ABSTRACT
This chapter illustrates the candidate approaches to performing external environmental cost accounting as an adjunct to environmental accounting. It shows that conducting external environmental cost accounting is a valuable adjunct to the environmental accounting process. While the manager may not yet know the final status of the idea of 'beyond-compliance' environmental performance, incorporating external costs in managerial decision-making may be a wise course of action and is most certainly an achievable one. External environmental costs, when assumed voluntarily by the firm, move the firm 'beyond environmental compliance'. The paper mill's managers are making a forecast of the regulatory future by defining option costs 'given some policy change'. Managers frequently examine myriad contingent situations in order to verify that an investment choice offers returns under a variety of sales levels, market conditions and production levels.
