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Accounting for greenhouse gas emissions in cities

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posted on 2022-03-28, 16:11 authored by Mia Parvez
Several social and environmental accounting (SEA) scholars have suggested that sustainability issues need to be explored at the regional or geographic boundary level as opposed to focusing on the legal form of corporations (Dumay et al., 2010; Gray, 20 10; Milne and Gray, 2007). One such regional level is that of a city as each city has its own geographic/regional boundary. In relation to the key sustainability issue of climate change, cities are responsible for a large share of anthropogenic greenhouse gas (GHG) emissions. Cities also have the ability and capacity to reduce GHG emissions via strategies and other actions. Policies and actions already being implemented at city level have the potential to reduce GH G emissions by 1 billion metric tons annually by 2030 (Ostrander and Oliveira, 2013). Measurement is vital for managing GHG emissions and disclosure is the critical step for public accountability. Extant accounting literature, however, is relatively silent about exploring the measurement and disclosure practices of GHG emissions at the city level. Prior studies have predominately examined the accounting and reporting of GHG emissions in the corporate sector (e.g., Andrew and Cortese, 2011a; Depoers et al., 2016; Kolk et al., 2008). These studies found that the quality of disclosure is poor and advocated mandatory reporting as well as calling for further GHG disclosure research. In responding to this call, this thesis ex amines the extent and quality of disclosures of GHG emissions and reduction activities at the city-level. This thesis consists of three empirical research papers. Paper 1 (Mia et al., 2019) investigates the quality of GHG emissions disclosures of 42 cities to the Carbon Disclosure Project (CDP) and compares them with the expectations of users. The expectation gap framework is used to examine GHG disclosure quality on the premise that quality disclosure is needed to meet user expectations, and the quality dis closure should be complete, consistent, timely, accurate, reliable and comparable. An expectation gap may arise because o f deficient performance, deficient standards and users' unreasonable expectations. Content analysis is conducted to analyse the expectation gap. Overall, the findings are that GHG emissions disclosures do not meet the expectations of users. In relation to performance, man y cities have excluded several GHGs from emissions inventory, used multiple protocols to calculate emissions inventory, reported old emissions data and applied emissions reduction tar gets to a limited number of emissions sources. In relation to standards, the CDP guidelines are flexible regarding what is reported by cities, what protocols cities are using and there i s no checking for accuracy and completeness. In relation to expectations, that there are several geophysical and technical factors making it impossible to have comparable information at the city level. These findings suggest there is scope for the CDP to improve and standardise its disclosure system, working in collaboration with cities and the C40 alliance. Cities should also focus on improving their performance by providing accurate, complete, reliable and timely information. Even with standardisation, however, city-level emissions comparison is no t possible. A useful disclosure is therefore likely to be the actions cities take to reduce emissions and the impact of those actions. By disclosing actions and their impact, cities can learn best practices from each other and improve emissions reductions. The central recommendation is therefore that CDP should be asking for more information at a project or activity level from cities. A key finding from Paper 1 is that the differences between cities mean that the disclosure of emissions reduction actions will be much more useful for public accountability and peer learning than disclosure of raw emission levels. Paper 2 (Mia, et al., 2018a) investigates this issue further by exploring the quality of city emissions reduction actions and targets disclosures via traditional channels as well as social media. Three research questions are addressed. First, what communication channels are used by world megacities to dis close their emissions reduction targets and actions? Second, are these targets and ac tions communicated consistently across different channels? Third, what is the quality of the actions disclosed in different channels? Accountability theory is used to explain disclosures on the basis that cities are accountable to different groups of stakeholders to disclose information about their emissions reduction targets and actions which they can do by different channels. Media richness theory is used to explain why alternative disclosure might be useful e specially for discharging accountability. Ten megacities are selected and their emissions reduction targets and actions are examined across different channels to identify the common disclosure channels. Document analysis is conducted to assess the consistency of disclosed targets and actions related information, and a scoring system is developed to evaluate the quality of the disclosed actions related information across different channels. The findings are that cities have taken various actions including energy efficiency programs to reduce emission s and used multiple disclosure channels including social media. Disclosed information related to emissions reduction targets is consistent, but information about emissions reduction action s is mostly inconsistent, inadequate and mainly narrative in form. Concerning social medi a, this study finds that despite having a large number of online followers, several cities do no t use social media to disclose emissions reduction actions. The implication of these findings is that city authorities should better exploit the power of social media to inform and educate about their actions to reduce emissions, because it offers engagements and dialogue with the citizens to improve transparency and accountability. Standard setters and sustainability auditors also need to consider multiple disclosure channels to ensure information is consistent across the different channels to improve the credibility of the disclosed information. Paper 3 (Mia, et al., 2018b) extends the works of Papers 1 and 2 by focusing on one emissions reduction action in detail: energy efficiency. This particular action was selected as part of the findings of Paper 2 were that many cities including Australian cities are taking energy efficiency measures to reduce GHG emissions. Energy efficiency measure can reduce more than one-third of GHG emissions in the most cost-effective way (Magill, 2014; IEA, 2014). A comprehensive disclosure of the energy efficiency measures can help investors, community and other stakeholders to evaluate the cost and assess the social, economic and environmental benefits associated with energy efficiency measures. Paper 3 therefore explores the calculative practices and public disclosure about energy efficiency measure s within Australia's largest cities. From an accountability perspective, it is argued that Australian cities need to provide information about their energy efficiency activities in detail to the community and other stakeholders either to legitimise their existence or to fulfill the stakeholders' need or to help in their decision-making process. In the absence of any disclosure guideline for actions, a disclosure index is developed to assess the energy efficiency measures and applied to the eight major Australian cities in the sample, for the years 2017 and 2 018 (until 15 October). Findings of this study suggest that while many Australian cities are undertaking energy efficiency activities, they fall short in providing information related to costs and impacts of their energy efficiency measures and actions. Such limited disclosure makes it difficult for stakeholders to assess cities' energy efficiency measures and activities. These findings imply that a standardised and mandatory reporting requirements in relation t o energy efficiency (and other emission reduction projects) would facilitate enhanced transparency and accountability. Collectively, this thesis contributes to an understanding of the accounting and public disclosure practices of GHG emissions and reduction activities at the regional level. Beyond GHG emission disclosure research, in relation to other sustainability issues such as biodiversity or water, this thesis highlights that even with standardisation disclosures may not be comparable at the city or local government level because of different regional characteristics. Important disclosures for cities and similar type of agencies are the act ions taken to reduce sustainability viii harms and the impact of those actions. By making such disclosures, cities and local government can learn best practices from each other, with the aim of achieving sustainability. Therefore, policymakers and standard setters (e.g., CDP, GRI) should be as king for more information at a project or activity level. Also, standardised guidelines and verification processes are needed for actions related information to help organisations to provide complete, accurate, consistent, reliable and more comprehensive information. In addition, auditors should review the digital platform while conducting assurance service for traditional annual reports and SEA reports so that information is consistent across different channels. Standards setters also should contemplate the potentiality and popularity of digital platform s as these new form of communication channels offer both immediacy and interactivity which may be highly relevant in designing, developing and deploying SEA reporting frameworks.


Table of Contents

Chapter 1: Introduction -- Chapter 2: Cities lead climate Change by mitigating GHG Emission -- Chapter 3: Literature review on social and environmental accounting research -- Chapter 4: Paper 1: greenhouse gas emissions disclosure by cities: the expectation gap -- Chapter 5: Paper 2: measuring for climate actions: a disclosure study of ten megacities -- Chapter 6: Paper 3: energy efficiency public disclosure of major Australian cities -- Chapter 7: Conclusion.


Theoretical thesis. Bibliography: pages 179-229

Awarding Institution

Macquarie University

Degree Type

Thesis PhD


PhD, Macquarie University, Macquarie Business School, Department of Accounting and Corporate Governance

Department, Centre or School

Department of Accounting and Corporate Governance

Year of Award


Principal Supervisor

James Guthrie

Additional Supervisor 1

James Hazelton


Copyright Mia Parvez 2019. Copyright disclaimer:




1 online resource (xii, 229 pages)

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