1. Introduction to SEEA and its monetary modules
EUROPEAN STATISTICAL TRAINING PROGRAMME (ESTP)
Eva Milota
Directorate Spatial Statistics
Vienna
26 – 28 March 2014
Course on “Environmental Protection Expenditure statistics and accounts and related topics”
Introduction to SEEA and its monetary modules

2. D Introduction to SEEA Outline SEEA and the green economy
The SEEA conceptual framework
SEEA structure
General principles
SEEA Volume 1
SEEA Volume 2
SEEA Volume 3
SEEA Volume 1 - Monetary Modules
Integrated Framework for Monetary Environmental Accounting (Eurostat)

3. SEEA and the Green Economy
D Introduction to SEEA
SEEA and the Green Economy
The economy impacts on the environment and the environment impacts on the economy
To understand these linkages we need to integrate environmental and economic information
SEEA provides a comprehensive conceptual and accounting framework that can be used to create a database suitable for analysing and evaluating the interactions between the economy and the environment
As such, SEEA may provide part of the solution in informing on the green economy

4. D Introduction to SEEA The SEEA Conceptual Framework
Environment
Natural Resources (stocks)
-Land
-Water
-Ecosystems
-Soil
-Etc.
Natural Resource flows
-Materials
-Energy
-Ecosystem services
Economy
Activities
-Production
-Consumption
-Accumulation
Instruments
-Financial/Monetary
-Taxes/subsidies
-Financing
-Resource rent
-Permits
Actors
Enterprises
Households
Government
Non-profit institutions
Analytical and Policy Frameworks
-Productivity analysis
-Natural resource management
-Climate change
-Green Growth/Green Economy
Land/
Resource use/
Ecosystems
Emissions/waste
Outside territory of reference
Outside territory of reference
Source: UNSD

5. Extensions and Applications (Volume 3)
D Introduction to SEEA
SEEA Structure
General Principles
Concepts
Classifications
Accounting rules
Valuation principles (where applicable)
SEEA
Volume 1
Volume 2
Extensions and Applications (Volume 3)
Source: UNSD

6. General Principles Introduction to SEEA
SEEA is an organising framework for an integrated system of stocks and flows accounts from which policy relevant statistics and indicators can be derived that measure interactions between the economy and the environment and the quality of environmental assets
The stocks and flows can be measured in both physical and monetary terms
SEEA sets out the underlying concepts, definitions, classifications and accounting rules that underpin the stocks and flows accounts
As such, SEEA can provide guidance in the setting up of a program of basic environment statistics in terms of scope, coverage and underlying concepts

7. General Principles: SEEA as an organizing framework
Introduction to SEEA
General Principles: SEEA as an organizing framework
Indicators
Accounts
SEEA
Basic data
Econ. Stats|Env. Stats
Source: UNSD

8. General Principles: SEEA accounts and aggregates
Introduction to SEEA
General Principles: SEEA accounts and aggregates
Asset accounts: record stocks and changes in stocks (flows) of natural resources such as land, forest, water and minerals
Physical flow accounts: provide a systematic physical description of production and consumption processes, including their natural resource inputs, product throughputs and outputs i.e. wastes. Link the physical information to the economic accounts
Monetary accounts: separately identify environmentally- related transactions presented in the existing SNA flow accounts in order to make them more explicit for analysis
Environmentally-adjusted aggregates: combine modules of SEEA to form a full-sequence of accounts from which aggregates such as depletion-adjusted net domestic product and net saving can be derived.

9. SEEA Volume 1: The Central Framework
Introduction to SEEA
SEEA Volume 1: The Central Framework
Measures in physical terms the flows of goods and services of energy, water and materials that cross between the economy and the environment and circulate within the economy
Accounts for natural resources and their using up by the economy
It uses standard national accounting concepts and classifications and expands on them to better measure the relationship between the economy and the environment
The one extension to the SNA is that Volume 1 provides guidance on how to calculate measures of depletion of those natural assets that are within the asset boundary of the SNA (e.g. subsoil assets)
As such, national accounts aggregates such as net domestic product and net national saving can be adjusted for the “using up” of those natural assets in the production process
SEEA Volume 1 is predicated on established statistical standards embodied in the SNA. It complements the SNA by elaborating those concepts and classifications that better measure the relationship between the economy and the environment

10. SEEA Volume 2: Experimental Accounts
Introduction to SEEA
SEEA Volume 2: Experimental Accounts
Volume 2 looks at the ecosystems in their capacity to provide services to current and future generations
All assets discussed in the central framework as individual assets are seen as jointly producing services
The concept of ecosystem services is well known in the scientific community, but there is little practical experience in measuring the concept among official statisticians
Hence Volume 2 will aim to do no more than present the current state of thinking on these matters. As such, Volume 2 cannot be regarded as a statistical standard
That said, statisticians may choose to use the Volume 2 framework to generate policy-relevant datasets, with the qualifications attaching thereto.

11. SEEA Volume 3: Extensions and Modifications
Introduction to SEEA
SEEA Volume 3: Extensions and Modifications
This Volume will describe the uses for, and applications of, SEEA-generated datasets
The Volume may be no more than a website
As SEEA is applied in practice, it is expected that additional materials will be generated

12. Introduction to SEEA
SEEA Volume 1: The Central Framework

13. Introduction to SEEA

14. Introduction to SEEA
Environmental Protection Expenditure Accounts (EPEA)
EPEA provide information on the output of environmental protection specific services produced across the economy and on the expenditure of resident units on all goods and services for environmental protection purposes. –
This module is quite well developed and is one of the three new modules of the new regulation amending regulation (EC) No. 691/2011.
Environmental Goods and Services Sector (EGSS)
The EGSS provide information on the extent to which the economy may become more environmentally friendly and resource efficient. The types of environmental goods and services in scope of the EGSS are environmental specific services, environmental sole-purpose products, adapted goods und environmental technologies.
This module is newly developed and is one of the three new modules of the new regulation amending regulation (EC) No. 691/2011.

15. Introduction to SEEA Environmental payments by government
Most of the following payments should be considered as part of environmental protection expenditure:
Environmental payments by government
Environmental subsidies and similar transfers
An environmental subsidy or similar transfer is a transfer that is intended to support activities which protect the environment or reduce the use and extraction of natural resources. It includes those transfers defined by the SNA as subsidies, social benefits to households, investment grants and other current and capital transfers. There might be distinguished between environmentally beneficial or environmentally damaging payments. A definition of environmentally damaging subsidies is not included in the SEEA.
Environmental subsidies is part of Eurostat's work programme, a manual for accounting those payments is in discussion.

16. Introduction to SEEA Environmental payments to government
Environmental Taxes
The decision as to whether a tax is environmental is based on the consideration of the tax base. Specifically, an environmental tax is a tax whose tax base is a physical unit (or a proxy of it) of something that has proven, specific, negative impact on the environment.
Environmental Tax Accounts are part of Regulation (EC) 691/2011.
Rents
A rent is the income receivable by the owner of an environmental asset for putting the asset at the disposal of another institutional unit. It is paid on the use in production of non-produced assets such as land or mineral and energy resources.
Sales of goods and services (fees)
Fees are payments made by users of goods and services provided by government units.
Fees can be as important as taxes to create an environmental inventive effect. In Austria they are presented in a subsidiary account to environmental taxes.
Fines and penalties
Fines and penalties are compulsory payments imposed on institutional units by law, related to illegal activities of interest e.g. fines for polluting water bodies.

17. Introduction to SEEA
Environmental transfers by non-government institutional units
Besides flows that are receivable or payable by government units (taxes and subsidies) there can be transfers between other institutional units e.g. from households to conservation groups or between international organisations and resident institutional units. They are considered to be environmental if the primary intent is that the money is spent for environmental protection or resource management purposes.
Permits to use environmental assets
One mechanism for managing the interaction between the economy and the environment is the use of permits and licenses to access, extract or use environmental assets. This licenses or permits may relate to the physical removal of environmental assets (fishing licenses, mining licenses) or to the use of the environment as a sink for emissions.

18. Introduction to SEEA Permits to extract and harvest natural resources
Mineral and energy resources
Land resources
Timber resources
Aquatic resources
Water resources
Permits for the use of the environment as a sink, e.g.
Sanitary landfill charges
CO2 emission permits
Generally those permits are to be categorised as taxes or fees.

19. Introduction to SEEA
Transactions concerning fixed assets used in economic activities related to the environment
There are no strict boundaries on which fixed assets may be of interest and no aggregate for environmentally related fixed assets is defined in SEEA, but three types of financial flows that should be considered:
Consumption of fixed capital
The using up of an asset over time through its use in production is accounted for by means of an allowance for consumption of fixed capital. This allowance should be deducted from income and recognized as a cost of production.
Terminal costs
Costs incurred to prevent environmental problems when production or operation ceases and use of fixed assets ends, e.g.
Mines are closed and mining slag heaps are treated to minimize leaching
Oil rigs and other mining equipment are dismantled and removed
Landfills are sealed …..

20. Introduction to SEEA Remedial costs
Costs of a remedial nature are often incurred after a site has been closed and the operator has left:
Expenditure to restore land to allow its use for some other purpose
Expenditure to ensure that no harmful emissions from deposits of pollutants or other residuals are able to leach into the surrounding environment and cause environmental damage

21. Introduction to SEEA Implementing SEEA and resulting ideas:
Going one step further – building an integrated framework for monetary environmental accounts

22. Introduction to SEEA Why further integrating the monetary modules?
The monetary environmental accounts (MEA) modules are linked and complement each other.
They use in part the same classifications, concepts, terms and definitions.
They use the same data sources.
They form in principle an integrated system.

23. Introduction to SEEA
BUT! There are some areas of heterogenity between the MEA modules – for example:
Source: Eurostat

24. Comparison of EPEA, ReMEA and EGSS
Introduction to SEEA
Or in more detail:
Comparison of EPEA, ReMEA and EGSS
Source: Eurostat

25. Introduction to SEEA
What should it look alike?
Source: Eurostat

26. Introduction to SEEA So what is needed?
Common scope, even though a single module could cover only a part of it.
Common definitions, wording and classification, i.e. a same “label” should identify always the same concept / variable for all the modules.
Consistency with national accounts concept, definitions, classifications and methods

27. Course on “Environmental Protection Expenditure statistics and accounts and related topics”
Please address queries to:
Eva Milota
Contact information:
Guglgasse 13, 1110 Vienna
phone: +43 (1)
fax: +43 (1)
Introduction to SEEA and its monetary modules