1. Overview: Environment Protection Expenditure Statistics New Survey on Environmental Goods and Services at Statistics Canada
Presented by Jeff Fritzsche
Environment Accounts and Statistics Division
Ottawa, Ontario, Canada
Working Group “Environmental Expenditure Statistics”
Luxembourg - March 25th, 2009

2. Statistics Canada – Statistique Canada
Overview
Environmental protection expenditures at Statistics Canada
Government pollution and abatement control expenditures
Business sector environmental protection expenditure statistics
Environmental Goods and Services
New Survey of Environmental Goods and Services
Statistics Canada – Statistique Canada
Wednesday March 25, 2009

3. Environmental protection expenditures at Statistics Canada
The approach
We have concentrated our efforts on compiling information on expenditures on environmental protection and environmental remediation
We are not currently working to compile data on a broader set of environmental expenditures
Not collecting data on resource management expenditures and expenditures to protect people from environmental threats (expenditures on purification of water for human consumption, for example)
We have also developed data on the production of environmental protection goods and services
Statistics Canada – Statistique Canada
Wednesday March 25, 2009

4. Environmental protection expenditures at Statistics Canada
Progress is a challenge as concepts continue to evolve, implications for data collection are significant, costs are high
The approach
Be guided by an appropriate and tested classification (CEPA, SERIEE)
Undertake new data collection activities to fill gaps as new funding is available – policy needs may direct which gaps are filled first
Data must be available before an account can be constructed
Have not attempted to compile a complete environmental protection account to date
Expenditures for too many of the components would only be broad estimates
Building a time series relying on these data would not be meaningful
When we have filled more data gaps we will attempt to prepare an account
Statistics Canada – Statistique Canada
Wednesday March 25, 2009

5. Government Pollution Abatement and Control Expenditures
Statistics Canada produces environmental protection expenditure statistics for each level of government:
Federal, Provincial and local levels:
Sewage collection and disposal
Waste collection and disposal
Other pollution control activities
Other environmental services
We do not include water purification and supply in government environmental protection expenditure estimates
Produce total consolidated figures for all levels
Statistics Canada – Statistique Canada
Wednesday March 25, 2009

6. Statistics Canada – Statistique Canada
Wednesday March 25, 2009

7. Business Sector Environmental Protection Expenditures

8. A bit of history – Survey of Environmental Protection Expenditures
First dedicated environment protection expenditure business survey conducted in 1994
Coverage limited to primary and manufacturing industries identified as being the heavier polluters
Questions restricted to financial and other descriptive statistics
Questions on integrated processes (pollution prevention) capital and operating expenditures and environmental practices
A clear definition of an ‘environmental protection expenditure’ was particularly important as businesses began implementing solutions based on integrated processes and technologies
Subjective interpretation will likely always exist but for comparisons over time, consistent applications of methodology crucial for respondents and data users
Introduction of the “compliance criterion” in the 1994 survey reference year
Also included “anticipated” environmental protection expenditures
1994 survey did not include questions on physical reductions in emissions due to PAC or P2 activities
More investments in integrated processes through 1990s has demonstrated the shift from end of pipe solutions.
Pollution prevention incorporated into the Canadian Environment Protection Act which mandates businesses to develop solutions to the reduction of pollutants using pollution prevention rather than traditional end-of-pipe
1994 questionnaire introduced the concept of compliance criterion but did not apply it to all categories of expenditures, but in 1995, it was applied to all questions
The pure purpose criterion. Activities and expenditure where the main objective is protecting the environment are included in full. This criterion works best where the main objective of protecting the environment is clear and unambiguous, for example end-of-pipe capital expenditure.
The extra-cost criterion is used to identify the portion of the cost of more environmentally friendly technologies and changes in processes and products to be attributed to environmental protection. The investment and operating expenditure are compared to those of a “standard” or less environmentally beneficial alternative, if there is one, or the estimated additional cost of incorporating the environmentally beneficial feature. Only the extra expenditure is included.
The net-cost criterion. Only expenditure undertaken for environmental protection purposes which leads to a net increase in cost (that is where spending exceeds any savings or income arising before the net cost was actually incurred) is included. When expenditure is recorded, this criterion only applies to operating expenditure.
The compliance criterion. Expenditure undertaken with the main objective of protection the environment but specifically in order to comply with environmental protection legislation, conventions or voluntary agreements. This can be further sub-divided to show those activities and transactions undertaken in order to comply with legislation only.
Statistics Canada – Statistique Canada
Wednesday March 25, 2009

9. Business sector environment protection expenditure statistics
Business sector estimates are limited to primary industries (resource extraction and energy production) and manufacturing
Operating and capital expenditure estimates for the following categories are produced:
Hazardous and non-hazardous waste and sewage collection, treatment, storage, disposal and recycling;
Pollution abatement and control expenditures (end-of-pipe);
Pollution prevention (integrated process) expenditures;
Environmental monitoring;
Environmental assessments and audits;
Site reclamation and decommissioning;
Protection and restoration of wildlife and habitat;
Environmental charges;
Other environment protection expenditures 9
Statistics Canada – Statistique Canada
Statistics Canada – Statistique Canada
Wednesday March 25, 2009

10. Survey of Environmental Protection Expenditures
Coverage of survey
Logging
Oil and Gas Extraction
Mining
Electric Power Generation, Transmission, Distribution
Pipeline Transportation
Manufacturing
Further divided into 11 industrial sub-categories
Statistics Canada – Statistique Canada
Wednesday March 25, 2009

11. Business sector – additional statistics
A dedicated survey provides the flexibility to collect other types of information of special interest to policy departments and other users
Use of environmental technologies
Operating and investments in environmental technologies
Pollution prevention methods
Environmental management practices 11
Statistics Canada – Statistique Canada
Statistics Canada – Statistique Canada
Wednesday March 25, 2009

12. Framework used in Canada
The collection of environment protection expenditure statistics has been driven primarily by the needs of policy departments and other data users in Canada
As a result, domestic classifications of information have influenced the way in which the data is collected and organized
International classifications and standards have also guided the work
CEPA has guided the classification of expenditures made to protect air and climate; wastewater management; waste management; protection and remediation of soil, groundwater and surface water, noise and vibration abatement; protection of biodiversity and landscape (restoration); protection against radiation
Research and development is not included in the Canadian statistics 12
Statistics Canada – Statistique Canada
Statistics Canada – Statistique Canada
Wednesday March 25, 2009

13. Selected results – Survey of Environmental Protection Expenditures
Statistics Canada – Statistique Canada
Wednesday March 25, 2009

14. Selected results – Survey of Environmental Protection Expenditures
Expenditures on energy-related environmental processes and technologies
Businesses in 16 primary industries and manufacturing spent $2.0 billion on energy-related environmental processes and technologies
Top 5 spenders were:
Statistics Canada – Statistique Canada
Wednesday March 25, 2009

15. Environmental Goods and Services

16. Environmental Goods and Services
From 1995 to 2004 collected statistics on the sales of goods and services for the purposes of environmental protection
Began as a cost-recovery “Environment Industry Survey” funded by Industry Canada in an attempt to measure the “Environment Industry” in Canada
Funding is now sourced from a program called the “Policy Research Data Group”, where several government departments provide a pool of money to Statistics Canada to fill various data gaps identified as being important
Statistics Canada – Statistique Canada
Wednesday March 25, 2009

17. Environmental Goods and Services - Environment Industry Survey
Collected information from companies on their production of environmental goods and their delivery of environmental services
Revenues from sales of (for example):
Pollution control equipment
Equipment for remediation of soils, groundwater
Hazardous and non-hazardous waste management equipment
Monitoring equipment
Wastewater treatment equipment and management and treatment services
Environmental consulting engineering services
Greenhouse gas reduction technologies and services
Client characteristics
Exports
Environmental employment
Green consumer products not included
Statistics Canada – Statistique Canada
Wednesday March 25, 2009

18. How did we compile our business sector environment industry estimates?
Environment Industry Survey (45%)
Engineering and Consulting Services* (.5%)
Demand side information on capital expenditures (11%)
Scrap – Business Register (Wholesale scrap metal dealers) (20%)
Waste Management (23%)
______________________________
*Could cover 11% (overlaps the EIS)
Statistics Canada – Statistique Canada
Wednesday March 25, 2009

19. Survey of Environmental Goods and Services
Questions related to the quality and representation of the Environment Industry Survey estimates – had not changed from the 1995 Environment Industry survey report
Estimates difficult to interpret over time – Why?
No industry or commodity classification – how to identify firms?
Survey of all “known” establishments – not a representative sample
Attempting to measuring “dual use” goods and services
Easier to measure the “clean up” part, but what about the “prevention” part?
Environmental-related production of establishment often small part of overall production
Many very small firms
Result: difficult to measure QUALITY of estimates and interpret CHANGE over time
Statistics Canada – Statistique Canada
Wednesday March 25, 2009

20. Statistics Canada – Statistique Canada
Survey redesign
Decision made to postpone the 2006 survey and embark in a thorough conceptual and methodological review
Conceptual review involved the exploration of alternative approaches
Investigation of international approaches
Compilation guide developed by Eurostat task force
Ernst and Young report on eco-industry
U.S. Survey of Environmental Products and Services
Consultation with users
Various government departments and NGOs
Statistics Canada – Statistique Canada
Wednesday March 25, 2009

21. Statistics Canada – Statistique Canada
Demand-side approach
Possibility of multi-sector coverage of environmental goods
Purchases made by firms across a range of industries
No need to maintain list of environmental firms and products
Comprehensive list of firms seems only possible for a limited range of environmentally-related goods and services
Resolves dual use problem
The end user knows with certainty why a good or service was used
Unduplicated information can be compared to GDP
Less likelihood of double-counting
Reduced response burden
Potential to reduce response burden by eliminating supply-side surveys
Statistics Canada – Statistique Canada
Wednesday March 25, 2009

22. Many challenges to supply-side approach
Limited resources to produce comprehensive estimates based on a supply-side framework
How to measure exports?
Client demands for supply-side information
Statistics Canada – Statistique Canada
Wednesday March 25, 2009

23. New Survey of Environmental Goods and Services
The new survey has the following objectives:
Produce representative estimates that can be compared over time
Produce estimates that include an evaluation of quality
Limit coverage to selected industry classifications
Selected manufacturing (based on previous Environment Industry Survey results)
Wholesalers (particularly for imports and exports)
Limit coverage to selected categories of environmental goods and services
Based on client needs and ability for respondents to provide the information
Statistics Canada – Statistique Canada
Wednesday March 25, 2009

24. Statistics Canada – Statistique Canada
Survey Content
Survey has three main sections:
Sales of selected environmental goods (machinery, equipment, products)
Renewable energy production
Management of non-hazardous waste
Management of industrial air pollution or flue gas
Industrial waste water treatment and municipal sewage treatment
Remediation of ground water, surface water and leachate
Remediation of soil, sediment and sludge
Sales of selected environmental services
Site remediation services and emergency response services
Exports
Statistics Canada – Statistique Canada
Wednesday March 25, 2009

25. Survey coverage and methods
2-phase sample
1st phase
Research done to find as many manufacturing and wholesale establishments as possible that provide any of environmental goods and/or services classified on the SEGS questionnaire
Telephone survey of 5,500 establishments in selected manufacturing and wholesale NAICS categories using representative sampling
Those who answer ‘Yes’ to any of the screening questions will automatically be included in the Phase II survey
All establishments found in the Remediation Services Industry were automatically included for sampling in Phase II – expect about 1,000
2nd phase
Those identified in the first phase along with those pre-identified will receive the full paper questionnaire
Statistics Canada – Statistique Canada
Wednesday March 25, 2009

26. Statistics Canada – Statistique Canada
Services industries
To improve productivity and reduce respondent burden, negotiated with Services division to add sample / questions to two service industry questionnaires
Survey of Consulting Engineers
Survey of Engineering Services
Statistics Canada will produce 2008 estimates for the following:
Revenues from the sale of environmental goods and services by
Remediation services industry
Consulting engineering industry
Engineering services industry
Selected wholesale industries
Selected manufacturing industries
Waste management industry
Statistics Canada – Statistique Canada
Wednesday March 25, 2009

27. Statistics Canada – Statistique Canada
Conclusion
Statistics Canada continues to produce statistics related to the supply and demand of environmental protection goods and services
While several industry sectors are covered, data gaps remain
Although international classifications have influenced our statistical collection, domestic and client needs are also important drivers
Future work
The harmonization of the supply and demand of environmental goods and services has not yet been achieved
If the new SEGS approach is successful, Statistics Canada hopes to expand collection – both by industry coverage and content, using the work of the Environmental Goods and Services Task Force as a guide
Statistics Canada – Statistique Canada
Wednesday March 25, 2009