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Potentially Environmentally Damaging Subsidies (PEDS)

Potentially Environmentally Damaging Subsidies (PEDS). Hanna Brolinson, Maja Cederlund Statistics Sweden. Economic instruments in the Environmental Accounts. Environmentally related subsidies. Tax exemptions. Emission permits. Environmental taxes. Environmentally motivated.

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Potentially Environmentally Damaging Subsidies (PEDS)

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  1. Potentially Environmentally Damaging Subsidies(PEDS) Hanna Brolinson, Maja Cederlund Statistics Sweden

  2. Economic instruments in the EnvironmentalAccounts Environmentally related subsidies Tax exemptions Emission permits Environmentaltaxes Environmentallymotivated Potentiallyenvironmentallydamaging Official statistics Method development during 2010-2012

  3. Keepingtrack of PEDS is policy relevant • Roadmap to a ResourceEfficient Europe*, Milestone: By 2020 environmental harmful subsidies will be phasedout • OECD Green Growth**: environmental harmful subsidies are identified as constraints to a green growth and governments should identify those subsidies whose removal (or reform) would boost long-term economic growth or reduce environmental damage • FFFSR – Friends of Fossil FuelSubsidy Reform: Initiative from NZ to form a group whichaim is to support G20 countries in the phasingout of fossil fuel subsidies • Rio+20 Conference***: Combining market and regulatory instruments ("how"): eco-taxes, removing environmentally harmful subsidies…*** • European council is about to ask all EU countriesabouttheir PEDS year 2012 according to the environmentalministry • Data on PEDS is wished for in manycontexts • No regular data production or statisticalperspective on PEDS exist * http://ec.europa.eu/environment/resource_efficiency/pdf/com2011_571.pdf ** http://www.oecd.org/document/10/0,3746,en_2649_37465_44076170_1_1_1_37465,00.html *** http://europa.eu/rapid/pressReleasesAction.do?reference=IP/11/754&format=HTML&aged=1&language=EN&guiLanguage=en

  4. Proposed definition • Potentially environmentally damaging subsidies (PEDS) are subsidies that potentially lead to increased emissions or an increased outtake of natural resources, and are not payed out with an environmental motive. PEDS are primarily paid to emission intensive sectors and to activities that lead to an increased use of products included in the environmental tax base list.

  5. Proposed framework • Connection to tax base list? Environmentallymotivated PotentiallyEnvironmentallyDamaging Subsidies Resource Management EnvironmentalProtection ResourceUse Emissions to air, water and soil Activities Classifications CRUMA CEPA CRUMA CEPA

  6. Proposed Swedish method • Same data source as for EMS • Subsidy • Environmentallyrelatedsubsidy - PEDS • Go throughgovernment budget/budget lines (find information about the support) • Point out support to activities that - lead to increased emissions - increasedouttake of naturalresources - are not categorised as EMS (no examples) • Support to method: emission intensive sectors • Ifneeded, calculate a share • Classify in categories (same as for taxes) • Distribute on NACE

  7. Examples of PEDS • Transport support (share) • Purpose: give some compensation to the 4 most nothern counties in Sweden, stimulate to increased value added • Given for train (15%), boat (10%) or road (75%) • Largest receivers; NACE 20 (Wood), 34 (Motor vehicles) • Traffic procurement/traffic contracts (share) • Compensation to regional personal traffic by air, train, boat or bus. Need to be politically motivated – in areas where no commercial conditions to operate public transport! • State support to road maintenance (share in future) • For example: road planning, building, maintenance, investments. • Areal support and livestock support/Farm and livestock support (share in future?) • For now also include the farm support (not dependent on the production). Still emission intensive sector  still ”Potential”!

  8. Swedish experience of PEDS • Data source is available (same as for EMS) • Large need for data! Demands from many different users (Ministry, EU, OECD, Authorities…) • The method works • The definition works • We have needed the support from emission intensities (or similar) - to focus on the topic (including all as PEDS is not relevant for any users…)

  9. Way forward • The manual should include EMS as well as PEDS • Since a manual of environmentally related subsidies (not of only EMS) • Satisfy international demand, not only include what is most straight forward. We can do more! • A chance to show that we from the statistical side can contribute to a sustainable development

  10. Next step • Need to prolong TF to include PEDS as well (take this chance) • Homework for PEDS in 2012 • Test definition and methodology on your datasource for EMS • Sweden couldlead a ’reflection group’ or similar in order to shareexperience and guide others. Ask us – wewillhelp! • Study the EU budget with regards to PEDS • Sweden willcontinue to work on PEDS • Shares (moredetails, describemethod) • Distribution to NACE (moredetails, describemethod) • Continue with a total analysis of environmentallyrelatedsubsidiesincluding: • EMS • PEDS • Tax exemptions • Emission permits (not auctioned)

  11. Who wants to join??? • Germany, the Netherlands, Norway, France? • Other?

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