1. THE TREATMENT OF PERMITS IN THE SNA 2008
John Verrinder
Eurostat

2. Background to the development of the rules
Task Force on Harmonisation of Public Sector Accounts
Advisory Expert Group
General agreement on way forward
Discussion on emission permits…
SNA 2008 – Chapter 17
part Q: Licences and permits to use a natural resource
part S: Permits to undertake a specific activity

3. “Natural Resource” Defined in SNA 208 Chapter 10 D
Economic assets – “only those naturally occurring resources over which ownership rights have been established and are effectively enforced can therefore qualify as economic assets”
“Certain naturally occurring assets, however, may be such that it is not feasible to establish ownership over them: for example, air, or the oceans.” (para )
“natural assets must not only be owned but must also be capable of bringing economic benefits to their owners” (para )

4. Permits issued by government
Permits are “not dependent on a qualifying criteria, but are designed to limit the number of individual units entitled to engage in the activity.”
Fees to be recorded as taxes (examples of taxi or casino licences -> other taxes on production)
Spread over time if government recognises a liability to repay in case of cancellation
Government permits as assets when all of …
Activity does not utilise a government asset
Permit issue not subject to qualifying criteria
Limited number of permits (“monopoly profits”)
Permit holder can legally and practically sell the permit bto a third party

5. Permits to use natural resources as sinks
Note definition of natural resources
Discharge of water – if water is an economic asset … treatment as for radio spectrum licences
SNA para 17.36: “Governments are increasingly turning to the issuing of emission permits as a means of controlling total emissions. These permits do not involve the use of a natural asset (there is no value placed on the atmosphere so it cannot be considered to be an economic asset) and are therefore classified as taxes even though the permitted “activity” is one of creating an externality.