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Examining distinct carbon cost structures and climate change abatement strategies in CO2 polluting firms

26.05.2017Comments are closed.


Climate change,
carbon intensity,
carbon efficiency,
cost drivers,


  • Simon Čadež (University of Ljubljana),
  • Chris Guilding (Griffith University)



A management accounting perspective that underscores a quest for reducing conventionally appraised costs, negative output costs as well as heightened eco-efficiency, has been used in pursuit of the study’s two main study objectives. Firstly, the study seeks to further understanding of the relationship between product output volume, carbon costs, and CO2 emission volume in carbon intensive firms. Secondly, it identifies factors affecting climate change abatement strategies pursued by these firms. Heightening appreciation of the climate change challenge, combined with minimal CO2 emission research undertaken from a cost management perspective, underscores the significance of the study.


A triangulation of quantitative and qualitative data collected from Slovenian firms that operate in the European Union Emissions Trading Scheme has been deployed.


CO2 polluting firms exhibit differing carbon cost structures that result from distinctive drivers of carbon consumption (product output vs capacity level). Climate change abatement strategies also differ across carbon intensive sectors (energy, manufacturing firms transforming non-fossil carbon-based materials, other manufacturing firms) but are relatively homogeneous within them.

Practical implications

From a managerial perspective, the study demonstrates that carbon efficiency improvements are generally not effective in triggering corporate CO2 emission reduction when firms pursue a growth strategy.


The paper has high originality as it reports one of the first management accounting studies to explore the distinction between combustion and process related CO2 emissions. In addition, it provides distinctive support for the view that eco-efficiency is more consistent with the economic than the environmental pillar of sustainability.


Accounting, Auditing, and Accountability Journal, 2017


JCR 16/94, AJG 3


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