Discuss the advantage and limitations of green accounting
Answers
Some Limitations:
Environmental accounting is potentially a very valuable tool in planning, public resource management, pollution control and policy analysis. Its main limitations are as follows:
1.
Valuation techniques for environmental goods and services are imperfect and shadow prices are only partial valuations. This applies to both deductive and interrogative techniques.
2.
Social values for environmental goods and services are uncertain and change very rapidly.
3.
Non-economic values are also important in political processes.
4.
Aggregation of individual preferences may not yield a meaningful net social preference.
5.
Economic values are marginal and incremental, not absolute and total
6.
Reliable industry data are not readily available.
7.
Assumptions underlying standard economic theory and analytical models are often not met.
(unable to answer advantages.)