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

2. 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

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

4. 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

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

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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

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

13. 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

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

15. 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

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

17. 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

18. 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

19. 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

20. 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