Eurostat Working Group “Environmental Expenditure Statistics”

1. The Istat Classification of Resource Use and Management Activities and expenditure (CRUMA)reference document: C. Ardi – F. Falcitelli “The Classification of Resource Use and Management Activities and expenditure – CRUMA”, Istat, Rome, 2 August 2007 – ENV/EXP/WG/05 (2008) http://circa.europa.eu/Public/irc/dsis/envirmeet/library?l=/environment_20-210508&vm=detailed&sb=Title Eurostat Working Group “Environmental Expenditure Statistics” Meeting of 20-21 May 2008 - Luxembourg Federico Falcitelli Head, Economic accounts for the environment Eurostat, 20-21 May 2008, Luxembourg

2. The Istat Classification of Resource Use and Management Activities and expenditure (CRUMA) Summary • CRUMA • Why has been developed • How has been developed • Reference points • Rationale • Content • What it includes • What it excludes • Fields of application in Italy • An example of figures • CRUMA versus other classification criteria (e.g. COFOG) • Who is discussing CRUMA

3. The Istat Classification of Resource Use and Management Activities and expenditure (CRUMA) Why • for the natural resource management field there is no an international agreed accounting system and classification, while for the environmental protection field EPEA and CEPA exist • the attempts made so far (e.g. OECD/Eurostat 1999, SEEA2003) in order to fill this gap have led to heterogeneous solutions: CEPA for the environmental protection domain and classifications based on different structure and principles for the resource management domain • in Italy there is a great demand of information on environmental expenditure concerning both domains (environmental protection and resource management) especially from Central and Local Government

4. The Istat Classification of Resource Use and Management Activities and expenditure (CRUMA) How, Reference points (1/3) • Main reference points… • SERIEE 1994, Ch. X • SEEA 2003, Ch. 5 • OECD/Eurostat 1999 manual on environmental industries • … for • Defining the scope of the natural resource management sector in terms of: • Definition of natural resources • Identification of the kinds of resource management activities

5. The Istat Classification of Resource Use and Management Activities and expenditure (CRUMA) How, Reference points (2/3), Scope Defining the scope • Natural resources (SERIEE 1994 §§ 10043-10045) • According to the generally accepted definition, natural assets correspond to non-produced assets: water (marine and inland), air, land (soil, ecosystems, etc.), wild flora and fauna, sub-soil assets, as well as living assets produced by human activities (livestock, plants). • Restrictions: Only those natural resources corresponding to non-produced natural assets whose use takes the form of goods, are dealt with in the natural resource use and management account. Hence, produced natural resources (livestock, plants) are excluded as well as those environmental services which result from uses of certain functions of natural assets (assimilation of pollutants, aesthetic value, etc.). • Management activities (SERIEE §§ 10046-10048) • For the purpose of the account, management activities designate: • research for new resources, • withdrawals from existing resources, • activities aimed at reducing withdrawals (recovery, recycling, policies for saving or substitutes resources), • development and regulatory activities for certain resources (e.g. inland waters). • Activities which consist in the transformation of natural resources, i.e. corresponding to their use as input for the production of another product are not described in the account; however activities aimed at lowering their consumption, whether directly or indirectly are considered.

6. The Istat Classification of Resource Use and Management Activities and expenditure (CRUMA) How, Reference points (3/3),List of Natural resourcesandKinds of activities • SERIEE 1994 • SEEA 2003

7. The Istat Classification of Resource Use and Management Activities and expenditure (CRUMA) How, Rationale (1/3), Consistency with CEPA • To set up a classification fully consistent with CEPA in terms of: • Classification principles: • main purpose criterion and • the technical nature of the activity • The twofold classification criteria of the activities: • by environmental domain and • by kind of activity • The method for building the classification: • first: to set up a classification matrix, i.e. a [type of activity] by [environmental domain] matrix • second: to fill in the matrix

8. The Istat Classification of Resource Use and Management Activities and expenditure (CRUMA) How, Rationale (2/3), CEPA2000 classification matrix: [type of activity] by [environmental domain]

9. The Istat Classification of Resource Use and Management Activities and expenditure (CRUMA) How, Rationale (3/3), CRUMA classification matrix: [type of activity] by [natural resource]

10. The Istat Classification of Resource Use and Management Activities and expenditure (CRUMA) Content, What it includes, CRUMA list 1/2 10 Use and management of inland waters 10.1 Reduction of the intake 10.2 Reduction of water losses and leaks, water reuse and savings 10.3 Replenishment of water stocks 10.4 Direct management of water stocks 10.5 Measurement, control, laboratories and the like 10.6 Other activities 11 Use and management of natural forest resources 11.1 Reduction of the intake 11.2 Reduction of the consumption of forest (wood and non wood)-related products 11.3 Reforestation and afforestation 11.4 Forest fires 11.5 Direct management of forest areas (as a resource and not as a habitat) 11.6 Measurement, control, laboratories and the like 11.7 Other activities 12 Use and management of wild flora and fauna 12.1 Reduction of the intake 12.2 Replenishment of wild flora and fauna stocks 12.3 Direct management of wild flora and fauna stocks 12.4 Measurement, control, laboratories and the like 12.5 Other activities 13 Use and management of fossil energy 13.1 Reduction of the intake 13.2 Reduction of heat and energy losses, and energy savings 13.3 Direct management of the stocks of non-renewable energy sources 13.4 Measurement, control, laboratories and the like 13.5 Other activities

11. The Istat Classification of Resource Use and Management Activities and expenditure (CRUMA) Content, What it includes, CRUMA list 2/2 14 Use and management of raw materials 14.1 Reduction of the intake 14.2 Reduction of raw materials use through the reduction of scraps and the production and consumption of recycled materials and products 14.3 Direct management of raw material stocks 14.4 Measurement, control, laboratories and the like 14.5 Other activities 15 Research and development activities for natural resource use and management 15.1 Inland waters 15.2 Natural forest resources 15.3 Wild flora and fauna 15.4 Fossil energy 15.5 Raw materials 15.6 Other R&D activities for natural resource use and management 16. Other natural resource use and management activities 16.1 General administration of natural resources 16.1.1 General administration, regulation and the like 16.1.2 Environmental management 16.2 Education, training and information 16.3 Activities leading to indivisible expenditure 16.4 Activities not elsewhere classified Remarks on 16.1 and 16.2 categories: If the general administration activities and general education, training and information activities concern both environmental protection and use and management of natural resources, they should be broken down between positions 16.1 and 16.2 and the corresponding CEPA categories ( CEPA 9.1 and 9.2). If this is impossible, they should be classified alternatively in CRUMA categories or in the CEPA ones according to the “main purpose” criterion; if this is impossible as well, they should be classified within the corresponding CEPA categories ( CEPA 9.1 and 9.2)

12. The Istat Classification of Resource Use and Management Activities and expenditure (CRUMA) Content, What it excludes CRUMA and CEPA exclude Natural risk management activities, with a few exceptions

13. The Istat Classification of Resource Use and Management Activities and expenditure (CRUMA) Fields of application in Italy • A complete RUMEA is currently building for the whole economy for CRUMA 10 - inland waters (no data on ancillary activities) • The whole CRUMA is applied to the general government; the figures produced are given to the national accounts department for producing data on General Government expenditure by COFOG according to the ESA95 requirements

14. The Istat Classification of Resource Use and Management Activities and expenditure (CRUMA) An example of figures: Italian regions (NUTS II), 2005 Distribution of intermediate consumption + current and capital transfers + gross fixed capital formation

15. The Istat Classification of Resource Use and Management Activities and expenditure (CRUMA) Correspondences to COFOG

16. The Istat Classification of Resource Use and Management Activities and expenditure (CRUMA) CRUMA versus other classification criteria The concept of “(environmentally) sustainable” economic activities, used in the OECD/Eurostat classification, cross cuts CEPA and CRUMA categories Env. activities classified by economic activity Env. activities classified by env. domain or nat. res.

17. The Istat Classification of Resource Use and Management Activities and expenditure (CRUMA) Who is discussing CRUMA • Eurostat Working Group “Environmental Expenditure Statistics” • Task Force on EGSS • Reflection Group on natural Resource Use and Management Expenditure Accounts (RUMEA) • London Group • Issue paper on classification of RUM activities and expenditures, with the contribution of the Eurostat Reflection Group on RUMEA So far the CRUMA has been considered a good starting point to work on with a view to develop a standard classification for RUMEA purposes

18. The Istat Classification of Resource Use and Management Activities and expenditure (CRUMA) Thank you for the attention falcitel@istat.it