Acta academica karviniensia 2020, 20(1):5-17 | DOI: 10.25142/aak.2020.001

EMISSION ALLOWANCES – RECOGNITION AND THE FUTURE

Hana Březinová, David Trytko

Private College of Economic Studies Znojmo, s.r.o., Loucká 656/21, 669 02 Znojmo

Emission of the greenhouse gases has a significant impact on the environment of the whole planet. Innumerable international plenary sessions have agreed only on partial solutions. The signatory countries came up with the instrument which should improve the air quality- the emission allowances. The politicians and environmentalists involved in the Kyoto Protocol and subsequent Paris Agreement have negotiated emission reductions. Achievement of this goal is established for years 2005 - 2030. 43 % of current greenhouse gas emissions should be reduced. Each allowance represents the right to emit one tonne of carbon dioxide (CO₂) or the equivalent amount of two more powerful greenhouse gases, nitrous oxide (N₂O) and perfluorocarbons (PFCs). Allowances are distributed among individual countries, which allocate them free of charge to plants, factories and other fixed installations. These emission allowances can be the subject of trade between these operators. All these facts result in questions related to the accounting methods. How many allowances are needed? Should they be recognised as an asset? Is their price regulation necessary? Can emission allowances reduce greenhouse gases or are government subsidies and compensations - alternatively carbon taxes - more suitable for this purpose? Is the business environment more or less destroyed? The goal of this article is to contribute by critical discussion to easier, fair and true recognition of emission allowances.

Keywords: emission allowance, intangible asset, Kyoto Protocol, Paris Agreement, right.

JEL classification: E20, E22, F64, F65, G12, H25, M41

Received: September 14, 2020; Revised: October 16, 2020; Accepted: December 16, 2020; Published: December 17, 2020  Show citation