1 Indicators and the System of Environmental and Economic Accounting for Water Regional Workshop on Water Accounting Santo Domingo, Dominican Republic July 2007 Michael Vardon United Nations Statistics Division

2 Outline Audience for indicators Relationship of environment to economy Pressure-State-Response (Driving forces) Key issues and concerns Characteristics of Indicators Past experience Millennium Development Goals SEEAW indicators Issues for indicator users and producers

3 Audiences for information Indicators Micro data Accounting SNA, SEEA, SEEAW Public Politicians Policy Makers Strategic planners Researchers

4 The economy and the environment have a complex, multifaceted relationship Provides economic resources to production process (e.g. minerals, timber, water, energy) Provides non-economic resources to production process as well as other uses for mankind Receives wastes from the economy

5 A model of interaction: Pressure – State – Response

6 Concerns over the level impact the economy is having on environment Depletion of natural resource (e.g. oil, forests, biodiversity)Depletion of natural resource (e.g. oil, forests, biodiversity) Degradation of natural resources (e.g. air and water pollution)Degradation of natural resources (e.g. air and water pollution) Potentially catastrophic effects (e.g. climate change)Potentially catastrophic effects (e.g. climate change)

7 Questions Are environmental endowments being used responsibly. Is their use posing a treat to economic development now? Will their unchanged use into the future pose future threats? Who benefits from use, who bares the cost of use?

8 Characteristics of indicators Focus on outcomes Focus on outcomes Have an unambiguous 'good' direction Have an unambiguous 'good' direction Be supported by timely data of good quality Be supported by timely data of good quality Be available as a time series Be available as a time series Be sensitive to changes Be sensitive to changes Be summary in nature; Be summary in nature; Be capable of disaggregation Be capable of disaggregation Be interpreted easily by the general reader. Be interpreted easily by the general reader. Adapted from Measures of Australia’s Progress 2002

9 Millennium Development Goals Millennium Development Goals Goal 7: Ensure environmental sustainability

10 MDG: Target 30 – access to improved drinking water

11 MDG: Target 31 – access to improved sanitation

12 Challenges to monitoring and achieving MDG 7 ‘Countries face many difficulties in monitoring the MDG 7 indicators, as well as in the overall goal of making progress on environmental sustainability.” “Insufficient availability of data and disaggregated data, lack of baseline data to act as references, and uncoordinated data collection inhibit the monitoring of targets set.” Source: Making Progress on Environmental Sustainability,

13 MDG 7:Steps for improvement “While the MDG framework is best managed as a group of interrelated targets, MDG 7 warrants particular attention given the weaknesses both in monitoring and in overall progress. This report presents specific steps to be used in tailoring targets and indicators for MDG 7. The steps can be followed in the order offered here or in a different sequence: 1) assess country environmental issues; 2) identify existing priorities; 3) use analytical frameworks to determine additional critical parameters; 4) set country-specific and verifiable targets; 5) select indicators and establish a baseline to track progress; 6) implement monitoring and data gathering systems; 7) analyse and interpret results; and 8) communicate the results to policy makers and the public. Source: Making Progress on Environmental Sustainability,

14 So for MDG (and other reporting frameworks) we need….. An analytical framework for understanding the relations between the environment and the economyAn analytical framework for understanding the relations between the environment and the economy Indicators of these relationshipsIndicators of these relationships Monitoring and data systems to support the framework and indicatorsMonitoring and data systems to support the framework and indicators To be able analyse and interpret results and communicate results to policy makers and the publicTo be able analyse and interpret results and communicate results to policy makers and the public Integrated environmental and economic accounting provides this

15 Why an accounting approach? Encourages the adoption of standardsEncourages the adoption of standards Introduces accounting concepts to environmental statisticsIntroduces accounting concepts to environmental statistics Improves the quality and usefulness of both economic and environmental statistics by encouraging consistency and integrationImproves the quality and usefulness of both economic and environmental statistics by encouraging consistency and integration Implicitly defines ownership and hence responsibility for environmental impactsImplicitly defines ownership and hence responsibility for environmental impacts Encourages the development of comprehensive data setsEncourages the development of comprehensive data sets Facilitates international comparisonsFacilitates international comparisons

16 Strengths of the accounting approach Organised body of information facilitates integrated economic-environmental analysis (complements sustainable development indicators, modelling)Organised body of information facilitates integrated economic-environmental analysis (complements sustainable development indicators, modelling) Comprehensive and consistent, routinely producedComprehensive and consistent, routinely produced Provides a system into which monetary valuations of environmental costs can be incorporatedProvides a system into which monetary valuations of environmental costs can be incorporated Allows trade-offs between the environment and the economy (and within the economy), overtime and between locations to be described and analysedAllows trade-offs between the environment and the economy (and within the economy), overtime and between locations to be described and analysed

17 SEEAW Indicators (pages ) 1. 1.Water availability 2. 2.Water intensity and productivity 3. 3.Opportunities to increase water supply 4. 4.Cost and price of water supply and wastewater treatment services

18 Indicators of water availability: FAO/AQUASTAT Internal Renewable Water ResourcesInternal Renewable Water Resources “Average annual flow of rivers and recharge of groundwater generated from endogenous precipitation.” (FAO/AQUASTAT)“Average annual flow of rivers and recharge of groundwater generated from endogenous precipitation.” (FAO/AQUASTAT) External Renewable Water ResourcesExternal Renewable Water Resources “Part of the country’s renewable water resources shared with neighbouring countries. Total external resources are the inflow from neighbouring countries (trans-boundary groundwater and surface water inflows), and the part of the shared lakes or border rivers. The assessment considered the natural resources generally; if there are reservations in neighbouring countries, they are called actual resources.” (FAO/AQUASTAT)“Part of the country’s renewable water resources shared with neighbouring countries. Total external resources are the inflow from neighbouring countries (trans-boundary groundwater and surface water inflows), and the part of the shared lakes or border rivers. The assessment considered the natural resources generally; if there are reservations in neighbouring countries, they are called actual resources.” (FAO/AQUASTAT) Total Natural Renewable Water ResourcesTotal Natural Renewable Water Resources The sum of internal and external renewable water resources. It corresponds to the maximum theoretical amount of water available for a country on an average year on a long reference period.” (FAO/AQUASTAT)The sum of internal and external renewable water resources. It corresponds to the maximum theoretical amount of water available for a country on an average year on a long reference period.” (FAO/AQUASTAT)

19 Indicators of water availability Per capita renewable resourcesPer capita renewable resources Ratio between Total renewable water resources and population size. (WWDR 2003, Margat 1996)Ratio between Total renewable water resources and population size. (WWDR 2003, Margat 1996) Annual Withdrawals of Ground and Surface Water as a Percent of Total Renewable Water/Exploitation indexAnnual Withdrawals of Ground and Surface Water as a Percent of Total Renewable Water/Exploitation index The total annual volume of ground and surface water abstracted for water uses as a percentage of the total annually renewable volume of freshwater. (UN, 2001)The total annual volume of ground and surface water abstracted for water uses as a percentage of the total annually renewable volume of freshwater. (UN, 2001) Consumption IndexConsumption Index Ratio between Water Consumption and Total Renewable Resources. (Margat, 1996)Ratio between Water Consumption and Total Renewable Resources. (Margat, 1996)

20 Indicators for water intensity and productivity

21 Indicators for opportunities to increase water supply

22 Indicators for cost and price of water supply and wastewater treatment

23 Indicators of access to and affordability of water and sanitation services

24 Links between the World Water Development Report Indicators and SEEAW World Water Assessment Programme 2006World Water Assessment Programme of 38 Indicators can be directly derived from the water accounts21 of 38 Indicators can be directly derived from the water accounts An 5 indicators can be partially derivedAn 5 indicators can be partially derived 12 cannot be derived but can be included as supplementary information. Of these12 cannot be derived but can be included as supplementary information. Of these 4 are social indicators (e.g. urban and rural population)4 are social indicators (e.g. urban and rural population) 3 are related to land areas and could be derived from land accounts3 are related to land areas and could be derived from land accounts 3 are related to energy and could be derived from energy accounts3 are related to energy and could be derived from energy accounts Remaining 2 relate to ISO certificationRemaining 2 relate to ISO certification

25 Key issues for indicator users and providers Limited resources mean some important decisions What topics are most important?What topics are most important? What inter-linkages are needed?What inter-linkages are needed? Scale (time and space)Scale (time and space) Macro v. micro level statisticsMacro v. micro level statistics Level and change or cause and effectLevel and change or cause and effect Accuracy and precision (±0.1%, 1.0% or 10%)Accuracy and precision (±0.1%, 1.0% or 10%) Frequency (e.g. daily, annually or multi-yearly)Frequency (e.g. daily, annually or multi-yearly) Perfection v. realistically deliverablePerfection v. realistically deliverable Benefits and costs of data collection. Where do these occur (e.g. now/later, public/private, here/there)?Benefits and costs of data collection. Where do these occur (e.g. now/later, public/private, here/there)?

26 Recalling …..the economy and the environment have a complex, multifaceted relationship Provides economic resources to production process (e.g. minerals, timber, water, energy)Provides economic resources to production process (e.g. minerals, timber, water, energy) Provides non-economic resources to production processes and other uses for mankindProvides non-economic resources to production processes and other uses for mankind Receives wastes from the economyReceives wastes from the economy Need an information system and indicators that record these relationships in a consistent way ….SEEAW provides this!Need an information system and indicators that record these relationships in a consistent way ….SEEAW provides this!

27 Contact details Michael Vardon Adviser on Environmental-Economic Accounting United Nations Statistics Division New York USA Room DC Phone: Fax: