1. WG Environmental Accounts / Environmental Expenditure Statistics Introducing NACE Rev. 2 in the environmental accounts Luxembourg, 28-30 March 2011

2. Environmental Accounts 28-30 March 2011 NACE Rev. 2 and the environmental accounts 2 Background The changeover of the national accounts and other economic statistics to NACE Rev. 2 from reference year 2008 onwards will be largely completed in 2011. For the environmental accounts, the changeover poses specific challenges: –Countries need to adapt their compilation procedures (e.g. for air emission accounts or environmental taxes) –It is necessary to ensure comparability across countries and to maintain the possibility to calculate EU aggregates

3. Environmental Accounts 28-30 March 2011 NACE Rev. 2 and the environmental accounts 3 So far, all environmental accounts data collection is voluntary. For the data collections that Eurostat launched in 2010, two questionnaires have been offered, one based on NACE Rev. 1.1 and one based on NACE Rev. 2. This concerned air emission accounts, environmental expenditure (JQ) and environmental taxes. The Regulation on European environmental economic accounts will require: –First data transmission in 2013 –Covering the reference years 2008 – 2011 –Air emission accounts and environmental taxes to be submitted in a breakdown based on NACE Rev. 2 NACE Rev. 2 and Eurostat data collection

4. Environmental Accounts 28-30 March 2011 NACE Rev. 2 and the environmental accounts 4 Analytical uses A key advantage of environmental accounts is that data are consistent with the national accounts supply-use and input-output framework. This allows analytical uses, e.g. calculating emissions embedded in imports and exports, or emissions induced by final demand categories. Most countries do not plan to back cast their input-output tables (IOT). Typically, the IOT before 2008 will use NACE Rev. 1.1 and NACE Rev. 2 from 2008 onwards. Environmental accounts data need to be coherent with the IOT to be useful.

5. Environmental Accounts 28-30 March 2011 NACE Rev. 2 and the environmental accounts 5 Recommendations In order to be able to aggregate data across countries and for analytical uses to be possible, the data should be available in the same classification. Eurostat proposes the principle that all countries ensure their environmental accounts are in NACE Rev. 1.1 until reference year 2007 and in NACE Rev. 2 from 2008 onwards.

6. Environmental Accounts 28-30 March 2011 NACE Rev. 2 and the environmental accounts 6 Possible issues Problems could arise if individual countries deviate from the principle temporarily or permanently, for example: –Back casting at national level of both IOT and environmental accounts and doing subsequent revisions only in NACE Rev. 2. –Delays in changing over to NACE Rev. 2 = completion of changeover after 2012. Some environmental accounts areas are highly affected (those using a detailed industry breakdown – air emissions, taxes, ), others less (ew-MFA, environmental expenditure in the JQ).

7. Environmental Accounts 28-30 March 2011 NACE Rev. 2 and the environmental accounts 7 Delegates are kindly requested to: endorse the principle that data should be reported in NACE Rev. 2 from reference year 2008 onwards, and in NACE Rev. 1.1 prior to 2008. alert Eurostat if for their country this principle cannot be applied at least for air emission accounts, environmental taxes by economic activities and environmental expenditure prior to 2013. (In 2013, the future Regulation will require data in NACE Rev. 2 from reference year 2008 onwards.) alert Eurostat when there are plans to back cast data on the basis of NACE Rev. 2 to years prior to reference year 2008. report their experience with introducing NACE Rev. 2 in other areas - energy accounts, water accounts, environmental subsidies, environmental goods and services sector. Questions