Environmental transfers Eurostat Unit E2 Environmental accounts and climate change

Overview Background 2012 pilot data collection Results of the 2012 pilot data collection Conclusions of the TF 2012 (future plans) PEDS or EHS Environmental subsidies in COFOG codes QUESTIONS

Background 2010 2011 2012 TF met two times TF mandate approved in 2009 by DIMESA SEEA 2012 central framework Background 2010 TF met two times methodological issues, terminology, definitions and boundaries PEDS (EHS) 2011 TF meet once pilot exercise conducted in the TF - tested the feasibility of a new data collection framework conclusions presented to the Working Group in March 2012 2012 Working Group was asked to join a voluntary pilot data collection TF meet once in October results of the 2012 pilot data collection COFOG as a data source for environmental subsidies and similar transfers

Aim – enlarge experience >>> regular data collection Sent to WG on 22 June 2012: ▪ excel workbook ▪ guidelines document Transfers in the national accounts: ▪subsidies ▪social contributions ▪social benefits other than social transfers in kind ▪social transfers in kind ▪other current transfers, investment grants ▪other capital transfers Not a priority: ▪preferential tax rates or tax credits ▪environmental transfers paid by corporations or the rest of the world Subsidies and similar transfers paid by general government for activities: ▪ which protect the environment (environmental protection) ▪make the use of natural resources more efficient (resource management) 2012 data collection

Results of the 2012 pilot data collection By end September 2012 - 6 replies from DE, SI, SE, LU, LV and NL To recall the coverage of the 2011 pilot exercise in the TF: PT, FR, DE, SI, SE, IT NL, NO and AT: information used from reports following grants awarded by the Commission Data sources used: national accounts and budget analysis - equally used Information complemented sometimes by other sources (specific surveys, data from agencies responsible with the execution of subsidy schemes, etc )

Results of the 2012 pilot data collection Environmental relevance of the subsidies and similar transfers COFOG 05 motivation written in the budget choice based on the cover of the CEPA/CReMA, in coherence with the decisions taken to establish the national list of environmental goods and services (LU)

Results of the 2012 pilot data collection Data sheet replies: Description of the subsidy/transfer: all countries Type of transfer according to the ESA code: all countries special cases (some from 2011 pilot exercise)- NL (tax credits), NO (mixed transfers), SE (potentially damaging subsides) Breakdown of the receiver by NACE: only SE Amount of the transfer: all countries Environmental domain: CEPA and CRUMA, COFOG, only SE by environmental tax categories + DE (in 2011)

Results of the 2012 pilot data collection Conclusions of the TF in October 2012 data on transfers from central government can be easily accessed need for detailed budget analysis to be able to split COFOG 5.3 transfers by CEPA categories and to cover environmental transfers other than those in COFOG 5 special budget analysis every year and for all layers of government would be very resource intensive Identifying the final beneficiaries and allocation of transfers to NACE seems to be very difficult More coordination with the compilers of COFOG would be an efficient way forward For a future data collection, no breakdown by NACE seems possible, only a distribution of transfers by institutional sectors

Conclusions of the TF 2012 (future plans in the area) Further exploring the data sources and analyse user needs Develop questionnaire with a reduced scope (central government only, a NACE breakdown less detailed than A*64 or only a breakdown by institutional sectors) Next TF meeting (June 2013) - dedicated specifically to transfers to address remaining methodological issues More complete and updated version of the guidelines explain the links with the other modules of environmental monetary accounts explain clearly the differences between the types of transfers included in the proposed new legal base for environmental expenditure (only COFOG 5 incorporate issues discussed and agreed in the October 2012 more work on getting practical examples and country experience

TF on environmental transfers PEDS (EHS) ● SEEA central framework (but no definition) ● RIO+20 ● OECD’s Green Growth initiative ● Europe 2020 strategy (flagship initiative for a resource-efficient Europe) ● Resource Efficiency Roadmap and the European Semester process MS ● Sweden - focus on direct PEDS derived from the government budget ● the Netherlands - focus on indirect tax-related subsidies (tax exemptions/reductions) ● Austria and Germany - analyses on harmful subsidies (private organisations) TF on environmental transfers ● difficult to find a definition, a list might help ● national accounts - possible data source ● text on PEDS (EHS) in the future statistical guide on environmental subsidies and similar transfers ● no data collection envisaged in the future DG Environment ●water related subsidies difficult to discuss with MS ● study launched - look closer at water prices and reduced VAT rates ● some data in recent waste reports are available on the website ● Market Based Instruments Forum (June 2012) dedicated to EHS - new qualitative information Study commissioned on 'Supporting the phasing-out of environmental harmful subsidies'

Environmental subsidies in other COFOG codes COFOG TF ● broad picture of government expenditure by economic function ● no detailed and accurate data for the purpose of environmental economic accounts ● difficult to envisage the reclassification of some environmental subsidies to COFOG 05 (e.g. agricultural environmental subsidies or international environmental aid) Environmental transfers TF ● explore the possibility of a dual coding as part of the COFOG work, Proposal for an 'of which' COFOG

Proposal for an 'of which' COFOG Option 1: ‘of which’ position that refers to environmental protection and resource management, env. accountants further deal with CEPA and CReMA Option2 (figure below): detailed environmental expenditures in the COFOG structure classified into CEPA/CReMA by the COFOG compilers 04.3 Fuel and energy, of which: 04.3 CEPA 1 - to reduce air pollution and protect the climate 04.3 CEPA 7 - for the protection against radiation such as for example support given for international nuclear safety cooperation and subsidies given from the Radiation Safety Authority to protect from radiation 04.3 CReMA 13 - for the management of energy (in particular for the development of renewable energy and the reduction of energy consumption), for example subsidies for energy efficiency, new energy technology introduction, energy investments in public facilities, installing solar heat or introducing wind power

Delegates are kindly requested to express their opinion on PEDS (EHS) - some initial questions Are you aware of any work in your country by the Ministry of Environment or other organisation on PEDS (EHS)? Do you face any data demand concerning PEDS (EHS) in your country? How would you see the way forward? Should tax exemptions/reductions be included? COFOG 'of which proposal' Are the methods proposed feasible? Do you agree with going further with developing this approach? Do you have any suggestions or comments to help improve the proposal?