Restructuring Double-Entry Accounting for Climate Change Remediation by Monetary Authorities

The Federal Reserve System and the U.S. Treasury are two powerful planning agencies with regard to monetary policy and the economy. Yet, their monetary policies do not consider climate-change remediation. Their policy emphasis is mainly focused on investment and production, while climate change from investment and production is creating devastating ecological and social disruption. The double-entry accounting system utilized by banks and production corporations is not designed to record the consequences of their finance, investment, and production activities on climate change. Restructuring Federal Reserve and Treasury policy regarding climate change is not possible without change in the accounting system to provide relevant indicators because banks, corporations, and monetary authorities are captives of a double-entry accounting system that does not consider ecological challenges. In order to record and integrate ecological impacts, a conversion to single-entry accounting is not necessary. Accounts for ecological impacts can be added to traditional double-entry accounts in order to demonstrate the environmental impact of particular corporate activities. Then, monetary authorities could require banks to consider such ecological accounts when making loans and, in turn, consider that database in their relationships with the banks.