specifically it seeks to examine the financial regulatory infrastructure that will more than likely oversee the Australian ETS, the same regulatory infrastructure which failed to prevent the global financial crisis. Design/methodology/approach – A critical examination of the financialisation of the atmosphere that follows the growth of the financialisation of capitalism when economic activity shifted from production and service sectors to finance. Financialisation of capitalism is supported by capitalist regulation influenced by neo‐liberal doctrines of free markets and small government. Findings – Trillions of dollars of taxpayer funds bailed out large financial institutions that nearly collapsed after unregulated trading in complex financial products that were supposed to hedge future risk. Corporate emissions trading will involve similar financial products. The measurement and reporting of actual emissions to support the Australian ETS also creates challenges for the accountancy profession to provide a workable conceptual framework. Practical implications – If the currently flawed financial infrastructure required for the GHG emissions trading scheme, no amount of taxpayer funded bailouts will reverse the extreme climate change associated with an environmental catastrophe. Originality/value – The application of financialisation of monopoly capitalism and capitalist regulation theories to the critical analysis of commoditised GHGs traded as financial products in the proposed Australian ETS. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Accounting, Auditing & Accountability Journal Emerald Publishing

Can the financialised atmosphere be effectively regulated and accounted for?

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Publisher
Emerald Publishing
Copyright
Copyright © 2011 Emerald Group Publishing Limited. All rights reserved.
ISSN
0951-3574
DOI
10.1108/09613671111184760
Publisher site
See Article on Publisher Site

Abstract

Purpose – This paper aims to carry out a critical analysis of the proposed Australian emissions trading scheme (ETS) as a complex market solution to reduce greenhouse gases (GHGs). Specifically it seeks to examine the financial regulatory infrastructure that will more than likely oversee the Australian ETS, the same regulatory infrastructure which failed to prevent the global financial crisis. Design/methodology/approach – A critical examination of the financialisation of the atmosphere that follows the growth of the financialisation of capitalism when economic activity shifted from production and service sectors to finance. Financialisation of capitalism is supported by capitalist regulation influenced by neo‐liberal doctrines of free markets and small government. Findings – Trillions of dollars of taxpayer funds bailed out large financial institutions that nearly collapsed after unregulated trading in complex financial products that were supposed to hedge future risk. Corporate emissions trading will involve similar financial products. The measurement and reporting of actual emissions to support the Australian ETS also creates challenges for the accountancy profession to provide a workable conceptual framework. Practical implications – If the currently flawed financial infrastructure required for the GHG emissions trading scheme, no amount of taxpayer funded bailouts will reverse the extreme climate change associated with an environmental catastrophe. Originality/value – The application of financialisation of monopoly capitalism and capitalist regulation theories to the critical analysis of commoditised GHGs traded as financial products in the proposed Australian ETS.

Journal

Accounting, Auditing & Accountability JournalEmerald Publishing

Published: Oct 25, 2011

Keywords: Climate change; Financialisation of atmosphere; Capitalist regulation; Accounting; Australia

References