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CONCERTED ACTION: Environmental Valuation in Europe (EVE) |
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Summary of EVE Workshop 8Green National Accounts
Contributions:
Workshop Summary:This workshop focused on the most recent national and international level advancements in the field of green accounting. The main aim was to identify possible convergence and complementarity amongst various approaches in the area of physical satellite accounts and physical indicators as well as monetary valuation, using the avoidance cost and the damage cost approaches. Several of the participants were members of the London Group, an informal forum created in 1993 to share experience of developing and implementing environmental satellite accounts linked to the System of National Accounts among practitioners and representatives from statistical offices and international organisations (including the United Nations Statistical Office, Eurostat, OECD, The World Bank). The first session on "Developments at the Institutional Level" provided an overview of developments in Green National Accounting frameworks at the international level. Anne Harrison (OECD) outlined the process of reform of the United Nations System for Integrated Environmental and Economic Accounts (SEEA), explaining the structure of the system and of the forthcoming publication. So far most critical parts of the publication seem to be the chapter on "Valuation", which the workshop dealt with and the chapter on "Policy Applications and Uses" because of the lack in public involvement and participation. An open question remains why users' involvement comes only at a later stage. Anton Steurer (Eurostat) presented developments of Green Accounting activities within the European Union (EU) after the Communication of the Commission in 1994 [COM94(670)] with particular emphasis on the role of Eurostat in co-ordinating EU member states' activities, especially setting up ad hoc Task Forces which aim at exchanging experiences and ensuring comparability among countries. The most important fields of Eurostat's activities are: asset accounts (forests, sub-soil assets, water, land), emission accounts (particularly the NAMEA, National Accounting Matrix including Environmental Accounts), material flow accounting, environmental accounting (environmental expenditure, job creation in the environmental sector, environment taxes), SEEA revision and valuation issues. While the World Bank is not specifically concerned with environmental statistics, Kirk Hamilton (The World Bank) explained that their interest in Green Accounting comes from the concern to have environmental issues more effectively integrated into macroeconomic policy. Therefore, they developed indicators which draw attention on resource depletion and pollution damages. The 'genuine saving' indicator, for example, has been calculated over the past 30 years for several countries. Evidently, figures are sensitive to the categories of environmental assets included in the calculation. However, this indicator of change in assets is still regarded as useful providing a quick impression and an overall order of magnitude of the direction of development, and hence delivering a useful message to policy-makers. A roundtable on "Current and Future User Needs and Expectations" (chaired by William Watts, European Commission, DG Economic and Financial Affairs) brought together policy-makers, NGO representatives and experts to discuss the actual needs in terms of information needed by decision-makers. This roundtable was particularly interesting because Senator Fausto Giovanelli, Member of the Italian Parliament, participated and presented the Italian framework law project on green accounting which he promotes in Italy on the basis of the guidelines of the European Commission Communication of 1994. Once approved by both branches of the Italian Parliament, this law would require the state, regions, provinces and municipalities to provide environmental information of the type of pressure-state-response indicators, NAMEA and SERIEE (Système Europèen de Rassemblement de l'Information Economique sur l'Environnement). These information sets should then be approved at each level of the administration by its respective competent body, thereby explicitly tabling environmental considerations for policy-makers to consider and enhancing the debate on sustainability. Gérard Aubrée (European Commission, DG Environment) reported on future environmental priorities at the EU level in the light of the draft 6th Environment Action Programme. He stressed the importance of environmental and sustainability indicators, as well as integrated economy-environment systems such as the NAMEA system, in order to take environmental concerns into account when designing sectoral policies. The point of view of environmental associations in terms of expectations from green accounting was presented by Paolo Lombardi (WWF Italy). Activities of OECD on indicators (policy performance reviews) were outlined by Anne Harrison. Finally, the position of the American Congress on environmental accounting was reported by Barbara Fraumeni (Bureau of Economic Analysis, USA). Session II on "Methodological Developments of the EU Research" summarised the most important results of relevant projects funded by the European Commission, as well as methodological advancements in the field of valuation for the purpose of green accounting. Anil Markandya (Bath University, UK) presented the methodology for calculating the damage value to the environment developed under the EU-funded projects GARP I and II (Impact Pathway Analysis) and the results obtained in four EU countries applying this methodology (see also FEEM Newsletter 2.1999: 16-18). The methodology is based on dose-response functions which allow estimating impacts on health, crops and materials from pressure data. Monetary values are calculated on the basis of individual willingness-to-pay (WTP) / willingness-to-accept (WTA). Results show the order of magnitude of damage in absolute and relative terms (as a percentage of the GDP) as well as their attribution to industrial sectors on the basis of their estimated contribution to the total damage. This approach allows to determine which countries are net-importers and which are net-exporters of pollution. Limits to this approach consists in the conceptual difficulty to extend the methodology to media other than air and the controversy over the reliability of adopted monetary values. Martin O'Connor (C3ED, Université Versailles St. Quentin en Yvelines) presented a different approach to Green Accounting which emerged from the EU-funded GREENSTAMP project, and is based on the calculation of avoidance costs for meeting certain standards. The approach is based on looking at how an economy would perform if it respected certain environmental standards. Within the GREENSTAMP approach, the rules used for calculating GDP remain unchanged, but its calculation is constrained by environmental standards. The difference between the actual GDP and the constrained GDP, or 'greened economy' GDP, accounts for the mismanagement of the environment and as such can be considered as an indicator of that mismanagement. The main problem in the GREENSTAMP methodology is the identification of the sustainability standards, which are part of the sets of assumptions needed for modelling the greened economy GDP. The research team of GREENSTAMP took the view that these should arise from a transparent and participatory decision-making process. Anni Huhtala (National Institute for Economic Research, Sweden) presented the outcomes of Chapter 5 SEEA revision group on "Valuation" which encompassed both a cost-based approach and a benefit/damage based approach. The first is consistent with the GREENSTAMP methodology and allows calculation of a greened economy GDP, while the latter is in line with the GARP approach and leads to the calculation of the Eco-Domestic Product (EDP) which is the aggregate defined in the SEEA. Session III, "A critical perspective on Green Accounting", consisted of three presentations assessing the methods used in Green Accounting as presented in previous sessions. Pamela Mason (Bath University, UK) and Marialuisa Tamborra (FEEM, Italy) presented a joint paper on the possibility of integrating and extending the GARP and GREENSTAMP approaches, taking into account both sustainability and welfare issues. The analysis also took into account the empirical findings obtained by applying both methodologies, which illustrated that these are partial and difficult to compare. However, the theoretical and empirical analysis clarified the potential for the complementarity of these two approaches. The discussion which followed identified the need for research to produce results that can be collated. This effort should also be supported by European institutions. Jochen Jesinghaus (JRC, Ispra, Italy) brought a different perspective into the debate, based on non-monetary information. His presentation focused on the potential of environmental indicators and indices for creating a transparent public debate, as already shown by some successful examples. With the aid of a "communicative" graphical presentation and suitable aggregation techniques (weighting and evaluating using benchmarking tools), this approach can provide both detailed and synthetic information to the public and support the decision-making process with transparent and reliable data. Peter Bartelmus (Wuppertal Institut, Germany) illustrated the links between SEEA and Material Flow Accounting (MFA, a non-monetary approach), identifying the possibility for their harmonisation and complementarity, relying on the results of an empirical pilot exercise of calculating both SEEA and MFA figures for Germany. Although MFA is a physical approach based on strong sustainability criteria, and SEEA contains both physical and monetary accounts, they can be combined in order to steer an economy towards a higher resource productivity, which is the primary aim of MFA. It has however been noted that MFA methodology does not account for certain types of pollution such as noise. In session IV on "Applications" several practical examples of valuation and green accounts were given in order to draw some lessons on the applicability and the state-of-the-art in this field. Mark De Haan (Statistics Netherlands) presented the evolution of Green Accounting in The Netherlands and more specifically the methodological developments and uses of the NAMEA. The Netherlands has been producing NAMEA series since 1993 for air emissions, waste, waste water, use of oil and gas and is now also estimating environmental impacts (greenhouse gas effects, acidification, eutrophication) by sector of origin. Other interesting indicators were presented, including one measuring environmental efficiency gains of production and consumption. This approach seems very promising, as witnessed by the introduction of the NAMEA at the EU level. Jan Kolar (GISAT Geoinformation Company, Czech Republic) presented the most representative empirical example of application of the GREENSTAMP methodology, which calculated abatement cost curves for NOx, SOx, and water in the Czech Republic. These results were obtained within an EU-funded project which also focused on land cover and land use accounting. Angelica Tudini (ISTAT, Italian Statistical Office) outlined the activities of ISTAT in the field of Green Accounting, describing those projects that are at a most advanced stage: the calculation of environmental protection expenditure (Government, Industry and Services) and the calculation of the NAMEA for air emissions. Karl Schoer (Statistisches Bundesamt, Germany) illustrated another example of physical accounting, Water Flow Accounts, conceived as part of the overall framework of Material and Energy Flow Information System (MEFIS). This system presents in physical units the material flows caused by human activity from nature to the economic system (in terms of raw materials) and vice versa (in terms of pollutants). Barbara Fraumeni explained the future actions in the field of Green Accounting after the American Congress had blocked BEA's activities (IEESA for subsoil assets). The USA currently has a strong interest in developing a comprehensive Green Accounting System (based on SEEA), following the opinion of the panel of experts (headed by Tobin Nordhaus) charged by Congress to evaluate BEA's work. The concluding round table on "Prospects for Applications and Future Research Agenda", chaired by Anton Steurer, included: Cesare Costantino (ISTAT, Italian Statistical Office), Mark De Haan, Kirk Hamilton, Anni Huhtala, Jan Kolar, Pamela Mason (replacing Anil Markandya) and Peter Bartelmus. They identified key areas of future actions in terms both of applications and research. The concluding remarks signalled that Green Accounting has reached maturity. It is now time to start producing on a regular basis empirical results using well-established methodologies and to communicate these results, and their implications, to the general public. Most of the papers presented at the EVE workshop will be published in FEEM working papers and are downloadable from FEEM.
Workshop Participants:
Contact Details: Marialuisa TamborraFondazione Eni Enrico Mattei (FEEM) Corso Magenta, 63 20123 Milano Italy Tel: +39-02-52036974 Fax: +39-02-52036946 E-mail: [email protected]
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