Investing Green Environmentally Friendly Capital

1241 WordsMay 3, 20155 Pages
Investing in green environmentally friendly capital has been increasing over the past several years as a result of increasing environmental awareness in consumers and more and more environmental regulations. More and more business operators are adopting green technologies to prevent pollution where it starts. The challenge the green manufacturing industry is facing is justifying the benefits of adopting green technologies to manufacturers because adopting green technologies has tangible and intangible benefits. Identifying these intangible benefits is the key aspect of making investment decisions in green technologies. Traditional costing systems do not identify intangible benefits so, activity-based costing can be used to analyze investments in green technology that will lead to the best decision. This research paper proposes and investment decision model for justification of adopting green technology using the activity-based costing system that will include not only the direct benefits of green technology but also the intangible benefits that are generated by the adopting green manufacturing technologies. Green manufacturing was defined as ‘a system that integrates product and process design issues with issues of manufacturing planning and control in such a manner as to identify, quantify, assess, and manage the flow of environmental waste with the goal of reducing and ultimately minimizing environmental impact while also trying to maximize resource efficiency’ (Tsai
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