European Commission Stephen.White@ec.europa.eu Sustainable Development and Economic Analysis Unit DG Environment European Commission Environmental Expenditure Statistics, 23 May 2007

Environmental Expenditure Statistics, 23 May 2007 Introduction Political interest in eco-industry and the economy-environment links Major studies for completion 2007: Sectoral burden of environmental policy (end 2007) Links between environment and the economy and jobs (Summer 2007) Environmental Expenditure Statistics, 23 May 2007

Environmental Expenditure Statistics, 23 May 2007 Sectoral Burden Study Environmental Expenditure Statistics, 23 May 2007

Aim of Sectoral burden study Overall: clearer picture of impact of environmental policy on sectors Specific: Differences between firms Differences between MS Main drivers Synergies Should complement EPE statistics Environmental Expenditure Statistics, 23 May 2007

Environmental Expenditure Statistics, 23 May 2007 General outline Environmental Expenditure Statistics, 23 May 2007

Environmental Expenditure Statistics, 23 May 2007 Sector Analyses 4 sectors Oil chain (production, transport, refineries) Electricity production Steel industry Textile and leather industry Chosen as those with high costs or where politically contentious Environmental Expenditure Statistics, 23 May 2007

Environmental Expenditure Statistics, 23 May 2007 Working towards… Comprehensive reports, with key info on: 1. Definition of the industry e.g. based on legislation, business cycle, … 2. Socio-economic analysis Cf. employment, turnover, size of companies, … 3. Competitive analysis Market structure (demand, supply factors) Competitive analysis (internal competition, external competition, potential competition) 4. Environmental issues 5. Legal aspects 6. Environmental expenditures Environmental Expenditure Statistics, 23 May 2007

Further Data Gathering Environmental expenditure in more detail… Drivers of environmental expenditures Legislation, policy intruments (e.g. permit, NEC) Compliance – strategic Synergies Benefits of environmental expenditures Target pollutants Ex-ante vs ex-post cost-effectiveness Environmental Expenditure Statistics, 23 May 2007

Environmental Expenditure Statistics, 23 May 2007 State of play MS: pre-selection (BE, DE, ES, EE, LT, LV, GR, FR, HU, IT, NL, PL, PT, SI, SE, UK) Eurostat Data from SBS and JQ No data for ‘sub’sectors / companies available National statistics offices MS Mini-survey sent on January 31 Responses: NL: data can be analysed on site GE, BE, LITH: data confidential ES, FR, GR, HU, LATV, PT, IT: no response SW – can buy analysis UK – may be possible with agreement Conclusion: support from NSO not straightforward Environmental Expenditure Statistics, 23 May 2007

Further Data Gathering Aim: gather data on micro-level Web-based survey Sample of companies: Countries: 8 MS Companies: 10/country/sector Cf. E-PRTR Info on companies: Financial: Amadeus Environmental: E-PRTR, coporate reports Environmental expenditures ? Review by industry federations Environmental Expenditure Statistics, 23 May 2007

Environmental Expenditure Statistics, 23 May 2007 Conclusions Deliverables Analyses of cost structures, innovation, competitiveness, benefits Theoretical background Empirical Draft report Timing Workshop October Final report November Environmental Expenditure Statistics, 23 May 2007

Environmental Expenditure Statistics, 23 May 2007 Linkages Between the Environment and the Economy and Jobs Environmental Expenditure Statistics, 23 May 2007

Aim of Wider Links Study Eco-industry is ‘tip’ of the iceberg Specific: Environment as input into economy Environmental loss as drag on economy Changes to environmental policy and link to economy Jobs analysis Environmental Expenditure Statistics, 23 May 2007

Environmental Expenditure Statistics, 23 May 2007 In a picture … Environmental Expenditure Statistics, 23 May 2007

Environmental Expenditure Statistics, 23 May 2007 What links? Activities where the environment is a primary resource or input into the economic process – Agriculture, forestry, mining, electricity generation (excl. renewables) and water supply Activities concerned with protection and management of the environment – Waste recycling, renewable energy, pollution & sewage control, environmental management, etc.) Activities dependent on environmental quality – Tourism Environmental Expenditure Statistics, 23 May 2007

The Approach (two strands) Environmental Expenditure Statistics, 23 May 2007

Environmental Expenditure Statistics, 23 May 2007 Sections of the study Standardised approach – using input-output (I-O) tables and hybrid model (mapping and splitting of environment related sectors/activities) Reverse engineering scenarios – basis for adding dynamics to the model Non-standardised approach – value of the environment on the wider economy (not possible to capture under I-O framework) Environmental Expenditure Statistics, 23 May 2007

Standardised approach OECD Input-Output Tables Methodology for mapping environment related activities – mapping and splitting of sector Key issues Data gaps – employment levels, wage rates, purchase pattern. Environment related tourism – sensitive to definition (nature tourism, eco-tourism and sustainable tourism, I-O missing for Romania and Bulgaria Environmental Expenditure Statistics, 23 May 2007

Reverse engineering scenarios Sustainable Consumption & Production Energy efficiency of Manufacturing industry Climate change – eg investing 1% of GDP in climate related initiatives (and reducing other expenditure to compensate) Green Product Procurement Getting prices right for water Bio-diversity / ecosystem improvements or losses Growth or fall in environment related tourism as a result of environmental quality. Environmental Expenditure Statistics, 23 May 2007

Environmental Expenditure Statistics, 23 May 2007 The future… Political pressures Better Regulation Lisbon Agenda Sustainable Development Strategy Focus moving to improving implementation of environmental policies Knowledge is key, so pressure to better understand links, costs and benefits will continue Environment Protection Expenditure statistics are at the ‘core’ Environmental Expenditure Statistics, 23 May 2007