Qantas and Its Marginal Abatement Cost Curve in the Context of Late Capitalism and Climate Change
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University of Wollongong Research Online University of Wollongong Thesis Collection 1954-2016 University of Wollongong Thesis Collections 2014 Qantas and its marginal abatement cost curve in the context of late capitalism and climate change Juergen Seufert University of Wollongong Follow this and additional works at: https://ro.uow.edu.au/theses University of Wollongong Copyright Warning You may print or download ONE copy of this document for the purpose of your own research or study. The University does not authorise you to copy, communicate or otherwise make available electronically to any other person any copyright material contained on this site. You are reminded of the following: This work is copyright. Apart from any use permitted under the Copyright Act 1968, no part of this work may be reproduced by any process, nor may any other exclusive right be exercised, without the permission of the author. 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Recommended Citation Seufert, Juergen, Qantas and its marginal abatement cost curve in the context of late capitalism and climate change, Doctor of Philosophy thesis, School of Accounting, Economics and Finance, University of Wollongong, 2014. https://ro.uow.edu.au/theses/4510 Research Online is the open access institutional repository for the University of Wollongong. For further information contact the UOW Library: [email protected] Faculty of Business, School of Accounting, Economics and Finance QANTAS AND ITS MARGINAL ABATEMENT COST CURVE IN THE CONTEXT OF LATE CAPITALISM AND CLIMATE CHANGE Mr Juergen Seufert A thesis submitted in fulfilment of the requirements for the award of the degree of Doctor of Philosophy University of Wollongong August 2014 STATEMENT OF ORIGINAL AUTHORSHIP I, Juergen Heinz Seufert, declare that this thesis, submitted in fulfilment of the requirements for the award of Doctor of Philosophy, in the School of Accounting, Economics and Finance, University of Wollongong, is wholly my own work unless otherwise referenced or acknowledged. The document has not been submitted for qualifications at any other academic institution. Juergen Seufert i ABSTRACT The build-up of Greenhouse Gases in the atmosphere and consequential Global warming possesses a real threat to human society. Science alerted us to this problem and at the same time provides technologies capable of emission reductions, yet it is behavioural change that is urgently needed. This thesis investigates how we are to understand Qantas and its Marginal Abatement Cost Curve (MACC) in a late- capitalist, ecological crisis context. Firstly, it explores the political and economic interrelations between Qantas, the Australia Government and Australians also in regard to the introduction of the Australian Emissions Trading Scheme (AU ETS) and the role Qantas’ MACC can play in relation to behavioural change. Accounting literature identifies an urgent need for accounting researchers to engage in theories and world-views other than mainstream positivist accounting research to shed light on the relationship of accounting and the macroeconomic and political context which it shapes and through which it is shaped (Sikka, et al., 1995; Arnold, 1990; Arnold, 2009a). In the context of global warming the MACC will be introduced as ‘new accounting’ (Gray, 2002) to assist companies and governments to reduce CO2. The MACC supports questions of the State and companies about accountability for abatement options. Laughlin’s (1995) middle range thinking provides the freedom to flesh out a theoretical lens empirically. This research draws on Habermas’ (1973) ‘legitimation crisis’ and Beck’s (Beck, 1996; 2006; 2008c; 2008b; 2008a; 2010b; 2010a) work on the ‘ecological crisis’ to be applied to the case study of Qantas. These theories explain the relation between the economic, state and social realms’ interactions in the context of global warming and Australian climate actions. These lenses also accommodate the introduction of the MACC as part of a solution to climate change. To achieve the objectives of this study requires qualitative and quantitative multiple data sources from and about Qantas. Firstly, it draws on publicly available data from Qantas’ annual reports, SEA-reports and other disclosures presented on Qantas webpage, Government Reports and Hansard, industry reports, public media and existing academic literature that partially deals with Qantas’ relation to the government. In order to model the MACC for Qantas this thesis relies on publicly available information as widely accepted in the academic literature. Extensive reports ii by Kar et al. (2010) and Farries and Eyers (2008) about CO2-e indicate abatement opportunities. Qantas’ individual specification of fleet, processes, and deployed technology as well as key determinants set by the Australian Government and aviation market are identified from Qantas’ annual reports, government reports or other publicly available sources. The findings illustrate the subjectively created and experiential nature of Qantas’ economic crisis. Accounting discourse is actively used to create and emphasise crises. There is a deep involvement of the Australia Government in Qantas’ production process. Accounting and neoliberal-informed rhetoric assists the Government to provide rationality for its actions to fill market gaps and produce financial and other supports to curb the economic crisis within Qantas. Accounting concepts provide means to keep latent the prioritisation of individual capitalist interests’, such as Qantas’, even in the wake of global warming. Finally, accounting rhetoric has contributed to the diminishing support of the Australian electorate and a motivational crisis to withdraw support for climate actions. The MACC in this context can be mobilizer to show potential CO2 abatement opportunities, reduce the impact of Qantas’ economic crisis, provide rationality to Government’s use of income redistribution and be part of a solution to curb global warming. The MACC modelled for Qantas reveals process, technology, biofuel and aircraft-replacement related abatement opportunities. The analysis of these abatement options reveals opportunities to achieve behavioural change and hurdles for their implementation. This study fills a theoretical gap, enhancing Habermas’ legitimation crisis with contemporary literature updates and combining it with the work of Beck’s ecological crisis. These crisis theories are applied to an Australian context of a significant economic player within Australia, Qantas, enhances our understanding of the political economy and the very role of accounting to create, curb or hide circumstances which could lead to crises. It provides a new lens to consider SEAR in the wake of global warming. The MACC, this being the first time introduced into accounting research, provides means to act on the macro level to signal ways to engage with solutions to the ecological crisis. For Qantas it provides a useful tool to create visibility of CO2, to abate CO2, and to finally trigger behavioural change. Limitations to this study are with the case study approach, allowing only limited generalisation from findings. Data were all publicly obtained and even though iii triangulation was applied data limitations could be a limitation to the reliability of some analysis. Modelling of the MACC required the author to make several assumptions about the future. Even though a sensitivity analysis to interest rate changes was conducted, the figures might vary if the calculation could draw on Qantas internal data. The implementation within a company could overcome this limitation and could reveal more details about the process necessary for the MACC to unfold its ‘true’ potential for decision making. Other future research could expand on the theoretical lens and on stakeholder engagement to strive towards a ‘new accounting’ which assists us to curb rather than to legitimise global warming. iv ACKNOWLEDGEMENTS I would like to thank my parents and grandparents for their unconditional support on my endeavour to undertake this PhD in Australia. Their belief in me and their encouragement provided the basis for my academic work. I owe much of my academic success and development to my supervisors and friends Professor Brian Andrew and Dr Anura De Zoysa. Both have been outstanding in supporting my intellectual development; I have truly learned from the best. It was the freedom to develop my own thoughts and ideas and their support that has made my PhD journey a very enjoyable one. Thank you Brian! Thank you Anura! I am truly blessed to have had you as supervisors and friends. Great thanks go to my friends and colleagues from the School of Accounting, Economics and Finance. The friendly and supportive atmosphere contributed much to the pleasure of my PhD journey and allowed me to grow as an academic teacher. I would also like to thank participants of: A-CSEAR (2011 and 2012); CSEAR (2013); The RMIT Accounting