Definition and delimitation of the Environmental Goods and Services Sector according to the 2009...

Definition and delimitation of the Environmental Goods and Services

Sector according to the 2009 Eurostat handbook

Expert Group meeting on International economic and social classifications

United Nations Headquarters, New York

1-4 September 2009

Cesare Costantino

Italian national statistical institute

Environmental accounting

Federico FalcitelliMinistry of the Economy and

Finance

State General Accounting Department

Expert Group meeting on Classifications, United Nations, New York 1-4 September 2009

Summary

• Background

• Definition and delimitation of EGSS according to the 2009 Eurostat handbook

Definition of EGSS and relationship with the scope of the satellite accounts on environmental expenditure

Delimitation of EGSS, definitions and classifications with specific reference to:

Environmental purposes

Products

Producers

Overview

• Concluding remarks


Need for an international handbook

• Strong policy interest in measures targeted to the environmental goods and services sector need to have good quality, comparable, coherent data on e.g.

EGSS’ turn-over, value added, etc., while minimising the burden on national statistical offices

• The international guidelines available - “The Environmental Goods & Services Industry. Manual for data collection and analysis” (OECD/Eurostat, 1999) – need to be improved leave open a number of issues on the definition, classification

and identification of the sector do not deal with all operational aspects are endorsed within the SEEA2003, which currently is

undergoing a revision process with a view to becoming an international statistical standard

Background


Eurostat’s initiative for developing the handbook

• In 2007 Eurostat launched an ad hoc Task Force for developing a handbook on the Environmental Goods and Services Sector - EGSS

• The handbook was finalized and was approved in march 2009 by the Eurostat Working Group on Environmental Expenditure statistics

• The approach developed by Eurostat was considered by the London Group and is taken into account for the on-going revision of the SEEA

Background


The Eurostat handbook

• Structure of the handbook: Ch. 1 background information on EGSS Ch. 2 definition, delimitation and classification

of the sector Ch. 3 guidelines to identify and classify the

population Ch. 4 methodologies for data collection, reporting

and analysis Ch. 5 Standard tables for data collection and

process for their compilation Ch. 6 Recommendations and examples on

presentation and interpretation of figures

Background


Definition of EGSS

• The Environmental Goods and Services Sector consists of a heterogeneous set of producers of technologies, goods and services aimed at: measuring, controlling, restoring, preventing,

treating, minimising, investigating and sensitizing to environmental damages to air, water and soil as well as problems related to waste, noise, biodiversity and landscapes. That includes “cleaner” technologies, goods and services that prevent or minimise pollution.

measuring, controlling, restoring, preventing, minimising, investigating and sensitizing to resource depletion. That mainly results in resource-efficient technologies, goods and services that minimise the use of natural resources.

Definition


ServicesGoods

ServicesGoods

SUPPLY USE

Environmental protection

Resource use and management

ServicesGoods

ServicesGoods


Resource use and managament

Environmental Goods and Services Sectorstatistics

SEEA and SERIEE satellite accounts (EPEA+RUMEA)

EPEAEnvironmental Protection Expenditure Account

RUMEAResource Use and Management Expend. Account

Supply side perspective: EGSS statistics and satellite environmental accountsDefinition


Defining and delimiting the EGSS

EGSS is defined and delimited by answering three main questions

Which kind of environmental technologies, goods and services?

Which kind of producers?

What does it mean “environmental”?

Environmental purposes covered

Products covered

Producers covered

Definition and delimitation


Types of environmental purposes covered

• EGSS includes the provision of environmental technologies, goods and services that respond to two types of environmental purposes:

Environmental Protection (EP): technologies and products suitable for both preventive and remedial purposes, i.e. for the prevention, reduction, elimination and treatment of air emissions, waste and wastewater, soil and groundwater contamination, noise and vibration as well as radiation, the prevention, reduction and elimination of soil erosion and salinity as well as other kinds of degradation, the preservation of biodiversity and landscapes as well as the monitoring and control of the quality of the environmental media and waste

Resource Management (RM): technologies and products suitable for managing and/or conserving the stock of natural resources against depletion phenomena, including both preventive and restoration activities as well as the monitoring and control of the levels and uses of natural resource stocks.

• remark 1: in both cases EGSS includes Administative activities, education, training, information and

communication activities Research and development activities

• remark 2: EGSS’ output is for every kind of use, i.e. intermediate and final consumption as well as gross capital formation



Activities not included in EGSS

• Not included in EGSS: Activities related to natural hazards and natural risk

management (nevertheless, e.g. the protection of soil against erosion for reducing the risk of landslides and floods are included, given the primary aim of protecting the soil)

Extraction, exploitation and mobilisation of non-renewable resources (Resource Use - RU)



What is crucial is the “main purpose”

How to establish whether a product responds to an environmental purpose

The environmental purpose at issue has to be the “main purpose” for the product

How to identify the main purpose

mainly on the basis of the technical nature of the activity or the producer’s intention, i.e. regardless of the intention of the users

The selection criterion based on the producer’s intention should however be applied for handling cases that are not already solved according to the technical nature of the activity

In practice, producer’s intention means:• the awareness of the producer about the environment-friendly characteristics of its

output; • the awareness of the producer about the use of its output; • the environment-related markets to which the producer addresses its output(e.g. producers of renewable energy technologies, clean cars or eco-efficient devices).

Does EGSS include whatever product beneficial to the environment?

All products whose main purpose (according to the technical nature or the producer’s intention) is not an environmental purpose are not included in the EGSS even if the product has a favourable impact on the environment (e.g. electronic delivery of documents). Hence, excluded from the EGSS are products that, while beneficial to the environment, primarily satisfy technical, human and economic needs or requirements for health and safety.



Types of environmental products

Types of products Environmental protection (EP) Resource management (RUM)

Environmental specific services- are the output of Environmental

Protection (EP) or Resource Management (RM) “characteristic” activities

EP services: waste management, wastewater management, and any other kind of service according to CEPA

RM services: water or energy saving, production of energy by means of renewable sources, and any other kind of service according to CReMA

Connected products- have no use except for supporting the

execution of EP or RM specific services- may be services or goods (durable or

non-durable goods)

e.g. maintenance services for septic tanks, trash bags, septic tanks, and all components that are used specifically and exclusively for environmental protection technologies

e.g. tap filters, differentiate systems for flushing the toilet, and all components that are used specifically and exclusively for resource management technologies

Adapted products- equivalent normal products have to exist

(at least theoretically)- their primary use is not for EP or RM- they may be durable or non-durable

goods

“cleaner” products: e.g. mercury-free batteries, cars or buses with lower air emissions, biodegradable soaps, ecological paints

“resource efficient” products: e.g. recycled paper, recycled glass, efficient refrigerators and washing machines, renewable energy, heat from heat pumps and solar panels

End-of-pipe technologies- treat pollution that has been generated or

resources that have already been withdrawn, or measure the level of pollution or resources use (monitoring)

e.g. filters, incinerators, wastewater management facilities

e.g. plants and methods for producing recycled products

Integrated technologies- decrease material inputs, reduce energy

consumption, minimise waste and/or reduce emissions compared to the national current standard

“cleaner” technologies: e.g. organic farming which reduces the impact of agriculture on soil quality

“resource efficient” technologies: e.g. plants and methods for producing renewable energy such as through windmills, solar panels, hydroelectric turbines, combined heat and power

Products


Kinds of producers

General Government

Ancillary

Market Non market Market Non market Non market Non market

Producers

Indirect non corporate level: policy, administration, planning, legislation, supervision, control,

information, etc

Principal Secondary

Corporations

All NACE divisions

Institutional sectors

• General Government

• Corporations

Producers

activities

• Market/non market activities

• Principal/secondary/ancillary activities


Environmental purposes and classifications to be used

Environmental prot. (EP)

CEPA 2000

remark: CEPA 2000 is an international standard

EGSS environmental purposes

Resource manag. (RM)

CReMA (Classification of Resource Management Activities)

remark: CReMA is derived by the draft CRUMA 2009 (Resource Use activities not included)

Classification


CReMA (Classification of Resource Management Activities)

• 10: Management of waters • 11: Management of forest resources

11 A: Management of non-cultivated forest areas 11 B: Minimisation of the intake of forest resources

• 12: Management of wild flora and fauna• 13: Management of energy resources

13 A: Production of energy from renewable sources 13 B: Heat/Energy saving and management 13 C: Minimisation of the intake of fossil resources as raw

material for other use than energy production

• 14: Management of minerals • 15: Research and development • 16: Other natural Resource Management activities

Classification


Summary of main concepts

Economic variables

Turn over

Value added

Employment

Exports



CEPA 2000

Resource management

CReMA

Products

Env. Specific services

Connected products (goods and services)

Adapted goods (cleaner and resource-efficient)

End of pipe technologies

Integrated technologies

Producers

Principal / secondary

Non market

Corporations NACE 2 digit level Market

Ancillary

General Gov. Administrative level

Overview


Definition and delimitation of EGSS: major achievements

• The EGSS concept according to the 2009 Eurostat handbook is consistent with the one developed within the 1999 OECD/Eurostat guidelines

• As concerns definition and classification issues, the main “value added” of the 2009 Eurostat handbook is represented by having: enhanced the consistency with the internationally agreed

satellite accounting systems SEEA and SERIEE provided an improved classification for resource management

activities (less developed in the 1999 guidelines, leading to overlapping with CEPA)

clarified a number of issues left opened in the 1999 guidelines (e.g. concerning cleaner goods and technologies)

made the definition and delimitation of the sector more operational, by providing the users of the handbook with practical instructions

Concluding remarks


Questions to the Expert Group

• What is your opinion on the criteria to delimitate the EGSS?


Thank you for your attention

[email protected] [email protected]

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