Chapter 16 Environmental Cost

8/15/2019 Chapter 16 Environmental Cost

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Environmental Costs:Environmental Costs:Measurement and ControlMeasurement and Control

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Ecoefficiency essentiallymaintains that organizations

can produce more usefulgoods and services whilesimultaneously reducingnegative environmental

impacts, resourceconsumption, and costs.

Defning, Measuring, and ControllingDefning, Measuring, and ControllingEnvironmental CostsEnvironmental Costs

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The Ecoe ciency Paradigm The Ecoe ciency Paradigm

The Ecoe ciency Paradigm The Ecoe ciency Paradigm

(1) Reduce the consumption ofesou ces

(!) Reduce the en"i onmenta# impact

($) Inc ease p oduct "a#ue

(%) Reduce en"i onmenta# #ia&i#it'


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coefficienc' Re#ationshipscoefficienc' Re#ationships

coefficienc' Re#ationshipscoefficienc' Re#ationships


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continued


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Ecoe ciency RelationshipsEcoe ciency Relationships

Ecoe ciency RelationshipsEcoe ciency Relationships


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continued


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Environmental costs are costs that are incurred!ecause poor environmental "uality e#ists or maye#ist.


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$nvironmental costscan !e classified infour categories%prevention costs,detection costs,

internal failure costs,and e#ternal failurecosts.


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Classifcation o Environmental Costs y !ctivityClassifcation o Environmental Costs y !ctivityClassifcation o Environmental Costs y !ctivityClassifcation o Environmental Costs y !ctivity


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Prevention Activities

"a#uating and se#ecting supp#ie s"a#uating and se#ecting po##ution

cont o# e uipmentDesigning p ocessesDesigning p oductsCa 'ing out en"i onmenta# studiesAuditing en"i onmenta# is*sDe"e#oping en"i onmenta# management s'stemsRec'c#ing p oductsO&taining I+O 1%,,1 ce tification


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Detection Activities

Auditing en"i onmenta# acti"itiesInspecting p oducts and p ocesses

De"e#oping en"i onmenta# pe fo mance measu esTesting fo contamination-e if'ing supp#ie en"i onmenta# pe fo manceMeasu ing contamination #e"e#s


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Internal Failure Activities

Ope ating po##ution cont o# e uipmentT eating and disposing of to.ic /aste

Maintaining po##ution e uipmentLicensing faci#ities fo p oducingcontaminantsRec'c#ing sc ap


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External Failure Activities

C#eaning up a po##uted #a*eC#eaning up oi# spi##s

C#eaning up contaminated soi#+ett#ing pe sona# in0u ' c#aims(en"i onmenta##' e#ated)Resto ing #and to natu a# stateLosing sa#es due to poo en"i onmenta#eputation

continued


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External Failure Activities

Recei"ing medica# ca e due to po##uted ai

Losing emp#o'ment &ecause of contaminationLosing a #a*e fo ec eationa# useDamaging ecos'stems f om so#id /aste disposa#

+ocieta#costs


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Environmental Cost ReportEnvironmental Cost ReportEnvironmental Cost ReportEnvironmental Cost Report


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Relative Distri ution: Environmental CostsRelative Distri ution: Environmental CostsRelative Distri ution: Environmental CostsRelative Distri ution: Environmental Costs


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Environmental "inancial #tatementEnvironmental "inancial #tatementEnvironmental "inancial #tatementEnvironmental "inancial #tatement


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continued


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Environmental "inancial #tatementEnvironmental "inancial #tatementEnvironmental "inancial #tatementEnvironmental "inancial #tatement


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Unit-Based Environmental Cost Assignments—

$nvironmental costs are separated into a costpool

)osts are assigned to individual products usingunit-level drivers

*est for a homogeneous product setting

Environmental CostingEnvironmental Costing 2


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Life cycle assessment identifies the environmentalconsequences of a productthrough its entire life cycle andthen searches foropportunities to obtainenvironmental improvements.

%i e&Cycle Cost !ssessment%i e&Cycle Cost !ssessment 3


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16-Cont o##ed &' Custome

Disposa#Rec'c#ingoduct Use

andMaintenance

ac*aging

Cont o##ed &' +upp#ie

Cont o##ed &'Manufactu e

oduction

Product&%i eProduct&%i eCycle #tagesCycle #tagesProduct&%i eProduct&%i e

Cycle #tagesCycle #tages

Ra/Mate ia#s



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Assessment Stages(1) Inventory analysis

(2) Impact analysis

(3) Improvement analysis



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Inventory analysis specifies the types and"uantities of materialsand energy inputsneeded and theresulting environmentalreleases in the form ofsolid, li"uid, and

gaseous residues.



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'nventory !nalysis'nventory !nalysis'nventory !nalysis'nventory !nalysis


continued


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'nventory !nalysis'nventory !nalysis'nventory !nalysis'nventory !nalysis



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Impact analysis assesses the

environmental effects ofcompeting designs andprovides a relativeran+ing of those effects.



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Cost assessment determines the financial

conse"uences of theenvironmental impactsidentified in the inventoryand improvement stepsof life-cycle assessment.



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Improvement analysis hasthe o! ective of reducing theenvironmental impactsrevealed !y the inventoryand impact steps.



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ive core o! ectives for the environmentalperspectives%

1) Minimize hazardous materials2) Minimize raw or virgin materials

3) Minimize energy requirements4) Minimize the release of residues) Ma!imize opportunities to recycle

4#trategic&$ased Environmental#trategic&$ased EnvironmentalResponsi ility !ccountingResponsi ility !ccounting


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( )ectives and Measures: Environmental Perspective( )ectives and Measures: Environmental Perspective( )ectives and Measures: Environmental Perspective( )ectives and Measures: Environmental Perspective



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*on&+alue&!dded Cost Trends: Environmental Costs*on&+alue&!dded Cost Trends: Environmental Costs*on&+alue&!dded Cost Trends: Environmental Costs*on&+alue&!dded Cost Trends: Environmental Costs


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Environmental Cost Trend raphEnvironmental Cost Trend raphEnvironmental Cost Trend raphEnvironmental Cost Trend raph


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16-!,,% !,,2 !,,3 !,,4

ounds emitted

C5C missions

$ar raph or Trend !nalysis$ar raph or Trend !nalysis$ar raph or Trend !nalysis$ar raph or Trend !nalysis


,

!,

%,

3,

6,

1,,


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-a.ardous /aste Management Pie Chart-a.ardous /aste Management Pie Chart-a.ardous /aste Management Pie Chart-a.ardous /aste Management Pie Chart



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End oEnd oChapter 01Chapter 01

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Chapter 16 Environmental Cost