1. Environmental activity accounts Expenditures, taxes and EGSS
Note that some of the participants may know more about energy accounting than the presenter. However, this introduction is very helpful to ensure everyone has the same basic knowledge.
RIKKE: Ask participants: who knows about [experience in producing or using]:
Energy statistics
Energy balances
Energy accounts

2. Outline Review of basics
What are environmental activity accounts? (30min)
2-1 Protection expenditures
2-2 Goods and services
2-3 Taxes and subsidies
Group exercise (15min)
Questions and discussion (15min)
SEEA-CF - Environmental activity accounts

3. Learning Objectives
Learning objectives
What Environmental Activity Accounts are and why they are important
The basic concepts
How they are treated in the SEEA
Country examples
Data sources and measurement challenges
Energy, Water, Solid Waste, Air emissions, Wastewater, Asset Accounts (Minerals & Energy, Land, Soil, Timber, Aquatic Resources, Other Biological Resources, Water)
Think about links to climate change:
Mitigation, adaptation, impact reduction, early warning…
SEEA-CF - Environmental activity accounts

4. SEEA: Stocks and flows Environment Economy P = Price (monetary value)
1. Review of basics
SEEA: Stocks and flows
Assets (P & Q)
Land, Soil
Timber
Aquatic
Other biological
Minerals & energy
Water
Ecosystems + conditions
Environment
Flows (P & Q)
Materials
Energy
Water
Ecosystem services
Economy
Production
Consumption
Accumulation
Imports
Exports
P = Price (monetary value)
Q = Quantity (physical)
Residuals (Q)
Solid waste
Air emissions
Effluents
Ecosystem impacts
Already in the SNA – just need to ensure we have detail.
Mitigate & Manage (P)
Protection $
Goods & Services
Taxes & subsidies
Ecosystems & Oceans

5. Scope of environmental activities
1. Review of basics
Scope of environmental activities
SEEA-CF 4.11
…economic activities whose primary purpose is to reduce or eliminate pressures on the environment or to make more efficient use of natural resources.
Environmental restoration, conservation
Resource management
Taxes, subsidies and permits
Technologies to reduce impacts
How to decide on primary purpose?
Primary purpose: intended, major use
How to decide on primary purpose?
Primary purpose: intended, major use
SEEA-CF - Environmental activity accounts

6. Which are environmental activities?
1. Review of basics
Which are environmental activities?
Installing solar panels
Buying equipment to measure pollution
Buying an apartment in an area with less pollution
Buying mercury-free batteries
Buying guns to shoot rabbits
Installing low-flow shower
Taxing fuel
Taxing carbon emissions
Remember: Primary purpose criterion?        
Environmental protection
Resource management
SEEA-CF - Environmental activity accounts

7. Environmental Activities in SEEA-CF
1. Review of basics
Environmental Activities in SEEA-CF
Supply
Use
From  To
Environmental Goods and Services Sector (EGSS)
Environmental protection expenditure accounts (EPEA)
All  All (Government, companies, households, NPISH)
Environmental subsidies and similar transfers
Government  All
Environmental taxes & permits
All  Government
Taxes and subsidies in more detail than EPEA
NPISH = Non-profit institutions serving households
Environmental activities are the transactions of monetary terms between economic units that maybe considered environmental. There are suppliers and users and exchanges in different sectors (goods and services)
Subsidies: from the government
Tax: to the government
Both EGSS & EPEA are aligned with SNA (usage of same terminology)
What is NPISH? Can you pronounce it?
Primary purpose: intended, major use
SEEA-CF - Environmental activity accounts

8. Uses Implied in 9 SDGs Assessing benefits/costs Allocating funds
1. Review of basics
Uses
Implied in 9 SDGs
How much are we spending?
Who provides?
How financed?
Assessing benefits/costs
Allocating funds
Tax or cap? (price vs quantity)
Which account links to which SDG?
Goal 6. …sustainable management of water…
Goal 7. …sustainable and modern energy…
Goal 9. …sustainable industrialization…
Goal 11. Make cities and human settlements …resilient and sustainable…
Goal 12. …sustainable consumption and production…
Goal 13. …combat climate change and its impacts
Goal 14. …oceans, seas and marine resources…
Goal 15. …terrestrial ecosystems… forests… desertification… land degradation… biodiversity loss
Goal 17. …means of implementation…
Fisheries subsidies: mostly bad since encourage overfishing; may be good if promote sustainable management.
Links to climate action: costs of fuel efficiency, sustainable energy, mitigation; all climate change expenditures?
14.6 Fisheries subsidies: Are they good or bad?
13 Links to climate action?
SEEA-CF - Environmental activity accounts

9. Protection expenditure accounts (EPEA)
2-1 Protection Expenditures
Protection expenditure accounts (EPEA)
SEEA-CF 4.45
…to enable identification and measurement of society’s response
to environmental concerns through the supply of and demand for environmental protection services and through
the adoption of production and consumption behavior aimed at preventing environmental degradation
Payments ($) from User to Supplier
Get some information on “Supply” from user, but incomplete ( EGSS to get complete picture)
SEEA-CF - Environmental activity accounts

10. Protection expenditure accounts (EPEA)
2-1 Protection Expenditures
Protection expenditure accounts (EPEA)
Why exclusions?
because primary purpose is not “environmental protection”
Exclusions because primary purpose not “environmental protection”; timber & aquatic have own categories.
SEEA-CF - Environmental activity accounts

11. Protection expenditure accounts (EPEA)
2-1 Protection Expenditures
Protection expenditure accounts (EPEA)
Four main tables in SEEA:
Who produces protection services?
Supply and use
All national expenditures
Who pays for it?
SEEA-CF - Environmental activity accounts

12. Waste disposal, sewage treatment…
2-1 Protection Expenditures
EPEA: Who produces?
Resident producers
Generation of income
“Specialist” = primary activity + +
Examples?
This table is a combined production and generation of income account which presents information on the production of characteristic environmental protection products
i.e., environmental protection specific services, by resident producers
Resident producers: resident vs territory
Waste disposal, sewage treatment…
SEEA-CF - Environmental activity accounts

13. 2-1 Protection Expenditures
EPEA: Supply and Use
Basic prices = purchase price + (taxes) –(subsidies) Total supply = resident + imports Total use = consumption + exports
This table is a supply and use table for the specific services
Displays the total supply of specific services from resident producers and the rest of the world and the use of environmental protection specific services by various economic units
SEEA-CF - Environmental activity accounts

14. EPEA: National expenditures
2-1 Protection Expenditures
EPEA: National expenditures
Adds
connected products
adapted goods
Capital formation (investment)
What are households paying for?
This table broadens the scope of the EPEA to include connected products and adapted goods purchased by those undertaking environmental protection activities
Includes capital formation for environmental protection activities by specialist, non-specialist and own account producers, and relevant environmental protection transfers
Provides an estimate of the total outlays by an economy on environmental protection which is reflected in the aggregate: national expenditure on environmental protection
Environmental protection (waste disposal, air purification, more efficient technology etc.)
SEEA-CF - Environmental activity accounts

15. EPEA: Who pays for it? Government + corporations + households
2-1 Protection Expenditures
EPEA: Who pays for it?
Government + corporations + households
This table is an extension of the third table designed to present the financing of national expenditure on environmental protection
“Rest of the world” pays residents?
Example: transfers for international cooperation
(e.g., ROTW subsidizes sewage treatment in country)
SEEA-CF - Environmental activity accounts

16. EPE Accounts Data sources SNA for aggregates & benchmarks More detail
2-1 Protection Expenditures
EPE Accounts
Data sources
SNA for aggregates & benchmarks
More detail
Government expenditure accounts
Balance of payments/trade
Focussed survey of EPE
SEEA-CF - Environmental activity accounts

17. 2-1 Protection Expenditures
EPE Accounts
Canada: Bi-annual industry Survey of Environmental Protection Expenditures (SEPE)
3,500 respondents (20+ employees)
Capital & operating expenditures
“spending made in response to current or anticipated regulations, conventions or voluntary agreements”
Spending on renewable energy and on greenhouse gas emission mitigation
All expenditures (including voluntary)
SEEA-CF - Environmental activity accounts

18. EPE Accounts INEGI Mexico “Green” GDP Depletion costs
2-1 Protection Expenditures
EPE Accounts
INEGI Mexico “Green” GDP
Depletion costs
Hydrocarbons
Forest resources
Groundwater
Degradation costs
Soil
Solid waste treatment expenditures
Water pollution expend.
Air pollution expend.
8.5% of GDP in 2003
5.0% in 2015
National plan  4.5% by 2018
Concept
Total cost for Depletion and Degradation
Percentages with respect to GDP
Total Costs
907,473
5.0
Depletion costs
122,716
0.7
Hydrocarbons
79,175
0.4
Forest resources
15,658
0.1
Ground water
27,883
0.2
Degradation costs
784,757
4.3
Soil
88,402
0.5
Solid waste
61,253
0.3
Water pollution
57,403
Air pollution
577,698
3.2
Could be misinterpreted as “raise GDP by stopping EPE”
Possibilities for mis-interpretation?
Could be misinterpreted as
“raise GDP by stopping EPE”
SEEA-CF - Environmental activity accounts

19. EPE Accounts Challenges Small sample  limit detail released
2-1 Protection Expenditures
EPE Accounts
Challenges
Small sample  limit detail released
Harmonizing government & private expenditures
SEEA-CF - Environmental activity accounts

20. Environmental Goods and Services Sector (EGSS)
Supply side of environmental activities
= production of environmental goods and services
Objective
assess the contribution of EGSS to the total economy and employment
EGSS statistics provide…
Indicators of the production or environmental goods, services and technologies
Contribution of production within the economy as a whole
Extent of related employment, investment and exports from the sector
Production, “green” employment, value added, exports, gross investment
Production, “green” employment, value added, exports, gross investment
SEEA-CF - Environmental activity accounts

21. Environmental Goods and Services Sector (EGSS)
Scope:
…producers of all environmental goods and services
…all products…produced, designed and manufactured for environmental protection and resource management…
Environmental specific services, connected products, adapted goods and technologies
“Primary purpose” criterion (technical nature of product or activity / intention of the producer)
Target population, Intention of producer difficult to ascertain (e.g., StatCan survey)
Start with screening (do you…)
Target sectors for more detail
Via nature of good/service?
EGSS excludes goods and services produced for purposes that, while beneficial to the environment, primarily satisfy technical, human and economic needs or that are requirements for health and safety
SEEA-CF - Environmental activity accounts

22. Environmental Goods and Services Sector (EGSS)
Sewage and refuse disposal
Recycling
Waste & scrap, recycled goods
Renewable energy production
Sustainable energy systems
Insulation
Equipment
Consulting & engineering
Construction, inspection
Organic agriculture
Government, NGOs, education
Providers of EGSS
SEEA-CF - Environmental activity accounts

23. Environmental Goods and Services Sector (EGSS)
What do they produce?
2-2 Goods and services
Environmental Goods and Services Sector (EGSS)
EGSS
EGSS
Who produces?
Methodology: Data sources:
Activity approach:
Identify industry
Product approach:
Identify commodities
Industry consumption surveys
Household surveys
SNA (supply/use)
Commodity statistics
Industry production surveys
SNA, industry statistics
Corporate reports
SEEA-CF - Environmental activity accounts

24. Environmental Goods and Services
Netherlands
Many environmental activities have been identified by Statistics Netherlands as EGSS activities
For every activity a specific methodology has been developed to compile the data
Canada
Ongoing frame developed from existing surveys (EPE)
Screening in other surveys (e.g., innovation, biotech)
SEEA-CF - Environmental activity accounts

25. Environmental Goods and Services
Netherlands data sources
SEEA-CF - Environmental activity accounts

26. Environmental Goods and Services
Canada Goods
SEEA-CF - Environmental activity accounts

27. Environmental Goods and Services
Canada Services
SEEA-CF - Environmental activity accounts

28. Environmental Goods and Services
Challenges
Identifying primary purpose of product
“Widget” could be for pollution reduction or creation
Identifying target survey population
Complex industries (manufacturing, consulting services…)
 Iterative process (activity AND product approach)
The more effort, the larger the EGSS
International comparability
Same: Scope, Methodology, Data sources?
Cleaner goods / resource efficient goods = “green”?
Integration with EPEA / ReMEA (use of EGSS)
Dissemination of the results (confidentiality)
SEEA-CF - Environmental activity accounts

29. Environmental taxes SEEA-CF 4.150
2-3 Taxes and subsidies
Environmental taxes
SEEA-CF 4.150
… tax base is a physical unit of something that has a … negative impact on the environment
Energy taxes: Carbon, fuel, other
Transport taxes
Pollution taxes
Resource taxes
Remember: Primary purpose criterion
Energy taxes
Includes taxes on energy products used for both transport and stationary purposes
Carbon taxes should be reported as a separate subcategory within energy taxes
A special type of carbon taxes: payments for tradable emissions permits
Transport taxes
Includes taxes related to the ownership and use of vehicles and other transport equipment, and the use of roads
Pollution taxes
Taxes on water and air emissions, generation of solid waste and Sulphur
Resource taxes
Taxes on water abstraction, extraction of raw materials and other resources
Why resource consumption/depletion tax?
Resource consumption/depletion tax to reduce consumption of depletable resources
SEEA-CF - Environmental activity accounts

30. Environmental taxes 2-3 Taxes and subsidies
SEEA-CF - Environmental activity accounts

31. Environmental subsidies
2-3 Taxes and subsidies
Environmental subsidies
SEEA-CF 4.138
… transfer intended to support activities that protect the environment or reduce the use and extraction of natural resources…
transfer intended to support activities that protect the environment or reduce the use and extraction of natural resources
Subsidies
Social benefits to households
Investment grants
Other current transfers
Other capital transfers
Transfers between different economic units have different names.
SEEA-CF - Environmental activity accounts

32. Environmental subsidies
2-3 Taxes and subsidies
Environmental subsidies
SEEA-CF - Environmental activity accounts

33. Environmental taxes & subsidies
2-3 Taxes and subsidies
Environmental taxes & subsidies
Data sources
SNA
Tax department (administrative data)
Surveys
Country examples EU
SEEA-CF - Environmental activity accounts

34. Environmental activities (EU)
Country examples
Environmental activities (EU)
EGSS – 1oo% increase in 12 years
EPEA – 2% of GDP
Taxes – €325B
Observations?
SEEA-CF - Environmental activity accounts

35. Group Exercises
Group Exercise
Sector
EPE
EGSS
Government
Households
ST company
ECS Company
RG Company
Total
Small country (10,000 households, government, 3 companies)
Government:
Collects $1M from households for sewage treatment
Collects $20M from households for general taxes
Pays $900K to ST Company for treating sewage
ST Company:
Purchases services from ECS company for redesign for $40K
ECS company manufactures and sells $100K in solar panels to households
Households:
Donate $50K in used products to RG company
RG company:
Sells recycled products for $50K
Manufactures hiking boots & sells to households to $100K
Calculate Gross EPE and EGSS
SEEA-CF - Environmental activity accounts

36. Group Exercise (one answer)
Group Exercises
Group Exercise (one answer)
Government:
(a) Collects $1m from households for sewage treatment
Collects $20M from households for general taxes
(b) Pays $900K to ST Company for treating sewage
ST Company:
(c) Purchases services from ECS company for redesign for $40K
ECS company:
(d) manufactures and sells $100K in solar panels to households
Households:
(e) Donate $50K in used products to RG company
RG company:
(e) Sells recycled products for $50K
Manufactures hiking boots & sells to households to $100K
Gross EPE and EGSS = $2090
Sector
EPE
EGSS
Government
(b) 900
(a) 1000
Households
1000
(d) 100
(e) 50
ST company
(c) 40
ECS Company
(c) 40
RG Company
Total (Gross)
$2090
Gross includes double counting. Which? E.g., intermediate consumption…
Gross vs net?
SEEA-CF - Environmental activity accounts

37. Environmental Activities
Take home points
Environmental Activities
Take home points
EPEA track USE of environmental protection (EP)
EGSS tracks SUPPLY of environmental protection (EP)
Taxes limit consumption and subsidies (should) promote EP
Most data already available, but needs more detail
Discussion
Links to climate change?
Are all climate change mitigation, adaptation, planning…in EPEA?
Does your NSO track Environmental Activities?
EPE. EGSS, taxes, subsidies?
Which would be the most important?
Who [are/could be] your data providers?
SEEA-CF - Environmental activity accounts

38. References
References
Statistics Netherlands: services/methods/surveys/korte-onderzoeksbeschrijvingen/environmental- protection-expenditure
Statistics Canada: 3
Eurostat: goods-and-services-sector
OECD:
SEEA-CF - Environmental activity accounts

39. Acknowledgements Materials prepared by: Materials adapted from:
Michael Bordt
Regional Adviser on Environment Statistics
ESCAP Statistics Division
Hye Kyeong Choi
Consultant on Environment Statistics
ESCAP Statistics Division
Materials adapted from:
Sokol Vako (UNSD; Chiba, Japan; Feb. 23, 2016)
Sjoerd Schenau (Statistics Netherlands and Eurostat course on Environmental Taxes)
SEEA-CF - Environmental activity accounts