Placing a Financial Value on the Natural Environment - Essay Example

Placing a financial value on the natural environment Introduction Despite the several critical arguments bashing the UK government for placing financial value on the natural environment, the move is one strategic and effective way of mitigating some of the most prevalent environmental degradation issues thereby making environmental management easier. The contemporary society faces several environmental degradation issues some of which only become evident with the climate change arising from global warming. The developed countries including the United Kingdom are among the leading emitters of carbon monoxide and carbon dioxide among other harmful gases that deplete the ozone layer thus resulting in global warming (Karen & Ricardo, 2012). Additionally, the desire for improved infrastructure makes it possible for government agencies and the private sector to overlook the natural environment. Placing a financial value on the natural environment thus makes it possible for the government to maintain high-level accountability thus monitoring changes and implementing appropriate policies in curbing the effects of environmental degradation. Emission of carbon dioxide gases and the diminishing forest cover in countries globally is a vital social issue that governments all over the world strive to address. Pacing financial value on the natural environment thus makes it possible for the government to account for the activities of every individual and determine an appropriate way of compensating especially for people who emit carbon but cannot take social responsibility (Glasson, Therivel & Chadwick, 2005). The Canadian for example has implemented and efficient mechanism of taxing those emitting carbon. Through a tax regime entitled carbon tax, the Canadian government collects revenue it uses in improving the forest cover with the view of increasing conservation of the environment. Additionally, such costs act as incentives for entrepreneurs to use clean sources of energy such as bio fuels, the sun and wind among many others. By placing financial value on the natural environment, the implementation of such effective policies become more efficient and less exploitative since the government will monitor the activities of every emitter of carbon thereby charging appropriately. The approach adopted by the UK government promises more effectiveness owing to the governments attention to details associated with the placement of the financial value on the natural environment. Total enterprise value is a concept in accounting that helps entrepreneurs to determine the actual value of their entries. The concept evaluates the varying debt levels in companies; the UK government has adopted the same principle in evaluating the operation of companies and determining their effects on the natural environment thereby placing a commensurate value on the effects they have on the environment. Total enterprise value is an addition of the total capitalization, the interests bearing debts and preferred stock. Viewing the natural environment as an enterprise, the government easily monitors the actions of different interests groups thereby charging them as appropriate. Such a view increases the success rates of such initiatives as the carbon tax in case the UK government decides to adopt similar policies since they provide the government with a holistic view of the natural environment. By adopting the concept of natural capital, the government compels companies among other interest groups within the country to calculate the financial impact that their operations have on the natural environment. The government through state organs such as the Scottish Wildlife Trust work with other similar groups including the United Nations to monitor the progress the government is making in preserving the environment (Carroll & Turpin, 2009). Most private developers rehabilitate land and use such in setting up their companies. Such changes affect the natural resources since they interfere with the natural ecosystem. However, the government will now permit such entrepreneurs to operate only after paying for the disturbance they cause to the naturally existing ecosystem. The government later uses such revenue in rolling extensive social responsive initiatives elsewhere thereby possibly overcoming the effects of such new companies (Clark & Canter, 1997). The concept of natural resource makes it possible for the government to assess the impacts that companies have on the environment. Most of the developed countries including China and the United States had refused to reduce the amount of carbon dioxide they emit. The two largest emitters cited the difficulties of assessing companies in order to determine the impact that they have on the environment (Clark, 1994). Currently, the level of pollution in China has begun stifling economic growth as companies cannot contract foreign executives most of who cite the health implications of the high levels of pollution in the country. The UK government has learnt from the mistakes of such government thereby adopting a mechanism that will help regulate the activities of each company and making it possible or such companies to account for their activities. This way, it becomes possible to shut a company or to compel such companies to take initiatives that can overcome the pressure they pile on the environment (Ruddy & Hilty, 2008). Every citizen in the United Kingdom including those criticizing the move to place financial value to the natural environment is wary of the changing climate and the rising global warming. As the glaciers continue to melt, water levels rise in large water bodies thereby resulting in tsunamis (Edwards & Miller, 2001). The government had to take an initiative that would incorporate environmental accounting in the operation of companies in the country. Environmental accounting is a vial concept that entrepreneurs will begin considering before setting up a company in the country. The BP oil spillage for example was a major environmental catastrophe that did not only result in the death of humans but also destruction of natural habitats in the seas. Through environmental accounting, companies set aside an amount of capital to carry out clean ups and fines among many other costs. Several measures exist that entrepreneurs can use in order to avoid unnecessary pollution of the environment (Feld, 2013). Most entrepreneurs fail to consider the use of such technologies and efficient success of energy owing to the laxity portrayed by the government coupled with the fact that petroleum products are readily available (Rychlak & Case, 2010). However, by placing financial value on the natural environments, companies will begin considering such alternatives as using sun, wind and bio fuels among other clean sources of energy. Environmental accounting compels companies to consider the costs of the effects that their operations have on the natural environment. Through the accounting regime, companies will have to set aside money to carry out environmental clean ups, consider purchasing alternative technologies that do not pollute the environment and wastes management among many others (Great Britain, 2009). Previously, the government had laws the compelled companies to ensure that the environment was clean. However, the absence of a law to evaluate the implications of a company on the environments by considering every type of pollution resulted in the reckless operation of companies as they emitted poisonous gases into the environment. By placing financial value on the natural environment, the government increases its control of the environment thus improving accountability (Hanna, 2009). Wild life conservation is an equally fundamental aspect of environmental management. However, the government must have adequate funds to carry out extensive and effective conservation plans (Petts, 2006). Wild life and the natural environment is a resource that can generate adequate funds for conservations. As such, the government therefore will develop parks and animal sanctuaries in order to care for some of the endangered animals as it intensifies fight against poaching among other illegal activities that heighten human and animal conflicts. The need to preserve the endangered animals is vital in order to preserve the ecosystem. This requires the government to maintain the initial size of forests coverage. However, increased population has compelled humans to encroach animal habitats. An effective clean up in order to develop a society that considers all the animals and plants requires an effective policy a feature that validate the placement of financial value on the natural environment. The united nation considers four vital aspects of the natural environment including provisioning, regulating, cultural and supporting. Each of the four relies on the ability of the environment to sustain the growing demand for the same. In provisioning, trees provide timber while the water bodies provide fish. Such prove the natural environment as a key resource. Humans make money by trading such resources, this therefore validates the need to place financial value on natural environment in order to monitor the increase and decrease in the capacity of the resources. Without effective regulation, deforestation has claimed millions of acres of forest covers in Brazil, Canada and the Central African Republic among many other regions. The same is applicable in the measurement of the quantity of fish in lakes globally. In regulating, trees serve to clean up the air as they absorb carbon dioxide and release oxygen. The regulating function is vital but relies on the size of the forest cover, which should always be commensurate to the amount of carbon dioxide that a region emits. Unfortunately, most countries continue to emit more carbon monoxide among other harmful gases while their forest covers continue to diminish owing to deforestation and the lack of appropriate legislations to govern the two. The policy by the UK government thus provides for ways of ensuring that a balance between the two remains in order to develop a society that is conducive for the survival of both humans and other living things. In a summary, the management of the environment is a principle responsibility of humans. The environment must remain clean and accommodate every living creature. However, it becomes difficult to manage unquantifiable matter since it remains difficult to monitor its development. With the placement of financial value on the natural resource, it becomes possible to monitor the development of the natural environments thereby implementing appropriate policies to curb undesirable trends. In 2008, humans caused environmental damage amounting to six and a half trillion dollars. With an effective way of measuring such, it becomes impossible to observe such appalling trends. The UK government understands this; it has therefore adopted an appropriate policy that will attach financial value to the use of the natural resource thereby improving its accountability to the populace. References Carroll, B. & Turpin T. (2009). Environmental impact assessment handbook, 2nd ed. New York: Thomas Telford Ltd. Clark, R. & Canter, L. eds. (1997). Environmental Policy and NEPA: Past, Present and Future. Boca Raton, Florida: St. Lucie Press. Clark, T. W. (1994). Endangered Species Recovery: Finding the Lessons, Improving the Process. Washington, DC [u.a.: Island Press. Edwards, P. & Miller, C. A. (2001). Changing the atmosphere: expert knowledge and environmental governance. Cambridge, Mass: MIT Press, 2001. Print. Feld, B. (2013). Startup boards: Reinventing the board of directors to better support the entrepreneur. Hoboken, N.J: Wiley. Glasson, J; Therivel, R & Chadwick A. (2005). Introduction to Environmental Impact Assessment. London: Routledge. Great Britain. (2009). Pre-budget report 2008: Green fiscal policy in a recession : third report of session 2008-09 : report, together with formal minutes, oral, and written evidence. London: Stationery Office. Hanna, K. (2009). Environmental Impact Assessment: Practice and Participation, 2nd ed. Oxford: OUP. Karen, M. & Ricardo, P. (2012). Environmental and Energy Law, London, John Wiley & Sons, 2012. Print. Petts, J. (2006). (ed.), Handbook of Environmental Impact Assessment, Vols 1 & 2. Oxford, UK: Blackwell. Ruddy, T. F. & Hilty, L. M. (2008). "Impact assessment and policy learning in the European Commission". Environmental Impact Assessment Review 28 (2–3): 90. Rychlak, R. J. & Case, D. W. (2010). Environmental Law: Oceanas Legal Almanac Series. 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