Environmental protection expenditure accounts (EPEA) are a statistical framework that describes environmental activities in monetary terms and organises these

statistics Statistics (from German: '' Statistik'', "description of a state, a country") is the discipline that concerns the collection, organization, analysis, interpretation, and presentation of data. In applying statistics to a scientific, indust ...

into a full set of accounts, just like that of the

national accounts National accounts or national account systems (NAS) are the implementation of complete and consistent accounting techniques for measuring the economic activity of a nation. These include detailed underlying measures that rely on double-entry ...

. The EPEA is part of the

System of Integrated Environmental and Economic Accounting System of Environmental-Economic Accounting (SEEA)System of Environmental-Economic Accounting 2012: Central Framework – final, official publication 2012, UN, EC, IMF, OECD and World Ban"System of Integrated Environmental and Economic Accounting" ...

which, in March 2012, was adopted as a statistical standard by the

United Nations Statistical Commission The United Nations Statistical Commission (StatCom) is a Functional Commission of the United Nations Economic and Social Council, established in 1947. The Statistical Commission oversees the work of the United Nations Statistics Division (UNSD). I ...

. The EPEA results in a net national total expenditure for

environmental protection Environmental protection is the practice of protecting the natural environment by individuals, organizations and governments. Its objectives are to conserve natural resources and the existing natural environment and, where possible, to repair dam ...

of an

economy An economy is an area of the production, distribution and trade, as well as consumption of goods and services. In general, it is defined as a social domain that emphasize the practices, discourses, and material expressions associated with th ...

.SERIEE Environmental Protection Expenditure Accounts – Compilation guide Eurosta
"SERIEE Environmental Protection Expenditure Accounts – Compilation guide"
, Eurostat 2002, 170 pp. The statistics are usually presented by

economic sector One classical breakdown of economic activity distinguishes three sectors: * Primary: involves the retrieval and production of raw-material commodities, such as corn, coal, wood or iron. Miners, farmers and fishermen are all workers in the p ...

s (government, industries, households) and by what environmental domain has been protected, i.e.

water Water (chemical formula ) is an inorganic, transparent, tasteless, odorless, and nearly colorless chemical substance, which is the main constituent of Earth's hydrosphere and the fluids of all known living organisms (in which it acts as ...

, air,

biodiversity Biodiversity or biological diversity is the variety and variability of life on Earth. Biodiversity is a measure of variation at the genetic ('' genetic variability''), species ('' species diversity''), and ecosystem ('' ecosystem diversity'') ...

etc. The main types of statistics that feed into the framework are investment statistics, statistics on current outlays, government statistics on subsidies and investment grants, all with bearing on protection of the environment. The statistics cover actual outlays. This means that, for example, losses of income are not seen in the statistics with the exception of specific transfers (or subsidies) that are designed to compensate any economic losses. Neither do the statistics cover all activities that might have a beneficial environmental impact. There is a distinction between the purpose of the activity and the effect of the activity. For example, new production equipment that is installed solely for the purpose of increasing productivity and reducing costs may use energy and materials more efficiently, and as a side effect reduce environmental discharges. The expenditure for this new equipment would not be included in EPE. The main aim of the statistics is to provide indicators to show the response of society to reduce pollution. The statistics can be used in different types of analysis. One type of analysis determines whether the "polluter pays" principle holds, i.e. whether those who pollute are also the ones who pay for remediation and clean-up. It can also be used to analyse the effects on enterprise competitiveness, for cost-effective analysis related to propositions of new regulations and policies.Environmental protection expenditure in Europe Eurosta
"Environmental protection expenditure in Europe"
Eurostat 2001, 232 pp.

Scope

In order to create the

on environmental protection expenditure (EPE) an international definition has been agreed upon. "Environmental protection groups together all actions and activities that are aimed at the prevention, reduction and elimination of pollution as well as any other degradation of the environment. This includes measures taken in order to restore the environment after it has been degraded due to the pressures from human activities".1994 SERIEE §2006 SERIEE 1994 Eurosta
"SERIEE 1994"
Eurostat 2002, 182 pp. and SEEA Central Framework chapter 4 SEEA Central Framework Committee of Experts on Environmental Economic Accounting Statistics Division/Department of Economic and Social Affairs, United Nation
"SEEA Central Framework"
Statistical Commission Forty-third session 28 February – 2 March 2012 Item 3 (e) of the provisional agenda, Committee of Experts on Environmental Economic Accounting Statistics Division/Department of Economic and Social Affairs, United Nations, 329 pp. This definition delimitates the area so that hygiene and security are excluded as well as management of natural resources. The full sequence of EPEA are compiled through five different tables that interact with one another. The tables are established, just like the

on a

double-entry bookkeeping system Double-entry bookkeeping, also known as double-entry accounting, is a method of bookkeeping that relies on a two-sided accounting entry to maintain financial information. Every entry to an account requires a corresponding and opposite entry to ...

. They were developed this way so that consistent indicators with the national accounts could be ensured. The tables cover statistics on production of environmental protection activities, the use of environmental protection services (e.g.

waste management Waste management or waste disposal includes the processes and actions required to manage waste from its inception to its final disposal. This includes the collection, transport, treatment and disposal of waste, together with monitorin ...

waste water Wastewater is water generated after the use of freshwater, raw water, drinking water or saline water in a variety of deliberate applications or processes. Another definition of wastewater is "Used water from any combination of domestic, industrial ...

management services), how the financing of environmental protection happens and a supply and use tables and net cost of environmental protection (what is the final expenditure and who is bearing the expenditure.)

Collecting the underlying statistics

The EPEA framework consists of five different tables and covers the economy and the transactions of it. In order to fill the tables several different data sources need to be collected and attributed to the correct place in the framework tables. The data sources would be taken from existing information such as the

National accounts National accounts or national account systems (NAS) are the implementation of complete and consistent accounting techniques for measuring the economic activity of a nation. These include detailed underlying measures that rely on double-entry ...

, from business

or government finance

. But sometimes a statistical office would need to undertake a special investigation to find the correct information.

Specialised producers

Specialised producers of environmental protection services are defined as activities that are focused on servicing the environment. That means waste management activities and activities for waste water management: "all those producers whose principal activity is the production of environmental protection (EP) services, regardless of whether they belong to the private or public producers group or if they carry out market or non-market activities" Businesses undertaking e.g.

can be either market or non-market actors. This means that they're either owned by a public entity (such as a local government) or by a private actor. It is important to the EPEA tables that this distinction is made in the

. If

are published according to e.g.

International Standard Industrial Classification The International Standard Industrial Classification of All Economic Activities (ISIC) is a United Nations industry classification system. Wide use has been made of ISIC in classifying data according to kind of economic activity in the fields of em ...

economic statistics for the following codes could be collected: * Division E – Water supply; sewerage, waste management and remediation activities * ISIC 37 – Sewerage * ISIC 38 – Waste collection, treatment and disposal activities; materials recovery * ISIC 39 – Remediation activities and other waste management services

Secondary non-specialised producers

Secondary non-specialised producers are actors that performs environmental protection services but not as a primary activity. This means for example that a business in the chemical industry sells excess energy to the local energy grid would be a secondary non-specialised producer (as its primary activity is the production of chemicals.) These types of activities are rarely seen in statistics published.

Ancillary non-specialised producers

In most countries the statistics are collected through sample surveys conducted by national statistical offices. This means that, in general, businesses are requested to fill out questionnaires with specific questions about their past investments or current outlays with bearing on environmental protection. The respondents of a survey needs to know if any new equipment has been installed in the production process, if it has an environmental component to it and how much this extra component could be worth (in monetary terms). The respondent also has to know how the new equipment is reducing environmental pressure, i.e. within what environmental domain (air, waste, waste water etc.) the equipment is working for.

Government

Interpreting the statistics

The basic message of the statistics is to show how much money has been spent on protecting the environment from human activities in past years. If the statistics is presented within the accounting framework of EPE then the statistics also show who has spent the money and who has financed the spending. Current international statistics of

Eurostat Eurostat ('European Statistical Office'; DG ESTAT) is a Directorate-General of the European Commission located in the Kirchberg, Luxembourg, Kirchberg quarter of Luxembourg City, Luxembourg. Eurostat's main responsibilities are to provide stati ...

presents statistics on investments and current expenditure for the protection of the environment. In 2006 Europe spent around 1.8 percent of

Gross Domestic Product Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjective nature this measure is of ...

on treating and preventing environmental pollution through investments and current expenditure. To know who spent how much and on what has its advantages, it provides an insight on how the area is perceived comparing one sector to another. It also show which sectors are under more pressure to undo the damage to the environment that their specific production are creating. However, the statistics becomes much more interesting when comparing the amount spent to the environmental burden the sector is having. For example, are the highest investments made in for example the reduction of air pollution made by the sector that has the largest emission of for example green house gases? Eurostat made an attempt at showing this for some of the European countries.Manufacturing industry 1995-2003 Economic activities and their pressure on the environment
"Manufacturing industry 1995-2003 Economic activities and their pressure on the environment"
Eurostat Statistics in Focus, 16/2006, 12 pp. The publication shows that this is not always the case. Another study, based on Swedish statistics show that enterprises that has internal research and development (R&D) departments which also work on environmental R&D are more likely to invest in environmental protection then if they have not.

History

Statistics on environmental protection expenditure follows the recommendations of the Chapter XXI of the 1993

System of National Accounts The System of National Accounts (often abbreviated as SNA; formerly the United Nations System of National Accounts or UNSNA) is an international standard system of national accounts, the first international standard being published in 1953. Handb ...

. Eurostat, national statistical offices and experts gathered to develop a whole new type of statistics. The result became a manual called European System for the Collection of Economic Information on the Environment (SERIEE). The manual presented a conceptual statistical framework for a monetary description of environmental protection activities and to some extent resource management activities. After the publication of SERIEE European statistical offices started to test and develop this new type of statistics. Much due to the adoption of variables on pollution prevention (integrated) investments, pollution treatment (end-of-pipe) investments and current expenditure on environmental protection in the Structural Business Statistics Regulation 58/97 in 2002 part of the EPEA were developed faster.SBS 58/97, European Parliament and Counci
"Council Regulation (EC, Euratom) No 58/97 of 20 December 1996 concerning structural business statistics"
Eur-Lex, 31997R0058 .Amending the SBS 58/97, European Parliament and Counci

Eur-Lex, L 317/1 . The evaluation of SERIEE were focused on the EPEA framework and several countries provided pilot studies on the topic. Examples are Belgium,The Environmental Protection Expenditure Account in Belgium: Initial assessment based on the SERIEE method Kestemont, B. National statistical institute of Belgiu
"The Environmental Protection Expenditure Account in Belgium: Initial assessment based on the SERIEE method"
, Kestemont, B. National statistical institute of Belgium 1999, 26 pp. France,In 1997, France spent 145 billion francs on environmental protection Daniel Desaulty, IFEN and Philippe Templé, MAT
"In 1997, France spent 145 billion francs on environmental protection"
, Daniel Desaulty, IFEN and Philippe Templé, MATE 1999, 8 pp. and GermanyImplementation of SERIEE in Germany Reporting year 1995 Wolfgang Riege-Wcislo German Federal Statistical Offic
"Implementation of SERIEE in Germany Reporting year 1995"
, Wolfgang Riege-Wcislo German Federal Statistical Office 1999, 39 pp. among other countries. At the same time, the System of Integrated Environmental and Economic Accounting, System of Integrated Environmental and Economic Accounting (SEEA) were being developed. The manual SEEA 2003 manualHandbook of National Accounting System of Integrated Environmental and Economic Accounting 2003, UN, EC, IMF, OECD and World Ban
"System of Integrated Environmental and Economic Accounting"
, United Nations, European Commission, International Monetary Fund, Organisation for Economic Co-operation and Development and World Bank 2003, 598 pp. adopted the EPEA as part of their work and environmental protection expenditure statistics became recognised world wide. Throughout this time

and the

OECD The Organisation for Economic Co-operation and Development (OECD; french: Organisation de coopération et de développement économiques, ''OCDE'') is an intergovernmental organisation with 38 member countries, founded in 1961 to stimulate ...

has collected data in this field in a joint data collection scheme, by gentlemen's agreement. This means that the countries receiving the questionnaire are not obliged to answer under any legal obligation but do so out of voluntary agreement. A simplified EPEA has been the requirement and investments, current expenditure, revenues and subsidies/transfers for environmental protection has been the targeted variables of statistics. These variables are often also considered

official statistics Official statistics are statistics published by government agencies or other public bodies such as international organizations as a public good. They provide quantitative or qualitative information on all major areas of citizens' lives, such as ...

. Recent discussions in the statistical community are the proposal to include the EPEA tables in full or in a simplified form in the adopted Regulation (EU) No 691/2011 of the European Parliament and of the Council of 6 July 2011 on European environmental economic accounts.Regulation on European environmental economic accounts: Update on progress and future development of new modules, Doc. ENV/DIMESA/4.1/2011 Eurostat
"Regulation on European environmental economic accounts: Update on progress and future development of new modules"
, Doc. ENV/DIMESA/4.1/2011 Eurostat.

Implementation

The studies in late 1990s indicated that the EPEA were difficult to compile, i.e. in the sense that numerous types of statistics were required and the gaps of information in the tables provided results that were uncertain at best. Even more recent studies have concluded the same thing.Environmental Protection Expenditure Accounts in Sweden – a pilot application and analysis Final report to Eurostat, Statistics Swede
"Environmental Protection Expenditure Accounts in Sweden – a pilot application and analysis Final report to Eurostat"
Statistics Sweden 2009, 60 pp. A few countries have found the compilation of the EPEA feasible and can provide results that are viable. For example, Italy and Belgium produce the accounts on a regular basis.Summary Report: The Belgian Environmental Tax Accounts, Environmental Protection Expenditure Accounts, and Air Emissions Accounts, Federal Planning Bureau Belgiu

, Federal Planning Bureau Belgium 2011, 12 pp.Istat Istituto nazionale di statistic
"Istat Istituto nazionale di statistica"
Istat Istituto nazionale di statistica . The general approach is, however, not to complete the full EPEA but to show, specifically, investments and current expenditure for environmental protection by the environmental domain the activity has been implemented in.

Scope

Collecting the underlying statistics

Specialised producers

Secondary non-specialised producers

Ancillary non-specialised producers

Government

Interpreting the statistics

History

Implementation

See also

SEEA modules

Other related articles

References

External links