Accounting: the expanded

TABLE 5.8: Comparison of ENERGY STAR and Non-ENERGY STAR

		ENERGY STAR				Non- ENERGY STAR
	Number required	Initial cost	Maintenance (yearly)	Energy use	Initial cost		Maintenance (yearly)	Energy use
Exit signs Compact fluorescent lights	573 (3 per floor) 4584 (24 per floor)	$75 each $15 each	$0 $0	44 kWh 42 kWh	$45 each $0.50 each		$10 $10	193 kWh 146 kWh

Energy savings are not the only impact of using these energy-efficient devices. There is also an impact on the creation of carbon dioxide gases, the production of which is linked to global warming. By choosing to use the ENERGY STAR rated devices in these two examples, CO₂ emissions are reduced by almost 2,000 tonnes for 10 years. This impact is also shown in the Expanded Value Added Statement using a shadow price of
$45.79/tonne of CO₂, based on the estimated cost of an international emission-trading permit (Wigle, 2001). This is only one method of assigning a cost (and fairly conservative), but allows it to be included in the statement.³⁰ With these two items alone, exit signs and compact fluorescent lights, this would result in a value to society of almost
$90,000 over the ten years.

Whereas in a traditional Value Added Statement the impact of purchasing energy efficient devices would not be shown, the Expanded Value Added Statement highlights

³⁰ Estimates go as high as $835 US (1992) per tonne (Wigle, 2001).
the social and environmental impacts of purchases of external goods and services. In this case, the additional value added created is distributed to customers: to condominium owners in the form of lower condominium fees and to renters in the form of lower rents. These future savings can be thought of as self-created intangible assets and carried at cost on the balance sheet, and amortized over the useful life of the device. With major advances made in the last 15 years in the energy use of appliances, and the increasing importance of addressing the use of non-renewable energy sources and their impact on global warming, the Expanded Value Added Statement can make visible the ‘secondary costs’ of these items, especially if the initial cost of energy-efficient devices is higher than less energy-efficient ones.