1. Turnover and value added estimation
Practical approach and methods
Workshop on Reporting Environmental Goods and Services
12-13 november 2009
Bech Building – A3/45
ICEDD asbl

2. Turnover
Value added
Turnover
Totals invoiced by the observation unit during the reference period. This corresponds to the market sales of goods or services supplied to third parties
It excludes:
stocks (so is not really the production except in case of services where it is a proxy)
imported goods nor services
reductions in prices, rebates, discounts, etc.
It includes
all charges, duties and taxes on the goods or services (except VAT charged to customers or other deductible taxes directly linked to turnover)
For non-market producers (GG or ancillary): turnover = total costs of production (as there are no sales)
Handbook, Chapter 4 (4.3 and 4.4), pp

3. Turnover Problem of possible double-counting among main producers:
Value added
Turnover
Problem of possible double-counting among main producers:
Environmental goods, technologies or services could be used in the production of another environmental output
Solution:
Intermediate consumptions of environmental technologies, goods and services are quantified and excluded from total turnover of EGSS
For secondary or ancillary producers, it is assumed that no intermediate consumption of environmental goods, services or technologies are realised (the whole IC is related to principal activity)

4. Turnover of the corporations
Value added
Turnover of the corporations
In case of specific environmental NACE classes:
Turnover extracted from registers directly
The entire turnover is taken into account as they carry out only environmental activities
In case of sectors providing both non-envi. and envi. technologies and products:
Need to know the environmental share of the activities to allocate the appropriate turnover to EGSS

5. Turnover of the corporations
Value added
Turnover of the corporations
Estimation of shares based on coefficients
If the population is large: share of total environmental producers to total producers of a corporations sector applied to total turnover of the sector
In other cases: shares are estimated on an establishment base
To distribute turnover by establishments, share of employed people of an establishement to total employment of the company can be used
For some sectors, employees are in the headquarters and not in each establishement of production (for ex. energy sector): use the number of establishments as a share

6. Turnover of the corporations
Value added
Turnover of the corporations
Estimation of turnover based on physical or consumption data
Turnover could be approximated by combining physical output and average price ratios of the output
For example: in the case of energy (part of renewable energy: physical production of energy used)
Case of integrated technologies as production system
Turnover = costs of production (excluding environmental techn., goods and services bought)
Personnel costs,
Material costs
Consumption of fixed capital for own account production
Taxes on production

7. Turnover of the corporations
Value added
Turnover of the corporations
Case of ancillary production:
Turnover = environmental expenditures for the use of the good, techn. or service = costs of production
Sources of data:
By SBS regulation collecting ancillary EPE
By table B of EPEA and current expenditures collected through the Joint Questionnaire
In the case of the RM ancillary activities: costs of auto-production of energy deducted from physical data sources (for example: energy statistics in case of combined heat and power plant)

8. Turnover of the General Government
Value added
Turnover of the General Government
= non-market producers:
Turnover = sum of costs of production
Sources:
Table B of EPEA for the GFCF and table A for the expenditures
Budget analysis: have information on receipts and use of funds by the government units. Description of expenditures is needed to select environmental expenditures (need share for not specifically envi. units)
COFOG: GG’s expenditures by functions of government
A full division dedicated to the environment protection (Division 5)
No division for the resources management
Expenditures could also be classified in divisions with a mix of envi. and non envi. expenditures

9. Turnover Surveys to collect information on turnover
Value added
Turnover
Surveys to collect information on turnover
In order to avoid compiling information on non environmental activities:
Ask the respondents to provide their lists of environmental technologies or products
Let them select their principal and secondary activities
Ask them the turnover of each environmental technology or product
Will then have turnover by type of technology or product and can isolate environmental turnover

10. Turnover
Value added
Value added
Value added at basic prices = the difference between production (at basic prices) and intermediate consumption (at purchasers’ prices)
Comparable to the national level of income (GDP)
It includes:
Consumption of fixed capital
Compensation of employees
Taxes on production (for examples taxes on property and payroll taxes, except taxes on intermediary inputs)
Product-related subsidies
It excludes:
Subsidies (for example labour or capital-related taxes except product-related subsidies)
Intermediary consumption (environmental or non-environmental)

11. Value added of the corporations
Turnover
Value added
Value added of the corporations
Method of estimation based on employment
Ratios of production per employee or valued added per employee are roughly similar in a particular NACE class (the most detailed NACE information)
VA/employee of a particular NACE class * EGSS employment = EGSS VA
SBS data or national accounts data by NACE classes

12. Value added of General Government
Turnover
Value added
Value added of General Government
VA = difference between total costs of production and intermediary consumption
VA = sum of compensation of employees, consumption of fixed capital, some labour and capital-related taxes and product-related subsidies

13. Value added Surveys to collect information on VA
Turnover
Value added
Value added
Surveys to collect information on VA
In order to avoid compiling information on non environmental activities:
Ask the respondents to provide their lists of environmental technologies or products
Let them select their principal and secondary activities
Ask them the VA of each environmental technology or product
Will then have VA by type of technology or product and can isolate environmental VA for establishments carrying out both envi. and non envi. activities
For entirely environmental activities, take the entire value added

14. Thanks for your attention!
Céline Martin
Marco Orsini
Maria Jose Lopez
ICEDD asbl
Boulevard Frère Orban, 4
5000 Namur