Potentially Environmentally Damaging Subsidies (PEDS) Hanna Brolinson, Maja Cederlund Statistics Sweden

Economic instruments in the Environmental Accounts Environmental taxes Tax exemptions Emission permits Environmentally related subsidies Environmentally motivated Potentially environmentally damaging Official statisticsMethod development during

Keeping track of PEDS is policy relevant Roadmap to a Resource Efficient Europe*, Milestone: By 2020 environmental harmful subsidies will be phased out OECD Green Growth**: environmental harmful subsidies are identified as constraints to a green growth and governments should identify those subsidies whose removal (or reform) would boost long-term economic growth or reduce environmental damage FFFSR – Friends of Fossil Fuel Subsidy Reform: Initiative from NZ to form a group which aim is to support G20 countries in the phasing out of fossil fuel subsidies Rio+20 Conference***: Combining market and regulatory instruments ("how"): eco-taxes, removing environmentally harmful subsidies…*** European council is about to ask all EU countries about their PEDS year 2012 according to the environmental ministry Data on PEDS is wished for in many contexts No regular data production or statistical perspective on PEDS exist * ** ***

Proposed definition Potentially environmentally damaging subsidies (PEDS) are subsidies that potentially lead to increased emissions or an increased outtake of natural resources, and are not payed out with an environmental motive. PEDS are primarily paid to emission intensive sectors and to activities that lead to an increased use of products included in the environmental tax base list.

Proposed framework Connection to tax base list? Resource Use Resource Management Environmental Protection Activities Environmentally motivated Subsidies Emissions to air, water and soil Potentially Environmentally Damaging Classifications CRUMACEPACRUMACEPA

Proposed Swedish method Same data source as for EMS Subsidy Environmentally related subsidy - PEDS Go through government budget/budget lines (find information about the support) Point out support to activities that - lead to increased emissions - increased outtake of natural resources - are not categorised as EMS (no examples) Support to method: emission intensive sectors If needed, calculate a share Classify in categories (same as for taxes) Distribute on NACE

Examples of PEDS Transport support (share) Purpose: give some compensation to the 4 most nothern counties in Sweden, stimulate to increased value added Given for train (15%), boat (10%) or road (75%) Largest receivers; NACE 20 (Wood ), 34 (Motor vehicles) Traffic procurement/traffic contracts (share) Compensation to regional personal traffic by air, train, boat or bus. Need to be politically motivated – in areas where no commercial conditions to operate public transport! State support to road maintenance (share in future) For example: road planning, building, maintenance, investments. Areal support and livestock support/Farm and livestock support (share in future?) For now also include the farm support (not dependent on the production). Still emission intensive sector  still ”Potential”!

Swedish experience of PEDS Data source is available (same as for EMS) Large need for data! Demands from many different users (Ministry, EU, OECD, Authorities…) The method works The definition works We have needed the support from emission intensities (or similar) - to focus on the topic (including all as PEDS is not relevant for any users…)

Way forward The manual should include EMS as well as PEDS Since a manual of environmentally related subsidies (not of only EMS) Satisfy international demand, not only include what is most straight forward. We can do more! A chance to show that we from the statistical side can contribute to a sustainable development

Next step Need to prolong TF to include PEDS as well (take this chance) Homework for PEDS in 2012 Test definition and methodology on your datasource for EMS Sweden could lead a ’reflection group’ or similar in order to share experience and guide others. Ask us – we will help! Study the EU budget with regards to PEDS Sweden will continue to work on PEDS Shares (more details, describe method) Distribution to NACE (more details, describe method) Continue with a total analysis of environmentally related subsidies including: EMS PEDS Tax exemptions Emission permits (not auctioned)

Who wants to join??? Germany, the Netherlands, Norway, France? Other?