3.1.1 The physical flow accounting framework and subsystems

3.8 The physical flow accounting framework presented in this chapter provides a set of accounting principles and boundaries within which a consistent recording of all types of physical flows relating to economic activity can be made. Most commonly, the recording of physical flows will focus on particular areas of interest, such as flows of energy or water, in part because physical flows may be measured in a variety of units which cannot necessarily be compared or aggregated. This is also due to the breadth and complexity of recording all relevant physical flows in a single account. Therefore, while this chapter presents a complete accounting framework for all physical flows, it is expected that compilers will focus on the application of the general principles in specific areas, such as the measurement of physical flows of energy, water, air emissions and solid waste.

3.9 The framework for the measurement of physical flows is based on the structure of the monetary supply and use tables used to measure economic activity. In broad terms, these tables show transactions in products between industries, households, government and the rest of the world. These tables are based on the principles outlined in the 2008 SNA and are introduced in chapter II.

3.10 The same structure can be used to record the underlying physical flows relating to the transactions between the different economic units. Further, flows to and from the environment can be linked in by adding relevant columns and rows to the monetary supply and use table. These additions yield a physical supply and use table (PSUT) that can record all physical flows: (a) from the environment, (b) within the economy and (c) back to the environment.

3.11 However, unlike transactions, it is not immediately obvious that all physical flows can simply be aggregated or that all physical flows should be recorded similarly. Consequently, three different subsystems have developed within the broad supply and use framework: material flow accounting,¹³ water accounts and energy accounts.

3.12 In all three subsystems, the scope of physical flow accounting includes flows from the environment to the economy, flows within the economy and flows back to the environment. However, in each subsystem, different measurement units are generally used. In material flow accounting, flows are measured in terms of mass (e.g., in tonnes).¹⁴ In water accounts, the unit of measurement is volume (e.g., cubic metres) and in energy accounts the unit of measurement is energy content (e.g., joules). While all three subsystems represent only part of the total physical flows, each subsystem is a complete and balanced system of flows.

3.13 Within each of these subsystems of physical flow accounting, greater refinements of focus can be undertaken consistent with the general principles of PSUT. This is especially the case for material flow accounts. At an aggregate national level, i.e., that summing all industries, economy-wide material flow accounts (EW-MFA) can be compiled. At the same time, it is also possible to focus on detailed accounts relating to individual products, or on the flows of specific types of residuals such as emissions to air or solid waste.

3.14 Within all subsystems, there may also be interest in focusing on only one component of the physical flows, for example, energy use by industries and households, rather than on those flows in conjunction with all PSUT-related flows. Nonetheless, even in this narrower context, the same concepts, definitions and standards are applied so that the organization of data and the development of broader information systems can be supported.

3.1.2 Chapter structure

3.15 The physical supply and use approach is explained in section 3.2, including definitions of natural inputs, products and residuals. These definitions are fundamental in defining the boundaries between the environment and the economy and hence in constructing meaningful supply and use tables.

3.16 In section 3.3, a range of general accounting matters are discussed, including gross and net recording of flows and the treatment of flows between countries.

3.17 In the final three sections, the measurement of individual physical flow accounts is discussed: energy accounts in section 3.4, water accounts in section 3.5 and a number of material flow accounts, including air emission, water emission and solid waste accounts, in section 3.6.

3.2.1 The physical supply and use table approach

3.19 As explained in chapter II, in the context of measuring physical flows related to supply and use, the economy is defined by the production boundary of the SNA. The production boundary comprises a specific set of economic activities carried out under the control and responsibility of institutional units in which inputs of labour, capital, and goods and services are used to produce outputs of goods and services (products).¹⁵ The SEEA recognizes that some of the inputs (natural inputs of materials and energy) come from the environment and that, as a result of the production, consumption and accumulation of products, a range of other physical flows occur that can result in the return of materials and energy to the environment.

3.20 Flows from the environment into the economy are natural inputs, flows within the economy consist of either products or residuals, and flows from the economy to the environment are residuals. This series of flows is represented in figure 3.1. Some natural inputs, after entering the economy, are recorded as immediately returning to the environment, as they are no longer required by the economy. Natural inputs that are not used in production, for example, mining overburden, mine dewatering and discarded catch in fishing, are called natural resource residuals. Also, some residuals remain in the economy instead of returning directly to the environment, for example, solid waste collected and stored in controlled landfills.

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Physical flows in relation to the production boundary of the economy

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3.21 The underlying framework for the recording of physical flows follows the monetary supply and use tables for products as defined in the SNA and summarized in chapter II of the SEEA. The monetary supply and use table covers all flows of goods and services within the production boundary of the SNA.

3.22 The intent in physical flow accounting is to record the physical flows underpinning the transactions recorded in the monetary supply and use tables, primarily with respect to goods, and to then extend the monetary supply and use table to record physical flows from the environment to the economy (such as flows of natural resources) and physical flows from the economy to the environment (such as emissions to air and water).

3.23 Conceptually, flows solely within the environment are out of scope of physical supply and use tables, although there may be instances where the recording of such flows is useful for analytical purposes. Examples of these flows include the evaporation and precipitation of water and soil moved through soil erosion. The asset accounts presented in chapter V include flows within the environment to the extent that the flows reflect changes in the stock of environmental assets.

3.24 This general framework of flows may be applied in the case of individual commodities or groups of commodities. For example, flows of the hazardous element mercury might be tracked from the point of its extraction from the environment through its circulation within the economy and release to the environment. Alternatively, there may be interest only in analysing physical flows into the economy or out of the economy without necessarily linking the two. For example, the analysis of solid waste will focus on flows within the economy (e.g., flows to waste treatment plants) and from the economy to the environment, but not on flows from the environment to the economy.

3.25 The general framework for the full articulation of physical flows is depicted in table 3.1 in the form of a physical supply and use table (PSUT). A full articulation of all flows is generally most relevant for energy and water, where all flows can be meaningfully expressed in a single unit, for example, joules or cubic metres.¹⁶

Table 3.1

General physical supply and use table

^a No entries for government final consumption are recorded in physical terms. All government intermediate consumption, production and generation of residuals is recorded against the relevant industry in the first column of the PSUT.

Table 3.1

General physical supply and use table

Supply table
	Production; generation of residuals		Accumulation
	Production; generation of residuals by industries (including household production on own account), classified by ISIC	Generation of residuals by households	Industries—classified by ISIC	Flows from the rest of the world	Flows from the environment	Total
Natural inputs					A. Flows from the environment (including natural resource residuals)	Total supply of natural inputs (TSNI)
Products	C. Output (including sale of recycled and reused products)			D. Imports of products		Total supply of products (TSP)
Residuals	I1. Residuals generated by industry (including natural resource residuals)	J. Residuals generated by household final consumption	K1. Residuals from scrapping and demolition of produced assets	L. Residuals received from rest of the world	M. Residuals recovered from the environment	Total supply of residuals (TSR)
	I2. Residuals generated following treatment		K2. Emissions from controlled landfill sites
Total supply
Use table
	Intermediate consumption of products; use of natural inputs; collection of residuals	Final consumptiona	Accumulation
	Industries—classified by ISIC	Households	Industries—classified by ISIC	Flows to the rest of the world	Flows to the environment	Total
Natural inputs	B. Extraction of natural inputs B1. Extraction used in production B2. Natural resource residuals					Total use of natural inputs (TUNI)
Products	E. Intermediate consumption (including purchase of recycled and reused products)	F. Household final consumption (including purchase of recycled and reused products)	G. Gross capital formation (including fixed assets and inventories)	H. Exports of products		Total use of products (TUP)
Residuals	N. Collection and treatment of residuals (excluding accumulation in controlled landfill sites)		0. Accumulation of waste in controlled landfill sites	P. Residuals sent to the rest of the word	Q. Residual flows to the environment	Total use of residuals (TUR)
					Q1. Direct from industry and households (including natural resource residuals and landfill emissions)
					Q2. Following treatment
Total use

^a No entries for government final consumption are recorded in physical terms. All government intermediate consumption, production and generation of residuals is recorded against the relevant industry in the first column of the PSUT.

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Table 3.1

General physical supply and use table

Supply table
	Production; generation of residuals		Accumulation
	Production; generation of residuals by industries (including household production on own account), classified by ISIC	Generation of residuals by households	Industries—classified by ISIC	Flows from the rest of the world	Flows from the environment	Total
Natural inputs					A. Flows from the environment (including natural resource residuals)	Total supply of natural inputs (TSNI)
Products	C. Output (including sale of recycled and reused products)			D. Imports of products		Total supply of products (TSP)
Residuals	I1. Residuals generated by industry (including natural resource residuals)	J. Residuals generated by household final consumption	K1. Residuals from scrapping and demolition of produced assets	L. Residuals received from rest of the world	M. Residuals recovered from the environment	Total supply of residuals (TSR)
	I2. Residuals generated following treatment		K2. Emissions from controlled landfill sites
Total supply
Use table
	Intermediate consumption of products; use of natural inputs; collection of residuals	Final consumptiona	Accumulation
	Industries—classified by ISIC	Households	Industries—classified by ISIC	Flows to the rest of the world	Flows to the environment	Total
Natural inputs	B. Extraction of natural inputs B1. Extraction used in production B2. Natural resource residuals					Total use of natural inputs (TUNI)
Products	E. Intermediate consumption (including purchase of recycled and reused products)	F. Household final consumption (including purchase of recycled and reused products)	G. Gross capital formation (including fixed assets and inventories)	H. Exports of products		Total use of products (TUP)
Residuals	N. Collection and treatment of residuals (excluding accumulation in controlled landfill sites)		0. Accumulation of waste in controlled landfill sites	P. Residuals sent to the rest of the word	Q. Residual flows to the environment	Total use of residuals (TUR)
					Q1. Direct from industry and households (including natural resource residuals and landfill emissions)
					Q2. Following treatment
Total use

^a No entries for government final consumption are recorded in physical terms. All government intermediate consumption, production and generation of residuals is recorded against the relevant industry in the first column of the PSUT.

3.26 The rows of the table show the types of natural inputs, products and residuals. The rows for natural inputs and residuals represent an extension in the PSUT compared with the monetary supply and use table in the SNA. The top half of the table, the supply table, sets out the flows relating to the production, generation, and supply of natural inputs, products and residuals by different economic units or the environment. The bottom half of the table, the use table, sets out the flows relating to the consumption and use of natural inputs, products and residuals by different economic units or the environment. Each of these flows is defined and discussed in detail in this section.

3.27 The columns of the PSUT are structured to reflect both the activity underlying the flow (e.g., whether it is related to production, consumption or accumulation) and the economic units involved. The second column covers the use of natural inputs, the production and intermediate consumption of products, and the generation and receipt of residuals by all enterprises in the economy. It is classified by industry using the ISIC.

3.28 The third column covers the consumption of products by households and the generation of residuals from this consumption. The activity of households in extracting and collecting natural inputs from the environment for their own consumption is a productive activity; hence, this activity should be recorded in the second column under a relevant industry class.

3.29 Unlike the monetary supply and use table, no entries in physical terms are made in relation to government final consumption expenditure. Government final consumption expenditure represents the acquisition and consumption by governments of their own output and does not have any directly associated physical flow. All of the physical flows related to the intermediate consumption of governments, for example, paper and electricity, are recorded in the first column under the relevant industry class (commonly, public administration). The generation of residuals by governments in the production of their output is also recorded in the second column.

3.30 There may be analytical interest in distinguishing the non-market productive activity of households and governments from the market activity within particular industries (e.g., the abstraction of water on own account by households for final consumption). In these cases, alternative presentations of PSUT may be developed where the information on the relevant productive activity, which is an “of which” within a broader industry class, is rearranged and shown next to other flows associated with households (e.g., final consumption) or government.

3.31 The fourth column, entitled “Accumulation”, covers changes in the stock of materials and energy in the economy. From a supply perspective, this column records reductions in the physical stock of produced assets through, for example, demolition or scrapping. It also displays emissions from controlled landfill sites generated by materials discarded in previous accounting periods. From a use perspective, the accumulation column records additions to the physical stock of produced assets (gross capital formation) and the accumulation over an accounting period of materials in controlled landfill sites. Amounts of water, energy and materials that are incorporated into other products are also recorded in the accumulation column of the use table.

3.32 Accumulation flows may be classified by industry using the ISIC and, if so, can be combined with industry-level information from the second column to provide an overall assessment of flows of residuals by industry. At the same time, retaining the distinction between residuals from current activity (from the second column) and residuals from past activity (from the fourth column) may be important for some analyses. Alternatively, the accumulation flows may be classified by product, for example, by type of scrapped produced asset. Further discussion on the recording of scrapped and demolished produced assets is included later on in this section.

3.33 The fifth column recognizes the exchanges between national economies in the form of imports and exports of products and flows of residuals. Residuals received from the rest of the world and residuals sent to the rest of the world primarily relate to the movement of solid waste between different economies. Excluded from these flows are so-called transboundary flows, for example, polluted water flowing downstream into a neighbouring country or air emissions transferred into the atmosphere of other countries. Transboundary flows are considered flows within the environment and are hence out of scope of the PSUT framework. Where relevant, these flows may be recorded as supplementary items. They may also be relevant in broader assessments of the state of the environment, for example, assessments of the quality of water resources over time.

3.34 The sixth column is the significant addition to the monetary supply and use table structure. It is in this column that flows to and from the environment are recorded. Within the PSUT, the environment is a “passive” entity which does not undertake production, consumption or accumulation in the same way as units inside the economy. Nonetheless, the incorporation of the environmental column allows a full accounting for flows of natural inputs and residuals, which would otherwise not be possible.

3.2.2 Definition and classification of natural inputs

3.45 Natural inputs are all physical inputs that are moved from their location in the environment as a part of economic production processes or are directly used in production.

3.46 The three broad classes of natural inputs are natural resource inputs, inputs of energy from renewable sources and other natural inputs as presented in table 3.2. This section discusses each of these classes and notes some specific measurement issues for natural resource inputs concerning the flows of resources affected by extraction processes but not used by the economy (i.e., natural resource residuals) and the treatment of cultivated biological resources.

Table 3.2

Classes of natural inputs

Table 3.2

Classes of natural inputs

1	Natural resource inputs
1.1		Extraction used in production
1.1.1			Mineral and energy resources
1.1.1.1				Oil resources
1.1.1.2				Natural gas resources
1.1.1.3				Coal and peat resources
1.1.1.4				Non-metallic mineral resources (excluding coal and peat resources)
1.1.1.5				Metallic mineral resources
1.1.2			Soil resources (excavated)
1.1.3			Natural timber resources
1.1.4			Natural aquatic resources
1.1.5			Other natural biological resources (excluding timber and aquatic resources)
1.1.6			Water resources
1.1.6.1				Surface water
1.1.6.2				Groundwater
1.1.6.3				Soil water
1.2		Natural resource residuals
2	Inputs of energy from renewable sources
2.1		Solar
2.2		Hydro
2.3		Wind
2.4		Wave and tidal
2.5		Geothermal
2.6		Other electricity and heat
3	Other natural inputs
3.1		Inputs from soil
3.1.1			Soil nutrients
3.1.2			Soil carbon
3.1.3			Other inputs from soil
3.2		Inputs from air
3.2.1			Nitrogen
3.2.2			Oxygen
3.2.3			Carbon dioxide
3.2.4			Other inputs from air
3.3		Other natural inputs n.e.c.

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Table 3.2

Classes of natural inputs

1	Natural resource inputs
1.1		Extraction used in production
1.1.1			Mineral and energy resources
1.1.1.1				Oil resources
1.1.1.2				Natural gas resources
1.1.1.3				Coal and peat resources
1.1.1.4				Non-metallic mineral resources (excluding coal and peat resources)
1.1.1.5				Metallic mineral resources
1.1.2			Soil resources (excavated)
1.1.3			Natural timber resources
1.1.4			Natural aquatic resources
1.1.5			Other natural biological resources (excluding timber and aquatic resources)
1.1.6			Water resources
1.1.6.1				Surface water
1.1.6.2				Groundwater
1.1.6.3				Soil water
1.2		Natural resource residuals
2	Inputs of energy from renewable sources
2.1		Solar
2.2		Hydro
2.3		Wind
2.4		Wave and tidal
2.5		Geothermal
2.6		Other electricity and heat
3	Other natural inputs
3.1		Inputs from soil
3.1.1			Soil nutrients
3.1.2			Soil carbon
3.1.3			Other inputs from soil
3.2		Inputs from air
3.2.1			Nitrogen
3.2.2			Oxygen
3.2.3			Carbon dioxide
3.2.4			Other inputs from air
3.3		Other natural inputs n.e.c.

Natural resource inputs

3.47 Natural resource inputs comprise physical inputs to the economy from natural resources. Thus, natural resource inputs comprise inputs from mineral and energy resources, soil resources, natural timber resources, natural aquatic resources, other natural biological resources and water resources. Natural resource inputs exclude the flows from cultivated biological resources. Cultivated biological resources are produced within the economy and hence are not flows from the environment.

3.48 For natural resources, the point at which they are recognized as entering the economy needs to be defined for each type of resource. It is recognized that some amount of economic production must be undertaken before a natural resource can be considered extracted and it therefore becomes a matter of determining the point at which the natural resource is best meaningfully described as extracted, and hence “enters the economy” as part of a longer production process.

3.49 All natural resource inputs are recorded as entering the economy from the environment. The majority of natural resource inputs that enter the economy (e.g., extracted minerals, removals of timber, water abstracted for distribution) become products. However, some natural resource inputs do not subsequently become products and instead immediately return to the environment. These flows are termed natural resource residuals.

3.50 There are three types of natural resource residuals:

• (a) Losses during extraction, which cover resources that the extractor would prefer to retain (e.g., losses of gas through flaring and venting);

• (b) Unused extraction, which covers resources in which the extractor has no ongoing interest (e.g., mining overburden, mine dewatering and discarded catch);¹⁷

• (c) Reinjections. These flows cover natural resources that are extracted but are immediately returned to the deposit and may be re-extracted at a later time (e.g., water reinjected into an aquifer and natural gas reinjected into a reservoir).

3.51 Table 3.3 presents examples of different natural resource inputs. It separates the quantities of resource extracted into those amounts that are intended and available for use in the economy (i.e., extraction used in production) and those amounts that return to the environment (i.e., natural resource residuals). In general terms, the point of entry to the economy is the point at which the resource is available for further processing. The notion of processing includes the transportation of the resource; hence, the extraction point should be as close to the physical location of the resource as possible.

Table 3.3

Examples of natural resource inputs

Table 3.3

Examples of natural resource inputs

Natural resource	Extraction used in production	Natural resource residual
Mineral and energy resources	Gross ore; crude oil; natural gas	Mining overburden; flaring, venting at well head; reinjection of natural gas
Soil resources	Excavated soil used for agricultural, construction and land reclamation purposes	Dredgings; unused excavated soil
Natural timber resources	Removals of timber	Felling residues
Natural aquatic resources	Gross catch less discarded catch	Discarded catch
Other natural biological resources	Harvest/capture	Harvest/capture residues
Water resources	Abstracted water	Mine dewatering

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Table 3.3

Examples of natural resource inputs

Natural resource	Extraction used in production	Natural resource residual
Mineral and energy resources	Gross ore; crude oil; natural gas	Mining overburden; flaring, venting at well head; reinjection of natural gas
Soil resources	Excavated soil used for agricultural, construction and land reclamation purposes	Dredgings; unused excavated soil
Natural timber resources	Removals of timber	Felling residues
Natural aquatic resources	Gross catch less discarded catch	Discarded catch
Other natural biological resources	Harvest/capture	Harvest/capture residues
Water resources	Abstracted water	Mine dewatering

3.52 In some cases, there is a clear link between the class of natural resource that is extracted and the associated natural resource residual. For example, felling residues are in the same class of natural input as removals of timber resources. However, in other cases, the classes are different. For example, for soil and rock moved in the extraction of minerals, the total natural resource input will be a combination of the minerals extracted and the soil and rock moved (mining overburden).

3.53 In situations where a natural resource residual is subsequently sold, for example, felling residues for fuelwood, the flows are recorded as extraction used in production. The recording of extractions used in production and natural resource residuals is consistent with the recording of extraction in the asset accounts described in chapter V.

3.2.3 Definition and classification of products

3.64 Following the SNA, products are goods and services that result from a process of production in the economy. The scope of products included in physical flow accounts is limited to those with positive monetary value.

3.65 For an individual enterprise, different types of production may be recorded. Products that are sold to other economic units are considered to result from either the primary or secondary production of the enterprise, depending on the relative significance of the product. In principle, the enterprises that produce the same primary products are grouped to the same industry class.

3.66 In some cases, products are produced on own account. This occurs when they are not sold to other economic units but either are used directly for the final consumption of the producer (e.g., production of agricultural output consumed by farmers) or are a form of capital formation (e.g., own-account construction of a house). In both cases, the physical flows should be recorded to ensure consistency with the output and production boundaries of the monetary supply and use tables.

3.67 An enterprise may also undertake ancillary production, which generally involves the production of supporting services (such as accounting, employment, cleaning and transport services) that might be purchased from other enterprises but are produced in-house to support the production of primary and secondary products. The SNA recommends that only in cases where ancillary production is significant should distinct measures of output for the production of these different services be recorded. In such cases, separate establishments should be created that are treated as undertaking the ancillary production. However, in most cases, the production of these services is not recorded as a separate set of outputs; instead, the relevant inputs are recorded as constituting part of the overall inputs to the production of the enterprise’s primary and secondary products.

3.68 There are also some products that are used as part of production processes within an enterprise (intra-enterprise flows) that are not recognized by monetary transactions in the SNA. For example, electricity generated through the incineration of solid waste for use within a firm would not be recorded in monetary terms in the SNA. These intra-enterprise flows may be recorded for physical flow accounting, however, since there are physical flows that take place. However, the extent of recording should be consistent with the analytical purpose at hand.

3.69 There are many situations in which households undertake production involving the extraction or collection of natural resource inputs and then consume this production on own account. Examples include the collection of fuelwood, the abstraction of water, and catching fish in recreational fishing. In these cases, the production is recorded as part of the production of the relevant economic activity in the industry column of the PSUT. Consistently, the use of natural inputs by households is also recorded in the industry column. Depending on the significance of the activity, it may be useful to separate this production from that of other units undertaking the same activity. The corresponding household final consumption of own-account production is shown in the third column of the PSUT.

3.70 An important product flow in the PSUT framework is the flow of fertilizers, including those fertilizers produced on own account such as manure. The spreading of fertilizers on soil results in two flows. First, there are nutrients that are absorbed by the crops; this amount is considered a product flow, that is, it remains within the economy. Second, there are nutrients that are not absorbed; these are recorded as flows of residuals from the dissipative use of products.

3.71 Products may be either goods or services. In general, the product component of physical flow accounts will focus on goods that are transacted between economic units. However, in some cases—for example, the provision of wastewater treatment services—there may be an interest in comparing physical flows (e.g., the flow of wastewater into and out of a sewerage facility) with the associated payment for services.

3.2.4 Definition and classification of residuals

3.73 Residuals are flows of solid, liquid and gaseous materials, and energy that are discarded, discharged or emitted by establishments and households through processes of production, consumption or accumulation.

3.74 Residuals may be discarded, discharged or emitted directly to the environment or captured, collected, treated, recycled or reused by economic units. These various transformation processes may lead to the generation of new products that are of economic value to the unit undertaking the transformation even if the residual, when first discarded or emitted, has no economic value to the household or establishment discarding or emitting the residual.

3.75 In situations where the intent is to discard a product but the discarder receives money or other benefits in exchange for the discarded product, this is treated as a transaction in a product and not as a residual. These flows may be of particular interest in the compilation of solid waste accounts.

3.76 A distinction must be made between payments made by a generator of residuals to establishments that collect, treat or otherwise transform residuals, and the flows of the residuals themselves. The payments made are treated as payments for services and as transactions in products, while the flows of residuals are recorded separately. A specific case where this distinction applies relates to flows of solid waste between countries. The payments for the services provided for the transport and treatment of waste by other countries are recorded as imports and exports of services, while the physical flows of waste are separately recorded as flows of residuals.

3.77 Residuals should be recorded at the time the emission or discard event takes place. The timing of the emission or discard event may be quite distinct from the time of the acquisition, which is the appropriate time for recording the flow from the perspective of the monetary accounts. A specific case concerns consumer durables such as refrigerators, washing machines, cars and other products which households use over extended periods of time. In the monetary accounts, consumer durables are recorded as purchased and consumed in the same accounting period. This is in contrast with the treatment of fixed assets purchased by enterprises, which are recorded as consumed over the operating life of the asset. Emissions from consumer durables and discards of consumer durables should be recorded at the time they occur, even though the consumption activity will have been recorded in the monetary accounts in a previous period.

3.78 Controlled and managed landfill sites, emission capture and storage facilities, treatment plants and other waste disposal sites are considered to be within the economy. Therefore, flows of residuals into these facilities are regarded as flows within the economy rather than as flows to the environment. Subsequent flows from these facilities may either be directly to the environment as residuals or lead to the creation of other products or residuals.

3.79 Household or industrial waste may be dumped (possibly illegally) in open country or by the roadside. Similarly, tankers at sea may wash their tanks (also possibly illegally) or lose their cargo through wreckage. These flows should be recorded as residuals flowing from the economy to the environment.

3.80 Efforts might be made to recover residuals, including natural resource residuals, from the environment and bring them back into the economy either for treatment or for disposal at a landfill site. This is the only case where flows of residuals from the environment to the economy should be recorded. In numerical terms, the amount may be small but, in respect of particular incidents (e.g., the wreck of an oil tanker near a protected coast) or specific locations, there may be an advantage in identifying these flows explicitly.

3.81 The attribution of residuals to individual economies is consistent with the principles applied in the determination of the residence of economic units as outlined in chapter II. Residuals are attributed to the country in which the emitting or discarding household or enterprise is resident (for details, see sect. 3.3). The question whether the residual has been emitted or discarded into a national environment or into another country’s environment is not directly addressed in this recording, although it may be of interest in determining the change in the state of a national environment over time.

3.82 In principle, flows of residuals between the national environment and another environment are not recorded in the PSUT, as there are no flows out of or into an economy. Nonetheless, depending on the nature of the relationship between the different national environments, there may be interest in recording these flows. For example, countries at the downstream end of a river system may be interested in the flows of residuals generated by other countries and transported by a river or the deposition of acidification (“acid rain”) originating from acidifying emissions in other countries.

Classification of groups of residuals

3.104 There is no single classification of all residuals. A complication arises from the fact that the various groups of residuals overlap. In the context of organization of information suitable for answering different policy and research questions, there is no clear-cut approach that might be taken to resolve issues of double-counting. Such double-counting would arise if a complete classification was constructed based on the structure of the various groups of residuals just defined.

3.105 An example of the potential overlap is provided by the treatment of flaring and venting of natural gas at the well head. These flows of gas are considered natural resource residuals, losses during extraction and a component of air emissions.

3.106 Table 3.4 gives an indication of the types of materials that are commonly included in the different groupings of residuals to support analysis of residuals in terms of whether the focus is on the purpose behind the discard (e.g., disposal of solid waste), the destination of the substance (e.g., emissions to air) or the processes leading to the emission (e.g., dissipative losses).

Table 3.4

Typical components for groups of residuals

^a This list of typical components for groups of residuals can also be applied to certain flows defined as products.

Table 3.4

Typical components for groups of residuals

Group	Typical components
Solid waste (includes recovered materials)a	Chemical and health-care waste, radioactive waste, metallic waste, other recyclables, discarded equipment and vehicles, animal and vegetal wastes, mixed residential and commercial waste, mineral wastes and soil, combustion wastes, other wastes
Wastewatera	Water for treatment and disposal, return flows, reused water
Emissions to air	Carbon dioxide, methane, dinotrogen oxide, nitrous oxides, hydrofluorocarbons, perfluorocarbons, sulphur hexafluoride, carbon monoxide, non-methane volatile organic compounds, sulphur dioxide, ammonia, heavy metals, persistent organic pollutants, particulates (e.g., PM10 dust)
Emissions to water	Nitrogen compounds, phosphorus compounds, heavy metals, other substances and (organic) compounds
Emissions to soil	Leaks from pipelines, chemical spills
Residuals from dissipative use of products	Unabsorbed nutrients from fertilizers, salt spread on roads
Dissipative losses	Abrasion (tyres/brakes), erosion/corrosion of infrastructure (roads, etc.)
Natural resource residuals	Mining overburden, felling residues, discarded catch

^a This list of typical components for groups of residuals can also be applied to certain flows defined as products.

View Table

Table 3.4

Typical components for groups of residuals

Group	Typical components
Solid waste (includes recovered materials)a	Chemical and health-care waste, radioactive waste, metallic waste, other recyclables, discarded equipment and vehicles, animal and vegetal wastes, mixed residential and commercial waste, mineral wastes and soil, combustion wastes, other wastes
Wastewatera	Water for treatment and disposal, return flows, reused water
Emissions to air	Carbon dioxide, methane, dinotrogen oxide, nitrous oxides, hydrofluorocarbons, perfluorocarbons, sulphur hexafluoride, carbon monoxide, non-methane volatile organic compounds, sulphur dioxide, ammonia, heavy metals, persistent organic pollutants, particulates (e.g., PM10 dust)
Emissions to water	Nitrogen compounds, phosphorus compounds, heavy metals, other substances and (organic) compounds
Emissions to soil	Leaks from pipelines, chemical spills
Residuals from dissipative use of products	Unabsorbed nutrients from fertilizers, salt spread on roads
Dissipative losses	Abrasion (tyres/brakes), erosion/corrosion of infrastructure (roads, etc.)
Natural resource residuals	Mining overburden, felling residues, discarded catch

^a This list of typical components for groups of residuals can also be applied to certain flows defined as products.

3.3.1 Introduction

3.114 The application of the broad framework for physical flow accounting outlined in section 3.2 requires the adoption of a range of accounting principles and conventions. A number of these are explained in chapter II, including the principle of double-entry accounting, the units of measurement, and the definitions of economic units and industries.

3.115 The present section describes some specific recording principles relevant to physical flow accounting, namely, gross and net recording of physical flows, the treatment of international flows of goods and the treatment of goods for processing.

3.3.2 Gross and net recording of physical flows

3.116 The PSUT framework presented in section 3.2 records all flows between the environment and the economy, and between different economic units, and, where applicable, records flows within economic units. This recording of flows is referred to in the SEEA as gross recording. The key advantage of a gross recording approach is that a full reconciliation of all flows at all levels of the supply and use table, for example, by industry and by product, can be made.

3.117 However, recording all of these flows may hide some key relationships; hence, for analytical purposes, alternative consolidations and aggregations of flows have been developed. These alternative approaches are often referred to as net recordings, although the nature of the consolidations and aggregations varies and there is therefore no single application of net recording.

3.118 It is noted that the terms “gross” and “net” are used in a wide range of accounting situations. In the SNA, the term “net” is used to indicate that an accounting aggregate has been adjusted for consumption of fixed capital (depreciation). In other situations, the term “net” is used simply to express the difference between two accounting items. The terms “gross” and “net” are also used to describe aggregates that have related but different measurement scopes.

3.119 One of the common areas where gross and net recording is applied is that of energy accounts. Energy accounts compiled on a gross basis show all flows of energy between economic units; some of these are flows of energy products to energy producers (e.g., flows of coal to electricity producers) while others are flows to an end-user (e.g., flows of electricity to households). Net energy accounts exclude non-consumptive energy uses representing the transformation of one energy product into another product and hence allow a focus on the end use of energy.

3.120 Generally, care should be taken when using and interpreting the terms “gross” and “net” and clear definitions of inclusions and exclusions should be sought and provided.

3.3.3 Treatment of international flows

3.121 The treatment of physical flows to and from the rest of the world needs a careful articulation. An underlying principle applied in the SEEA is that relevant flows are attributed to the country of residence of the producing or consuming unit. This differs from the territory principle of recording, which is applied in a number of statistical frameworks. The territory principle attributes the relevant flows to the country in which the producing or consuming unit is located at the time of the flow.

3.122 In accordance with both the SNA and the Balance of Payments and International Investment Position Manual, 6th ed. (BPM6) (International Monetary Fund, 2009), the residence of an institutional unit is determined by the economic territory with which it has the strongest connection.¹⁸ In the majority of situations, the concepts of territory and residence are closely aligned; but there are important activities, in particular international transport, that need to be considered individually so that the appropriate treatment can be decided. This subsection discusses international transport, tourist activity and natural resource inputs.

3.3.4 Treatment of goods for processing

3.133 It is increasingly common for goods from one country to be sent to another country for further processing before being (a) returned to the original country, (b) sold in the processing country or (c) sent to other countries. In situations where the unprocessed goods are sold to a processor in a second country, there are no particular recording issues. However, in situations where the processing is undertaken on a fee-for-service basis and there is no change of ownership of the goods (i.e., the ownership remains with the original country), the financial flows are unlikely to relate directly to the physical flows of goods being processed.

3.134 From a monetary accounts perspective, the enterprise processing the goods assumes no risk associated with the eventual marketing of the products and the value of the output of the processor is the fee agreed for the processing. This fee is recorded as an export of a service to the first country. A consequence of this treatment is that the recorded pattern of inputs for the enterprise that is processing goods on behalf of another unit is quite different from the pattern of inputs when the enterprise is manufacturing similar goods on its own account.

3.135 A simple illustration may be given in relation to the production of petroleum products. A firm that refines crude oil on own account engages in intermediate consumption of crude oil and other inputs, and output of refined petroleum products. A firm that is processing crude oil on behalf of another firm has, in physical terms, similar inputs and uses the same produced assets but, in its accounts, shows neither the intermediate consumption of crude oil nor the output of refined petroleum products. Instead, an output equal only to the processing fee is recorded.

3.136 For similar amounts of crude oil processed, the estimates of value added and other inputs (i.e., labour and produced assets) are likely to be comparable. However, by recording only the processing fee rather than the full value of the goods processed, the nature of the aggregate supply and use relationship is changed.

3.137 Although this treatment accords with that of the SNA and provides the most appropriate recording of the monetary flows, it does not correspond to the physical flows of goods. Consequently, a different treatment of goods for processing is recommended for physical supply and use tables. This entails recording the physical flows of goods, both as they enter into the country of the processing unit and as they leave that country. Tracking the physical flows in this way enables a clearer reconciliation of all physical flows in the economy and also provides a physical link to the recording of the environmental effects of the processing activity in the country in which the processing is being undertaken, including, for example, emissions to air. The same considerations apply to flows of goods for repair and merchanting.

3.138 Generally, information on the physical flow of goods between countries is available in international trade statistics. However, it is necessary to identify those flows of goods where the ownership has not changed and to apply a different treatment in monetary terms compared with that of the international trade data.

3.139 Depending on the products and industries that are of interest, reconciliation entries may be required if accounts combining physical and monetary data are to be compiled.

3.4.1 Introduction

3.140 Energy flow accounts record flows of energy, in physical units, from the initial extraction or capture of energy resources from the environment into the economy; the flows of energy within the economy in the form of the supply and use of energy by industries and households; and, finally, the flows of energy back to the environment.

3.141 The compilation of energy flow accounts allows for a consistent monitoring of the supply and use of energy by energy type. Indicators of energy intensity, efficiency and productivity can be derived from the accounts in combination with monetary information.

3.142 Energy flow accounts are a subsystem within the general physical flow framework. Energy accounts data are compiled by converting physical measures of mass and volume such as tonnes, litres and cubic metres into a common unit representing energy content in net calorific terms. The use of the joule as a common measurement unit is recommended by the International Recommendations for Energy Statistics (IRES).¹⁹

3.4.2 Scope and definitions of energy flows

3.143 Energy flows consist of flows of (a) energy from natural inputs, (b) flows of energy products and (c) energy residuals. Flows of air emissions and solid waste generated by energy production and use are not included, although all types of waste used as inputs in the production of energy are included.

3.144 Energy from natural inputs encompasses flows of energy from the removal and capture of energy from the environment by resident economic units. These flows include energy from mineral and energy resources (e.g., oil, natural gas, coal and peat, and uranium), natural timber resources and inputs from renewable energy sources (e.g., solar, wind, hydro and geothermal).

3.145 Energy from cultivated biomass, including from cultivated timber resources, is treated as produced within the economy and is therefore first recorded as the flow of an energy product. However, to ensure a complete balance of energy flows in the PSUT, a balancing entry equal to the energy products from cultivated biomass is recorded as a component of energy from natural inputs in both the supply and the use tables.

3.146 Energy products are products that are used (or might be used) as a source of energy. They comprise (a) fuels that are produced/generated by an economic unit (including households) and are used (or might be used) as sources of energy; (b) electricity that is generated by an economic unit (including households); and (c) heat that is generated and sold to third parties by an economic unit.²⁰ Energy products include energy from biomass and solid waste that are combusted for the production of electricity and/or heat.²¹ Some energy products may be used for non-energy purposes.

3.147 A distinction can be made between primary and secondary energy products. Primary energy products are produced directly from the extraction or capture of energy resources from the environment. Secondary energy products are the result of transformation of primary, or other secondary, energy products into other types of energy products. Examples include petroleum products from crude oil, charcoal from fuelwood and electricity from fuel oil.

3.148 Heat and electricity may be considered either primary or secondary products depending on the process of their production. For example, if heat is captured directly from the environment through solar panels, it is considered a primary energy product; it is considered a secondary energy product if produced from other energy products such as coal or oil.

3.149 Generally, physical and monetary flows of energy products should be classified using the Standard International Energy Product Classification (SIEC) presented in the IRES. Often, monetary flows will be classified using the CPC. Since there is not a one-to-one relationship between SIEC and CPC categories, a correspondence between these classifications will be needed for detailed analysis of combined physical and monetary data sets.

3.150 Energy residuals in physical terms comprise a number of components. Most focus is on energy losses which are defined consistently with the general definition of losses outlined in section 3.2. Particular examples of energy losses include losses through flaring and venting of natural gas and losses during transformation in the production of primary energy products from energy from natural inputs and in the production of secondary energy products. Energy losses during distribution may arise from the evaporation and leakages of liquid fuels, loss of heat during transport of steam, and losses during gas distribution, electricity transmission and pipeline transport. Energy residuals also include other energy residuals, particularly heat generated when end-users (either households or enterprises) use energy products for energy purposes (e.g., electricity).

3.151 In order to fully balance the energy PSUT, it is also necessary to record two other residual flows. The first is derived from the energy embodied in energy products used for non-energy purposes, which is shown as leaving the energy system as a residual flow. Non-energy purposes include the use of energy products to manufacture non-energy products (e.g., the energy product naphtha is used in the manufacture of plastic, a non-energy product), and the direct use of energy products for non-energy purposes (e.g., as lubricants). The second additional residual flow results from the generation of energy from the incineration of solid waste. The energy embodied in solid waste is shown as entering the energy system as a residual flow before becoming an energy product. Neither of these residual flows is considered part of energy residuals.

3.4.3 Physical supply and use table for energy

3.152 Physical supply and use tables for energy record the flows of energy from natural inputs, energy products, energy residuals and other residual flows in physical units of measure. They are based on the principle that the total supply of each flow is equal to the total use of the same flow (i.e., total supply of energy products equals total use of energy products).

3.153 Table 3.5 represents the SEEA physical supply and use table for energy. The table encompasses flows of all energy from natural inputs and energy products, including those energy products that are transformed into other energy products. Therefore, the energy content of some products is counted more than once. Coal, for example, is used as input into a transformation process for obtaining electricity and heat, and the accounts record the energy content of the coal as well as the energy content of the resulting electricity and heat.

Table 3.5

Physical supply and use table for energy

(joules: net calorific units)

Note: Dark grey cells are null by definition.

Table 3.5

Physical supply and use table for energy

(joules: net calorific units)

Physical supply table for energy
			Production (including household production on own account); generation of residuals								Flows from the rest of the world
			Agriculture, forestry and fishing	Mining and quarrying	Manufacturing	Electricity, gas, steam and air conditioning supply	Transportation and storage	Other industries	Households	Accumulation	Imports	Flows from the environment	Total supply
				ISIC A	ISIC B	ISIC C	ISIC D	ISIC H
Energy from natural inputs
	Natural resource inputs
		Mineral and energy resources										1 161.0	1 161.0
		Timber resources										5.0	5.0
	Inputs of energy from renewable sources
		Solar										20.0	20.0
		Hydro										100.0	100.0
		Wind										4.0	4.0
		Wave and tidal
		Geothermal
		Other heat and electrical
	Other natural inputs
		Energy inputs to cultivated biomass										2.0	2.0
	Total energy from natural inputs											1 292.0	1 292.0

		Production (including household production on own account); generation of residuals								Flows from the rest of the world
		Agriculture, forestry and fishing	Mining and quarrying	Manufacturing	Electricity, gas, steam and air conditioning supply	Transportation and storage	Other industries	Households	Accumulation	Imports	Flows from the environment	Total supply
			ISIC A	ISIC B	ISIC C	ISIC D	ISIC H
Energy products
	Production of energy products by SIEC class
	Coal									225.0		225.0
	Peat and peat products
	Oil shale/oil sands
	Natural gas (extracted)		395.0									395.0
	Natural gas (distributed)				369.1							369.1
	Oil (e.g., conventional crude oil)		721.0									721.0
	Oil (oil products)			347.0						930.0		1 277.0
	Biofuels	5.3		0.2	1.5							7.0
	Waste	39.0		54.5						16.9 1		110.4
	Electricity				212.0					22.0 1		234.0
	Heat				78.5							78.5
	Nuclear fuels and other fuels n.e.c.
	Total energy products	44.3	1 116.0	401.7	661.1					1193.9		3 417.0
Energy residuals
	Losses during extraction		45.0									45.0
	Losses during distribution				12.0							12.0
	Losses during storage			6.0								6.0
	Losses during transformation			7.0	204.4							211.4
	Other energy residuals	50.3	3.2	418.7	90.6	632.0	96.0	240.0				1 530.8
	Total energy residuals	50.3	48.2	431.7	307.0	632.0	96.0	240.0				1 805.2
Other residual flows
	Residuals from end use for non-energy
	purposes			51.0								51.0
	Energy from solid waste								93.5			93.5
Total supply		94.6	1 164.2	884.4	968.1	632.0	96.0	240.0	93.5	1 193.9	1 292.0	6 658.7

Physical use table for energy
		Intermediate consumption; use of energy resources; receipt of energy losses						Final consumption		Flows from the rest of the world
		Agriculture, forestry and fishing	Mining and quarrying	Manufacturing	Electricity, gas, steam and air conditioning supply	Transportation and storage	Other industries	Households	Accumulation	Imports	Flows from the environment	Total supply
			ISIC A	ISIC B	ISIC C	ISIC D	ISIC H
Energy from natural inputs
	Natural resource inputs	5.0	1 161.0									1 166.0
	Inputs of energy from renewable sources				124.0							124.0
	Other natural inputs	0.3		0.2	1.5							2.0
	Total energy from natural inputs	5.3	1 161.0	0.2	225.5							1 292.0
Energy products
Transformation of energy products by SIEC class
	Coal				223.0							223.0
	Peat and peat products
	Oil shale/oil sands
	Natural gas (extracted)				395.0							395.0
	Natural gas (distributed)				87.0							87.0
	Oil (e.g., conventional crude oil)			360.0								360.0
	Oil (oil products)				16.0							16.0
	Biofuels
	Waste				31.0							31.0
	Electricity
	Heat
	Nuclear fuels and other fuels n.e.c.
	Total transformation of energy products			360.0	752.0							1 112.0

Physical use table for energy
		Intermediate consumption; use of energy resources; receipt of energy losses						Final consumption		Flows from the rest of the world
		Agriculture, forestry and fishing	Mining and quarrying	Manufacturing	Electricity, gas, steam and air conditioning supply	Transportation and storage	Other industries	Households	Accumulation	Imports	Flows from the environment	Total supply
			ISIC A	ISIC B	ISIC C	ISIC D	ISIC H
Energy products (cont’d)
End-use of energy products by SIEC class
	Coal	2.0	0.1	17.0				1.0	−21.0	1.9		1.0
	Peat and peat products
	Oil shale/oil sands
	Natural gas (extracted)
	Natural gas (distributed)	2.0		39.0	0.1		12.0	26.0	2.0	201.0		282.1
	Oil (e.g. conventional crude oil)									361.0		361.0
	Oil (oil products)	34.0	2.0	326.0		621.0	49.0	102.0	−3.0	80.0		1 211.0
	Biofuels	0.3		0.2	1.5			5.0				7.0
	Waste	3.0	0.1	4.0	37.0		1.0	33.0	0.3	1.0		79.4
	Electricity	7.0	1.0	22.0	50.0	10.0	15.0	29.0		100.0		234.0
	Heat	2.0		10.5	2.0	1.0	19.0	44.0				78.5
Nuclear fuels and other fuels n.e.c.												0.0
	Total end-use for energy purposes	50.3	3.2	418.7	90.6	632.0	96.0	240.0	−21.7	744.9		2 254.0
End-use of energy products for non-energy purposes				51.0								51.0
Energy residuals
	Losses during extraction										45.0	45.0
	Losses during distribution										12.0	12.0
	Losses during storage										6.0	6.0
	Losses during transformation										211.4	211.4
	Other energy residuals										1 530.8	1 530.8
	Total energy residuals										1 805.2	1 805.2
Other residual flows
	Residuals from end use for non-energy purposes								51.0			51.0
	Energy from solid waste	39.0		54.5								93.5
Total use		94.6	1 164.2	884.4	968.1	632.0	96.0	240.0	29.3	744.9	1 805.2	6 658.7

Note: Dark grey cells are null by definition.

View Table

Table 3.5

Physical supply and use table for energy

(joules: net calorific units)

Physical supply table for energy
			Production (including household production on own account); generation of residuals								Flows from the rest of the world
			Agriculture, forestry and fishing	Mining and quarrying	Manufacturing	Electricity, gas, steam and air conditioning supply	Transportation and storage	Other industries	Households	Accumulation	Imports	Flows from the environment	Total supply
				ISIC A	ISIC B	ISIC C	ISIC D	ISIC H
Energy from natural inputs
	Natural resource inputs
		Mineral and energy resources										1 161.0	1 161.0
		Timber resources										5.0	5.0
	Inputs of energy from renewable sources
		Solar										20.0	20.0
		Hydro										100.0	100.0
		Wind										4.0	4.0
		Wave and tidal
		Geothermal
		Other heat and electrical
	Other natural inputs
		Energy inputs to cultivated biomass										2.0	2.0
	Total energy from natural inputs											1 292.0	1 292.0

		Production (including household production on own account); generation of residuals								Flows from the rest of the world
		Agriculture, forestry and fishing	Mining and quarrying	Manufacturing	Electricity, gas, steam and air conditioning supply	Transportation and storage	Other industries	Households	Accumulation	Imports	Flows from the environment	Total supply
			ISIC A	ISIC B	ISIC C	ISIC D	ISIC H
Energy products
	Production of energy products by SIEC class
	Coal									225.0		225.0
	Peat and peat products
	Oil shale/oil sands
	Natural gas (extracted)		395.0									395.0
	Natural gas (distributed)				369.1							369.1
	Oil (e.g., conventional crude oil)		721.0									721.0
	Oil (oil products)			347.0						930.0		1 277.0
	Biofuels	5.3		0.2	1.5							7.0
	Waste	39.0		54.5						16.9 1		110.4
	Electricity				212.0					22.0 1		234.0
	Heat				78.5							78.5
	Nuclear fuels and other fuels n.e.c.
	Total energy products	44.3	1 116.0	401.7	661.1					1193.9		3 417.0
Energy residuals
	Losses during extraction		45.0									45.0
	Losses during distribution				12.0							12.0
	Losses during storage			6.0								6.0
	Losses during transformation			7.0	204.4							211.4
	Other energy residuals	50.3	3.2	418.7	90.6	632.0	96.0	240.0				1 530.8
	Total energy residuals	50.3	48.2	431.7	307.0	632.0	96.0	240.0				1 805.2
Other residual flows
	Residuals from end use for non-energy
	purposes			51.0								51.0
	Energy from solid waste								93.5			93.5
Total supply		94.6	1 164.2	884.4	968.1	632.0	96.0	240.0	93.5	1 193.9	1 292.0	6 658.7

Physical use table for energy
		Intermediate consumption; use of energy resources; receipt of energy losses						Final consumption		Flows from the rest of the world
		Agriculture, forestry and fishing	Mining and quarrying	Manufacturing	Electricity, gas, steam and air conditioning supply	Transportation and storage	Other industries	Households	Accumulation	Imports	Flows from the environment	Total supply
			ISIC A	ISIC B	ISIC C	ISIC D	ISIC H
Energy from natural inputs
	Natural resource inputs	5.0	1 161.0									1 166.0
	Inputs of energy from renewable sources				124.0							124.0
	Other natural inputs	0.3		0.2	1.5							2.0
	Total energy from natural inputs	5.3	1 161.0	0.2	225.5							1 292.0
Energy products
Transformation of energy products by SIEC class
	Coal				223.0							223.0
	Peat and peat products
	Oil shale/oil sands
	Natural gas (extracted)				395.0							395.0
	Natural gas (distributed)				87.0							87.0
	Oil (e.g., conventional crude oil)			360.0								360.0
	Oil (oil products)				16.0							16.0
	Biofuels
	Waste				31.0							31.0
	Electricity
	Heat
	Nuclear fuels and other fuels n.e.c.
	Total transformation of energy products			360.0	752.0							1 112.0

Physical use table for energy
		Intermediate consumption; use of energy resources; receipt of energy losses						Final consumption		Flows from the rest of the world
		Agriculture, forestry and fishing	Mining and quarrying	Manufacturing	Electricity, gas, steam and air conditioning supply	Transportation and storage	Other industries	Households	Accumulation	Imports	Flows from the environment	Total supply
			ISIC A	ISIC B	ISIC C	ISIC D	ISIC H
Energy products (cont’d)
End-use of energy products by SIEC class
	Coal	2.0	0.1	17.0				1.0	−21.0	1.9		1.0
	Peat and peat products
	Oil shale/oil sands
	Natural gas (extracted)
	Natural gas (distributed)	2.0		39.0	0.1		12.0	26.0	2.0	201.0		282.1
	Oil (e.g. conventional crude oil)									361.0		361.0
	Oil (oil products)	34.0	2.0	326.0		621.0	49.0	102.0	−3.0	80.0		1 211.0
	Biofuels	0.3		0.2	1.5			5.0				7.0
	Waste	3.0	0.1	4.0	37.0		1.0	33.0	0.3	1.0		79.4
	Electricity	7.0	1.0	22.0	50.0	10.0	15.0	29.0		100.0		234.0
	Heat	2.0		10.5	2.0	1.0	19.0	44.0				78.5
Nuclear fuels and other fuels n.e.c.												0.0
	Total end-use for energy purposes	50.3	3.2	418.7	90.6	632.0	96.0	240.0	−21.7	744.9		2 254.0
End-use of energy products for non-energy purposes				51.0								51.0
Energy residuals
	Losses during extraction										45.0	45.0
	Losses during distribution										12.0	12.0
	Losses during storage										6.0	6.0
	Losses during transformation										211.4	211.4
	Other energy residuals										1 530.8	1 530.8
	Total energy residuals										1 805.2	1 805.2
Other residual flows
	Residuals from end use for non-energy purposes								51.0			51.0
	Energy from solid waste	39.0		54.5								93.5
Total use		94.6	1 164.2	884.4	968.1	632.0	96.0	240.0	29.3	744.9	1 805.2	6 658.7

Note: Dark grey cells are null by definition.

3.154 The columns of the energy supply and use table follow the structure of the general PSUT presented in table 3.1. The level of industry detail highlights those industries that most commonly play a significant role in energy production or use; but there is no restriction in the amount of industry detail that may be incorporated. The accumulation column records changes in the inventories of energy products that can be stored, for example, coal, oil and natural gas.

3.4.4 Energy statistics, energy accounts and energy balances

3.176 Energy statistics, energy accounts and energy balances all provide information on energy supply and energy use. Energy statistics result from collecting and compiling information on production, imports, exports and domestic use of energy products on the basis of specific surveys and from using, for example, business statistics and international trade statistics. Energy balances reorganize these basic statistics by confronting and consolidating supply and use, and by highlighting the transformation of energy within the economy. Similarly, energy accounts, which primarily use national accounts classifications and definitions, can be seen as a reorganization and broadening of scope of energy statistics. Both energy balances and energy accounts apply the principle that supply equals use; however, supply and use are defined in different ways in these two systems.

3.177 In contrast to the energy accounts, energy balances normally include only physical data on energy. Since one of the main purposes of energy accounts is to link physical and monetary data in a comparable way, this leads to different definitions and a different organization of energy data in physical terms so that they can be aligned with the data in monetary terms in the national accounts.

3.178 One main difference between the energy balances and the energy accounts is reflected in how activities are classified and the treatment of various activities within the national boundary. The energy accounts use the concept of residence to determine whether a specific energy flow should be included, for instance, as imports and whether it is to be included as part of energy use. The boundary of the energy balances follows the territory principle of recording.

3.179 One method of reconciling aggregates that are derived from energy accounts and energy balances is through the compilation of bridge tables. Bridge tables show the adjustments required to either energy accounts or energy balances to account for the conceptual differences between the approaches. A full description of the relationship between energy accounts and energy balances and associated bridge tables is included in “SEEA-Energy”.

3.4.5 Energy aggregates

3.180 Accounting for energy flows provides a framework for the assessment of energy production and consumption and related issues of resource use and air emissions. Two energy aggregates are defined in the SEEA that are appropriate in dealing with particular analytical and policy questions. Other aggregates and indicators may also be compiled using data contained in the energy PSUT, with differences in what is included and excluded based on what questions are of policy or analytical interest.

3.181 Gross energy input reflects the total energy captured from the environment, energy products that are imported and energy from residuals within the economy (e.g., from incinerated solid waste). It can therefore serve as an indicator of the pressures placed on the environment (or other countries’ environments) in the supply of energy to the economy. In terms of entries contained in the energy PSUT, gross energy input is equal to energy from natural inputs plus imports of energy products plus energy from waste. For analytical purposes, it may be useful to disaggregate energy from natural inputs into the energy from natural resource inputs, the energy from renewable sources and the energy inputs to cultivated biomass, since each of these types of natural inputs corresponds to different environmental pressures.

3.182 The second main energy aggregate is net domestic energy use. Net domestic energy use reflects the net amount of energy used in an economy through production and consumption activity and can be utilized to assess trends in energy consumption by resident units. Net domestic energy use is defined as the end use of energy products (including changes in inventories of energy products) less exports of energy products plus all losses of energy (losses during extraction, losses during transformation, losses during storage and losses during distribution). It is regarded as a “net” measure, since for energy products that are transformed into other energy products, only the transformation losses are included, not the total input of energy products into the transformation process. Separate analysis of the components of net domestic energy use (e.g., total end use of energy products less exports, and total energy losses) can also provide important information concerning energy use.

3.183 For the total economy, gross energy input and net domestic energy use differ only by the amount of energy products exported. Both aggregates may also be compiled for individual industries and for households by using the same definitions applying to the total economy but by focusing on the relevant columns in the PSUT. These and other aggregates and indicators can be linked to data in the economic accounts in physical and monetary terms, in order to derive measures of intensity and productivity in energy use.

3.5.1 Introduction

3.184 Water flow accounts describe flows of water, in physical units, encompassing the initial abstraction of water resources from the environment into the economy, to the water flows within the economy in the form of supply and use by industries and households, and finally, flows of water back to the environment. The present section describes a complete PSUT for water flows, noting that individual components of the PSUT could be compiled separately. Related accounts for emissions to water (sect. 3.6) and asset accounts for water resources (sect. 5.11) are also relevant.

3.185 For the purposes of water resource management, the compilation of data for a river basin or other hydrologically relevant area may be appropriate. It is noted, however, that while physical data may be available for such geographical areas, corresponding economic data will generally be available only for administrative regions; therefore, these two geographical boundaries may not align.

3.5.2 Scope of water flows

3.186 Water is in continuous movement. Solar radiation and gravity keep water moving from land and oceans to the atmosphere in the form of water vapour (evaporation and transpiration) and falling back through precipitation. The focus of the SEEA is the inland water system, with provision for the inclusion of sea or ocean water abstracted for production and consumption (e.g., saline water for desalinization or cooling).

3.187 The inland water system comprises surface water (rivers, lakes, artificial reservoirs, snow, ice and glaciers), groundwater and soil water within the territory of reference. All flows associated with the inland water system are recorded in the asset accounts for water resources, including flows to and from accessible seas and oceans. The PSUT records the abstraction of water from the inland water system, and seas and oceans by economic units; the distribution and use of this water by various economic units; and the returns of water to the inland water system and seas and oceans. Flows such as the evaporation of water from lakes and artificial reservoirs and flows between water bodies are considered flows within the environment and are recorded in the asset accounts, as described in chapter V.

3.188 Emissions to water (e.g., pollution) are recorded in a separate PSUT which is discussed in section 3.6. The broader issue of the impact of economic activity on the quality of water requires an assessment of the quality of the stock of water resources. Water-quality accounts are discussed in more detail in SEEA-Water (United Nations, 2012b).

3.5.3 Physical supply and use table for water

3.189 Physical supply and use tables can be compiled at various levels of detail, depending on the required policy and analytical focus and data availability. A basic PSUT for water contains information on the supply and use of water and provides an overview of water flows. The PSUT is divided into five sections which organize information on (a) abstraction of water from the environment; (b) distribution and use of abstracted water across enterprises and households; (c) flows of wastewater and reused water (between households and enterprises); (d) return flows of water to the environment; and (e) evaporation, transpiration and water incorporated into products.

3.190 Table 3.6 presents the SEEA physical supply and use table for water. The columns of the PSUT are structured in the same way as the general PSUT represented by table 3.1.

Table 3.6

Physical supply and use table for water

(millions of cubic metres)

Note: Dark grey cells are null by definition.

Table 3.6

Physical supply and use table for water

(millions of cubic metres)

Physical supply table for water
			Abstraction of water; production of water; generation of return flows							Flows from the rest of the world
			Agriculture, forestry and fishing	Mining and quarrying, manufacturing and construction	Electricity, gas, steam and air conditioning supply	Water collection, treatment and supply	Sewerage	Other industries	Households		Imports	Flows from the environment	Total supply
(I) Sources of abstracted water
	Inland water resources
		Surface water										440.6	440.6
		Groundwater										476.3	476.3
		Soil water										50.0	50.0
		Total										966.9	966.9
	Other water sources
		Precipitation										101.0	101.0
		Sea water										101.1	101.1
		Total										202.1	202.1
	Total supply abstracted water											1 169.0	1 169.0
(II) Abstracted water
	For distribution					378.2							378.2
	For own-use		108.4	114.6	404.2	13.9	100.1	2.3					743.5
(III) Wastewater and reused water
	Wastewater
		Wastewater to treatment	17.9	117.6	5.6	1.4		49.1	235.5				427.1
		Own treatment
	Reused water produced
		For distribution					42.7						42.7
		For own use		10.0									10.0
	Total		17.9	127.6	5.6	1.4	42.7	49.1	235.5				479.8

			Abstraction of water; production of water; generation of return flows							Flows from the rest of the world
			Agriculture, forestry and fishing	Mining and quarrying, manufacturing and construction	Electricity, gas, steam and air conditioning supply	Water collection, treatment and supply	Sewerage	Other industries	Households		Imports	Flows from the environment	Total supply
(IV) Return flows of water
	To inland water resources
		Surface water			300.0		52.5	0.2	0.5				353.2
		Groundwater	65.0	23.5		47.3	175.0	0.5	4.1				315.4
		Soil water
		Total	65.0	23.5	300.0	47.3	227.5	0.7	4.6				668.6
	To other sources			5.9	100.0		256.3		0.2				362.4
	Total return flows		65.0	29.4	400.0	47.3	483.8	0.7	4.8				1 031.0
		of which: Losses in distribution				47.3							47.3
(V) Evaporation of abstracted water, transpiration and water incorporated into products
	Evaporation of abstracted water		29.5	38.3	2.5	1.8	0.7	3.6	10.0				86.4
	Transpiration		40.2	1.2									41.4
	Water incorporated into products		6.5	3.7									10.2
Total supply			267.5	314.8	812.3	442.6	627.3	55.7	250.3			1 169.0	3 939.5

Physical use table for water
			Abstraction of water; intermediate consumption; return flows						Final consumption	Flows to the rest of the world
			Agriculture, forestry and fishing	Mining and quarrying, manufacturing and construction	Electricity, gas, steam and air conditioning supply	Water collection, treatment and supply	Sewerage	Other industries	Households	Accumulation	Exports	Flows to the environment	Total use
(I) Sources of abstracted water
	Inland water resources
		Surface water	55.3	79.7	301.0	4.5	0.1						440.6
		Groundwater	3.1	34.8	3.2	432.9		2.3					476.3
		Soil water	50.0										50.0
		Total	108.4	114.5	304.2	437.4	0.1	2.3					966.9
	Other water sources
		Precipitation				1.0	100.0						101.0
		Sea water			100.0	1.1							101.1
		Total	0.0	0.0	100.0	2.1	100.0	0.0					202.1
	Total use abstracted water		108.4	114.5	404.2	439.5	100.1	2.3					1 169.0
(II) Abstracted water
	Distributed water		38.7	45.0	3.9		0.0	51.1	239.5		0.0		378.2
	Own use		108.4	114.6	404.2	3.1	100.1	2.3	10.8				743.5
(III) Wastewater and reused water
	Wastewater
		Wastewater received from other units					427.1						427.1
		Own treatment
	Reused water
		Distributed reuse	2.0	40.7									42.7
		Own use	10.0										10.0
	Total		12.0	40.7			427.1						479.8

			Abstraction of water; intermediate consumption; return flows						Final consumption	Flows to the rest of the world
			Agriculture, forestry and fishing	Mining and quarrying, manufacturing and construction	Electricity, gas, steam and air conditioning supply	Water collection, treatment and supply	Sewerage	Other industries	Households	Accumulation	Exports	Flows to the environment	Total use
(IV) Return flows of water
Returns of water to the environment
		To inland water resources										668.6	668.6
		To other sources										362.4	362.4
	Total return flows											1 031.0	1 031.0
(V) Evaporation of abstracted water, transpiration and water incorporated into products
	Evaporation of abstracted water											86.4	86.4
	Transpiration											41.4	41.4
	Water incorporated into products									10.2			10.2
Total use			267.5	314.8	812.3	442.6	627.3	55.7	250.3	10.2		1 158.8	3 939.5

Note: Dark grey cells are null by definition.

View Table

Table 3.6

Physical supply and use table for water

(millions of cubic metres)

Physical supply table for water
			Abstraction of water; production of water; generation of return flows							Flows from the rest of the world
			Agriculture, forestry and fishing	Mining and quarrying, manufacturing and construction	Electricity, gas, steam and air conditioning supply	Water collection, treatment and supply	Sewerage	Other industries	Households		Imports	Flows from the environment	Total supply
(I) Sources of abstracted water
	Inland water resources
		Surface water										440.6	440.6
		Groundwater										476.3	476.3
		Soil water										50.0	50.0
		Total										966.9	966.9
	Other water sources
		Precipitation										101.0	101.0
		Sea water										101.1	101.1
		Total										202.1	202.1
	Total supply abstracted water											1 169.0	1 169.0
(II) Abstracted water
	For distribution					378.2							378.2
	For own-use		108.4	114.6	404.2	13.9	100.1	2.3					743.5
(III) Wastewater and reused water
	Wastewater
		Wastewater to treatment	17.9	117.6	5.6	1.4		49.1	235.5				427.1
		Own treatment
	Reused water produced
		For distribution					42.7						42.7
		For own use		10.0									10.0
	Total		17.9	127.6	5.6	1.4	42.7	49.1	235.5				479.8

			Abstraction of water; production of water; generation of return flows							Flows from the rest of the world
			Agriculture, forestry and fishing	Mining and quarrying, manufacturing and construction	Electricity, gas, steam and air conditioning supply	Water collection, treatment and supply	Sewerage	Other industries	Households		Imports	Flows from the environment	Total supply
(IV) Return flows of water
	To inland water resources
		Surface water			300.0		52.5	0.2	0.5				353.2
		Groundwater	65.0	23.5		47.3	175.0	0.5	4.1				315.4
		Soil water
		Total	65.0	23.5	300.0	47.3	227.5	0.7	4.6				668.6
	To other sources			5.9	100.0		256.3		0.2				362.4
	Total return flows		65.0	29.4	400.0	47.3	483.8	0.7	4.8				1 031.0
		of which: Losses in distribution				47.3							47.3
(V) Evaporation of abstracted water, transpiration and water incorporated into products
	Evaporation of abstracted water		29.5	38.3	2.5	1.8	0.7	3.6	10.0				86.4
	Transpiration		40.2	1.2									41.4
	Water incorporated into products		6.5	3.7									10.2
Total supply			267.5	314.8	812.3	442.6	627.3	55.7	250.3			1 169.0	3 939.5

Physical use table for water
			Abstraction of water; intermediate consumption; return flows						Final consumption	Flows to the rest of the world
			Agriculture, forestry and fishing	Mining and quarrying, manufacturing and construction	Electricity, gas, steam and air conditioning supply	Water collection, treatment and supply	Sewerage	Other industries	Households	Accumulation	Exports	Flows to the environment	Total use
(I) Sources of abstracted water
	Inland water resources
		Surface water	55.3	79.7	301.0	4.5	0.1						440.6
		Groundwater	3.1	34.8	3.2	432.9		2.3					476.3
		Soil water	50.0										50.0
		Total	108.4	114.5	304.2	437.4	0.1	2.3					966.9
	Other water sources
		Precipitation				1.0	100.0						101.0
		Sea water			100.0	1.1							101.1
		Total	0.0	0.0	100.0	2.1	100.0	0.0					202.1
	Total use abstracted water		108.4	114.5	404.2	439.5	100.1	2.3					1 169.0
(II) Abstracted water
	Distributed water		38.7	45.0	3.9		0.0	51.1	239.5		0.0		378.2
	Own use		108.4	114.6	404.2	3.1	100.1	2.3	10.8				743.5
(III) Wastewater and reused water
	Wastewater
		Wastewater received from other units					427.1						427.1
		Own treatment
	Reused water
		Distributed reuse	2.0	40.7									42.7
		Own use	10.0										10.0
	Total		12.0	40.7			427.1						479.8

			Abstraction of water; intermediate consumption; return flows						Final consumption	Flows to the rest of the world
			Agriculture, forestry and fishing	Mining and quarrying, manufacturing and construction	Electricity, gas, steam and air conditioning supply	Water collection, treatment and supply	Sewerage	Other industries	Households	Accumulation	Exports	Flows to the environment	Total use
(IV) Return flows of water
Returns of water to the environment
		To inland water resources										668.6	668.6
		To other sources										362.4	362.4
	Total return flows											1 031.0	1 031.0
(V) Evaporation of abstracted water, transpiration and water incorporated into products
	Evaporation of abstracted water											86.4	86.4
	Transpiration											41.4	41.4
	Water incorporated into products									10.2			10.2
Total use			267.5	314.8	812.3	442.6	627.3	55.7	250.3	10.2		1 158.8	3 939.5

Note: Dark grey cells are null by definition.