The Research On The Accounting Of Chinese Enterprises’ Trading Of Carbon Emissions Rights

With the rapid development of social economy, human demands for natural resources are more and more, which lead to global greenhouse gas emissions continuing to increase, resulting in global warming becoming more and more serious. Therefore, most countries have reached a consensus:every country must reduce greenhouse gas emissions, in order to reduce the adverse effects of global warming on people’s life. In 1992, Intergovernmental Panel on Climate Change (IPCC) passed by an international convention "United Nations Framework Convention on Climate Change" (UNFCCC), which arranged the mandatory task of carbon emission reduction for the developed countries. The Convention supplies a basic framework agreement of international social cooperation in dealing with global warming. At present, more than 190 countries around the world have passed thro ugh the Convention. In December 1997, IPCC passed by Kyoto Protocol, which was a supplementary provision of UNFCCC. Kyoto Protocol identified three cooperated trading mechanisms to achieve emission reduction, which are International Emissions Trading Mechanism (IET), Joint Implementation Mechanism (JI)and Clean Development Mechanism (CDM). That provides operable cooperation mechanisms for the related countries to complete operational carbon emission reduction task. Therefore, the greenhouse gas emissions have become a scarce commodity, which can be freely traded and disposed in the trading market, and the trading of the carbon emissions rights has become an important means of reducing greenhouse gas emissions.Under the framework agreement of UNFCCC, although China has not been assigned carbon reduction mandatory task, as the big country of carbon emissions, China also has a great obligation to carry out carbon emission reduction work. At present, China has set up the carbon emission reduction task over the next few years, namely "to 2020, carbon dioxide emissions per unit of GDP than in 2005 fell by 40%-45%". From 2008, China has set up pilot institutions related to the trading of the carbon emissions rights in Beijing, Shanghai, Shenzhen, Tianjin and other areas constantly. Visibly, China attaches great importance to carry out carbon emission reduction work. With the gradual expansion of carbon emission trading market, China is actively developing CDM projects. And now China has become a CDM project supply country, which puts forward certain requirements to the development of the accounting theory of our country’s trading of the carbon emssions rights. And because of the economic benefit and social benefit effect the trading of the carbon emissions rights influences on enterprises, it is necessary for our country to research on the accounting treatment of the enterprises’ trading of the carbon emissions rights.This paper uses the method of inductive method, exploring the construction of theoretical accounting system of the trading of the carbon emissions rights through the summary and analysis of the existing accounting research literature focused on the carbon emissions trading. The paper may have the following innovations:Firstly, through the literature review, this paper finds that in the accounting confirmation of carbon emissions, domestic and foreign scholars agree that carbon emissions rights should be recognized as assets, but the specific classes of assets remain controversial According to the different types of carbon emissions trading market, this article argues that we should analyze in two kinds of situation. Initially, the enterprise should identify carbon emissions rights under the quotas of the total amount and transaction mechanism as "intangible assets", and identify carbon emissions rights under the baseline and credit mechanism as "available for sale financial assets". Then the enterprise should take a different accounting approach according to the different forms of mechanismSecondly, in the accounting measurement of carbon emissions rights, this paper argues that the enterprise shall adopt the double measurement model, which is the coexistence of historical cost and fair value measurement model. If the procurement costs of carbon emissions rights can be obtained reliably, such as, the carbon emissions rights come from the purchase of the trading market, the enterprise should adopt historical cost accounting measurement. If the carbon emissions rights come from the non-purchasing methods, for example, from the government distribution for free, or they are certified emission reductions (CERs) through the CDM project, and the carbon emissions rights have the reliable fair value, we should adopt the fair value accounting measurement. Then in the subsequent measurement of carbon emissions rights, the enterprise shall all adopt the fair value measurement model.Thirdly, in the disclosure of accounting information, we argue that enterprises should adopt the combination of disclosure in and out of the financial statements, to expose the relevant accounting information of the trading of the carbon emissions rights. Only in this way can enterprises provide more comprehensive and reliable accounting information about the trading of the carbon emissions rights for the information users.Finally, the paper puts forward several suggestions on how to implement the accounting of the trading of the carbon emissions rights in China, such as establishing and improving the carbon emissions trading market mechanism, formulating carbon accounting standards and enterprise carbon accounting system, strengthening the supervision of the government department and the social audit institutions and so on. That has a certain reference value for the development of China’s trading accounting of the carbon emissions rights.