Capandtrade emission allowances and US companies' balance sheets

Sustainability Accounting, Management and Policy Journal

Volumn 4, Issue 1, 2013, Pages 7-31

  Griffin, Paul A ^a  

^a UNIVERSITY OF CALIFORNIA   (United States)

Author keywords

AB 32; Allowances; Cap and trade; Emission; Emission accounting; Free emission allowances; Global warming; Global Warming Solutions Act of 2006; Greenhouse gas emissions

Indexed keywords

EID: 84878230296     PISSN: 20408021     EISSN: 2040803x     Source Type: Journal    
DOI: 10.1108/SAMPJ-01-2012-0001     Document Type: Article

References (40)

1. American Clean Energy and Security Act (2009), 111th United States Congress (H.R. 2454), available at: www.govtrack.us/congress/bill.xpd?bill=h111-2454 (accessed May 7, 2012).
2. Armstrong, C., Core, J., Taylor, D. and Verrecchia, R. (2011), “When does information asymmetry affect the cost of capital?”, Journal of Accounting Research, Vol. 49 No. 1, pp. 1-40.
3. Bailis, R. (2009), Emissions Reductions and Lower Carbon Intensity: Are We Making Progress?, Center for Business and the Environment at Yale, New Haven, CT, May.
4. CBO (2009a), “Cost estimate: H.R. 2454”, American Clean Energy and Security Act of 2009, Congressional Budget Office, June 5, available at: www.cbo.gov/doc.cfm?index=10262 (accessed May 7, 2012).
5. CBO (2009b), “The estimated costs to households from the cap-and-trade provisions of H.R. 2454”, Letter to the Honorable Dave Camp, Congressional Budget Office, June 19, available at: www.cbo.gov/doc.cfm?index=10327 (accessed May 7, 2012).
6. CDP (2007-2009), S&P 500 Reports, Carbon Disclosure Project, London.
7. Chamberlain, A. (2009), “Who benefits from free emissions allowances? An economic analysis of the Waxman-Markey cap-and-trade program”, Economics Policy Study No. 2009-07, Chamberlain Economics LLC, September.
8. 2 allowance trading system and the Clean Air Act Amendments of 1990: reflections on twenty years of policy innovation”, working paper, Harvard Kennedy School, Cambridge, MA, January.
9. Chicago Climate Futures Exchange (2004), The Sulfur Dioxide Emission Allowance Trading Program: Market Architecture, Market Dynamics and Pricing, Chicago Climate Change, Inc., Chicago, IL.
10. Diamond, D.W. and Verrecchia, R.E. (1991), “Disclosure, liquidity, and the cost of capital”, The Journal of Finance, Vol. 46 No. 4, pp. 1325-1359.
11. Easley, D. and O'Hara, M. (2004), “Information and the cost of capital”, The Journal of Finance, Vol. 70 No. 4, pp. 1553-1583.
12. Elfrink, J. and Ellison, M. (2009), “Accounting for emissions allowances: an issue in need of standards”, The CPA Journal, Vol. 207 No. 2, pp. 30-33.
13. Epstein, L. and Schneider, M. (2008), “Ambiguity, information quality and asset pricing”, The Journal of Finance, Vol. 63 No. 1, pp. 197-228.
14. FASB (1993), “Accounting for certain investments in debt and equity securities”, SFAS No. 115, superseded, Financial Accounting Standards Board, Norwalk, CT, May.
15. FASB (2003), “Participants' accounting for emissions allowances under a “cap and trade” program”, Emerging Issues Task Force No. 03-14, November, Financial Accounting Standards Board, Norwalk, CT, removed from agenda, December.
16. FASB (2007), “Minutes of February 21, 2007 board meeting: emission allowances”, Financial Accounting Standards Board, Norwalk, CT, February 23.
17. FASB (2008), “Minutes of October 21, 2008 board meeting: emissions trading schemes”, Financial Accounting Standards Board, Norwalk, CT, October 24.
18. FASB (2010), “Project update: emissions trading schemes”, Financial Accounting Standards Board, Norwalk, CT, November 19.
19. FERC (1993), “Uniform system of accounts”, Order No. 522, Federal Energy Regulatory Commission, Washington, DC, March 31.
20. Fornaro, J., Winkleman, K. and Glodstein, D. (2009), “Accounting for emissions”, Journal of Accountancy, Vol. 208 No. 1, pp. 40-45.
21. Francis, J., LaFond, R., Ohlsson, P. and Schipper, K. (2005), “The market pricing of accruals quality”, Journal of Accounting and Economics, Vol. 39 No. 2, pp. 295-327.
22. Frankel, R. and Li, X. (2004), “Characteristics of a firm's information environment and the information asymmetry between insiders and outsiders”, Journal of Accounting and Economics, Vol. 37 No. 2, pp. 229-259.
23. Fredriksson, P. and Millimet, D. (2002), “Is there a ‘California effect’ in US environmental policymaking?”, Regional Science and Urban Economics, Vol. 32 No. 6, pp. 737-764.
24. Global Warming Solutions Act (2006), Assembly Bill 32, California Health and Safety Code, beginning at Section 38500, passed August 31.
25. Griffin, P., Lont, D. and Sun, Y. (2011), “The relevance to investors of greenhouse gas emission disclosures”, UC Davis Graduate School of Management Research Paper No. 01-11, available at: http://ssrn.com/abstract=1735555 (accessed May 7, 2012).
26. IAS (1998), “Provisions, contingent liabilities, and contingent assets”, International Accounting Standard No. 37, IASC Foundation, London.
27. IASB (2005), “IASB withdraws IFRIC interpretation on emission rights”, International Accounting Standards Board, IASC Foundation, London, July.
28. IASB (2010), “Emission trading schemes”, International Accounting Standards Board, IASC Foundation, London, February.
29. IETA (2007), “Trouble-entry accounting – revisited: uncertainty in accounting for the EU emissions trading scheme and certified emission reductions”, International Emissions Trading Association, Genève, May.
30. IFRIC (2004), “Emission rights”, International Financial Reporting Interpretations Committee No. 3 (IFRIC3), issued December 2004, withdrawn June 2005, International Financial Reporting Interpretations Committee, London.
31. Kahn, M. (1996), “New evidence on trends in vehicle emissions”, Rand Journal of Economics, Vol. 27 No. 1, pp. 183-196.
32. Kothari, S. (2001), “Capital market research in accounting”, Journal of Accounting and Economics, Vol. 31 Nos 1-3, pp. 105-231.
33. Margolis, J. and Walsh, J. (2003), “Misery loves companies: rethinking social initiatives by business”, Administrative Science Quarterly, Vol. 48 No. 2, pp. 268-305.
34. Monast, J., Anda, J. and Profeta, T. (2009), “U.S. carbon market design: regulating emissions allowances as financial instruments”, Working Paper No. CCPP 09-01, Duke University, Durham, NC, February.
35. Neter, J. and Wasserman, W. (1990), Applied Linear Statistical Models, 3rd ed., Richard D. Irwin, Homewood, IL.
36. Pace Energy Climate Center (2011), Policy Brief: Analysis of Surplus Emission Allowances in the Regional Greenhouse Gas Initiative (RGGI) and State Control of the Surplus, Pace Energy Climate Center, White Plains, NY, December 30.
37. Raiborn, C. and Massoud, M. (2010), “Emissions allowances: accounting and public policy issues”, Accounting and the Public Interest, Vol. 10, pp. 106-121.
38. SEC (2010), “Commission guidance regarding disclosure related to climate change”, Release Nos. 33-9106, 34-61469, Securities and Exchange Commission, Washington, DC, February 2.
39. Vogel, D. (1997), “Trading up and governing across: transnational governance and environmental protection”, Journal of European Public Policy, Vol. 4 No. 4, pp. 556-571.
40. Zhang, F. (2006), “Information uncertainty and stock return”, The Journal of Finance, Vol. 61 No. 1, pp. 105-136.