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Environmental Goods and Services Sector
Sacha Baud Directorate Spatial Statistics Vienna 6 - 7 June 2013
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Political needs and applications (I)
In the 1990s (and up to present time) the economic opportunities related to environmental protection moved into the centre of interest. Important political initiatives are: Europe 2020 Reduction of greenhouse gas emissions by 20% 20% share of renewable energy Increase of energy efficiency by 20% 6th Environmental Action Plan EU biodiversity strategy to 2020 Road map to a resource efficient Europe
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Political needs and applications (II)
Road map for moving to a low-carbon economy in 2050 Future 7th Environmental Action Plan These and further political initiatives supported the development of the so called ‘green economy’ in the past and still do it. This increased focus on the environment also affected the European Statistical System as it is responsible for the provision of data to measure the efficiency of these political activities. For this purpose the ESS developed new statistical products concerning the environment and its interaction with the economy (the society).
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Political needs and applications (III)
In 1995 OECD and Eurostat proposed the collection of information on the Environment Industry as part of the SERIEE system. Economy Resource Use and Management Accounts Environmental Protection Expenditure Accounts Collecting and processing of basic data: e.g. Environment Industry Environment In 1999 publication of the joint OECD/Eurostat „The Environmental goods and services industry – Manual for data collection and analysis“. Definition: The environment industry consists of activities which produce goods and services to measure, prevent, limit or correct environmental damage to water, air and soil as well as problems related to waste, noise and eco-systems.
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Political needs and applications (IV)
Between 2006 and 2009 a Eurostat task force developed the EGSS methodology which resulted in an improved data collection of integrated technologies and clean goods and in an inclusion of resource management activities. Eurostat data collection handbook “The Environmental Goods and Services Sector” Since 2012 the EGSS methodology is a worldwide standard as part of the System of Environmental-Economic Accounting (SEEA), volume I Central Framework. Near future: EGSS is one of the modules of the first extension of Regulation (EU) 691/2011 on European environmental economic accounts. Obligatory reporting to Eurostat: First reference year 2015 First reporting year 2017
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Political needs and applications (V)
EGSS in the context of SERIEE SERIEE consists of three pillars: Environmental Protection Expenditure Accounts Resource Use and Management Accounts Intermediate systems for collecting and processing of basic data: These systems shall provide the data for compiling EPEA. Focus is on the output of the environment industry – EGSS. Economy Resource Use and Management Accounts Environmental Protection Expenditure Accounts Collecting and processing of basic data: e.g. Environment Industry Environment
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Political needs and applications (VI)
Therefore, definitions and classifications of EGSS have to be consistent with SERIEE and thereby with EPEA, Resource Use Accounts (RUA) and Resource Management Expenditure Accounts (ReMEA). This condition allows for a multiple use of data sources. However, EPEA, RUA, ReMEA and EGSS are focused on environmental activities from different perspectives so there are important differences that have to be taken into account, e.g. if data sources for EPEA are also used for EGSS.
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Questions?
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Definition and scope of EGSS and of green jobs (I)
The EGSS - Environmental Goods and Services Sector consists of a heterogeneous set of producers of technologies, goods and services that: Measure, control, restore, prevent, treat, minimise, research and sensitise environmental damages to air, water and soil as well as problems related to waste, noise, biodiversity and landscapes. This includes “cleaner” technologies, goods and services that prevent or minimise pollution. Measure, control, restore, prevent, minimise, research and sensitise resource depletion. This results mainly in resource-efficient technologies, goods and services that minimise the use of natural resources. These technologies, goods and services must satisfy the end purpose criterion, which is in this case environmental protection or resource management. Technologies, goods and services which have a favourable impact on the environment but another main purpose are NOT INCLUDED in EGSS.
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Definition and scope of EGSS and of green jobs(II)
Environmental protection (EP) includes preventive and remedial technologies and products: to prevent, reduce, eliminate and treat air emissions, waste and wastewater, soil and groundwater contamination, radiation, noise and vibration, to prevent, reduce and eliminate soil erosion, salinity and other kinds of degradation, to preserve biodiversity and landscapes, and to monitor and control the quality of environmental media and waste. Resource management (RM) includes technologies and products: to manage and/or conserve the stock of natural resources against depletion, including preventive and restoration activities, to monitor and control the levels and uses of natural resources stocks. Both EP and RM also comprise administrative activities, education, training, information and communication activities, research and development.
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Definition and scope of EGSS and of green jobs (III)
The Environmental Sector comprises: Environmental technologies, goods and services for every kind of use (intermediate or final consumption, gross fixed capital formation) Only EGS, which are produced for the environment (“main purpose criterion”) EGS produced by corporations and the general government EGS produced as principal, secondary or ancillary activity Market and non market activities
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Definition and scope of EGSS and of green jobs (IV)
end-of-pipe technologies integrated technologies connected goods Adapted goods EGSS env. spec. services connected services ancillary activities
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Definition and scope of EGSS and of green jobs (V)
Environmental technologies are technical processes, installations and equipment (goods), methods or knowledge (services) whose technical nature or purpose is EP or RM. There are two types: End-of-pipe technologies are mainly technical installations and equipment which operate independently or are identifiable parts at the end of production or consumption cycles. They are used to measure, control, treat and restore or correct pollution, environmental degradation and resource depletion. Examples: Wastewater or waste treatment facilities, filters, equipment to recover materials. Integrated technologies are less polluting and resource intensive than the equivalent average technology in a given country. They comprise technical processes, methods or knowledge used in production processes. Examples: Wind mills, combined heat and power, solar panels, dry ovens in cement industry.
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Definition and scope of EGSS and of green jobs (VI)
Connected products (goods or services) are not the output of characteristic EP or RM activities but their use directly serves an EP or RM objective (the use must be exclusively for that objective), e.g. catalytic converters, rubbish containers, noise reduction windows, EP maintenance services for septic tanks, RM services such as installation of renewable energy production technologies. Adapted products are less polluting or more resource efficient than equivalent normal products which furnish a similar utility. Their primary use is not EP or RM (in EPEA only extra costs are considered, in EGSS overall costs), e.g. mercury-free batteries, cars with lower emissions, recycled paper, water- saving devices, renewable heat and energy,, resource-efficient appliances. Environmental specific services are the “characteristic” environmental protection or resource management activities. Their purpose is EP or RM, e.g. waste management or wastewater management activities, energy and water-saving activities, activities to reduce water leaks and water losses.
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Definition and scope of EGSS and of green jobs (VII)
Source: Handbook on Environmental Goods and Services Sector (Eurostat 2009)
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Definition and scope of EGSS and of green jobs (VIII)
Overview of environmental goods and services End-of-pipe technology: operates independently or is an identifiable part at the end of a production or consumption cycle. Pressure on the environment already occurred. Integrated technology: Less polluting and resource intensive than the equivalent average technology in a given country. Connected products: Are not the output of characteristic EP or RM activities but their use directly serves an EP or RM objective. Adapted products: Less polluting or more resource efficient than equivalent normal products with a similar utility. Their primary use is not EP or RM. Environmental specific services: Characteristic environmental protection or resource management activities. Their purpose is EP or RM.
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Definition and scope of EGSS and of green jobs (IX)
In the framework of the Eurostat EGSS questionnaire the following data shall be delivered: Output (turnover in EGSS handbook) Exports Gross value added Employment
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Definition and scope of EGSS and of green jobs (X)
How to identify producers and activities belonging to EGSS? Only the producer of the final environmental technology, good or service (= main producer) is taken into account. Suppliers of components which are not used exclusively in environmental technologies are excluded from EGSS. Distributors of environmental technologies and goods are also not part of EGSS. Installation activities are part of EGSS as producers of connected services, if they are specialised in the installation of environmental technologies and products. Construction activities can be part of EGSS, e.g. construction of passive/energy-efficient houses, construction of wastewater treatment facilities.
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Definition and scope of EGSS and of green jobs (XI)
Producers Corporations General Government Principal Secon-dary Ancillary Market Non-market Market Non-market Market Non-market Non-market Source: Based on EGSS handbook, page 40
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Definition and scope of EGSS and of green jobs (XII)
The General Government (GG) consists of central, regional and local governments, authorities, communities and government agencies carrying out activities relating to administration, planning, legislation, supervision, control, information etc. General Government provides environmental services more or less free of charge (= non-market services), e.g. regulatory, administrative or control activities related to EP or RM. Government-owned entities (like public corporations) carrying out market or non- marked activities, e.g. waste and wastewater treatment services, are excluded from general government sector (in EPEA they are called GG specialised producers). They have to be classified in those NACE rev. 2-digits which typically carry out these activities, e.g. wastewater treatment services in NACE 37, waste treatment in NACE 38.
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Definition and scope of EGSS and of green jobs (XIII)
Data on corporations should be collected on the LKAU level (local kind of activity unit = establishment in SNA). It is the smallest unit of a corporation with book- keeping. If the environmental activity of a corporation is not the primary but secondary activity it should be allocated to the NACE category of the establishment and not of the corporation. Corporations can carry out market and non market activities. Market activities are sold on the market at economically significant prices, i.e percent or more of the production costs are covered by the price. Non-market activities are provided free of charge or at economically insignificant prices (less than 50 percent).
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Definition and scope of EGSS and of green jobs (XIV)
The principal activity is the activity of a unit producing most of the gross value added. If no gross value added data are available other key figures must be used to determine the most important activity, e.g. employment or turnover. In the case of a non-market producer the principal activity is responsible for most of the costs of production. Secondary activities are all other activities of a unit provided for use by other units. Ancillary activities are technologies and goods where the producer is also the beneficiary, i.e. they are not provided for use by other units but to support the main productive activities of the own unit, e.g. autoproduction of renewable energy (deviation of NACE rev. 2 rules), in-house waste collection and treatment, in-house wastewater treatment plants, education and training and other general administration.
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Data transmission to Eurostat
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Questions?
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Classifications (I) The following classifications are crucial in relation to EGSS: Classification of Environmental Protection Activities (CEPA) Classification of Resource Management Activities (CReMA) Statistical Classification of Products by Activity (CPA) Community Production (Prodcom) Combined Nomenclature (CN) Classification of the Functions of Government (COFOG) Statistical Classification of Economic Activities (NACE)
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Classifications (II) Classification of Environmental Protection Activities (CEPA): Protection of ambient air and climate 1.1.2 of which for the protection of climate and ozone layer Wastewater management Waste management Protection and remediation of soil, groundwater and surface water Noise and vibration abatement Protection of biodiversity and landscape Protection against radiation Research and development 8.1.2 R&D for the protection of climate and ozone layer Other environmental protection activities Breakdown of the questionnaire, in the legal base probably more aggregated.
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Classifications (III)
Classification of Resource Management Activities (CReMA): Management of waters Management of forest resources 11 A. Management of forest areas 11 B. Minimisation of the intake of forest resources Management of wild flora and fauna Management of energy resources 13 A. Production of energy from renewable sources 13 B. Heat/energy saving and management 13 C. Minimisation of the intake of fossil resources as raw material for uses other than energy production Management of minerals Research and Development R&D for the production of energy from renewable sources Other natural resource management activities Breakdown of the questionnaire, in the legal base probably more aggregated.
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Classifications (IV) Statistical Classification of Products by Activity (CPA): As already explained the focus of EGSS is on the (main) producers of environmental goods, technologies and services. These products can be identified using the CPA. CPA is compatible with NACE, therefore environmental G-T-S can be allocated to the producing economic unit (if possible LKAU/establishment). But CPA is on 6-digit level and therefore in many cases too imprecise. Eurostat provides a list of environmental G-T-S based on CPA. Community Production (Prodcom): Like CPA Prodcom is a classification of products and both are compatible. The advantage of Prodcom is that it is more detailed than CPA. On EU level products are classified by 8-digit codes, on national level by 10-digit codes.
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Classifications (V) Combined Nomenclature (CN)
The CN is used for the classification of goods in international trade. It is based on 8-digit codes which can be linked to other classifications (products or economic activities) via correspondence tables. This classification can be used to identify exports of environmental G-T-S. But as it is the case for CPA and Prodcom, only a part of exported environmental G-T-S can be identified directly. A further problem is that there are thresholds for reporting obligations. So, further data sources are needed, e.g. surveys or telephone interviews asking for the share of environmental exports in total output.
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Classifications (VI) Classification of the Functions of Government (COFOG): COFOG can be used as a data source for General Government activities. Take only data on costs of production, no employment data. General public services Defence Public order and safety Economic affairs Environment protection Housing and community amenities Health Recreation, culture and religion Education Social protection
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Classifications (VII)
Classification of the Functions of Government (COFOG): 5. Environment protection 5.1 Waste management 5.2 Waste water management 5.3 Pollution abatement 5.4 Protection of biodiversity and landscape 5.5 R&D Environment Protection 5.6 Environment protection n.e.c. = CEPA 3, allocation to NACE 38 = CEPA 2, allocation to NACE 37 = CEPA?, reallocation? = CEPA 6, reallocation? = CEPA 8, allocation to NACE 72 = CEPA? Statistical Classification of Economic Activities (NACE): The producers of environmental G-T-S are classified by NACE. Classification should be done on the level of LKAU/establishment. It can differ from the enterprise classification.
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Classifications (VIII)
Goods – Technologies – Services Adapted goods Connected goods End-of-pipe technologies Integrated technologies Specialized services Connected services Ancillary activities Environm. protection activities (CEPA) Resource management activities (CReMA) Prot. of ambient air and climate Waste manage-ment Noise and vibration abatement R&D Management of waters Management of fossil energy res. Management of wild flora and fauna Wastewater management Soil, groundwater, surface water Biodiver-sity and landscape Other Management of forest resources Manage-ment of minerals R&D Others Industries (NACE digit level)
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Questions?
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Methodology (I) 1. step: Identification of the EGSS population (I)
As there is no standard classification of environmental technologies, goods and services, the first and most important step is the identification of the EGSS population. This task cannot be done with a single approach, so a mix of methods and data sources has to be applied. The EGSS handbook provides practical examples and guidance but it can only be a supporting document because the methods finally chosen depend on the data sources available on the national level. Main data sources should be official statistics, supplemented by further data sources, registers, studies, internet or literature research etc. Eurostat provides a list of environmental goods and services, based on CPA.
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‚Specialised industries‘
Methodology (II) ‚Specialised industries‘ EGS Producers Source: EGSS handbook, page 72
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Methodology (III) 1. step: Identification of the EGSS population (II)
CPA or Prodcom statistics: This is the most important data source, because it is focused on the output by product. With the support of the Eurostat EGS list it is possible to identify a part of ‘specialised industries’ and EGS (NACE B to F). Furthermore the list provides the type of product and the EP or RM domain. This statistics doesn’t provide information on gross value added and exports. Availability of employment data depends on the level of aggregation. Structural Business Statistics: Allows for the identification of economic activities (NACE G to N, S95), i.e. industries. Except for specialised industries it is necessary to use further information to calculate the environmental share, e.g. through surveys or expert estimations. Provides information on output, employment and gross value added. Environmental protection expenditure accounts (EPEA) or COFOG: Data source for costs of production and maybe employment of General Government.
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Methodology (IV) 1. step: Identification of the EGSS population (III)
Up to now focus was on products and industries. Other official statistics/external information: It is necessary to determine the environmental share of those CPA or Prodcom codes which are not fully environmental. This can be done with further data sources, e.g. Energy balances/statistics (products) Business register (producers) Survey on environmental services of service industries Responsible ministries (products, producers) Business associations (products, producers) Specialised internet platforms (products, producers) Direct data collection from enterprises engaged in EGS by telephone Specialised literature/studies (products) Expert information (products, producers, industries)
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Methodology (V) 1. step: Identification of the EGSS population (IV)
If enterprises/producers are used to calculate the environmental share of a CPA or Prodcom code (e.g. biomass heating systems, wind mills) data on output, gross value added and employment can be drawn from Structural Business Statistics. At this stage all environmental goods, technologies and services should be identified.
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Methodology (VI) 2. step: Filling data gaps and estimations (I)
Once all environmental technologies, goods and services are identified and allocated to industries missing data have to be filled (subsequently some examples are described). Employment is missing: From Short Term Statistics data on production value and employment on NACE 5-digit level (at least in Austria) are available. Production value/unit of employment can be used to estimate the employment (necessary for Prodcom data). Structural Business Statistics can be used in an analogous manner. Output is missing: For enterprises not part of the SBS population (e.g. small enterprises, national parks, environmental organisations) assumptions are possible, e.g. average share of output and gross value added per employed persons in the economic branch (or a similar branch) on the most detailed level (4-digit in Austria).
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Methodology (VII) 2. step: Filling data gaps and estimations (II)
Gross value added is missing: Data on gross value added can be taken e.g. from Structural Business Statistics or National Accounts. GVA can be missing for e.g. whole economic activities (industries), enterprises or data based on Prodcom. GVA can be calculated based on unit of employment of on unit of output. Export is missing: Exports can be calculated on the basis of the CN classification of trade statistics. But as already mentioned only a part of exported environmental G-T-S can be identified directly. A further problem is that there are thresholds for reporting obligations. So, further data sources are needed, e.g. surveys or telephone interviews asking for the share of environmental exports in total output.
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Methodology (VIII) 2. step: Filling data gaps and estimations (III)
Only physical amounts are available: In exceptional cases it could be that only the output in physical values is available, e.g. fuelwood. In Austria we use the following solution: From energy statistics we know the production in TJ and the price per kWh. 1. calculation step: conversion of TJ in kWh 2. calculation step: calculation of output in Euro 3. calculation step: calculation of employment using information on average revenues by person (self)-employed in FTE in forestry. Calculations on gross value added and exports are not done in Austria but would be analogous to the estimations already described (Exports from CN or other sources, gross value added from National Accounts or Forestry Accounts).
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Methodology (IX) Source: aligned with EGSS handbook, page 120
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Methodology (X) Source: aligned with EGSS handbook, page 120
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Methodology (XI) Source: aligned with EGSS handbook, page 120
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Methodology (XII) Source: aligned with EGSS handbook, page 120
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Methodology (XIII) 3. step: Allocation of activities to domains of EP and RM (I) Once all environmental technologies, goods and services are identified and allocated to industries they have to be assigned to the appropriate environmental protection or resource management domain. The description of the CEPA classification and the EGS list provides useful support. In most cases the assignment is straightforward because of the purpose of the activity, e.g.: NACE 37 Sewerage is classified in CEPA 2 Waste management ÖPRODCOM Renovating, maintenance and restoration work for one- and two-dwelling buildings … is classified in CREMA 13 B. Heat/ energy saving and management ÖPRODCOM Retreaded pneumatic tyres, of rubber is classified in CREMA 13 C. Minimisation of the intake of fossil resources as raw material for uses other than energy production
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Methodology (XIV) 3. step: Allocation of activities to domains of EP and RM (II) But technologies and goods can also be related to more than one domain of EP, of RM or both EP and RM. In such cases the activity shall be allocated to the main domain which is identified via the main purpose, the technical nature as well as the intention of the producer. e.g.: Renewable energy serves two purposes – prevention of both air emissions and natural resource depletion. Producers of renewable energy are classified in 13 A. Production of energy from renewable sources. Reason: By convention all activities aiming at the protection of ambient air and climate through the reduction of natural resource use shall be classified as a resource management activity. Recycling consists of two steps – the collection of waste and the transformation of waste into secondary raw materials or final goods. Collection/treatment of waste is classified in CEPA 3 Waste management, secondary raw materials (and final goods) in RM (class depends on material)
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Questions?
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Country example (I) Data sources used in Austria:
Short term statistics (STS) – Industrial commodity statistics Structural business statistics (SBS) Environmental protection expenditure accounts (EPEA) Energy balances Business register Survey on environmental services of service industries Direct data collection from companies engaged in EGS by telephone Association of Austrian Social Security Institutions (employees) Market statistics on renewable energy technologies (photovoltaics, solar thermal energy, heat pumps and biomass) Green Report (Ministry for Agriculture and Forestry) Specialized literature Expert information Internet research
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Country example (II) For data collection a mix of methods is applied as it is not possible to cover all aspects of the environment related economy with a single source. Basically, a supply-side approach is taken; only in exceptional cases demand-side elements is included (e.g. energy balances). Data are collected both by product groups (from short term statistics (STS) or structural business statistics - SBS) as well as by individual enterprises (primarily in the case of technology). Preferably data of official statistics are used, otherwise other data sources. Some EGS are classified together with non-environmental products - the shares of the environmentally relevant products are estimated (e.g. services) If only one of the two variables (output or employment) is available the other is estimated compliant with the EGSS manual. These estimates are based on data from STS as well as SBS, assuming an average ratio of turnover per employee or vice versa. If only physical data are available, output and employment are estimated (e.g. output and employment related to fuelwood production)
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Country example (III) Short term statistics:
NACE are fully taken into account in EGSS; for explicit environmental goods and services identified by Prodcom, energy balances or eco labels production value is taken from STS; if necessary number of employees in FTE is calculated using per capita average productivity of a relevant NACE 4-digit. Examples: air filters, renewable energies, eco textiles, eco paints, eco cleaning agents, eco furniture, eco matresses, recovered paper, hydro turbines, devices for filtering or purification of gases, liquids or air (about 70 positions in Prodcom).
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Country example (IV) Structural business statistics (I):
SBS data are used together with other data sources to calculate environmental output and employment. Examples: NACE 452: Share of costs for servicing of nuisance, e.g. exhaust gases, as well as costs for correcting deficiencies (Association of Automotive Technicians). NACE 55 and 56: Share of companies with Austrian eco label for tourism. NACE 691, 702, 749: Environmental share of legal activities, management consulting activities, other professional, scientific and technical activities n.e.c. (EPEA and survey on environmental services of service industries).
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Country example (V) Structural business statistics (II): Examples:
NACE 711, 712, 721: Environmental share of architectural and engineering activities and related technical consultancy; technical testing and analysis as well as research and experimental development on natural sciences and engineering (survey on environmental services of service industries). NACE 812, 813: Environmental share of cleaning activities (mainly chimney sweepers) and landscape service activities (survey on environmental services of service industries).
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Country example (VI) Environmental protection expenditure accounts for the General Government: Expenditure is classified by CEPA, with data from other sources and assumptions it is also possible to allocate data to resource management activities. Attention: Take care of reclassifying market production of General Government to corporations. Market statistics on renewable energy technologies: Study of TU Vienna comprising data on turnover and employment of production, installation and R&D of photovoltaic and solar thermal systems, heat pumps and biomass systems.
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Country example (VII) Further enterprises:
1. These have to be identified as potential suppliers of EGS (data sources: Network Environmental Technology, studies, environmental newspapers and internet research). 2. Environmental output and employment data calculated on the basis of STS, telephone interviews, Association of Austrian Social Security Institutions and SBS. Green report (Ministry for Agriculture and Forestry): Data on revenues and employment of certified organic farms. Energy balances: Production of renewable electricity. Data on turnover and employment from STS.
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Country example (VIII)
Energy-efficient /passive houses, energetic dwelling renovation: Definition of environmental output and employment of construction industry difficult. Pragmatic approach: output and employment calculated on the basis of housing subsidies (criteria energy savings and thermal rehabilitation); data source is a study. Recycling products (I): Calculated on the basis of input of scrap. Paper: Environmental share of output and employment calculated on the basis of used waste paper in paper production (Association of Austrian Paper Industry). Plastic: Recycling of waste plastics classified in NACE 38, therefore covered by STS. But correct allocation to CReMA 13 C. Minim. of the intake of fossil res. as raw material for uses other than energy production not possible.
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Country example (IX) Recycling products (II):
Metals: Calculation of environmental output and employment on the basis of input of scrap in steel production as well as aluminium recycling products (one company in Austria). Glass: Recycling of glass packaging carried out by a small number of companies, all of them are taken into account. Research institutes, universities, environmental protection organisations, natural and national parks: Employment in environmental technology research at universities based on studies of the Environment Agency Austria; further companies engaged in environmental research, but also environmental protection organisations, natural and national parks are identified by business register and internet research.
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Country example (IX) Ancillary activities:
Small amount of ancillary activities (own generation of renewable energies, environmental ancillary activities in agriculture); data sources are energy balances and the Green Report.
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Eurostat data requirements
Draft module on EGSS of Regulation (EU) 691/2011 What is proposed in the Regulation concerning classifications? Eurostat EGSS questionnaire
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Discussion of problems
Please write down problems you still have? Which support do you need from Eurostat?
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