System of Environmental-Economic Accounting Measurement framework towards sustainability Alessandra Alfieri Chief, Environmental-Economic Accounts Section United Nations Statistics Division

Outline History The need for the SEEA The nature of the SEEA The development of the SEEA Next steps

History Policy Statistics Rio +20 - 2012 Brundtland (WCED) – 1983 Agenda 21 – 1992 SIDS – 1994 & 2005 MDGs – 2000 Johannesburg – 2002 Marrakech process Rio +20 - 2012 Statistics Indicator sets (DPSIR, FDES) - 70s onwards SEEA-1993 – Interim report SEEA-2003 – Best practices SEEA-Water - 2007 Statistical standard (interim) SEEA 2012 Statistical standard SEEA-Energy 2012

Why we need SEEA? The economy impacts on the environment and the environment impacts on the economy The state of the environment and its health are important insofar as they provide services to humanity To understand these linkages we need to integrate environmental and economic information An accounting framework brings discipline to the organisation of environmental and related data

The information pyramid

Environmental-Economic Accounting and Environment Statistics Often developed to answer one particular question or problem Difficult to figure out if all information is included Not always easy to see the whole picture, or how it relates to other things

Environmental-Economic Accounting and Environment Statistics Environmental accounts: Help to make sense of the larger picture Help to identify pieces that are missing Can make connections to other statistics - especially economic statistics

SEEA - the national accounts for the environment Uses accounting concepts and classifications to environmental information Links to the national accounts for the economy Broad definition of environmental assets Links monetary and physical information Separately identifies information already part of the national accounts for the economy Enables national accounts to be adjusted for depletion of natural resources and allocated the

The SEEA Framework – Central framework Territory of reference Economy Instruments -Financial/Monetary -Taxes/subsidies -Financing -Resource rent -Permits Actors Enterprises Households Government Non-profit institutions Activities -Production -Consumption -Accumulation Analytical and Policy Frameworks -Productivity analysis -Natural resource management -Climate change -Green Growth/Green Economy Outside territory of reference Outside territory of reference Land/ Resource use/ Ecosystems Emissions/waste Environment Natural Resources (stocks) -Land -Water -Ecosystems -Soil -Etc. Natural Resource flows -Materials -Energy -Water -Ecosystem services -Etc. 9

SEEA accounts and aggregates – Central framework Asset accounts: record stocks and changes in stocks (flows) of natural resources such as land, forest, water and minerals Physical and hybrid flow accounts: provide a systematic physical description of production and consumption processes, including their natural resource inputs, product throughputs and outputs i.e. wastes. Link the physical information to the economic accounts Monetary accounts: separately identify environmentally- related transactions presented in the existing SNA flow accounts in order to make them more explicit for analysis Environmentally-adjusted aggregates: combine modules of SEEA to form a full-sequence of accounts from which aggregates such as Green GDP, or Net Saving can be derived.

SEEA and the policy quadrants Improving access to services and resources I Managing supply and demand II III Improving the state of the environment and reducing impacts IV Mitigating and adapting to extreme events Sustainability

Quadrant I – Improving access to services and resources SEEA informs policies that aim to ensure households access resources and services Relevant indicators that can be used to inform those policies are: Investments in infrastructure for delivery Losses in distribution Costs of services

Quadrant II – Managing supply and demand Refers to allocation of natural resources The following indicators can be derived directly from the SEEA: Efficiency of production Decoupling Multi factor productivity Efficiency of consumption Embedded emissions Footprint indicators Costs of production and costs paid by users (fees, taxes, rents, permits) Financing (who pays for the investments and current costs) Depletion estimates

Quadrant III-Improving the state of the environment and reducing impacts Covers policies related to the health and capacity of ecosystem to provide services and reducing the impacts on the environment. Possible indicators that can be derived from the SEEA are: Environmental protection and resource management expenditures EGSS Emissions of pollutants into air and water and waste Land use and land cover Economic instruments

Quadrant IV – Mitigating and adapting to extreme events Refers to policies that aim to reduce the potential harm created by extreme events and changing environmental patterns Possible indicators that can be derived from SEEA: Expenditure for mitigation and adaptation Measure to assess the impacts of disasters

The development of SEEA Three parts Part 1 – Central framework (to be adopted as international statistical standard) Part 2 – Experimental Ecosystem accounting Part 3 – Extensions and applications

SEEA Vol. 1 – Chapter structure Ch. 1 - Introduction and policy relevance Ch. 2 - Statistical framework Stocks and flows in physical and monetary term Statistical units Boundaries (environment/economy, production and asset boundaries) Classifications Ch. 3 - Physical flow accounts Flows environment/economy and within economy, MFA, Energy and water Ch. 4 – Monetary flow accounts EGSS Environmental Protection Expenditure and Resource Management Accounts Taxes/subsidies, permits, rents, depletion Ch. 5 – Asset Accounts Physical and monetary stocks and changes in stocks for land and natural resources (e.g. mineral and energy resources, water, biological resources, etc.) Ch. 6 – Summarizing and integrating the accounts Hybrid accounts

SEEA Part 2 – Experimental ecosystem accounts Conceptual framework – perspective of the environment Statistical units for ecosystems and their link with economic units Classification of ecosystem service Full carbon accounting Ecosystem health Monetary accounts Link to the SNA valuation principles Valuation of selected services

SEEA Part 3 - Applications Audience Analysts and producers Technique based presentation Input-output and CGE modelling Resource efficiency and productivity indicators and the use of hybrid tables Composite indicators Depletion adjusted saving techniques Consumption based I-O analysis / footprint techniques Decomposition analysis Complemented by glossy publications

The development of SEEA Central framework (Chapters 1-6) are out for global consultation (until 7 December 2011) Adoption by UN Statistical Commission expected in March 2012 Part 2 and Part 3 – planned for UN endorsement in 2013 (best practices) Work overseen by UNCEEA London Group on Environmental Accounting considering technical issues World Bank, EEA and UNSD are leading the development of experimental ecosystem accounts Extensive consultation with national statistical offices and other key stakeholders

The SEEA and supporting suite of publications Energy balances e.g. IRES Compilation Material SEEA-Energy e.g. IRWS Other water statistics Compilation Material SEEA-Water Output frameworks Systems frameworks Intermediate frameworks SEEA Input frameworks Data Data Quality Assessment Frameworks Metadata and documentation (e.g. SDMX) ISIC, CPC, Asset Classification, Class. of Environmental Activities, Class. of Physical Flows etc Cross functional frameworks

Implementation of SEEA Strategy of implementation being discussed by the UNCEEA Agreement on a minimum set of accounts and tables linked to the policy relevance Water and energy simplified accounts are good candidates Training material to be developed on water and energy – London Group on Environmental Accounting to play a key role Could simplified tables for EGSS be considered?

Way forward Developing SEEA as an international standard will be a critical milestone in mainstreaming environmental-economic accounting Reaffirming the SEEA as the measurement and monitoring framework for sustainable development/green economy Integration of policy/analytical and measurement framework SEEA to be recognized in Rio Move forward in implementation