CHAPTER ONE INTRODUCTION 1.0 BACKGROUND OF THE STUDY

The historical development of Accounting attests to the fact that Accounting is a product of its commercial environment and rooted in capitalist ideology. Accounting has scarcely dropped the vestiges of pacioli’s commercial capitalist era. This disposition of accounting has meant that it destroys its habitat within the ecosystem to the extent that a wide rift now exists between accounting and its natural environment. In the recent times there has been increased hue and cry about climate change in the world, as it has been highly inimical to our existence; ocean levels keep rising, global warming keeps threatening; yet, natural resources like the forest, serving as natural processor that regulates an appealing atmosphere is being cut down, and the capacity of trees which removes carbon dioxide from the earth is being diminished. According to Uwaegbulam (2011), major parties have been at loggerheads for years and warning as climate disasters are becoming direr. Recently, there has been an increased awareness of the interaction between firms and environment in which they operate, this enlightenment has been sharpened by concerns about resources depletion, resources scarcity, environmental degradation and the activities of these firms that lead to the depletion of the ozone layer and thereby causing an imbalance in the environmental system.The native American Iroquois confederacy has a tenet it mandates its chiefs to follow, one to which people today are now paying attention to; It simply states that a chief must consider how each of his actions will affect his descendants seven generations into the future. At present the goals of this design are being sort after by the United and are implied by governments. To Zimmerman (2008), the UNEP is the tool of the UN in encouraging sustainable development—increasing standards of living without destroying the environment.

Thus, the increasing concern about environmental degradation, resources depletion and the sustainability of economic activity have made the development of Environmental accounting an area of significant interest in Nigeria.

  1.1     STATEMENT OF THE PROBLEM

Most environmental degradations and emissions are anthropogenic, an advent traceable to the industrial revolution of late 18th century where economic activities in many communities moved from agriculture to manufacturing.Production shifted from its traditional locations in the home and the small workshop to factories. The overallamount of goods and services produced expanded dramatically. New groups of investors, businesspeople, and managers took financial risks and reaped great rewards.

In the long run the industrial revolution has brought economic improvement for most people in industrialized societies. Many enjoy greater prosperity and improved health. There have been costs, however. Industrialization has brought factory pollutants and greater land use, which have harmed the natural environment (Mastrandrea and Schneider, 2008). In particular, the application of machinery and science to agriculture has led to greater land use and, therefore, extensive loss of habitat for animals and plants. These factors, in turn, have caused many species to become extinct or endangered.

Indeed, the use of natural resources including energy is indispensable to economic development, (Akinbamiand Adegbulugbe, 1998), and not devoid of environmental consequences as traceable to the environmental degradation and atmospheric pollution experienced in Nigeria. Yet, Nigeria as a developing country must continue to advance economically and this requires increased exploitation of natural resources. Evidentially, there exist a polarity between Nigeria’s GDP and energy consumption, as they are highly correlated. But the exposure here is that, most of the natural resources consumed are non-renewable and are under threat of depletion, and a persistence consumption of our most valued natural resources in present-day, would compromise the ability of futuregenerations to meet their own needs.

Ban (2007), in his address at the release of the Intergovernmental Panel on Climate Change (IPCC) Fourth Assessment Synthesis Report, said that “slowing and reversing these threats posed by climate change are the defining challenge of our age”. The primary way companies can contribute to solutions is to reduce carbon dioxide and other greenhouse gas emissions in their own operations and supply chains. Consequently, corporate climate reporting on carbon emissions has become a major focus, as disclosure prompts corporate responsibility – in this instance, GHG emissions reduction.

There are positive indicators of environment accounting practices in companies and business organizations in developing countries, yet the practice of environment accounting is not serious enough, as there are no specialized activities in companies or factories to apply it, nor is there planning or research to specially target and define the consumers, public, or owners’ needs. Rather, the practice is carried out in an improvised and random manner.

Accounting technology which is expected to keep up with societal demands and proffer solution to socio-economic and environmental challenges is advocating environmental accounting: a panacea for sustainable development, as this research would underscore.

1.2     OBJECTIVES OF THE STUDY

To sufficiently, address the questions raised in the statement of problem, the following research objectives are pursued, namely:

1.       To critically evaluate how environmental accounting affects sustainable development in Nigeria.

2.       To assess if environmental accounting prompt compliance with societal expectations of the environment and the consequences to non-compliance.

1.3     RESEARCH QUESTIONS

The study will provide answer to the following research        questions:

1.       Will environmental accounting accentuate sustainable development in Nigeria?

2.       Will environmental accounting prompt compliance with societal expectations ofthe environment and are there consequences to non-compliance?

1.4     RESEARCH HYPOTHESES

The associated hypotheses for this study include:

H01: There is no significant relationship between         environmental      accounting and sustainable development in Nigeria.

H02: Environmental accounting does not prompt compliance  with   societal expectations of the environment and                             there are no consequences to   non-compliance.

1.5     SIGNIFICANCE OF THE STUDY

The investigations of this study will be of great benefit          amongst;

1.       Corporate organizations: to adequately provide for environmental protection in their internal policies on investments and projects which impact on the environment. This will facilitate protection of the eco-efficiency and competitiveness among corporations in all productive sectors of the economy.

2.       Investors and environmental regulatory bodies: The study will facilitate environmental cost reporting responsiveness and disclosure to investors and environmental regulatory bodies. It will also assist in efficient cost valuation of environmental remediation and compensation to affected communities in Nigeria by corporate bodies impacting on the environment.

3.       Government: The study should stimulate national policies and programmes for the effective transfer, access and development of environmentally sound technologies in line with Kyoto Protocol requirement in Article 10 and also specified in Article 4, par.1 (c) of the United Nations Framework on Climatic Change (1992). The study is relevant to the government for improved System of National Accounts (SNA) for National Income computations considering environmental renewable and non-renewable natural resources.

4.       Researchers: It will further enhance research in environmental accounting. Ultimately, environmental accounting disclosure is paramount in corporate organizations in Nigeria and elsewhere as it has become an issue of concern at the global level.

1.6     SCOPE OF THE STUDY

Environmental accounting is an important tool for understanding the role played by the Natural environment in the economy.  The extent of this study was limited to environmental accounting as it concerns sustainable development in Nigeria and societal expectations of environmental accounting compliance.

1.7     OPERATIONAL DEFINITIONS OF TERMS

1.       Climate change: Refers to a statistically defined change in the average and/or variability of the climate system, this includes the atmosphere, the water cycle, the land surface, ice and the living components of Earth.

2.       Environment: Refers to the sum total of all surroundings of a living organism, including natural forces and other living things, which provide conditions for development and growth as well as of danger and damage.

3.       Environmental Accounting: is a subset of accounting proper, its target being to incorporate both economic and environmental information. Environmental accounting is a field that identifies resource use, measures and communicates costs of a company’s or national economic impact on the environment.

4.       Environmental degradation: is the deterioration of the environment through depletion of resources such as air, water and soil; the destruction of ecosystems; habitat destruction; the extinction of wildlife; and pollution.

5.       Environmental system: Is a system where life interacts with the various abiotic components found in the atmosphere, hydrosphere, and lithosphere. Environmental systems also involve the capture, movement, storage, and use of energy.

6.       Green House Gases (GHG): Is a gas that absorbs infrared radiation (IR) and radiates heat in all directions. Common examples of greenhouse gases include: carbon dioxide (CO2), methane (CH4), nitrous oxide (N20), hydro- and per fluorocarbons (HFCs, PFCs) and sulphur hexafluoride (SF6) emissions from fuel combustion, process reactions and treatment processes.

7.       Ozone Layer Depletion: Is simply the wearing out (reduction) of the amount of ozone in the stratosphere.

8.       Pollution: The presence in or introduction into the environment of a substance which has harmful or poisonous effects.

9.       Sustainable Development: Is a design involving a social, economic and environment that meets the needs of the present without compromising the ability of future generations to meet their own needs.