From Pioneer Work to Regulation and Beyond
Introduction
NAMEA (National Accounting Matrix including Environmental Accounts) is a statistical framework which extends the matrix presentation of national accounts (the NAM) to environmental flows. The term originates from the work conducted by the Dutch Statistical Institute in the 1990s.1 Early versions of the Dutch NAMEA were very comprehensive on the NAM side and covered income generation, distribution and use accounts as well as accumulation accounts and changes in balance-sheet accounts; environmental flows mainly included the generation of air pollutants, solid waste, phosphorus and nitrogen by production activities and household consumption. Over time and with the United Nations handbook System of Integrated Environmental and Economic Accounting (SEEA2), in particular, the term NAMEA became used as a synonym for hybrid flow accounts i.e. a matrix framework which presents an economic module including national economic accounts in monetary terms, (the NAM) side by side with an environmental module including flow accounts in physical units (EA), both modules being based on common national accounts principles; the term hybrid refers to the joint use of monetary and physical units.
The second section of the chapter describes a Hybrid Flow Account where the economic module is in the form of monetary Supply and Use. On the environmental side, the development of NAMEA-type accounts started in most EU countries from air emissions, thanks to the availability of good and comparable statistical data sources. Now referred to as air emission accounts, they are one of the three modules for which the forthcoming EU Regulation on environmental accounts will make it compulsory to produce nation-wide yearly time series. The other two modules are economy-wide material flow accounts and environmentally related taxes by economic activity.
In Italy, the Italian National Statistical Institute (ISTAT) has been regularly releasing a time series of air emission accounts at national level since 2004; air emission accounts at regional (NUTS 2) level for 2005 are also available.
The emphasis given to the sub-national breakdown of data is more the result of national priorities than the directions agreed upon at EU level, where the foreseen short-term development for NAMEA-type accounts is not in the direction of a spatial or temporal breakdown, but aims to expand the set of environmental pressures, particularly with energy accounts (in the medium term), and possibly water accounts (in the longer run).
The compilation of NAMEA-type accounts on the basis of existing statistics, which were not traditionally designed to be consistent with monetary economic accounts, requires a number of steps, described in the third section of the chapter, mainly with reference to air emission accounts and energy accounts.
NAMEA Accounts and Tables
A widely known kind of hybrid flow account3 is based on the integration of a monetary supply-and-use table for the economic module and physical flow accounts for the environmental module. The economic and environmental components are described below, first as two separate entities (Figure 1.1 and Figure 1.2) and then merged in one single matrix framework (Figure 1.3).
Figure 1.1 Monetary Supply-and-use Table.
Figure 1.1 presents a monetary supply-and-use table, a standard framework in national accounts. It shows the monetary value of products – goods and services – made available in the economy by means of domestic production or imports by producing industry and the use of products; it also shows the intermediate costs of economic activities as well as their value added (output minus intermediate consumption). The first row/column pair presents the goods and services account: column-wise (supply – resources) the supply of goods and services is shown first, with a distinction made between domestic industry products4 and imports; the column also records trade and transport margins and net indirect taxes charged on products thus ensuring that supply and use totals match.5 Row-wise, the account shows all possible uses of available resources: intermediate consumption by industries, final consumption, gross capital formation and exports.
Figure 1.2 Physical Supply-and-use Tables.
Figure 1.2 presents a pair of physical supply-and-use tables (PSUTs); they describe the origin and the destination of three kinds of flows:6 (a) resources – minerals, energy resources, water and biological resources; (b) products – goods and services produced within the economic system and also represented in Figure 1.1; (c) residuals – solid, liquid and gaseous residuals.
The physical supply table shows the origin of all flows (row headings) that can occur between the economy and the environment: by definition, natural resources can only be supplied by the environment whereas products and residuals can only be supplied by the economy, either the domestic industry or the rest of the world (RoW) in the form of imports.7 The product flows portrayed in the table are the physical counterpart of monetary transactions in Figure 1.1. In the full tables, each flow category is broken down according to a suitable existing classification, for example, for energy resources, the breakdown follows the classification of energy resource assets proposed in the draft System of Environmental-Economic Accounting for Energy (SEEA–E8). Column headings may also be detailed, particularly for industries, broken down according to the standard industry classification, NACE (Statistical Classification of Economic Activities in the European Community, version Rev. 1.1).
The use table shows, row-wise, the uses of available flows by industry for intermediate consumption, final users including RoW (for exports) and the environment.
All flows are quantified in physical natural units (tonnes, cubic metres, etc.). As in monetary tables, total supply also equals total use (for each flow) in physical tables.
Figure 1.3 Supply-and-use-based NAMEA (source: United Nations et al., 2003, § 4.38).
The rationale of hybrid accounts is to represent the economy-environment interface by applying the framework of supply-and-use tables (which scores high in terms of analytical potential) to flows other than product flows while maintaining different units (monetary and physical) in the scheme.
Figure 1.3 is a hybrid flow account obtained by merging the monetary supplyand-use tables in Figure 1.1 (economic module) with the PSUTs in Figure 1.2 (environmental module).
The economic module presents one more element than Figure 1.1: household consumption according to heating, transport and a residual ‘other’ category; these items, representing an ‘of which’ of final consumption, are particularly meaningful in the case of air emission accounts and energy accounts since they show the specific household consumption items associated with air emissions and energy use.
The environmental module describes the origin (columns) and destination (rows) of ‘natural resources’ and ‘residuals’ in one single framework as in Figure 1.2; by contrast, physical flows of products are not included in Figure 1.3 since the description of the flows of goods and services within the economy is provided in monetary terms in the economic module.
For natural resources, the accounting framework describes their supply by the environment and their use by production activities (industries), consumption activities and exports.
As regards residuals, the accounting framework describes their origin/supply – production activities (industries), consumption activities (private households), capital and imports – as well as their destination/use, which includes their use as input for industries, as capital stock (residuals going to landfill) and as exports. The balance between residuals supplied by the economy and those used by the economic system itself is the quantity of residuals released to the environmental system.9
The joint presentation of Figure 1.3 is typical of the NAMEA framework with the environmental module reporting the environmental pressures generated by the economy (air emissions, use of natural resources, etc.) and the economic module accounting for the socio-economic parameters (production, value added, employment, etc.) corresponding to the economic activities (industries and households) that generate environmental pressures. With regard to industries, the framework identifies two joint results generated by the activity carried out for each economic sector: economic values (output, value added, etc.) and pressures exerted to generate the economic values themselves. As far as households are concerned, the pressures generated by selected consumption activities are compared with the expenses incurred by households to purchase products whose use is at the root of the environmental pressures themselves.
For both production activities and households, environmental pressures are allocated to who is directly responsible for their generation (due to production or consumption processes respectively for industries and households).10 Alternatively, NAMEA data can be further processed using input–output analysis to give a consumption perspective, in which air emissions are reattributed to the production chains of final products.11
The acronym NAMEA is also used for data tables rather than matrix frameworks. Figure 1.4 presents a typical NAMEA-type table: columns cover the main socio-economic aggregates as well as environmental pressure data (e.g. air emissions, energy use, water use, waste generation) broken down (rows) into industry (NACE classification) and household consumption function.
Figure 1.4 NAMEA tables.
NAMEA-type tables according to the Figure 1.4 format are regularly available in Italy for air emissions.12 In addition to air emission accounts at national level, regional (NUTS 2) level air emission accounts are available for 2005.13
With regard to energy accounts, the release of ISTAT’s energy use data by economic activity for the years 1990–2008 is forthcoming whereas the production of complete physical supply-and-use tables for energy will be coordinated with Eurostat’s schedule.
At EU level, air emission account data are collected by Eurostat via bi-annual questionnaires – covering the years 1995 to t−2, 13 air pollutants14 and 60 NACE (in its version Rev 1.1) industries plus three household consumption categories –addressed to all EU member states and Norway and Switzerland.15 Since data collection is not yet compulsory, responses by member states show a high variability in data coverage (among countries and pollutants).16 The entry into force of the EU Regulation on environmental accounts will make it compulsory for member states to deliver data for 14 air pollutants17 broken down into economic activities (A64 level of the NACE Rev. 2, the most recent version of NACE). Further developments for NAMEA-type accounts in the EU will be in line with the priorities defined for physical accounts by the revised European Strategy for Environmental Accounting (ESEA 2008): energy accounts for the medium term and water accounts in the longer run.18 In both cases, data production will start from physical flow accounts by adopting the framework of physical supply-anduse tables described in Figure 1.2.
The explanation of the main features of the NAMEA framework, in this section, makes it clear that the main requirement of a NAMEA-type account is that environmental data are consistent with the national accounts principles and classifications that hold for the economic data.
Since environmental statistics used as primary data for environmental accounts are not compiled according to national accounts principles in the first place, environmental statistics need to be adjusted in order to be included in the NAMEA framework.
The next section describes the main issues that compilers face in practice when producing NAMEA-type accounts.
Compiling NAMEA-Type Accounts
This section explains the most common adjustments operated on environmental statistics when used in NAMEA-type accounts. Reference is made to the specific case of air emission accounts as well as energy accounts which are likely to pose similar problems. The kind of adjustment described here is common to all countries which derive air emission accounts from national emission inventories, i.e. national databases for air emissions generally used for countries’ communications within the framework of international conventions: the United Nations Framework Convention on Climate Change (UNFCCC) and the UNECE Convention on Longrange Transboundary Air Pollution (CLRTAP);19 a very similar situation occurs when energy accounts are derived from energy statistics/balances.
Following the international guidelines on air emissions, national inventories cover emissions that broadly correspond to the (national) geographic territory; the geographic territory is also the reference for energy balances.
By contrast, consistency with national accounts requires that all flows relate to the activities of ‘residents units’ (this is known as ‘residence principle’):
an institutional unit is said to be resident within the economic territory of a country when it maintains a centre of economic interest in that territory – that is, when it engages, or intends to engage, in economic activities or transactions on a significant scale either indefinitely or over a long period of time, usually interpreted as one year. Some of the production of a resident institutional unit may take place abroad, while some of the production taking place within a country may be attributable to foreign institutional units.
(Eurostat, 1996, § 1.30)
The adoption of the residence principle implies that air emissions/energy use in air emission accounts/energy accounts has to be related to resident units; its implementation means converting data from the geographic definition of a country’s territory which is adopted in air emission inventories/energy statistics and balances to the economic definition which forms the basis for national accounts. Figure 1.5 illustrates that the conversion implies including the activities of resident units in the Rest of the World (which are part of the economic definition but not included in the geographic one) and excluding the activities of nonresident units on the national territory (which are part of the geographic notion and do not fit into the economic one).
Figure 1.5 The coverage of resident and non-resident units in emission/energy statistics and accounts (source: adapted from Eurostat, 2009).
In practice, the adjustment is needed for economic activities that engage in international transport – by road, water and air – as well as for tourism consumption; for stationary economic activities (all except transport), the geographic and economic notions coincide.
The adjustment process needed to make the system boundary of environmental accounts consistent with the national accounts’ one implies that totals derived from air emission accounts and energy accounts do not equal, respectively, the emission totals of the main international agreements on emissions of air pollutants20 and the energy statistics totals.
Table 1.1 illustrates in detail how the emission/energy statistics totals and the accounts totals are related.21
Table 1.1 From emission/energy statistics to emission/energy accounts’ totals
Air emissions/energy use on national territory (UNFCCC or CLRTAP/energy statistics definition)
= Air emissions/energy use by resident units (i.e. the National Accounts definition) |
Source: adapted from Hass and Kolshus (2007).
Statistics needed to make the required corrections include, for example, fuel purchases abroad by tourists as well as by lorries, aircraft, ships belonging to resident companies, and the same purchases by non-residents on the country’s territory. As fuel-purchase data in many countries are likely not to include all the details needed, other statistical sources such as transportation statistics or monetary figures can be used to estimate the necessary distinction between resident units and non-resident units.22
In addition to applying the residence principle, another important step in the implementation of air emission/energy accounts relates to the breakdown of flows into economic activity (i.e. according to NACE classification and household consumption function). Since air emissions are classified by process and the breakdown of energy statistics/balances does not match economic classifications, a reassignment of air emissions/energy statistics from the original classification to the classification employed in national accounts is needed.23
From an EU-wide standpoint, the availability of NAMEA-type data is likely to improve as a result of the priorities set by Eurostat which are consistent with the recommendations provided by the 2008 European Strategy for Environmental Accounting (ESEA).
In the short term, the entry into force of the EU Regulation on environmental accounts will ensure the supply of a comparable set of air emission accounts time series up to the year t−2 for all member states.
In the medium term, the foreseen implementation of energy physical supply-and-use tables will bring advantages stemming not only from the high analytical potential of energy PSUTs per se, but also from the possibility of combining the new sets of energy flow accounts data with air emission accounts data.
Furthermore, the possible extension of the framework to water PSUTs in the longer run would make socio-economic, energy use, water use and air and water emissions data available with the same breakdown by industry (and household consumption function), thus significantly enhancing the scope of analysis and providing valuable input for environmentally extended macro-economic models.
Although it looks very promising, the coordinated development of NAMEA-type accounts foreseen at EU level does not fulfil all of the needs for improved data and indicators expressed by users in general and specifically by policy-makers.
Particularly relevant in this context are the expected innovations in statistical data at large which derive from projects that aim to measure societies’ progress, namely the European Commission’s proposed actions to improve the measurement of progress in a changing world, the ongoing OECD Global Project on Measuring the Progress of Societies and the recommendations of the ‘Stiglitz-Sen-Fitoussi Commission’ on the Measurement of Economic Performance and Social Progress. For environmental accounts in particular, the needs expressed by these projects include: (a) increasing the timeliness of environmental accounts, thereby reducing the current gap with national accounts’ data; (b) addressing distributional issues; (c) providing data with a territorial and temporal breakdown which goes beyond the current standard: national for the territory and year as temporal reference.
Although no EU-wide efforts to respond to these policy needs in a coordinated manner have been recorded yet, significant examples exist of individual countries that fulfil these objectives in their national release of NAMEA-type accounts and derived indicators.
With regard to timeliness – as a highly sensitive policy issue since it would allow the provision of short-term integrated environmental and socio-economic information to policy-makers – countries like Germany and the Netherlands release NAMEA-type estimates for the year t-1. The Netherlands is also in the forefront as regards distributional issues with its household air emissions account by income size and as regards the availability of data with a temporal breakdown, with its quarterly CO2 emission accounts.
Italy is leading the way in the field of territorial breakdown with the production in 2009 of the first set of air emission accounts at regional level and is to our knowledge the only EU country engaged in this exercise so far. The prioritygiven at ISTAT to the spatial breakdown is the answer to the demand for sub-national data in a country with a high level of regional diversity in natural resource endowment as well as socio-economic and technological development.24 The calculation of regional air emission accounts for additional years (planned for 2011)25 is a necessary step which will allow more comprehensive analysis to be pursued also at regional level.
Notes
1 See de Haan and Keuning (1994).
2 SEEA is the main international reference for the analysis of the relationship between the environment and the economy in a satellite account form. Reference is made here to the 2003 version, known as SEEA2003, see for example United Nations et al. (2003). The SEEA is currently being revised and is expected to be raised by 2012 to the formal status of an international statistical standard.
3 See UN et al. (2003), SEEA2003, mainly figure 1.1 in § 4.38.
4 Measured at basic prices. The basic price is the price receivable by producers from the purchaser for a unit of a good or service produced as output minus any tax payable on that unit as a consequence of its production or sale (i.e. taxes on products), plus any subsidy receivable on that unit as a consequence of its production or sale (i.e. subsidies on products).
5 Measured at purchasers’ prices. The purchaser’s price is the amount actually paid by the purchaser per unit of goods or service bought. It includes taxes, with VAT counting only for its non-deductible part, and the subsidies on the products are deducted. It also includes the costs of transport paid separately by the purchaser to take possession of the products at the place and time required. It does not include any added interest if a loan is granted.
6 In addition to the three categories shown here, the SEEA2003 also includes a fourth category for ‘ecosystem inputs’: water and other natural inputs (e.g. nutrients, carbon dioxide) required by plants and animals for growth, and the oxygen necessary for combustion.
7 In practice, residuals can also be generated by the environment of the RoW in the form of transboundary flows (residuals transported by wind and water); since no explicit distinction is made here between the domestic and the RoW environment, the simplifying assumption holds that residuals can only be generated in the economic sphere.
8 The SEEA–E manual, which is currently being drafted, applies the more general environmental accounting principles and accounting frameworks outlined in the UN handbook System of Integrated Environmental and Economic Accounting (SEEA) to the specific domain of energy. See http://unstats.un.org/unsd/envaccounting/seeae.
9 In the specific case of air emissions, the amount of residuals used by the economic system (destination) is negligible; hence, total supply equals the amount of residuals released to the environmental sphere. This explains why air emission accounts tables only include items related to supply (see Figure 1.4).
10 This is the so-called ‘production perspective’ under which air emissions (e.g. due to electricity production) are entirely assigned to the producing industries and not to users.
11 See, for example, Marra Campanale and Femia’s Chapter 6 in this book.
12 See ww.istat.it/conti/ambientali
13 See ISTAT (2009). Data at the regional level were calculated by using as main input the emission inventory produced by the Istituto Superiore per la Ricerca e la Protezione Ambientale (ISPRA) at the NUTS 3 level, available for the years 1990, 19952000 and 2005.
14 Carbon dioxide (CO2), carbon dioxide from biomass, sulphur oxides (SOx), nitrogen oxides (NOx), nitrous oxide (N2O), ammonia (NH3), methane (CH4), carbon monoxide (CO), non-methane volatile organic compounds (NMVOC), particulate matter (PM10), perfluorocarbons (PFCs), hydrofluorocarbons (HFCs), sulphur hexafluoride (SF6).
15 Results are published in the Eurostat database (http://epp.eurostat.ec.europa.eu/portal/page/portal/statistics/search_database). See also Eurostat (2010b). EU country groups (EU15, EU25, EU27) data are Eurostat estimates.
16 In Italy, for example, data are not reported for carbon dioxide from biomass, PFCs, HFCs, sulphur hexafluoride; only 9 out of the 19 pollutants covered by the annual air emission accounts time series can be used to fill in the Eurostat questionnaires (the other 10 are heavy metals which are not collected by Eurostat).
17 The 13 included in the voluntary questionnaires (see note 14) plus fine particles (PM2,5).
18 For monetary environmental accounts, ESEA 2008 gives priority to resource use and management accounts as well as statistics on environmental goods and services. See Eurostat (2008).
19 Inventory-based air emission accounts are the most common ones at present; for detailed compilation suggestions applying to this case and also to countries that use different data inputs see Eurostat (2009). In Italy, the national emission inventory is produced by the ISPRA. Updated time series are available at www.sinanet.apat.it/it/sinanet/sstoriche.
20 The United Nations Framework Convention on Climate Change (UNFCCC) and the UN-ECE Convention on Long-Range Transboundary Air Pollution (CLRTAP) with reporting to UN-ECE/EMEP.
21 Table 1.1 compares UNFCCC/CLRTAP totals and air emission accounts totals. If the comparison is made between totals directly derived from the emission inventories and air emission accounts, in addition to the items listed in Table 1.1 a further possible element explaining the difference would be any emission from non-economic agents (e.g. nature) as well as nature’s absorption of substances, covered in the national emission inventories and excluded in the accounts which only cover socio-economic related flows.
22 Compilation issues are widely analysed in the Eurostat Manual for air emission accounts (Eurostat, 2009). They are in most cases also relevant for energy accounts.
23 For details on how to assign process-based emissions to economic activities and households’ consumption functions, see Eurostat (2009).
24 For details on the possible uses of regional NAMEA-type data in the specific context of development policies, see Cervigni et al. (2005).
25 The ISPRA emission inventory at the NUTS 3 level is currently available for 1990, 1995, 2000 and 2005; see: www.sinanet.apat.it/it/inventaria/disaggregazione_prov2005.
References
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