Prospects for Environmental Management Accounting in the Age of Decarbonization: Focusing on Internal Carbon Pricing

In recent years, many companies have positioned efforts to decarbonize as a central issue in their environmental strategies. On the other hand, environmental management accounting has so far provided little effective consideration of the information and measures that support the realization of such strategies. Internal carbon pricing (ICP) has the potential to be one of the few management accounting methods that can directly address the above challenges. This study focuses on the importance of ICP as a new challenging issue in environmental management accounting that contributes to decarbonization management and examines the implications of using it and how to set it up. This work examines internal carbon pricing as a mechanism to encourage greenhouse gas (GHG) emission reductions within the framework of management accounting in order to evaluate the direction of the development of environmental management accounting in the decarbonization era. The paper explores the functioning of internal carbon accounting schemes and their impacts through the case of Microsoft Corporation and evaluates the influence on investment decisions of ICPs, which have gained attention in recent years as a tool to encourage GHG reductions. Additionally, the configuration and integration of ICP with management systems such as budgeting are studied. The study demonstrates that ICP provides a new path for environmental management accounting in the age of decarbonization based on these factors.