onomi on epts and erminolo ies 22.17
and communications between the various
departments/divisions of the business firm) and its
environmentAl Accounting
external operations (i.e., all its dealings with the The method of accounting which includes the
suppliers, customers, etc.). ecological and environmental damages done
by the economic activities in monetary terms.
e-commerce Integrated environment and economic (green)
accounting attempts at accounting for both
Method of buying and selling goods and services
socioeconomic performance and its environmental
over the Internet – a kind of direct marketing i.e.
without the help of any middle arrangement of effects and integrates environmental concerns into
sales. mainstream economic planning and policies. The
green GDP of an economy is measured by the same
method—experimented in Costa Rica, Mexico,
economies of scAle
Netherlands, Norway, and Papua New Guinea,
The long-run reduction in average/unit cost that among others. Indicative estimates suggest that
occurs as the scale of the firm’s output increases. conventionally measured GDP may exceed GDP
The opposite situation is known as diseconomies adjusted for natural resources depletion and
of scale. environmental degradation by a range between
1.5 per cent and 10 per cent.
economies of scope
The long-run reduction in average/unit cost that
environmentAl AuDit
occurs as the scope (diversification) of the firm’s Assessment of the environmental impact of a
activities increase. firm/public body through its activities. This is
done with an objective to reduce or eliminate the
eDgeworth box pollution aspect.
A concept for the purpose of analysing the
possible relationships between two individuals or environmentAl tAxes
countries. It is done using indifference curve. As against the Command and Control approach
The concept was developed by Francis Ysidro to managing environment, the Economic or
Edgeworth (1845–1926) who is also credited for Market Based Instruments (MBIs) approach
analytical tools of indifference curves and contract sends economic signals to the polluters to modify
curves. their behaviour. The MBIs used for environmental
taxes include pollution charges (emission/affluent
effective revenue Deficit & tax/pollution tax), marketable permits, deposit
refund system, input taxes/product charges,
[See Chapter 18, Public Finance in India]
differential tax rates, user administrative changes
and subsidies for pollution abatement, which may
engel’s lAw
be based on both price and quality. India has been
The law which says that people generally spend already collecting taxes on water and air via the
a smaller part of their budget on food as their Water Act and the Air Act. Due to its experience
income rises. The idea was suggested by Ernst India is among the chief participant in devising
Engel, a Russian statistician in 1857. the MBIs in the world.