1 Integrated Environmental and Economic Accounting and Water Resource Accounting Alessandra Alfieri United Nations Statistics Division

2 Outline Recent international developments in environmental-economic accountingRecent international developments in environmental-economic accounting Objectives of the SEEAObjectives of the SEEA Water resources accounting modulesWater resources accounting modules Uses of water accountingUses of water accounting Considerations on challenges and advantages in implementationConsiderations on challenges and advantages in implementation

3 Recent international developments Completion of the manual on Integrated Environmental and Economic Accounting (UN, Eurostat, IMF, OECD and World Bank) in cooperation with the London GroupCompletion of the manual on Integrated Environmental and Economic Accounting (UN, Eurostat, IMF, OECD and World Bank) in cooperation with the London Group Elaboration of a manual on water resources accounting (UNSD) – final draft to be completed in Fall 2005Elaboration of a manual on water resources accounting (UNSD) – final draft to be completed in Fall 2005

4 Recent international developments United Nations Statistical Commission approves the creation of the UN Committee on Environmental- economic Accounting, whose main objective is to mainstream environmental accounting in official statisticsUnited Nations Statistical Commission approves the creation of the UN Committee on Environmental- economic Accounting, whose main objective is to mainstream environmental accounting in official statistics Areas of responsibility of the UN Committee:Areas of responsibility of the UN Committee: CoordinationCoordination Promotion of environmental accountingPromotion of environmental accounting Methodological developmentMethodological development Technical cooperationTechnical cooperation Data harmonizationData harmonization

5 UNSD Strategy in water accounting Finalization of the handbook of water accounting for submission to the UN Committee (July 2005)Finalization of the handbook of water accounting for submission to the UN Committee (July 2005) Develop an implementation strategy of water accounting and statistics with the objective of promoting the implementation in countriesDevelop an implementation strategy of water accounting and statistics with the objective of promoting the implementation in countries Harmonize environment statistics and accountingHarmonize environment statistics and accounting Promote water accountingPromote water accounting UNSD will organize an international meeting bringing users and producers of water accounting and statistics next yearUNSD will organize an international meeting bringing users and producers of water accounting and statistics next year Organize international workshopsOrganize international workshops

6 SEEA Satellite system of the SNA to better measure the interrelationship between the economy and the environmentSatellite system of the SNA to better measure the interrelationship between the economy and the environment It is a flexible data system that allows presentation of environmental and economic information, in physical and monetary terms, in a common data framework, thus facilitating integrated analysisIt is a flexible data system that allows presentation of environmental and economic information, in physical and monetary terms, in a common data framework, thus facilitating integrated analysis

7 Objectives of the SEEA Develop a consistent data system for economic and environmental dataDevelop a consistent data system for economic and environmental data Provide a common system to derive indicators and measure sustainable developmentProvide a common system to derive indicators and measure sustainable development Provide a better measure of national wealth to include not only produced capital but also natural capitalProvide a better measure of national wealth to include not only produced capital but also natural capital

8 Objectives (cont’d) Assess availability of natural resources, their use in production and final consumption and the cost of depletionAssess availability of natural resources, their use in production and final consumption and the cost of depletion Assess the level and cost of emissions and other waste from production and consumptionAssess the level and cost of emissions and other waste from production and consumption Identify monetary flows related to the environment which are already within the SNA (e.g. expenditures on environmental protection, environmental taxes and subsidies, etc.)Identify monetary flows related to the environment which are already within the SNA (e.g. expenditures on environmental protection, environmental taxes and subsidies, etc.)

9 Why an accounting approach? Encourages the adoption of standardsEncourages the adoption of standards Introduces accounting concepts to environmental statistics thus improving economic and environmental statistics by encouraging consistencyIntroduces accounting concepts to environmental statistics thus improving economic and environmental statistics by encouraging consistency Implicitly defines ownership and hence responsibility for environmental impactsImplicitly defines ownership and hence responsibility for environmental impacts Encourages the development of comprehensive data setsEncourages the development of comprehensive data sets Facilitates international comparisonsFacilitates international comparisons

10 Water Resources Accounting A tool for integrated water resources managementA tool for integrated water resources management Describes the relationships between the water resources system with the economyDescribes the relationships between the water resources system with the economy Facilitates the design of economic and water policies and the analysis of the impacts of these policiesFacilitates the design of economic and water policies and the analysis of the impacts of these policies

11 What does it measure? Stocks of all water assets and their qualityStocks of all water assets and their quality Flows of water between the economy and the environment (use and returns of water by industry and households)Flows of water between the economy and the environment (use and returns of water by industry and households) Emission accountsEmission accounts Cost of abstraction, distribution, purification and treatment of waterCost of abstraction, distribution, purification and treatment of water Financing of water related activities (taxes and subsidies)Financing of water related activities (taxes and subsidies) Water management expenditures (by whom)Water management expenditures (by whom) Asset accountsAsset accounts Quality accountsQuality accounts

Flows between the economy and the environment

13 Physical and monetary flow accounts Comprehensive description of the use of water in the economy (industries and households)Comprehensive description of the use of water in the economy (industries and households) Description of returns of wastewater to the environment by economic agentsDescription of returns of wastewater to the environment by economic agents Emission accounts – identification of wastewater treated and discharged directly into the environmentEmission accounts – identification of wastewater treated and discharged directly into the environment

14 Monetary information in the flow accounts Cost of extraction, purification and distribution of waterCost of extraction, purification and distribution of water Financing of the costs of water (who is paying for the services)Financing of the costs of water (who is paying for the services) Investment in water assetsInvestment in water assets Expenditures for water management and protectionExpenditures for water management and protection

15 Indicators Water abstraction by sector and by sourcesWater abstraction by sector and by sources Water discharge by sectorWater discharge by sector Water abstraction/GDP by sectorWater abstraction/GDP by sector Water abstraction/number of employeeWater abstraction/number of employee Water abstraction per capitaWater abstraction per capita Water consumption by sectorWater consumption by sector Cost recovery – Is the government recovering the costs of collection, purification, distribution and treatment of water through the fees charged?Cost recovery – Is the government recovering the costs of collection, purification, distribution and treatment of water through the fees charged?

Index of water use in Botswana 1993 = 1.00 Volume of water Per capita water use Pula of GDP per m3 water

Water use by natural source in Botswana 57% 23% 20%

Env-Eco Profiles: water use, VA, employment by industry

Value-Added per m3 water use

WATER USE IN NAMIBIA, SOUTH AFRICA, BOTSWANA IN Per capita water use except agriculture (m3) Per capita water use (m3) 14816, Total water use (million m3) BOTSWANA SOUTH AFRICA NAMIBIA

RANDS of VALUED-ADDED per M3 of WATER, 1996 (7 rands = US$1 in 2000) GDP per m3 of water input nananaHouseholds Services,Trade, Govt Manufacturing Mining 1028AgricultureBOTSWANA SOUTH AFRICA NAMIBIA

22 Emission accounts They describe the amount of pollutantsThey describe the amount of pollutants added to water by an economic activityadded to water by an economic activity removed from water by an economic activityremoved from water by an economic activity discharged back into the environmentdischarged back into the environment Emission from point sources, although efforts are being made to describe also emissions from agriculture as well as landfill sitesEmission from point sources, although efforts are being made to describe also emissions from agriculture as well as landfill sites Describe who pollutes and how much and where (surface or ground water)Describe who pollutes and how much and where (surface or ground water) Look at concentration of pollutants in incoming and outgoing flows, emissions is the difference between incoming and outgoing pollutantsLook at concentration of pollutants in incoming and outgoing flows, emissions is the difference between incoming and outgoing pollutants

23 Emission accounts - Indicators Pollution intensity ratios by industry (with reference to environmental data, value added or employment)Pollution intensity ratios by industry (with reference to environmental data, value added or employment) Environmental themesEnvironmental themes Analysis with environmental expenditures over time give an indication of the effectiveness of these expendituresAnalysis with environmental expenditures over time give an indication of the effectiveness of these expenditures

24 Asset Accounts

25 Water resources EA.13 Water ResourcesEA.13 Water Resources EA.131 Surface WaterEA.131 Surface Water EA.1311 ReservoirsEA.1311 Reservoirs EA.1312 LakesEA.1312 Lakes EA.1313 RiversEA.1313 Rivers EA.1314 Soil waterEA.1314 Soil water EA.1315 Snow and iceEA.1315 Snow and ice EA.132 GroundwaterEA.132 Groundwater

Main flows within the physical water resource system

27 Indicators - Water asset accounts Total renewable resources per capitaTotal renewable resources per capita Total water available per capitaTotal water available per capita Abstraction/Total renewable resourcesAbstraction/Total renewable resources >1 not sustainable >0.4 water stress Depletion of ground and surface waterDepletion of ground and surface water

28 Quality Accounts They are very important as the quality of water limits its useThey are very important as the quality of water limits its use Define quality classes according to their relevance in the region/country (i.e. salinity level, BOD, etc.)Define quality classes according to their relevance in the region/country (i.e. salinity level, BOD, etc.) Result of modeling exercises – more removed from the conventional accounting approachResult of modeling exercises – more removed from the conventional accounting approach

29 Quality accounts

30 Quality accounts - Issues How to define the quality classes?How to define the quality classes? How to aggregate across pollutants? How to aggregate across stretches of rivers?How to aggregate across pollutants? How to aggregate across stretches of rivers? Is it relevant at the national level? Is it relevant for the accounting period? Or should the information be collected more frequently?Is it relevant at the national level? Is it relevant for the accounting period? Or should the information be collected more frequently? There are solutions being proposed in the handbook!There are solutions being proposed in the handbook!

31 Water Accounts: Challenges in implementation Data is dispersed and often not available in the form neededData is dispersed and often not available in the form needed Hydrological year and accounting period may not coincideHydrological year and accounting period may not coincide Spatial and temporal variabilitySpatial and temporal variability No common language between hydrologists and national accountants/statisticiansNo common language between hydrologists and national accountants/statisticians Big task!Big task!

32 Why should we bother? Uses MONITORINGMONITORING state of the water resourcesstate of the water resources progress toward meeting goals identified in policies and strategic plansprogress toward meeting goals identified in policies and strategic plansHOW? Indicators of sustainability, macroeconomic & water relatedIndicators of sustainability, macroeconomic & water related Indicators of impact of the economy on environmentIndicators of impact of the economy on environment Indicators of progress toward meeting specific environmental goalsIndicators of progress toward meeting specific environmental goals

33 Why should we bother? Uses (2) ANALYSISANALYSIS To design better regulations and environmental instrumentsTo design better regulations and environmental instruments To design better water management policiesTo design better water management policies To integrate water issues into mainstream economic decision makingTo integrate water issues into mainstream economic decision making To assess alternative development pathsTo assess alternative development paths To design policies to achieve sustainable developmentTo design policies to achieve sustainable development

34 Final remarks Do it in stepsDo it in steps Establish priorities and delineation of the frameworkEstablish priorities and delineation of the framework Institutional aspect – a key element in the implementationInstitutional aspect – a key element in the implementation Cross-training between national accountants and water experts to speak the same languageCross-training between national accountants and water experts to speak the same language