Accounting Essay Example

Accounting

Question 3: What do you think Hines means by her statement that “But to reduce a friend to a number or, worse, a money equivalent is likely to have even worse consequences than excluding them from accounts altogether” (p.29)? Explain whether you agree or disagree with Hines’ argument, providing reasons for your answer.

What is meant by this statement is that attaching economic value to the natural environment is likely to cause more severe problems that what would happen when the natural environment is excluded from economic valuation. The argument that is being made here is that nature should be appreciated for what it is, rather than being appreciated because of its economic value. What is important to note from this statement, though, is that whether an economic value is attached to nature or not, there are negative consequences. However, when an economic value is attached to nature, the consequences are more serious than what would be the case if nature is completely excluded from accounting and appreciated for its own intrinsic value (Hines 1991, p. 29).

I disagree with Hine’s statement. It is not true that valuing nature brings about more severe consequences than excluding nature from accounting. This is because of several reasons. To begin with, there is a direct relationship between the natural environment and the economy (Jantzen 2006, p. 6). The economic activities and overall progress of human beings are based on the use of resources provided by the natural environment. On the other hand, the economic activities of human beings have a direct effect on the natural environment. This relationship is seen in the form of benefits that humans derive from the natural environment. On one hand are direct benefits in the form of biomass, food, health and recreation while on the other, humans make indirect use of the natural environment as a source of protection against undesirable events such as flooding (Jantzen 2006, p. 8). Therefore, it is clear that it is not practical to separate the natural environment from the economy since both are completely interdependent.

As well, destruction of the natural environment, as a consequence of human activities, has been an on-going phenomenon from time immemorial. This, according to Juniper (2012), is seen in the form of destruction of forests that are not protected, depletion of important sources of water and extinction of different fauna and flora. The continued destruction of the environment as a result of human activities produces negative consequences. Since some human economic activities are based on the resources available in the natural environment, destruction of the natural environment threatens the future of different forms of human economic activities. Hence, not attaching economic value to natural resources cannot be said to have played a role of helping to conserve the natural resources.

From the foregoing, it can be concluded that attaching an economic value to the natural environment is not likely to produce consequences that are far worse than those that may arise from excluding the natural environment from accounting. On the contrary, valuing nature may produce various desirable consequences. One of the most important ones is that it may act as an incentive for reducing the pace at which natural resources are being depleted. Kenner (2014, p. 1) argues that attaching economic value to the natural environment may provide the right policy framework for guiding the process of conserving the environment on one hand and developing sustainable economic development processes on the other.

References

Hines, R 1991, ‘On valuing nature’, Accounting Auditing & Accountability Journal, vol. 4, no. 3, pp. 27-29.

Jantzen, J 2006, The economic value of natural and environmental resources, viewed 22 October 2015, <http://www.i-tme.nl/pdf/assessment%20of%20econ%20value%20of%20environment%20final.pdf>.

Juniper, T 2012, ‘We must put a price on nature if we are going to save it’, The Guardian, 10 August 2012, viewed 22 October 2015, <http://www.theguardian.com/environment/2012/aug/10/nature-economic-value-campaign>.

Kenner, D 2014, Who should value nature? viewed 22 October 2015, <http://whygreeneconomy.org/wp-content/uploads/2014/12/Who-should-value-nature.-Why-Green-Economy.pdf>.