1 Towards the implementation of SEEA-MFA Learning Centre on Environmental Accounts UNSC, New York February 2009 Bram Edens United Nations Statistics Division

Outline What is MFA?What is MFA? HistoryHistory Policy considerationsPolicy considerations Different approachesDifferent approaches ExamplesExamples Statistical issues in MFAStatistical issues in MFA Way forwardWay forward

What is MFA? Describe economy in physical termsDescribe economy in physical terms EW MFA vs. accounting approachEW MFA vs. accounting approach Principle: mass balancingPrinciple: mass balancing Criticized for ‘ton ideology’Criticized for ‘ton ideology’

History of MFA Beginning of 90s: First EW-MFA studies emerge (Austria, Japan, Germany, USA)Beginning of 90s: First EW-MFA studies emerge (Austria, Japan, Germany, USA) 1997, 2000: ‘The Weight of Nations’ (World Resources Institute)1997, 2000: ‘The Weight of Nations’ (World Resources Institute) 2001: Economy-wide Material Flow Accounts and Derived Indicators. A Methodological Guide (Eurostat)2001: Economy-wide Material Flow Accounts and Derived Indicators. A Methodological Guide (Eurostat) SEEA 2003: chapter 3 “Physical flow accounting”SEEA 2003: chapter 3 “Physical flow accounting” 2004: OECD Council Recommendation on Material Flows and Resource Productivity2004: OECD Council Recommendation on Material Flows and Resource Productivity 2007: EW-MFA data collection (Eurostat)2007: EW-MFA data collection (Eurostat) 2008: OECD guidance documents2008: OECD guidance documents Ongoing: SEEA-MFAOngoing: SEEA-MFA

Policy considerations ‘The Weight of Nations’ Industrial economies are becoming more efficient in their use of materials, but waste generation continues to increase.Industrial economies are becoming more efficient in their use of materials, but waste generation continues to increase. One half to three quarters of annual resource inputs to industrial economies are returned to the environment as wastes within a year.One half to three quarters of annual resource inputs to industrial economies are returned to the environment as wastes within a year. Outputs of some hazardous materials have been regulated and successfully reduced or stabilized but outputs of many potentially harmful materials continue to increase.Outputs of some hazardous materials have been regulated and successfully reduced or stabilized but outputs of many potentially harmful materials continue to increase. The extraction and use of fossil energy resources dominate output flows in all industrial countries.The extraction and use of fossil energy resources dominate output flows in all industrial countries. Source: World Resources Institute 2000

Policy considerations II ‘The Weight of Nations’ Physical accounts are urgently needed, because our knowledge of resource use and waste outputs is surprisingly limited.Physical accounts are urgently needed, because our knowledge of resource use and waste outputs is surprisingly limited. Neither traditional monetary accounts nor environmental statistics are an adequate basis for tracking resource flows into and out of the economy.Neither traditional monetary accounts nor environmental statistics are an adequate basis for tracking resource flows into and out of the economy. They record only a part of resource inputs, lose sight of some materials in the course of processing, and entirely miss major flows of materials that do not enter the economy at all, such as soil erosion from cultivated fieldsThey record only a part of resource inputs, lose sight of some materials in the course of processing, and entirely miss major flows of materials that do not enter the economy at all, such as soil erosion from cultivated fields On the output side, monetary accounts and environmental statistics record few material flows that are not subject to regulation or classified as wastes requiring treatment. Nor do they differentiate among the many materials that are aggregated in productsOn the output side, monetary accounts and environmental statistics record few material flows that are not subject to regulation or classified as wastes requiring treatment. Nor do they differentiate among the many materials that are aggregated in products Source: World Resources Institute 2000

Different approaches to measure material flows Statistics: waste, energy, foreign trade, production, etc.Statistics: waste, energy, foreign trade, production, etc. Economy Wide MFAEconomy Wide MFA Aggregate flows into and out of the economy (economy black box)Aggregate flows into and out of the economy (economy black box) Time series show decoupling, resource efficiencyTime series show decoupling, resource efficiency Comparison of direct and indirect flowsComparison of direct and indirect flows Accounting approach “physical flow accounting”Accounting approach “physical flow accounting” Disaggregation by industry and by products (black box is opened up)Disaggregation by industry and by products (black box is opened up) PSUT, PIOTPSUT, PIOT Substance or product specificSubstance or product specific Substance flow analysis, Life Cycle AnalysisSubstance flow analysis, Life Cycle Analysis

Domestic resources How EW-MFA sees the World

Example: DMI per capita - Denmark Biomass Fossil energy Non-metallic minerals Source: Statistics Denmark

Example: Material Productivity UK Source: ONS 2005

Example: Physical trade balance by material categories, 2000 Source: Eurostat 2002

Example: “Environmental hot-spots" of the iron & steel system, European Union, 2000 (million tonnes) Source: Source: Moll, Acosta and Schütz (2005) in OECD Synthesis Report (2008)

Example: International trade of chromium, focus on the United States and its major trade partners, 2000 Source: Johnson, Schewel and Graedel (2006) in OECD Synthesis Report (2008).

Statistical issues in MFA Classification of physical flowsClassification of physical flows CPC vs. waste classificationCPC vs. waste classification System boundariesSystem boundaries Residence vs. territoryResidence vs. territory Cultivated crops and treesCultivated crops and trees LandfillLandfill Consumer durablesConsumer durables TerminologyTerminology Socio-economic systemSocio-economic system Unused flowsUnused flows

Way forward? Mainstream MFA within official statisticsMainstream MFA within official statistics Develop SEEA-MFA as a standard (UNSD in cooperation with OECD and Eurostat)Develop SEEA-MFA as a standard (UNSD in cooperation with OECD and Eurostat) SEEA-MFA to UNSC in 2011SEEA-MFA to UNSC in 2011 Develop an implementation strategyDevelop an implementation strategy Implications for data collectionImplications for data collection Future research: impact weightingFuture research: impact weighting