Environmental Protection Expenditure Accounts: New reporting requirements and basic data needed

Abstract

This report presents the results from the project evaluating the requirements for the proposed module on Environmental Protection Expenditure Accounts (EPEA) amending Regulation 691/2011 on environmental economic accounting. The report will, together with a separate report on the evaluation of requirements for the Environmental Goods and Services Sector (EGSS), present the results from the project “Evaluation of requirements for EPEA and EGSS in the European Statistical System” according to Eurostat grant agreement no. 50904.2012.004- 2012438. The objectives have been to: 1. Identify the requirements, sources and costs related to the proposed inclusion of the module of EPEA in the EU-regulation 691/2011 on environmental accounting. 2. Develop alternative methods for estimating environmental protection expenditure (EPE). 3. Examine the national uses and demands of EPE data and accounts. We have used the draft regulation presented at DIMESA November 2012, agenda item 4.1, as at the basis of the evaluation (see appendix). The draft questionnaire for EPE legal module (printed 08.03.2013) has been used to identify the necessary data sources to comply with the proposed requirements. We have used Eurostat guidelines and relevant pilot study reports from other countries as important subject matter input. We have also had close cooperation with The Division for National Accounts and the Division for Public Finances in Statistics Norway to identify possible data sources for EPEA. The main conclusions are the following:  We have identified the main national data sources for the proposed legal module for EPEA.  These main data sources are the national accounts, COFOG statistics and EPE survey data from the structural business statistics (SBS).  There are still some challenges related to fulfilling the requirements. These challenges are mainly connected to the classification criteria of COFOG, and data gaps and the level of detail in the national accounts.  We will engage in a project together with the Division for Public Finances in 2014 to identify and code EPE relevant for the EPEA. Depending on available funding arrangements, we expect to engage in a similar project with the Division for National Accounts in 2015 to accommodate available national account data to the requirements of the EPEA.  We have outlined an alternative approach for estimating EPE for corporations which may reduce the resources needed for data collection. The new approach may also be better suited to monitor effects of environmental policy than the previous method.  We have estimated the total developing costs needed for complying with the requirements for EPEA to be 20 weeks without any unexpected challenges (excl. costs in order to establish a dissemination routine). The annual operational costs are estimated to be around 9 weeks. We aim at conducting a test reporting of EPEA in 2016.  We will proceed to explore new possible uses of data. It is also important that we find accessible and understandable ways to present the data to the users. This may create new national demands for EPE data and accounts.