While economic benefit accrues to Albertans through economic rent mechanisms of the oil and gas industry, other environmental and social impacts, called "externalities", are currently unaccounted for. This paper presents an environmental accounting framework design and application on the Athabasca Oil Sands. The case study used production, royalty collection and emissions data within its application. Based upon the current research, a damage function approach DFA) was applied for the valuation of oil sands emissions of NOX and SO2 to estimated health costs.
The application revealed that an FCA framework application can provide insights into the true costs of oil and gas operations and serves to stimulate discussion about the internalisation of such costs through government policy. Ultimately, government economic policies that adopt the full costing of activities, such as the health costs associated with oil sands development, could ensure that the polluting organisation pays for its impacts.