Integrating information about the cost of carbon through activity-based costing

Wen Hsien Tsai, Yu Shan Shen, Pei Ling Lee, Hui Chiao Chen, Lopin Kuo, Chi Chou Huang

Research output: Contribution to journalArticlepeer-review

44 Scopus citations


Environmental protection has been an issue of serious concern for many years. It is not a trend, but the responsibility of corporations. This responsibility for environmental protection should be internalized into business operations - prior to production - in order to reflect the true cost of the final product. Due to the use of traditional cost accounting, many organizations have not estimated their environmental costs precisely. Therefore environmental accounting systems such as carbon management accounting, environmental management accounting and greenhouse-gas accounting have attracted worldwide attention. In this paper, we propose an integrated concept - the Activity-Based Costing approach - to solve the problem of environmental and cost evaluation. We include a case study of an existing pulp and paper company in Taiwan to show that the activity-based costing method estimates emissions of waste and the environmental costs of a final product more accurately than traditional approaches do. The method can, therefore, provide information for use in existing environmental accounting systems and help managers incorporate environmental costs into their decision-making processes.

Original languageEnglish
Pages (from-to)102-111
Number of pages10
JournalJournal of Cleaner Production
StatePublished - Nov 2012


  • Activity-Based Costing
  • Environmental cost
  • External costs of carbon emission


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