Learning from Environmental Accounting to Meet Climate Change Challenges

1. Learning from Environmental Accounting to Meet Climate Change Challenges Julie L. Hass, European Commission – Eurostat Climate Change, Development and Official Statistics 11-12 December 2008 Seoul, Korea

2. Foundations of Environmental Accounts Economic Statistics Environment Statistics Economic Statistics Environment Statistics

3. Statistics to Accounts

4. Environmental Accounts – 3 main types • Physical flow and physical-monetary (hybrid) flow • Economic Accounts and environmentally related transactions • Asset accounts (physical and monetary) Source: SEEA-2003

5. Environmental Accounts • Reuses existing data to a large extent – reorganizes it so it can be matched to economic data • Establishes matched data sets that can be confidently used for analysis purposes- hybrid accounts are especially important • Identifies areas that are not covered in current statistics so these gaps can be filled (potentially)

6. Need to adjust system boundaries to arrive at matched data sets that can be used for analysis

7. Similarities between “Climate Change” and “Environment” • Multifaceted • Systemic • Hard to define precisely • Different meaning/emphasis in different countries / regions • Already exists so captured within the statistical system but how do we separate it out so we can identify and analyse it on its own? What can we learn from Environmental Accounts?

8. National Accounts / Government Economic Statistics: Investment Current expenditure R&D Government accounts Total investment Of which, environment related investment Total current expenditure Of which, environment related expenditure Total R&D expenditure Of which, environment related R&D expenditure Total government expenditure Of which, environment related government expenditure Where is “environment” in current statistics? Examples from environmental protection expenditure accounts

9. To identify more detail requires definitions, classification systems for these activities, methodology for implementation and reporting / publication of statistics • Definition of Environmental Protection Activities:“Environmental protection activities are those where the primary purpose is the protection of the environment; that is, the avoidance of the negative effects on the environment caused by economic activities.” (§5.29 SEEA-2003)

10. Classification of Environmental Protection Expenditure Activities (CEPA) • Protection of ambient air and climate • Wastewater management • Waste management • Protection of soil, groundwater and surface water • Noise and vibration abatement • Protection of biodiversity and landscapes • Protection against radiation • Research and Development • Other environmental protection activities • Classification is by main purpose

11. Methodology • For government expenditures: Budget analysis methodology that can be used for establishing the national accounts statistics for functions of government (COFOG) • Eurostat manual: Environmental expenditure statistics: General Government and Specialised Producers data collection handbookhttp://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-RA-07-012/EN/KS-RA-07-012-EN.PDF

12. Environmental Protection Expenditure Definition / identification criteria established Classification established: CEPA Methodology established: Budget analysis Annual statistics established: National Accounts reporting according to COFOG (classification of functions of government) Climate Change – government expenditures for mitigation and adaptation (Chapter 6 in the National Communication Report) Definition? Classification? Methodology? Reporting? Comparing EPE and Climate change

13. What can we use from Environmental Accounts? • Environmental Protection Expenditure Definition? • Partially – but identifying “mitigation” and “adaptation” is problematic • CEPA classification? • Partially – but needs to include resource use and management dimension – a proposal made at the Sept 2008 London Group meeting • Budget Analysis Methodology? • YES!

14. Proposed Classification of natural Resource Use and Management Activities (CRUMA) • Proposal to London Group from Istat and Eurostat to extend the CEPA to include natural resource use and management • 10. Use and management of inland waters • 11. Use and management of natural forest resources • 12. Use and management of wild flora and fauna • 13. Use and management of fossil energy • 14. Use and management of raw materials • 15. Research and development activities for natural resource use and management • 16. Other natural resource use and management activities

15. Based on this example, what can we learn? • The statistical system does have established systems that can contribute to monitoring changes over time – the challenge is to identify what is related to changes in the climate. • To identify climate change effects we need to identify if our classification systems are established in appropriate ways to separate out the effect of climate change. • Need to systematically go through our systems and analyse if they need to be changed, work step-by-step for improvement over time

16. What statistical systems? • Classification of Economic activities • Last revision in mid-1990s split ISIC 90 into 90.1, 90.2, 90.3 to give more detail for waste, waste water and other environmental activities • ISIC/NACE has been recently revised and currently being implemented in national statistical institutes so we can see the service industry in more detail • How does this classification system need to be changed to make identifying climate change a natural part of this system?

17. What statistical systems? A few examples... • Job classification? • Can we find those working on CDM projects?Or in other climate change related fields? • Disease classification? • Which diseases are we expecting to see increase / decrease? Will we be able to track these changes? • Land cover / land use classification? • How can we get this to be better?

18. Where to go from here… • What are we trying to identify? • Where is this already found within the statistical system? • How can we more easily separate climate change information from the rest of the information in the categories we currently have in official statistics? • What improvements need to be made? • Yes this is complex – but that should simply challenge us to be creative – not stop us from this important work!