Abstract

6.1 Environmental and economic information is important in the assessment of a range of contemporary environmental and economic policy and research questions. Beyond the provision of relevant information, a primary motivation of the SEEA is the effective integration of the vast amount of environmental and economic data, and assistance with the integration of social data, such as demographic and labour statistics.

6.1 Introduction

6.1 Environmental and economic information is important in the assessment of a range of contemporary environmental and economic policy and research questions. Beyond the provision of relevant information, a primary motivation of the SEEA is the effective integration of the vast amount of environmental and economic data, and assistance with the integration of social data, such as demographic and labour statistics.

6.2 The present chapter shows the potential for the organization and integration of information within the Central Framework. Integration can take a number of forms. At a first level, it can mean the presentation of information using common formats and classifications; at a second level, the Central Framework can be used to provide a range of descriptive statistics and indicators of environmental pressures, states and responses; and at a third level, data integrated under the Central Framework can be used to construct analytical models for the analysis of consumption and production patterns, including, for example, consumption footprint-type indicators.

6.3 The chapter’s focus is on the first two levels of integration: the organization of information, in particular the compilation of combined physical and monetary accounts; and the presentation of descriptive statistics and indicators. The accounts in the Central Framework are built in such a way as to fully support analytical uses. SEEA Applications and Extensions discusses in more detail the use of information from the Central Framework to build analytical models and for other, similar purposes.

6.4 It is not necessary to complete an exhaustive physical supply and use table for every material, or to compile asset accounts for every environmental asset. The intention of the Central Framework is to enable supply and use tables, asset accounts, and other components to be used as an organizing framework, depending on the intended analysis and the availability of data. Therefore, for many applications, it is legitimate to integrate a limited set of information.

6.5 At the same time, several environmental concerns involve many countries and therefore the compilation of comparable data and accounts for common areas of concern is another important motivation for the development of this international standard.

6.6 The chapter commences with a description, in section 6.2, of the four key areas of integration within the Central Framework: physical and monetary supply and use tables, asset accounts, the sequence of economic accounts, and functional accounts. Also discussed are the potential linkages of SEEA-based data to employment, demographic and social data.

6.7 Section 6.3 introduces the general concept of combining physical and monetary data within the Central Framework to form combined physical and monetary presentations or accounts. It then provides guidance on the basic organization and presentation of environmental and economic information. In this regard, it is noted that one motivation for the organization of information following the Central Framework is to improve data quality through data confrontation in an accounting framework. In particular, there can be benefits for data compilation through the confrontation of estimates measured in physical and monetary terms.

6.8 Section 6.4 provides guidance on the derivation of a range of descriptive statistics and environmental-economic indicators from information organized within the Central Framework. The scope of the statistics and indicators covered in this section is limited to those that are either aggregates or totals within the core accounts and tables, or that are easily derived from different parts of the Central Framework without the use of weighting or other complex assumptions. The statistics and indicators presented are not intended to constitute an exhaustive set, since, ultimately, the selection of statistics and indicators is dependent upon policy or research questions.

6.9 Section 6.5 sets out a general structure for combined presentations of physical and monetary data, including four examples of combined presentations, namely, for energy, water, forest products and air emissions. These examples give an indication of the potential of the Central Framework to provide information for analytical purposes.

6.10 This potential is further demonstrated in SEEA Applications and Extensions which provides introductory material on a number of different ways in which data from the SEEA can be used to support more detailed analytical techniques and specific thematic investigation. The areas covered in SEEA Applications and Extensions include input-output modelling, structural decompositions of environmental-economic information, and the analysis of sustainable production and consumption patterns.

6.2 Integration within the SEEA Central Framework

6.2.1 Introduction

6.11 The strength of the Central Framework arises from the consistent application of accounting rules, principles and boundaries in the organization of environmental and economic information in both physical and monetary terms. Consequently, the accounts and tables can add considerable value to the underlying statistical information. The nature of the integration of the various components is outlined in summary terms in chapter II. The present section provides additional detail on the integration across the four key areas of the Central Framework.

6.12 The first key area of integration is the link between measures of flows of goods and services in physical and monetary terms as reflected in monetary and physical supply and use tables. An important part of this integration entails recording physical flows of natural inputs from the environment and flows of residuals generated through economic activity. The use of common product and industry classifications, and consistent definitions and measurement boundaries is important in optimizing the potential for analysis.

6.13 The second key area of integration is the link between changes in the stock of environmental assets over an accounting period and the use of extracted natural resources as an input to economic production, consumption and accumulation. The connection between asset accounts and supply and use tables is of interest in this area.

6.14 The third key area of integration is the connection between the measures of production, consumption and accumulation in monetary terms and measures of flows of income between different sectors. These sectoral flows of income are reflected in a sequence of economic accounts and balancing items, such as value added and saving. Importantly, these balancing items can be adjusted for depletion so that estimates of the monetary cost of using up natural resources can be deducted from conventional economic aggregates such as GDP and saving to yield depletion-adjusted aggregates.

6.15 The fourth key area of integration concerns the identification of economic activities undertaken with an environmental protection or resource management purpose in functional accounts. Generally, these activities are not clearly identified using conventional classifications of industries and products. By identifying these activities within the conventional national accounting framework, it is possible to assess the significance of environmental activities in comparison with key economic aggregates such as GDP, value added, capital formation and employment.

6.2.2 Integration of supply and use tables in physical and monetary terms

6.16 The integration of supply and use tables in physical and monetary terms centres on the use of common classifications and terminology for the measurement of flows of products and the use of common boundaries between the economy and the environment. Consequently, flows recorded in monetary terms that focus on the exchanges of products between economic units are, in broad terms, the same set of flows of products measured in physical terms. Physical flows of natural input and residuals are not available in monetary terms but, since the measurement boundaries for these flows are aligned with measurement boundaries for product flows, the addition of natural input and residual flows in the supply and use table framework does not compromise the recording of flows relating to products.

6.17 The integration of supply and use tables in physical and monetary terms is the basis for the compilation of extended supply and use and input-output tables which are often used in environmentally extended input-output analysis.

6.18 As described in chapter III, there are some exceptions in respect of the general consistency of the recording of flows of products in physical and monetary terms:

  • (a) In cases where goods are sent abroad for processing, the monetary supply and use tables record transactions related to the service provided by the processing country. In physical terms, the actual physical flows of the goods should be recorded. The same considerations apply to goods for repair and merchanting;

  • (b) In some cases, it may be of interest to record physical flows of materials and energy, and their transformation into other products within an enterprise (intra-enterprise flows). In monetary terms, only flows between enterprises are recorded (except for the limited recording of ancillary activities) and therefore the value of these flows are not shown in the monetary supply and use tables;

  • (c) In monetary terms, there are often transactions in water between distributors within the water collection, treatment and supply industry. These are known as intra-industry sales. However, these transactions are not matched by actual physical flows of water, since the water is bought and sold in situ. Consequently, there are no physical flows recorded in the physical supply and use table for water corresponding to intra-industry sales.

6.19 The alignment of supply and use tables in physical and monetary terms is shown in table 6.1. This is an extension of the general physical supply and use table described in chapter III (table 3.1). The key areas of integration are the use of the same classifications for industries and products and the use of common groupings of economic units: enterprises (represented by industries), households and the rest of the world.

Table 6.1

Supply and use tables in physical and monetary terms

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Note: Dark grey cells are null by definition.

6.2.3 Integration of asset accounts and supply and use tables

6.20 The integration of information from asset accounts and supply and use tables is of particular relevance in the analysis of natural resources. For example, the assessment of the stock of fish resources will focus not only on extractions of fish relative to the available stock but also on the relationship between the extraction and other flows. Thus, there will be interest in so-called forward linkages which consider the extraction of fish in relation to the supply and use of fish products in the economy and associated international trade in fish products. Moreover, there will be interest in backward linkages for understanding the production processes associated with cultivated or natural fish resources, investment in boats and fishing gear by the fishing operators, and the extent of expenditure on resource management associated with fisheries. The integration of data from asset accounts and supply and use tables can provide information needed to examine these types of linkages. Similar considerations are relevant in the analysis of other natural resources.

6.21 Asset accounts present information on the stock of environmental assets at the beginning and end of an accounting period and on the changes in the stock over the period. The changes may be of many types. They may be due to economic activity (e.g., extraction of natural resources) or to natural flows (e.g., losses of environmental assets following natural disasters).

6.22 The relationship between these flows and the flows recorded in the supply and use tables is shown in table 6.2. Changes due to economic activity are recorded consistently in both the asset accounts and the supply and use tables, since extraction represents both a reduction in stock (an asset account entry) and a use of natural inputs (an entry in the physical supply and use table). For environmental assets, this consistency is ensured by defining individual natural resources for the purposes of asset accounting in the same way as natural resource inputs in the physical supply and use table. This table is described further in chapter II and the measurement issues associated with the individual flows are described in detail in chapters III and V.

Table 6.2

Connections between supply and use tables and asset accounts

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Note: Dark grey cells are null by definition. Blank cells may contain relevant flows. These flows are articulated in detail in chapter III.

While these residual flows (e.g., air emissions) are not flows of environmental assets, they still may affect the capacity of environmental assets to deliver benefits. The chnaging capacity of environmental assets may also be reflected in other changes in the volume of assets.

6.2.4 The sequence of economic accounts

6.23 In monetary terms, monetary supply and use tables and asset accounts record much of the information of interest in the assessment of the interactions between the economy and the environment. However, there are a range of other monetary transactions and flows that are of interest, such as payments of rent for the extraction of natural resources, and subsidies and grants from government units to other economic units in support of environmental protection activity. The SNA records all of these flows in a presentation referred to as the sequence of economic accounts. The articulation of the SEEA Central Framework is made complete in a sequence of economic accounts that presents information on all environmentally related transactions and flows.

6.24 A particular feature of the sequence of economic accounts is the derivation of balancing items. Typically, there is not a balance between relevant inflows and outflows. Thus, a balancing item is introduced. The balancing items provide information in their own right but also link the sequence of accounts together. Key balancing items include value added, operating surplus, saving and net lending/borrowing. Economy-wide aggregates can also be constructed such as gross domestic product (GDP) and gross national income (GNI).

6.25 Balancing items are the key driver for the construction of a sequence of economic accounts in the Central Framework. They can be defined so as to take into account the depletion of natural resources. Thus, measures of depletion-adjusted net domestic product, depletion-adjusted net value added by industry, and depletion-adjusted net saving by institutional sector are defined as part of the full accounting framework.

6.26 The entries required at a sector level are basically the same as those at the national level except in situations in which a natural resource is considered to be jointly owned by two sectors. This situation most commonly occurs in respect of mineral and energy resources where, often, the extractor has a long-term lease over the resource from the government, and both sectors share the resource rent attributable to the mineral and energy resources. The appropriate accounting in these situations is undertaken within the sequence of accounts and is described in section 5.5.

6.27 Table 6.3 presents the SEEA sequence of economic accounts for institutional sectors, with a focus on depletion-adjusted balancing items and aggregates. The primary difference from the SNA sequence of accounts are the adjustments for depletion made to the balancing items of net value added, net operating surplus, balance on primary incomes, net disposable income and net saving.

Table 6.3

SEEA Central Framework sequence of economic accounts (currency units)

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Note: “na”-signifies that the item is not applicable.

Non-profit institutions serving households.

GDP equals gross value added for all institutional sectors plus taxes less subsidies on products.

Description of the sequence of accounts

6.28 Each step of production, income distribution, income redistribution and use is described in a separate account. Each account has a name and leads to a balancing item which ensures that the sources and uses of funds are equal. These balancing items are of analytical interest in themselves and are often quoted in isolation from the underlying sequence of accounts. Examples of balancing items include value added, operating surplus and saving. Importantly, there are defined relationships between the balancing items in successive accounts and, usually, the balancing item for one account is the first entry in the following account.

6.29 Balancing items may be shown before or after deduction of consumption of fixed capital which is the deduction made to reflect the using up of fixed capital in the production process. Where consumption of fixed capital is not deducted, the name of the balancing item is preceded by the term “gross”. Where consumption of fixed capital has been deducted, the preceding term used is “net”. As noted, the key difference between the sequence of accounts of the SNA and the sequence of economic accounts of the Central Framework is the deduction of depletion of natural resources from balancing items measured in net terms (i.e., after the deduction of consumption of fixed capital).

(a) Production account

6.30 In the sequence of accounts, the balancing item of the production account is value added, which is also the aggregate described in connection with the supply and use table. As in the supply and use tables, value added represents the difference between output and intermediate consumption. Value added summed across all productive activities plus taxes less subsidies on products constitutes GDP. Measures of net value added and net domestic product (NDP) are obtained by deducting consumption of fixed capital, and measures of depletion-adjusted net value added and depletion-adjusted NDP are obtained by further deducting estimates of depletion.

(b) Generation of income account

6.31 The generation of income account shows how value added is allocated to the factors of production, i.e., labour and capital including both produced and non-produced assets. Amounts accruing to labour are shown as compensation of employees, while amounts accruing to capital are shown as operating surplus. This account also records gross mixed income which is the surplus accruing to unincorporated enterprises and implicitly contains a return to the owners for their labour and a return to capital. The balancing item in this account is termed “Operating surplus” in table 6.3 but strictly encompasses both operating surplus and gross mixed income. Taxes less subsidies on production must be deducted from value added to derive operating surplus. Following the approach taken in the production account, depletion is deducted from net operating surplus to derive depletion-adjusted net operating surplus, thus reflecting the using up of natural resources in the generation of income from production.

(c) Allocation of primary income account

6.32 Compensation of employees, taxes less subsidies on production, and operating surplus are three types of primary income. The final type of primary income is property income comprising flows of interest, dividends and rent. Property income is received in exchange for putting financial assets and non-produced assets, such as land and mineral and energy resources, at the disposal of other economic units. At a sector level, the balancing item of all primary incomes is the balance of primary incomes.

6.33 At a national level, the net impact of property income flows reflects the balance of these flows to and from the rest of the world. There may also be flows of compensation of employees to and from the rest of the world (recorded in the generation of income account). At a national level, the aggregate of the allocation of primary income account is GNI. Net national income (NNI) is derived by deducting consumption of fixed capital and depletion-adjusted NNI is derived by deducting depletion.

6.34 A key flow in the SEEA allocation of primary income account is rent on environmental assets, such as land and mineral and energy resources. This income reflects payments for the use of environmental assets between the extractor or user of the environmental assets and the legal owner. Usually, the rent on environmental assets represents one part of the income generated from extraction or use since, most commonly, the extractor/user will retain some operating surplus after the payment of rent to the legal owner. The details of the accounting treatment in these situations is outlined in section 5.5.

(à) Distribution of secondary income account

6.35 The redistribution of primary income by means of transfers is shown in the distribution of secondary income account. These are payments made without a quid pro quo, i.e., payments made that are not related to an exchange between economic units. The largest types of transfers are taxes on income, wealth, etc., and social benefits paid by government, such as unemployment benefits and old-age pensions. The balancing item in the distribution of secondary income account is disposable income, which shows the amount available for expenditure on final uses (consumption and capital formation).

(e) Use of disposable income account

6.36 Disposable income must be used for current final consumption or saved. In the use of the disposable income account, the balancing item is saving derived by deducting consumption expenditure from disposable income. Most commonly, this balancing item is shown after the deduction of consumption of fixed capital, i.e., net saving. As for the production and allocation of income accounts, the balancing item net saving is adjusted in the SEEA sequence of economic accounts to deduct depletion.

6.37 Depletion-adjusted net saving has a particular interpretation in the Central Framework. In general terms, saving represents the resources available for investment, while net saving represents the resources available to increase the overall asset base after accounting for the cost of replacing the fixed assets that have been used up over the accounting period.

6.38 Extending this concept, depletion-adjusted net saving represents the resources available to increase the asset base after accounting for replacing the fixed assets and “replacing” environmental assets that have been used up in the accounting period. Although non-renewable environmental assets cannot be replaced, adjusting net saving for depletion can give an indication of the extent to which patterns of income and consumption are in alignment with changes in the overall asset base, including produced and environmental assets.

(f) Capital and financial accounts

6.39 Income that is saved is used in a number of ways. It may be used for the acquisition of fixed capital, accounted for as a change in inventories, or for the acquisition of valuables, or it may be used to purchase financial assets (e.g., bank deposits) or reduce financial liabilities (e.g., repayments of home mortgages). The amount available for the acquisition of fixed capital and valuables may also be affected by capital transfers receivable and payable, and the net flow of these transfers is recorded in the capital account.

6.40 It is important to show that amounts of consumption of fixed capital that were effectively set aside in the derivation of balancing items in net terms in earlier accounts are in fact amounts that are available for the acquisition of fixed assets, since they are not an outlay in terms of current monetary expenditure. Hence, consumption of fixed capital is added back in the capital account. The same is essentially true of amounts of depletion, although the resources themselves cannot be “re-acquired”, as is the case with fixed assets. Nonetheless, the actual resources notionally set aside remain available for use; therefore, depletion is also added back in the capital account.

6.41 The balancing item of the capital account is net lending if the account is in surplus, or net borrowing if the account is in deficit. These terms are used, since any surplus must be lent to other units and any deficit must be financed by borrowing from other units, including from the rest of the world.

6.42 Net lending/borrowing is also the balancing item of the financial account which shows how the capital-account surplus or deficit is financed. If a country records a deficit in its capital account, then it must also show some amount of net borrowing from the rest of the world in the financial account (through either an increase in financial liabilities or a decrease in financial assets) that corresponds to the financing of that deficit.

6.43 In addition to completing the sequence of accounts, the capital and financial accounts are composed of transactions that reflect some of the changes between balance sheets at the beginning and end of an accounting period. In the SNA, other changes between balance sheets, for example, due to discoveries or catastrophic losses, are recorded in the other changes in volume of the assets account, or in the revaluation account. In the Central Framework, all changes in assets over an accounting period are recorded in asset accounts that incorporate all of these transactions and other flows. Asset accounts for environmental assets are described in detail in chapter V.

6.2.5 Functional accounts

6.44 The fourth area of integration concerns the identification of flows relating to environmental activity in monetary terms. These accounts are known as functional accounts, as they focus on economic activity undertaken for a particular function or purpose. The purposes of interest in the Central Framework are environmental protection and resource management. The two functional accounts that are described in chapter IV are the environmental protection expenditure account (EPEA) and statistics on the environmental goods and services sector (EGSS).

6.45 The basic organization of information for functional accounts follows the structure of the core monetary supply and use tables and the sequence of economic accounts. Within this structure, the objective is to identify all transactions with a specific environmental purpose.

6.46 The integrated aspects of functional accounts are based on the use of the core accounting structures, rules and principles of the national accounts. Consequently, information on environmental activities can be readily compared and contrasted with information on other activities within the economy. Further, environmental activities can be compared with other activities in relation to other economic variables, such as employment.

6.47 While the focus of functional accounts and statistics such as the EPEA and EGSS statistics is on flows in monetary terms, it is also possible to align the monetary estimates with relevant physical flows. This can be achieved, since the underlying accounting in these functional accounts is consistent in terms of the definition of economic units (enterprises represented by industries, households and governments) and the rest of the world, and the scope of products. It is possible, for example, to relate expenditure for environmental protection purposes by industries and households with quantities of air emissions by the same economic units.

6.2.6 Employment, demographic and social information

6.48 The usefulness of the information in the various tables and accounts of the Central Framework can be enhanced by relating different environmental and economic data to estimates of employment, estimates of population, various demographic breakdowns (such as age, household income levels, and household characteristics related to material well-being), and social measures, such as health and education.

6.49 Employment information, such as the number of people employed, the number of jobs, and the number of hours worked, may be used in the assessment of environmental activity from an industry perspective. In particular, there is likely to be interest in employment data related to the production of environmental goods and services as part of measures of the “green” economy.

6.50 Information on population and demographic breakdowns can be used in conjunction with information on the physical flows of water and energy to provide enhanced analysis of resource accessibility and availability, and changes in patterns of water and energy use. Demographic information used together with data on environmental protection expenditure may assist in understanding behaviours of different socioeconomic groups in relation to this type of environmental activity.

6.51 More generally, accounting for differences in population size and structure may be important for international comparisons of environmental and economic data. For example, measures of changes in per capita air emissions may be of interest in addition to aggregate measures of air emissions.

6.52 Social measures, such as those relating to health and education, may be usefully related to certain components of the Central Framework. For example, measures of air emissions may be complemented by measures of health status. This may be particularly relevant if finer-level geographical areas are being considered. In this regard, it may also be of interest to incorporate measures of actual final consumption of households (i.e., including the transfer of individual benefits to households purchased by governments (e.g., water services provided by government)) in the comparison of consumption activity across countries.79

6.53 Demographic and employment information may need to be adjusted for purposes of consistency with the concepts, definitions and classifications of the Central Framework, in particular for alignment with the concept of residence. Relevant information can be found in chapter 19 of the 2008 SNA. Techniques and analytical approaches for linking SEEA-based data with various types of employment, demographic and social data are explored further in SEEA Applications and Extensions.

6.3 Combining physical and monetary data

6.3.1 Introduction

6.54 The presentation of information in a format that combines both physical and monetary data is one of the strongest features of the Central Framework. This enables the provision of a wide range of information on specific themes, the comparison of related information across different themes, and the derivation of indicators that require the use of both physical and monetary data.

6.55 Given the integrated accounting structures for physical and monetary accounts and statistics, it is logical to use these structures and the common underlying accounting rules and principles to present both physical and monetary information. Such integrated formats are sometimes referred to as “hybrid” presentations or accounts because they contain data in different units. However, even though the units are different, the data sets are presented according to common classifications and definitions: hence, these presentations are referred to as combined physical and monetary presentations.

6.56 Different forms of combined physical and monetary presentations are possible and, indeed, there is no standard form for these presentations or accounts. Commonly, physical flow data are presented alongside information from monetary supply and use tables, but even for this basic structure different combinations are possible. Ultimately, the structures of combined presentations of monetary and physical data are dependent on the availability of data and the question under investigation.

6.57 While no standard structure can be defined, compiling and contrasting monetary and physical data in meaningful ways is at the heart of the SEEA philosophy. The present section provides general guidance on the compilation of combined physical and monetary presentations. More detailed presentations involving structures such as input-output tables, the full sequence of economic accounts or presentations that cover a particular theme or topic, for example, fisheries, are considered in SEEA Applications and Extensions and in targeted thematic publications.

6.3.2 The concept of combining physical and monetary data

6.58 The logic behind the recording of physical flows in a manner compatible with economic transactions is at the core of combining physical and monetary data. The linkage of physical flows to economic transactions ensures a consistent comparison of environmental costs with economic benefits, or environmental benefits with economic costs. This linkage can be examined not only at the national level but also at disaggregated levels, for example, in relation to regions of the economy, or specific industries, or for the purpose of examining the flows associated with the extraction of a particular natural resource or the emissions of a particular substance.

6.59 Because these presentations combine physical data that may be of more immediate relevance to scientists, with monetary data familiar to economists, they also have the potential to serve as a bridge between both types of specialists in the context of their analysis of the environment.

6.60 It is to be stressed that it is legitimate to include only a limited set of variables, depending on the most urgent environmental concerns to be taken into consideration, and that it is not necessary to complete an exhaustive physical supply and use table in order to be able to present combinations of physical and monetary data.

6.61 A combined physical and monetary presentation thus represents an analytical framework showing which parts of the economy are most relevant to specific aspects of the environment, and how changes in the economic structure influence the environment. Further, because the accounts provide consistent environmental and economic indicators, the possible trade-offs in environmental terms between alternative environmental and economic strategies can be analysed.

6.62 At finer levels of disaggregation, combined presentations can provide the research community with access to a structured database for further research on the role of these indicators in monitoring the overall environmental performance of national economies and industries. For example, it is possible to convert estimates of resource use or environmental pressures by industry into estimates of resource use or pressures by product group. Also, data sets with combinations of physical and monetary data may be of direct use in the development of environmental-economic models.

6.3.3 Organization of information

6.63 It is important that the information in the accounts be effectively communicated to users and decision makers. The present section highlights some general considerations in the presentation and organization of data, especially with a view to aligning physical and monetary data for combined presentations.

Time-series data

6.64 The tables in the Central Framework are designed to explain accounting concepts and relationships and therefore feature data only for a single time period. In practice, time series of the aggregates that show the trends in economic and environmental variables are also of interest to users.

6.65 Generally, time series should be compiled and presented over as long a period as possible with the periodicity determined based on the rate of change in the phenomenon under investigation and the needs of users. Often, in environmental and economic accounts, the length of time series may be short, as the source data may have been collected infrequently or only in recent years.

6.66 One difficulty in the creation of time series of accounting data is associated with the consistency with which source data are compiled over time. Changes in the classifications, coverage and definitions used in the collection of source data can require significant reworking by accountants in order that a consistent time series may be prepared. This may be especially problematic when the source data are compiled irregularly or infrequently.

6.67 It is recommended that accountants place emphasis on maintaining a continuity of time series, in part by being guided by the authority of the accounting framework which requires that meaningful balances and accounting identities be upheld.

6.68 One consequence of compiling accounting data in time-series fashion is that changes and additions to source data are likely to require the reassessment of data from previous accounting periods, and hence revisions in the time series may need to be implemented. Although, in principle, a compiler can wait until all possible data are available before releasing the accounts for one period, generally, a balance must be struck between the accuracy of the accounts and the timeliness of the information, and hence making revisions to the accounts should be considered standard practice.

6.69 At times, new information may not only highlight the need for revision to a specific time period but also suggest the need to reassess neighbouring time periods in order to retain the meaningfulness of the time series as a whole. The compiler plays an important role both in managing time series and in reassessing models and assumptions.

6.70 Since revisions are important but difficult to predict, they should be considered and implemented in a way that is explicable to users and can be meaningfully operationalized by compilers. In this regard, the best practice in formulating a revisions policy and undertaking analysis of revisions has been summarized in “Guidelines on revisions policy and analysis” (OECD, 2008a). Ideally, the revisions policies of national accounts and environmental accounts should be aligned.

6.71 It is important to ensure that the source data underpinning the physical and the monetary data relate to the same accounting period. Generally, monetary accounts will be compiled on a financial or calendar-year basis. Physical data may be compiled on a basis that aligns more closely with natural environmental patterns and seasons. Adjustments taking these differences into account may be needed.

6.72 Generally, the time frames considered in the Central Framework are annual but, in certain cases, the compilation of sub-annual time series may be appropriate, particularly cases where the physical flows or economic activity are seasonal in nature, for example, patterns of rainfall and electricity use. An understanding of required capacity in water and energy supply, or in the thresholds for various environmental pressures, will usually require knowledge of seasonal peaks and troughs rather than annual averages.

6.73 Some of the tables can be easily adapted to the presentation of data in time-series fashion. For others that are in a matrix-type format, for example, supply and use tables, choices need to be made regarding which variables should be highlighted. The ability to release data in non paper based format, for example, in databases, permits a greater flexibility in this regard.

Institutional sector and subsector data

6.74 For some accounts and tables, the Central Framework describes the compilation of data by institutional sector. In principle, all accounts can be compiled at this level of detail, although the data and accounting requirements for the compilation of a complete set of institutional sector accounts may be quite extensive.

6.75 It is noted that the terms “industry” and “sector” refer to different groupings of economic units. Analysis by industry combines all economic units undertaking similar types of production whether they are corporations, household units or government units. Analysis by institutional sector, as is discussed here, focuses on groupings of units with similar objectives and behaviours. The distinction is explained in greater detail in section 2.6.

6.76 There may be particular instances where a broad focus on specific institutional sectors or subsectors is appropriate. For example, there may be particular interest in the environmental activities of government at different levels, i.e., at national, regional or local levels. To compile accounts of this type, the flows between these different levels of government also need to be recorded and balanced.

6.77 Another area of focus may be the household sector and, in particular, those divisions of the household sector that are commonly not observed in market transactions, for example, the collection of water and fuelwood by households, subsistence farming and other informal household sector activities. While in concept these activities are part of the economy, often the lack of market transactions makes them difficult to observe and estimate. Given the close relationship between these non-observed activities and the local environments on which they depend, the preparation of accounts specifically for these types of units may be desirable.

6.78 Generally, consumption expenditure is recorded for households and general government only as being equal to the amount of consumption purchased by each sector. An alternative perspective on consumption is to recognize that, often, the consumption of households is supported by expenditure by governments on behalf of the households in an economy, for example, through the provision of education. Thus, an aggregate of the “actual” consumption of households can be defined equal to household consumption expenditure plus the amount of government consumption expenditure that is classified as individual consumption. Individual consumption is to be distinguished from collective consumption, which is consumption that cannot be attributed to individuals or households, such as defence services or the services of a legal and justice system.

6.79 The measurement of actual consumption is useful for cross-country comparisons and long-term comparisons within a country, as it accounts for the manner in which a provision of services to households is organized.

Data by geographical area

6.80 The initial consideration in the organization of information on a geographical basis concerns the application of the residence principle within all SEEA data sets. Consistent with the SNA, the accounts and tables of the Central Framework for a country are defined in terms of the economic residence of the economic units rather than of the location of the activity of the units. The distinction between residence and territory principles of recording is described in chapter II.

6.81 The main focus of the accounting descriptions and explanations is on accounting for a country as a whole. This aligns with the intent of the SNA and with the general purpose of the Central Framework, which is to serve as a national accounting tool rather than as a tool for accounting at the level of an economic unit. One of the motivations for retaining a higher-level focus stems from the fact that for the accounting principles to be applied at finer levels of geographical detail, there is a need to understand both the flows in and out of the smaller regions and the area of predominant economic interest for each economic unit. Often, this type of information is difficult to establish at small geographical levels.

6.82 At the same time, the fact that there are likely to be both administrative boundaries within countries and different environmental and economic circumstances in different areas of a country would suggest that the compilation of accounts by subnational geographical areas could be a sensible approach. The geographical areas relevant for environmental and economic accounting may not be the same as those resulting from the administrative breakdowns of regional areas. For example, water accounts are often compiled for river basins which are defined following hydrological concepts.

6.83 In principle, all accounts can be compiled at these finer levels but compilers should be aware that, in general, compilation will require additional assumptions, particularly regarding the location of economic units.

6.84 It may also be relevant to select specific variables, for example, output, employment or emissions; and to compile data relating to these variables at a regional level without compiling a full accounting framework. Provided the relationship between the variables is interpreted in the same way as in the broader accounting framework, meaningful information concerning the pressures and drivers in particular regions might be established without the need to compile a full set of supply and use tables and other accounts.

Data in volume terms

6.85 For many environmental and economic indicators and statistics, it is important—and more useful—to present monetary data in terms of the changes in the underlying volumes. Volumes represent changes in the value of stocks, transactions and other flows after the effect of price changes has been removed. Volume changes comprise changes in quantity and changes in quality. Adjusting for the effects of price changes is particularly important when presenting time series of data. Commonly, these estimates of volumes are termed estimates in “constant prices”.

6.86 A discussion on the approach to compiling monetary data in volume terms is in chapters II and V. From an integration perspective, compiling data in volume terms can be an important part of data confrontation. For the compilation of conventional national accounts estimates, it is increasingly common for countries to compile monetary supply and use tables in volume terms by removing the effects of price change from the supply and use tables based on transaction values. In concept, estimates in “volume” supply and use tables should bear a reasonable resemblance in structure to the flows of products in the physical supply and use tables.

6.87 It is not necessary to compile complete supply and use tables and asset accounts in volume terms in order to develop indicators that use variables expressed in volume terms. Ideally, an estimate of price change that is specific to the target variable should be used but, depending on the analytical purpose, it may be sufficient to divide a time series of monetary values by a general estimate of price change in an economy, for example, by a consumer price index.

Classifications

6.88 The monetary accounts and tables are compiled using a consistent set of classifications of products and industries as used in the SNA. For physical data, different classifications are often used for different topics and themes that are specifically developed for analysis of those topics. For example, detailed classifications for water and energy flows in physical terms have been developed. Any differences in classification need to be resolved before physical and monetary data are combined.

Accounting adjustments

6.89 Section 6.2.2 describes the areas in which the compilation of physical accounts should, in concept, record different flows, as compared with the monetary accounts compiled following the SNA. When combining physical and monetary data, these differences should be accounted for.

6.90 In concept, the measurement boundary relating to household production and consumption on own account (e.g., the collection of water and fuelwood for own consumption) is the same in physical and monetary terms. However, there may be more interest in fully describing physical flows associated with household production for own consumption for environmentally related analysis than would be the case in the compilation of monetary supply and use tables in monetary terms for general economic analysis. Consequently, where the detail concerning household own-account activity is of interest, it is important to ensure that the actual measurement scope in physical terms is aligned with that in monetary terms.

6.91 More generally, it is likely that the data sources used to compile estimates for monetary supply and use tables and physical flows will be different. It is therefore important, when combining monetary and physical data, to confirm that the implicit relationships between quantities and prices are meaningful and reasonable. A particular issue in this regard is the timing of recording of the flows in physical and monetary terms. It may be the case that the acquisition of products takes place in a different accounting period than that of their consumption (e.g., the purchase of heating oil for household use). When combining physical and monetary data, such timing issues should be taken into account.

6.4 SEEA Central Framework aggregates and indicators

6.4.1 Introduction

6.92 The Central Framework also lends itself to the derivation of important aggregates and indicators in the same way as the national accounts are well known for the important aggregates that are derived from the accounting structure, for example, GDP and NNI.

6.93 The breadth of the Central Framework enables many aggregates and indicators to be sourced from the component tables and accounts. The present section introduces the range of aggregates and indicators that are either embedded in the framework or easily derived as the ratio between variables within the framework. Data may also be used to compile more complex indicators that require a range of assumptions and weighting patterns for their derivation. Such indicators, however, are not discussed in this section.

6.4.2 Descriptive statistics

Totals and aggregates

6.94 The Central Framework contains a range of totals (for the economy) and aggregates (balancing items) that may be of interest in monitoring changes in environmental and economic activity:

  • (a) From the physical flow accounts, total physical flows such as total flows of water, energy, air emissions and solid waste, for the economy as a whole or for individual industries and households, can be obtained;

  • (b) From asset accounts, total physical flows of natural resources, including extractions and natural losses, can be obtained, as well as total values of natural resources and any associated depletion;

  • (c) From the sequence of economic accounts, the key monetary aggregates in the Central Framework are the depletion-adjusted balancing items such as depletion-adjusted net value added and depletion-adjusted net saving;

  • (d) From the functional accounts, EPEA and EGSS statistics, totals such as national expenditure on environmental protection and total production, value added and employment of environmental goods and services may be obtained.

6.95 These various totals and aggregates are naturally obtained from the accounting structures that have been described in chapters III, IV and V.

Structural statistics

6.96 Another type of descriptive statistics that can be obtained from the accounting structures are statistics on the structure of different physical and monetary flows and stocks. The fact that the accounting structures are complete in their coverage of economic units and geographical areas enables shares of different variables to be derived. For example, the share of total emissions by households and the share of water use by agriculture can be calculated in a straightforward manner from the relevant physical flow accounts.

6.97 Indicators related to land management, including land cover and land use indicators, are also considered structural statistics. These indicators may provide information on the share of total area being used for the maintenance and restoration of environmental function or the share of land owned by different industries.

6.98 Other examples of structural statistics include the share of environmental taxes in total taxes, the share of employment in the production of environmental goods and services in total employment, and the share of energy supply from renewable sources.

6.99 Specific mention is made of the ability to derive shares within functional accounts, since the totals relating to expenditure and production can be directly related to conventional national accounts aggregates, such as GDP and industry value added.

6.4.3 Environmental asset aggregates and indicators

6.100 Asset accounts in physical terms concerning individual environmental assets can provide indicators on the availability of these assets and changes in availability through the comparison of the amounts extracted with the remaining stock. Such information may be relevant in the management of demand and supply of environmental assets.

6.101 Asset accounts in monetary terms can be used to derive indicators for both individual environmental assets and for combinations of these assets, since summation across assets is possible in monetary terms. A summation can provide estimates of environmental asset wealth which in turn can be compared with estimates of the value of other assets, including produced and financial assets. Estimates of total national and institutional sector wealth can also be calculated.

6.102 The sequence of accounts can provide information on the depletion of environmental assets and also on the share of resource rent accruing to various sectors involved in the extraction of resources, particularly mineral and energy resources.

6.103 By combining these indicators with population statistics and descriptive statistics on households such as annual income, it is also possible to consider the use of resources on a per capita basis and the distribution and use of resources by different household types.

6.4.4 Aggregates related to financing and cost recovery of economic activity related to the environment

6.104 Data contained in the sequence of economic accounts can provide important insights on how economic activity related to the environment is financed and also on the full cost of providing access to resources, particularly water and energy. The financing aspects can be considered through analysis of subsidies and other transfers for environmental purposes, particularly flows from government and the rest of the world. It may also be relevant to consider the collection of environmental taxes as a means of supporting economic activity related to the environment.

6.105 Estimates of the full cost of supplying resources must incorporate the general operating costs such as intermediate consumption of materials and compensation of employees, and also other current and capital costs. These include payments of rent and interest, as applicable, and the costs of any relevant infrastructure and equipment. The estimation of capital costs should include both the consumption of fixed capital and the opportunity cost of investing in the assets which is equivalent to estimating a rate of return on the assets. The recognition of all costs is important in ensuring that investment decisions are taken with both short- and long-term costs in mind. All of the relevant variables for these estimates are contained in the sequence of economic accounts.

6.4.5 Environmental ratio indicators

6.106 The aggregates and indicators described directly above emerge from accounts and tables in either physical or monetary terms. There are also important indicators of environmental pressures and responses that can be derived from combined physical and monetary presentations. They are generically referred to here as environmental ratio indicators. The present subsection describes three main types of these combined indicators.

Productivity and intensity indicators

6.107 Productivity and intensity indicators are important indicators that can be derived from environmental and economic accounting data. Productivity indicators represent the ratio of an economic aggregate, such as output or GDP, to a physical flow, such as the energy content of energy products used. Intensity indicators represent the ratio of a physical flow to an economic aggregate, i.e., they are the inverse of productivity indicators. All of these indicators focus on the production process and changes in the extent to which natural resources and natural inputs are being used by industries to produce goods and services.

6.108 In the derivation of these types of indicators, it is important that the economic aggregate used be measured in volume terms, if the intention is to measure changes over time. Otherwise, the picture presented of the degree of productivity or intensity may be misleading.

Decoupling indicators

6.109 Decoupling indicators show the extent to which growth in income and consumption is occurring with a decreasing use of environmental resources, e.g., decreased energy use, or reduced emissions. They are derived by dividing a relevant economic aggregate (e.g., household consumption or GDP) by a relevant physical flow, for example, air emissions. These are essentially productivity indicators, but the focus is on the divergence of the environmental and economic aggregates.

6.110 As for productivity-type indicators, the economic aggregates should be measured in volume terms for time-series purposes. Also, in order to assess the relative significance of the decoupling, it is important to present decoupling indicators together with the values of the numerator and denominator.

Polluter pays indicators

6.111 Polluter pays indicators relate physical information on emissions to payments, primarily environmental protection expenditures and environmental taxes, that are made in relation to those emissions. These indicators help show the extent to which environmental protection costs are internalized, and whether taxation and other payment schemes are influencing the amount of emissions. An example of this type of indicator is the implicit tax rate for energy which is derived by dividing energy taxes (as defined in chapter IV) by joules of energy used.

6.4.6 The SEEA Central Framework and international indicator initiatives

6.112 For many years, there has been interest in the development of sets of indicators that offer insight into environmental and sustainable development issues. Examples of international indicator initiatives are those connected to the OECD project on green growth, the United Nations Environment Programme (UNEP) Green Economy initiative, the Beyond GDP initiative of the European Union, and the indicator work under the Convention on Biological Diversity.80 Many of the indicators that are of interest in these indicator sets can be found within the Central Framework.

6.113 Because of the strength of the underpinning accounting structure, particularly in terms of defining relationships between indicators and in providing a strong data compilation and confrontation framework, the Central Framework represents an important information base from which indicators can be chosen for use in populating different sets of indicators.

6.114 In addition, the strong connection between the Central Framework and the SNA provides links to core macroeconomic aggregates which allow environmentally focused indicators to be seen within a context more oriented towards economics, and hence accessible to a broader audience. This strong connection also allows for modelling and forecasting.

6.115 It is recommended that, in the development of sets of indicators that focus on environmental and sustainable development issues, the Central Framework be used as the basis for compiling indicators, wherever appropriate.

6.5 Examples of combined physical and monetary presentations

6.5.1 Introduction

6.116 The appropriate structure for combined physical and monetary presentations varies depending on the topic or theme under investigation and the scope and availability of data in physical and monetary terms.

6.117 The capacity to develop different structures allows information from different core accounting structures—for example, from supply and use tables, asset accounts, functional accounts and the sequence of accounts—to be combined. Such flexibility makes these presentations particularly appropriate for the organization of information on particular topics or themes.

6.118 For example, the compilation of asset accounts for fish resources may provide useful information in both physical and monetary terms. However, when these are combined with information on the supply and use of fish resources through the economy, information on employment in the fishing industry, information on the emissions generated by aquaculture, and information on any payments made for fishing quotas, a far more complete view of the fishing industry and associated activity is likely to be presented. The breadth of the Central Framework encompasses all of these types of information.

6.119 The present section presents a general structure that may be adopted for combining physical and monetary data, followed by four examples of combined presentations for particular themes. The themes are energy, water, forest products and air emissions. These examples should give a sense of the potential of the Central Framework for providing rich and integrated data sets on specific themes and also for supporting analytical activities through the development of its data.

6.120 It is also possible to combine information from a variety of different themes into a single presentation. For example, data on household energy use, water use, air emissions and other physical flows might be combined with data on household final consumption expenditure within a single presentation. Alternatively, information on a variety of environmental themes might be presented for a particular region within a country. An extended discussion of the analytical potential of SEEA data is presented in SEEA Applications and Extensions.

6.5.2 General structure for combined presentations

6.121 Although there are no standard presentations of combined physical and monetary data, there are some common areas that are generally included in combined presentations. At a broad level, these areas cover all of the content described in the Central Framework (chaps. III-V).

6.122 Table 6.4 sets out a possible structure and some typical content for the presentation of combined physical and monetary data. It has four sections, covering monetary flows, physical flows, stocks and flows of environmental and fixed assets, and relevant indicators. None of these are mandatory fields and additional variables and levels of detail may be added as data and information requirements allow. An important feature of the structure is that the column headings remain the same for each of the four sections, thus highlighting the ability of the structure to consider a range of different variables from the perspective of a consistent and commonly defined set of economic units.

Table 6.4

Possible structure of and typical content for combined presentations

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Note: Dark grey cells are null by definition.

6.123 The content presented in table 6.4 and the examples of combined presentations provided in the rest of the section relate only to a single time period. Often, it will be useful to present data over a longer time period and hence different structures will be required for presentation and publication purposes.

6.5.3 Combined presentations for energy data

6.124 Within energy accounts, there is particular interest in comparing the supply and use of energy products in monetary terms and in terms of energy content. A combined presentation of the supply and use of energy products in monetary and physical terms using the same industry and sector breakdowns may provide a useful comparison.

6.125 An example of a combined presentation for energy products is provided in table 6.5, which shows the supply and use of energy products by type of energy product in monetary terms (measured in currency units) and in physical terms (measured in joules). It is also extended to present related information on the relevant stocks of environmental assets; on flows of energy from natural inputs; and on gross fixed capital formation for the extraction of mineral and energy resources, the capture of energy from renewable sources, and the distribution of energy products.

Table 6.5

Combined presentation for energy data

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Note: Dark grey cells indicate zero entries by definition.

6.126 Broadly, each entry for the supply of energy products in physical terms has a corresponding entry in monetary terms. The exception concerns energy produced and consumed within establishments and losses of energy. These physical flows are included only in specific rows in the supply and use tables in physical terms, as there are no associated monetary transactions.

6.127 Additional entries in the monetary supply table are required to convert estimates of supply measured in basic prices to estimates of supply in purchasers’ prices. Monetary estimates in purchasers’ prices are required, as they are the basis of valuation in the use table.

6.128 For each industry, the tables show the supply and use of energy products and include, in monetary terms only, a row for the total supply of products and the total intermediate consumption and final use of products, i.e., totals including energy and non-energy products. Inclusion of the supply and use of all products in these presentations makes it possible to derive the share of output of energy products in relation to the total output of products in the economy. Similarly, it is possible to see the role that energy plays in relation to other products in terms of intermediate consumption by industries, household and government consumption, and exports.

6.129 To reap the full benefits of such a supply and use comparison, the same classification of energy products should be used. Currently, there is not a clear relationship between categories of the Standard International Energy Product Classification (SIEC), which is designed for classifying energy products in physical terms, and the Central Product Classification (CPC), which is generally used to classify product-level data in monetary terms. Compilers must resolve these differences in classification, potentially by undertaking combined analysis at higher levels of aggregation which yield consistent commodity definitions. In table 6.5, an aggregation of SIEC has been used to present the energy products.

6.5.4 Combined presentations for water data

6.130 Within water accounting, the interest lies in linking the abstraction and use of water in physical terms with estimates of output and value added by industry and the total final consumption of households. The presentation of physical and monetary information in the same account allows for the derivation of consistent indicators for evaluating the impact on water resources of changes in the economy due, for example, to changes in economic structure. Using combined accounts in economic models permits the analysis of possible trade-offs between alternative water policies and economic strategies.

6.131 A basic combined supply and use table for water is presented in table 6.6. For the monetary part of the combined supply table, two water-related products are identified: natural water and sewerage services. Depending on data availability, other products may be incorporated, for example, those relating to irrigation water. The monetary part also includes estimates of total supply of products (i.e., including the output of non-water products) for each industry, thus providing an indication of the relative significance of the output of water-related products as part of total industry output.

6.132 The monetary part of the combined supply table records additional entries to illustrate the conversion of measures of output in basic prices to measures of output in purchasers’ prices. This step enables an accounting balance to be maintained with the use table in monetary terms.

6.133 The physical flows in the combined supply table reflect volumes of water supplied between economic units, including volumes of wastewater to sewerage (shown along an “of which” row), as well as total returns to the environment. The bulk of the supply of water appears in the columns corresponding to the Water collection, treatment and supply industry and the sewerage industry. Flows relating to hydropower are shown explicitly, reflecting the relative significance of these flows within the total physical flows of water.

6.134 The monetary part of the combined use table shows the intermediate consumption and final use of the two primary water-related products. Total intermediate consumption for each industry and total final consumption for households and government are also shown to provide an indication of the significance of the use of water as part of total consumption.

6.135 A distinction is made between the final consumption expenditure by households and the actual final consumption of households. The difference reflects expenditure by governments to provide goods and services (in this case, water supply) to households. Thus, although these goods and services are purchased by governments, the consumption is in fact that of households. This distinction allows an improved comparison of consumption over time and across countries, as it is not dependent on the arrangements in place to manage and finance water supply.

Table 6.6

Combined presentation for water data

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Note: Dark grey cells indicate zero entries by definition.

6.136 It may be useful to incorporate in the monetary part of the combined use table, estimates of gross fixed capital formation (investment) for water supply and treatment operations. These entries are made for each relevant industry in additional rows in the table.

6.137 The physical part of the combined use table shows the volume of water abstracted from the environment, including amounts retained for own use, and amounts received by economic units.

6.138 Depending on the purpose of analysis, additional information, for example, concerning emissions to water by industry and household, or stocks of fixed assets used for water supply, can be included within the general combined supply and use table framework to provide a single reference point for relevant information. Additions such as these demonstrate the capacity of combined supply and use tables to incorporate additional information within a core structure.

6.5.5 Combined presentations for forest products

6.139 The following presentation for forest products provides an example of the types of data that might be compiled when considering flows related to environmental assets. Relevant flows include the physical flows of natural inputs and products, output and value added in monetary terms, stocks and flows of the relevant environmental assets, and stocks and flows associated with the extraction of natural resources.

6.140 Parts 1-6 of the combined presentation for forest products in table 6.7 record the supply and use of forest products such as timber and fuelwood. Within the supply and use structure, the flows of the products can be followed through the economy. Imports of these products should be recorded in the column entitled “Flows with the rest of the world”. In addition to flows of products, a more complete industry view of activity related to forests is obtained by including data relating to value added and employment.

Table 6.7

Combined presentation for forest products

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Note: Dark grey cells indicate zero entries by definition.

6.141 Parts 7 and 8 present information relating to the stock of timber resources, i.e., the area of land with timber resources (both cultivated and natural), the volume of standing timber, and the extent of extraction and depletion. Data on the stock of timber resources will generally be recorded in the columns of the table on the far right. In this presentation, the area of land is broken down into that containing cultivated and that containing natural timber resources, but presentations by species may be appropriate. For some entries, it may also be relevant to record values in the columns for the forestry industry, for example, for removals.

6.142 An alternative presentation of data on stocks would entail structuring the right-hand columns in terms of type of forest land, for example, primary forests, other naturally regenerated forests, and planted forests. Information on the stock of forest animals or different food resources within forest areas might logically be included under such an alternative presentation. Data may be included in monetary and physical terms.

6.143 The final part of the table, part 9, presents information on the stock of fixed assets used to extract forest products. Additional information, for example, on gross fixed capital formation on these assets, may also be included as appropriate.

6.144 Overall, this presentation gives a sense of the breadth of information that can be combined from within the Central Framework to help discuss and analyse themes relating to environmental assets.

6.5.6 Combined presentations for air emissions

6.145 Within air emission accounts, the interest is in presenting a range of physical and monetary information for industries and households using common classifications. Thus, a combined presentation can be constructed that allows comparison of air emissions by industry with the output and value added of those same industries measured in monetary terms. This combined presentation does not require compilation of a full supply and use table in physical terms. Rather, specific rows and columns within the full framework are selected.

6.146 A combined presentation for air emissions is presented in table 6.8. In parts 1-4 of the table, estimates of key economic variables are included, classified by industry. Since all industries produce air emissions, all industries are in scope of the combined accounts, although it may be of interest to focus on some specific industries, for example, electricity generation, steel manufacturing or transport industries, as these industries are often large emitters.

Table 6.8

Combined presentation for air emissions

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Note: Dark grey cells indicate zero entries by definition.

6.147 The choice of economic variables could extend to the full set of supply and use variables. The main variables by industry suggested in this presentation are measures of output, intermediate consumption, gross value added and employment. Each of these variables gives an indication of the relative size of each industry and hence assists in determining whether the associated emissions are significant factors for a specific industry and for the economy.

6.148 Part 1-4 also includes economic data on household final consumption expenditure (at the intersection of the row “Intermediate consumption and final use” and the column “Households”). The expenditure could be further classified to show the expenditure on products used for the purposes of transport and heating as these household activities are key sources of air emissions.

6.149 In parts 5 and 6, economic data on expenditure for environmental protection purposes and on environmental taxes are included. These data can be compared with the levels of emissions and can hence assist in assessing the effectiveness of industry, household and government responses to air emissions.

6.150 In parts 7 and 8 of the table, estimates of total air emissions broken down by type of substance are recorded. They are classified by industry and for households. The industry classification is the same as that used in the classification of the economic variables in parts 1-6. Note that following the general accounting principles, all emissions by government units are recorded against the relevant industry activity (e.g., public administration) rather than in the column entitled “Government” (see sect. 3.2 for details of this treatment).

6.151 A subset of total air emissions by industry relating to those due to transport activity is also shown in the table. Although transport activity will be most concentrated in the transport industry, all industries are likely to generate emissions owing to some extent to transport activity. The identification of transport emissions is important from a compilation perspective because adjustments are often needed to account for emissions from transport activity, for example, for that of households, and for resident and non-resident emissions.

6.152 In order to obtain the most benefit from the information on these various areas concerning air emissions, it is important to compile time series. Times series of information allow for an analysis of trends and also permit analysis of relationships between different variables that may not be evident in the assessment of data for a single time period. For example, it would not be expected that expenditure on environmental protection would lead to reductions in air emissions in the same accounting period.

6.153 Overall, this combined accounts framework for air emissions shows the benefits of the use of the same classifications and structures for the organization of different data. It permits the assessment of the relative importance of different air emissions, the derivation of relevant indicators for monitoring changes in air emissions, and the development of models based on the structured data set.