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Decarbonization and the obstacles to carbon credit accounting disclosure in financial statement reports: the case of UAE

Lilian Gheyathaldin Salih

Asian Journal of Accounting Research, 2024, vol. 9, issue 2, 169-180

Abstract: Purpose - This study investigated the visibility of carbon emissions allowances accounting in the financial reports of 32 clean development mechanism (CDM) projects in the UAE to uncover the obstacles to setting consistent standards for carbon emission accounting. As carbon emissions are monetized as credits, consistent accounting standards can aid decision-makers in the development of carbon emission mitigation strategies. Design/methodology/approach - This study used a grounded theoretical framework for exploring the terms used in the policy documents of international accounting bodies regarding accounting standards and guidelines for carbon emission credits. Raw qualitative data were gathered, and an inductive approach was used by analyzing documents from various sources using the qualitative data text analysis software QDA Miner 6. Findings - The findings showed that the financial statement reports of the corporations did not include disclosure of the carbon credit account. This omission was due to the lack of global standardization of carbon credit accounts and emission allowance recognition. This may hinder the production of a comprehensive report containing accurate and valuable financial information relevant to all stakeholders. Originality/value - The study is among the first to use a grounded theoretical framework to investigate whether corporations are applying common standards and guidelines for carbon emissions accounting.

Keywords: Carbon accounting; Carbon credit; Emission allowances; Clean development mechanism; Qualitative data analysis; UAE (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ajarpp:ajar-04-2023-0128

DOI: 10.1108/AJAR-04-2023-0128

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