TY - JOUR
T1 - Fossil fuel reserves and resources reporting and unburnable carbon
T2 - Investigating conflicting accounts
AU - Bebbington, Jan
AU - Schneider, Thomas
AU - Stevenson, Lorna
AU - Fordyce, Alison
N1 - Funding Information:
The authors would like to thank the Association of Chartered Certified Accountants and the Carbon Tracker for sponsoring aspects of this work. Thanks are also due to Nicola Brown for undertaking report analysis and Ling Wang for analysis of company reports in Chinese. Thanks are also due to Sonia Khao, Rachel Jackson, James Leaton, Kyle Stevens-Cox and the interviewees who gave freely of their time for this project. Comments and questions from participants at workshops and conferences where earlier versions of this paper were presented and the most helpful conversations with Vivien Beattie, Robert Charnock, Mary Canning, Delphine Gibassier, Martina Lunnenlueck, and Bert Scholtens are also acknowledged as are the comments of journal reviewers of the paper and Markus Milne's valuable input.
Publisher Copyright:
© 2019 The Authors
PY - 2020/1
Y1 - 2020/1
N2 - This paper investigates fossil fuel reserves and resources disclosures and how they might change in response to global climate change agreements that seek to limit greenhouse gas emissions. On the one hand, it might be expected that fossil fuel firms will be less valuable if their reserves become ‘unburnable’. On the other hand, capital markets currently assign a positive value to fossil fuel reserves and resources. A conundrum, therefore, exists. Given that accounting disclosure rules underpin capital market valuation processes, this setting provides an opportunity to interrogate the functionality of accounting during a time of change. To achieve this goal, a multi-methods investigation has been undertaken; combining a survey of accounting disclosure rules for reserves, identification of accounting disclosures made by fuel firms in several country stock markets, and stock market participants’ views on the extent to which unburnable carbon exists. Using Miller and Power (2013) we identify when and how unburnable carbon could be recognized in corporate reporting.
AB - This paper investigates fossil fuel reserves and resources disclosures and how they might change in response to global climate change agreements that seek to limit greenhouse gas emissions. On the one hand, it might be expected that fossil fuel firms will be less valuable if their reserves become ‘unburnable’. On the other hand, capital markets currently assign a positive value to fossil fuel reserves and resources. A conundrum, therefore, exists. Given that accounting disclosure rules underpin capital market valuation processes, this setting provides an opportunity to interrogate the functionality of accounting during a time of change. To achieve this goal, a multi-methods investigation has been undertaken; combining a survey of accounting disclosure rules for reserves, identification of accounting disclosures made by fuel firms in several country stock markets, and stock market participants’ views on the extent to which unburnable carbon exists. Using Miller and Power (2013) we identify when and how unburnable carbon could be recognized in corporate reporting.
KW - Accounting regulation
KW - Global climate change
KW - Stranded assets
KW - Unburnable carbon
UR - http://www.scopus.com/inward/record.url?scp=85065017205&partnerID=8YFLogxK
U2 - 10.1016/j.cpa.2019.04.004
DO - 10.1016/j.cpa.2019.04.004
M3 - Article
AN - SCOPUS:85065017205
SN - 1045-2354
VL - 66
JO - Critical Perspectives on Accounting
JF - Critical Perspectives on Accounting
M1 - 102083
ER -
