Environmental Accounts

Environmental accounts are a statistical system connecting economic and environmental information in a common framework to measure the contribution of the environment to the economy and the impact of the economy on the environment. They offer a means of monitoring the pressures exerted by the economy on the environment and of exploring how these might be abated. Environmental accounts organise environmental data from many domains using concepts and terminology of national accounts, and thus they can be used to answer questions such as: Which industry is emitting most greenhouse gases? How do patterns of consumption and production affect the environment? What is the effect of economic policy measures, such as an environmental tax on air emissions?

General Context

In recent decades awareness of environmental problems and sustainable development has been increasing not only in Europe, yet in the whole world. The public feels activities in these fields very carefully and, at the same time, wishes to be better informed on. This increases the political importance of environmental policies and sustainable development policies.

Important political initiatives on the European level with utmost relevance for environmental accounts are the European Green Deal, the 8th Environment Action Programme, implementation of Agenda 2030 in the EU, the New Action Plan for the Circular Economy or Recovery and Resilience Facility, which led to the creation of the National Recovery Plan in the Czech Republic. Important fields include climate change and climate neutrality, nature and biodiversity protection, health and the environment, the circular economy, the use of natural resources, waste management and the international dimensions of sustainable development, including sustainable transport and housing.

The European system of accounts (ESA), which is in accordance with the System of National Accounts (SNA), adopted by the United Nations Statistical Commission, is a major instrument used by the EU economic statistics to compile many economic indicators, including the gross national product (GDP). The ESA framework can be used to analyse and evaluate various aspects of economy, as, for example, its structure, economic development over time, etc., but for certain purposes, as the analysis of interactions between the environment and economy, the best solution is to compile separate satellite accounts.

The satellite accounts, in general, allow in a flexible way expand analytical capacities of national accounts for selected fields of social interest, as environmental burdens exerted by human activities, without overloading or disrupting functionality of the central statistical system.

The System of Environmental-Economic Accounting (SEEA) developed jointly by the United Nations, European Commission, International Monetary Fund, Organisation for Economic Co-operation and Development (OECD), and the World Bank forms a system of satellite accounts to the national accounts (SNA). It merges information on the economy and on the environment into a common framework, which allows to measure environmental benefits to the economy and economy impacts on the environment. It provides policy makers with indicators and descriptive statistical data to monitor these interactions and also a database for strategic planning and analyses of policies in order to find more sustainable ways of development. A revision of a part of this system, so-called the SEEA Central Framework was finalized in 2011 and adopted by the United Nations Statistical Commission on its 43rd session in 2012 as the first international standard for environmental-economic accounting.

Furthermore, in 2021, at the 52nd session of the United Nations Statistical Commission, SEEA Ecosystem Accounting was adopted as an international standard for ecosystem accounting, thus extending the focus of the SEEA Central Framework to the area of ecosystems.

Structure

Environmental accounts include an array of modules, each of which is focused on a specific field of environmental protection. At present, Eurostat has been working on three wider sets of modules as follows:

• Physical flow accounts
  - Air emission accounts,
  - Economy-wide material flow accounts, and
  - Physical energy flow accounts;
• Monetary flow accounts
  - Environmental taxes,
  - Environmental subsidies and similar transfers,
  - Environmental protection expenditure accounts,
  - Resource use and management expenditure accounts, and
  - Environmental goods and services sector accounts;
• Environmental asset accounts
  - Forestry accounts
  - Ecosystem accounts, and
  - Water accounts.

The SEEA further includes guidelines for establishing and use of many other environmental accounts, e.g. waste accounts, accounts for mineral and energy resources, etc.

Legal Framework

Aforementioned modules of environmental accounts are currently in different stages of development. Most of the work in progress is thus focused on methodology development, search for data sources, and on establishing of regular data collections. In April 2010 the European Commission, by means of Eurostat, submitted a draft of the Regulation on the European environmental economic accounts to the European Parliament and the Council, as a result of negotiations of the European statistical institutions on various levels. The Regulation was adopted in June 2011 as the Regulation (EU) No 691/2011 of the European Parliament and of the Council on European environmental economic accounts

The Regulation defined the legal framework for harmonized collection of comparable data from the EU Member States and, simultaneously, served as a part of the European Union response to the development of the System of Environmental-Economic Accounts (SEEA). Besides, it also provided a basis, on which other modules may be developed, taking into account their integration into the Regulation in the near future. The Regulation has modular structure and its first version included the three most methodologically developed environmental accounts:

• Air emission accounts,
• Environmental taxes, and
• Economy-wide material flow accounts.

The first transmission of data within this Regulation took place for the first two modules in September 2013 and for the module of economy-wide material flow accounts in December 2013. Methodologies for the accounts compiling are being developed by Eurostat with the help of experts from the EU Member States.

Eurostat and the EU Member States have continued in developing new modules by means of statistical working groups. In 2011 to 2012 there were methodologies elaborated and pilot tested of next three environmental accounts as follows: environmental protection expenditure accounts, environmental goods and services sector accounts, and physical energy flow accounts. These modules were evaluated as the most advanced from the concept point of view and also in line with the EU priorities of the green growth and efficient utilization of natural resources. Therefore the Commission in May 2013 adopted a draft for a change to the Regulation on European environmental economic accounts with the aim to add the aforementioned three modules. The draft was approved in April 2014 as the Regulation (EU) No 538/2014 of the European Parliament and of the Council  amending Regulation (EU) No 691/2011 on European environmental economic accounts.

In November 2021 the Commission Delegated Regulation (EU) No 2022/125  was adopted, regulating the timing and scope of the five modules of the original regulation. The legislative process is currently under way, which extends the regulation on environmental economic accounts by three more modules: forest accounts, accounts for environmental subsidies and similar transfers, and ecosystem accounts.

Environmental Accounting at the Czech Statistical Office

The Czech Statistical Office (CZSO) is responsible for the data transmission within the scope of the aforementioned Regulation on European environmental economic accounts to European institutions. The CZSO began to deal with issues of environmental accounting within a project financed by the Phare Programme in 2003. Then there were two accounts selected, air emission accounts and economy-wide material flow accounts, to be worked out. There were data sources identified and basic time series were compiled for these two accounts in cooperation with other institutions engaged in the project.

In the case of economy-wide material flow accounts the CZSO cooperated with the Charles University Environment Centre. Once the project was completed and closed the CZSO has started to carry out the compiling of these accounts as an every year routine task and its outcomes have been regularly published on the CZSO website (publication Material flow accounts (selected indicators) and table with main indicators - table Material flows).

The air emission accounts were created in cooperation with the Czech Hydrometeorological Institute and at present the Institute has been compiling the air emission accounts in order to meet the reporting duty as defined in the aforementioned regulation. The CZSO publishes these accounts in a shortened version on its website (table Air emissions). The environmental taxes were for the first time compiled by the CZSO within a Eurostat project. This way Eurostat supports the EU Member States by means of projects and other activities (workshops, special training programmes) in further developing of environmental accounting. A shortened version of this account is also available on the CZSO website (table Environmentally related taxes).

In 2017 the Czech Republic became to be bound to the reporting duty defined by the aforementioned amended regulation. All the tree new modules had been transmitted to Eurostat as a pilot project for several years before, yet in September 2017 tables of physical energy flow accounts were sent to Eurostat in the mandatory regime for the first time. Data on the other two accounts were sent then in December 2017. Physical energy flow accounts records energy flows (in physical units) from the primary extraction of energy sources from the environment, through their flows into the economy and inside the economy to energy flows back into the environment. Key indicators compiled from these data (table Physical energy flow accounts) and graph (Total domestic production of energy products in industry) can be found on the CZSO website.

The environmental goods and services sector accounts were compiled as a joint pilot project of the CZSO and Jan Evangelista Purkyně University, Ústí nad Labem as early as in 2011, yet the currently transmitted data employ results of the project solely in a marginal way. A shortened form of the data is published on the CZSO website (table Environmental goods and services output).

The environmental protection expenditure accounts were a followed-up to a joint Eurostat and OECD questionnaire, which the CZSO filled in and transmitted as early as since 2000, and also uses data from national accounts. The CZSO presents on its website environmental protection expenditure for the corporate sector, namely investment (table Environmental protection investment) and non-investment (table Environmental non-investment expenditure) type.

The data in the above-mentioned tables are updated every year, depending on the dates of transmission of individual sets of data to Eurostat and after the completion of the subsequent verification process. Overviews, in which all the aforementioned data are available, can be found in a European comparison on the Eurostat website.