1. SEEA-CF research agenda: Ew-MFA and PSUTs
by Aldo Femia and Claudio Paolantoni
London Group on Environmental Accounting
XXXIII meeting
San Josè de Costa Rica
17-20 October 2017

2. The SEEA-CF Research Agenda - “implementation issues”
From Schenau, S., “The Research agenda for the SEEA CF”, 2016, page 9

3. Differences in treatment of Ew-MFA and PSUTs
Ew-MFA are “well aligned with the PSUT” (SEEA CF , Section 3.6.6, §3.280)
But – due to their specific “macro purpose” and consequent focus on the overall mass of materials and residuals –
“practical choices on treatment have been made so that flows within the Ew-MFA system can be estimated more straightforwardly”.
These choices would imply some “Differences in treatment between EW-MFA and PSUT” (SEEA CF subtitle, under 3.6.6, page 92).
SEEA CF points out two differences. These concern:
international trade (§3.282),
flows associated with (cultivated) biological resources (§3.283).

4. SEEA CF §3.282
“EW-MFA estimates of physical flows of imports and exports are typically based on international trade data. While some adjustments are made to account for significant items such as fuel purchases abroad by resident economic units, a full adjustment of the trade data to a residence basis of recording as used in the PSUT is not currently attempted in EW-MFA accounts. It is noted that in comparing the PSUT with EW-MFA, it is necessary to consider the treatment of goods for processing, goods for repair, and merchanting, as described in section 3.3.”

5. 1. International trade (SEEA CF §3.282)
“EW-MFA estimates of physical flows of imports and exports are typically based on international trade data”.
Is this not the case for SUTs as well?
“While some adjustments are made … for … fuel, …a full adjustment … is not currently attempted in EW-MFA accounts”.
Is it in SUTs?
Residence principle explicitly adopted in Ew-MFA methodology
Fuels used in international transport by far the most important item
Ew-MFA compilers can adjust for goods other than fuels if they wish
“consider the treatment of goods for processing, for repair, and merchanting”
deviation from SNA principles established by the SEEA CF
=> international trade data are ok for PSUTs
Ew-MFA does not deviate from this deviation!
Suggestion in the paper: delete §3.282 of the SEEA CF
But be aware of SEEA CF § on storing of fuel abroad!!!

6. 2. Cultivated plants (SEEA CF, §3.283) - 1
“the flow from the environment to the economy is recognized at the point of harvest rather than as growth occurs”.
“the different boundary is appropriate for Ew-MFA purposes”.
PSUTs: mechanically coherent with SNA.
Ew-MFA: pragmatic.
Difference in treatment  different system boundary for cultivated plants
Note that:
Ew-MFA system boundary is internal to that of PSUT.
All other system boundaries coincide
the overall Ew-MFA system is non-external to the PSUT one.
Ew-MFA system is a sub-system of the wider one of the PSUT.

7. 2. Cultivated plants (SEEA CF, §3.283) – 2
Harvested biomass as inputs; Seeds and fertilizers and pesticides incorporated into plants as outputs
Internal flows in the PSUT
Exchange flows with the outer world (cross-boundary) in Ew-MFA
Water, Inputs from soil and from air to cultivated plants; Oxygen and other residuals output to the environment by cultivated plants
Cross-boundary flows in the PSUT
Not considered in Ew-MFA: completely external.

8. Our proposal: Ew-MFA as a subsystem
Natural environment
Used biomass
(products)
Seeds, fertilizers and pesticides incorporated in plants
Ew-MFA Subsystem
Cultivated
SEEA CF System
Water (1.1.6)
Inputs from soil (3.1)
Inputs from air (3.2)
Unused harvested biomass (residuals)
Seeds, fertilizers and pesticides NOT incorporated in plants
Unused unharvested biomass (residuals)
Oxygen and water vapour
plants
Harvested
biomass
Sub-
system

9. Nothing new under the sun
Karl Schoer, LG,
10 years ago

10. Nothing new under the sun
The OECD, 2008
«Reconciliation table» in

11. Terminology issues “unused biomass”:
in the SEEA CF limited to “resources over which the extractor has no ongoing interest”, excluding “losses during extraction” and “reinjections” (SEEA CF §3.50), which are part of “unused” materials in Ew-MFA;
The part of cultivated plants that is harvested but not incorporated into products is part of “unused biomass” in Ew-MFA. Not a “natural resource residual” (SEEA classification of natural inputs and list of residuals groups), but “vegetable wastes”, component of “solid waste”.
Domestic Extraction (DE) of Ew-MFA often said to measure Natural Resources extraction. But
items composing DE are not natural resources: even if very similar to the “natural” resources, they represent and measure something that has been extracted or harvested, and selected, i.e. products.
the very data sources we use provide production data and use classifications of products.

12. Conclusions
Ew-MFA is an application (a derived account) of the more general PSUT scheme concerning:
primary products, as for the DE,
products tout court as for DMC.
Its only difference with PSUT boundary concerns cultivated plants
Ew-MFA can be dealt with in the CF as a subsystem of the economy as represented in the PSUT, by way of reconciliation tables, or even by including in the PSUTs a column for “cultivated plants” and some rows for their specific flows.
Some attention is required:
to the treatment of unused flows
to terminology, especially concerning the way Ew-MFA is presented