Dataset: Environment Database - Environmental Protection Expenditure Accounts
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Last updated: June 22, 2022

Contact: ENV.Stat@oecd.org

Environmental protection (EP) includes all activities and actions which have as their main purpose the prevention, reduction and elimination of pollution as well as any other degradation of the environment. The scope of environmental protection expenditure is defined according to the Classification of Environmental Protection Activities (CEPA 2000). CEPA distinguishes nine environmental domains.

The Environmental Protection Expenditure Account (EPEA) is a monetary description of environmental protection activities in accordance with the System of Environmental-economic Accounting (SEEA) central framework. It is coherent with the European System of Accounts (ESA 2010) which applies to national accounts and related satellite accounts.

Because the full EPEA framework is quite expensive in terms of resources to be set up, this EPEA module significantly simplifies the full framework while it still allows compiling a measure of environmental protection expenditure for the whole economy comparable with national accounts aggregates.

This data focuses on the production and uses of environmental protection services. Output of these services can be output of market, non-market and ancillary activities. EPEA is directly linked to the three definitions of GDP, the production measure, the expenditure measure and the income measure of GDP.

EPEA covers (1) expenditure on EP products by resident units; (2) expenditure related to the production of EP products, including the gross capital formation, and (3) transactions related to the financing of EP expenditure. It covers both the supply and demand side. Demand equals supply:

Final consumption + Gross fixed capital formation (GFCF for characteristic environmental activities) + Exports - Imports =

Output - Intermediate consumption + VAT plus taxes less subsidies on products

 

That is, the final uses of a product equal the supply of that product. The terms can be reorganised as follows:

Final consumption + GFCF + Intermediate consumption = Output + Imports - Exports + VAT plus taxes less subsidies on products

The left side is the sought sum of expenditure on EP products by resident units. The right side proposes an alternative calculation approach, which indeed EPEA follows instead of the left side approach. There are several reasons for this choice, including that (a) output is simpler to measure than final consumption, intermediate consumption and capital formation (capital formation in EP products is rare; one instance is soil decontamination leading to land improvement); (b) imports and exports are small; and (c) output is also relevant by itself for analysis of production.

For more details see the Eurostat "Environmental protection expenditure accounts handbook":

https://ec.europa.eu/eurostat/web/products-manuals-and-guidelines/-/KS-GQ-17-004

Data is collected jointly with Eurostat, which collects data for OECD Europe countries.

Data is expressed in million national currency.

 

Country metadata

Austria) Break in series in 2009-10 for the public sector and in 2014 due to a change in sources

 

Canada) Data for the public sector refers only to the general government, for there is no data for non-profit institutions serving households. Canada conducts an annual environmental protection expenditures survey which provides a measure of the costs incurred by Canadian industries to protect the environment. However, the Canadian industrial classification does not correspond exactly to ISIC/NACE (it includes larger industrial groupings) and the survey provides estimates based on capital expenditures and not on gross fixed capital formation. Thus these data are not reported here. The survey has been redesigned for the reference year 2018 to harmonise the environmental protection activities with international classifications and extend the survey scope to include all expenditures made to protect the environment. Therefore more data is expected to be reported in the furture.

 

Costa Rica) Data for the public sector refers only to the central government

Denmark) Break in series in 2013-14: exclusion of municipality expenditure on the maintenance of public parks, recreational areas and facilities, and of expenses in relation to coastal protection from CEPA 6; lower estimates of the environmental component of administration expenditure in local governments, mainly within CEPA 4 and 6. The revision has led to a break in series in table 1 for CEPA 1 for expenditures and investment, CEPA 3 for salary and consumption and CEPA 6.

Estonia) Break in series in 2010

Finland) Break in series in 2018 due to a change in data sources (input-output tables)

France) Data for other businesses (ancillary) and for detailed economic sectors is confidential. Data for CEPA 9 includes only the expenditure of the general administration for environmental protection (ministries, local authorities, public institutions).

Israel) Data for manufacture of "other corporations (including ancillary)" include mining and electricity

 

Italy) Break in series for gross fixed capital formation in Table 3 in 2017 because the source data apply, since 2017, a new definition of the statistical unit, in order to make data comparable at the EU level. Under  the new definition, which takes into account the relationships between the legal units belonging to the same group, the enterprise is the smallest combination of legal units,  that is an organisational unit producing goods or services, which benefits from a certain degree of autonomy in decision-making. By contrast, the time series up to 2016 applies a different the definition under which one enterprise equals one legal unit. Another break occurs in 2016 in Table 1 for almost all variables and CEPA, due to the fact that in 2020  the COFOG 05 2016-2019 time series for the 2020 reporting was revised to improve the estimates, but in most cases the 2008-2015 time series was not revised. The CPA product 39 'Remediation services and other waste management services' is entirely allocated to CEPA 4. Possibile improvements would be: to single out 39.00.13 'Remediation and clean-up services, air' (CEPA 1), 39.00.14 'Building remediation services' (not EP service), 39.00.2 'Other remediation and specialised pollution control services' (all CEPA). NEEP calculated for CEPAs other than 2 and 3 is less reliable because not all calculation items are available. Similarly, NEEP calculated for CEPA 2 and 3 for years 2008-2011 is less reliable.

 

Korea) 2019 data is provisional. Final consumption expenditure for households is partial (some CEPA categories are missing), and so is the national expenditure on environmental protection.

Luxembourg) CEPA 3 only includes activities from NACE groups 38.1 and 38.2.

Mexico) "Protection of ambient air and climate" in the public sector includes measures to reduce air emissions through energy savings and efficiency, hydroelectric production and other renewable energy projects, as well as investments in cleaner transports (including maintenance). Expenditure on climate is included in CEPA 9 (other environmental protection activities). "Protection and remediation of soil, groundwater and surface water" in 2010-11 include investments in water and soil conservation activities such as tree planting and replenishment of degraded soils. In following years these expenditures have been classified under CEPA 9. Data on final consumption expenditure of households for waste management refers to household waste collection fees.

Norway) Break in series: in Table 3, oil and gas extraction are included as of 2008; in Table 4 break in 2015 due to a new data source for household consumption; in Table 1 break in 2013 for government budget for CEPA 4 and 6,

Portugal) Break in series in 2017 due to a change in the reference year (2016) in the National Account sources, and revisions due to new reporting guidelines.

Sweden) Break in series in 2015. Due to confidentiality rules, Swedish EPEA is based on modelling, and thus subject to errors.

Switzerland) Breaks in series in Table 1 due to the introduction of the revised financial statistic in 2008.

Türkiye) Break in series in 2013

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Millions
Dataset: Environment Database - Environmental Protection Expenditure AccountsContact person/organisation

Last updated: June 22, 2022

Contact: ENV.Stat@oecd.org

Environmental protection (EP) includes all activities and actions which have as their main purpose the prevention, reduction and elimination of pollution as well as any other degradation of the environment. The scope of environmental protection expenditure is defined according to the Classification of Environmental Protection Activities (CEPA 2000). CEPA distinguishes nine environmental domains.

The Environmental Protection Expenditure Account (EPEA) is a monetary description of environmental protection activities in accordance with the System of Environmental-economic Accounting (SEEA) central framework. It is coherent with the European System of Accounts (ESA 2010) which applies to national accounts and related satellite accounts.

Because the full EPEA framework is quite expensive in terms of resources to be set up, this EPEA module significantly simplifies the full framework while it still allows compiling a measure of environmental protection expenditure for the whole economy comparable with national accounts aggregates.

This data focuses on the production and uses of environmental protection services. Output of these services can be output of market, non-market and ancillary activities. EPEA is directly linked to the three definitions of GDP, the production measure, the expenditure measure and the income measure of GDP.

EPEA covers (1) expenditure on EP products by resident units; (2) expenditure related to the production of EP products, including the gross capital formation, and (3) transactions related to the financing of EP expenditure. It covers both the supply and demand side. Demand equals supply:

Final consumption + Gross fixed capital formation (GFCF for characteristic environmental activities) + Exports - Imports =

Output - Intermediate consumption + VAT plus taxes less subsidies on products

 

That is, the final uses of a product equal the supply of that product. The terms can be reorganised as follows:

Final consumption + GFCF + Intermediate consumption = Output + Imports - Exports + VAT plus taxes less subsidies on products

The left side is the sought sum of expenditure on EP products by resident units. The right side proposes an alternative calculation approach, which indeed EPEA follows instead of the left side approach. There are several reasons for this choice, including that (a) output is simpler to measure than final consumption, intermediate consumption and capital formation (capital formation in EP products is rare; one instance is soil decontamination leading to land improvement); (b) imports and exports are small; and (c) output is also relevant by itself for analysis of production.

For more details see the Eurostat "Environmental protection expenditure accounts handbook":

https://ec.europa.eu/eurostat/web/products-manuals-and-guidelines/-/KS-GQ-17-004

Data is collected jointly with Eurostat, which collects data for OECD Europe countries.

Data is expressed in million national currency.

 

Country metadata

Austria) Break in series in 2009-10 for the public sector and in 2014 due to a change in sources

 

Canada) Data for the public sector refers only to the general government, for there is no data for non-profit institutions serving households. Canada conducts an annual environmental protection expenditures survey which provides a measure of the costs incurred by Canadian industries to protect the environment. However, the Canadian industrial classification does not correspond exactly to ISIC/NACE (it includes larger industrial groupings) and the survey provides estimates based on capital expenditures and not on gross fixed capital formation. Thus these data are not reported here. The survey has been redesigned for the reference year 2018 to harmonise the environmental protection activities with international classifications and extend the survey scope to include all expenditures made to protect the environment. Therefore more data is expected to be reported in the furture.

 

Costa Rica) Data for the public sector refers only to the central government

Denmark) Break in series in 2013-14: exclusion of municipality expenditure on the maintenance of public parks, recreational areas and facilities, and of expenses in relation to coastal protection from CEPA 6; lower estimates of the environmental component of administration expenditure in local governments, mainly within CEPA 4 and 6. The revision has led to a break in series in table 1 for CEPA 1 for expenditures and investment, CEPA 3 for salary and consumption and CEPA 6.

Estonia) Break in series in 2010

Finland) Break in series in 2018 due to a change in data sources (input-output tables)

France) Data for other businesses (ancillary) and for detailed economic sectors is confidential. Data for CEPA 9 includes only the expenditure of the general administration for environmental protection (ministries, local authorities, public institutions).

Israel) Data for manufacture of "other corporations (including ancillary)" include mining and electricity

 

Italy) Break in series for gross fixed capital formation in Table 3 in 2017 because the source data apply, since 2017, a new definition of the statistical unit, in order to make data comparable at the EU level. Under  the new definition, which takes into account the relationships between the legal units belonging to the same group, the enterprise is the smallest combination of legal units,  that is an organisational unit producing goods or services, which benefits from a certain degree of autonomy in decision-making. By contrast, the time series up to 2016 applies a different the definition under which one enterprise equals one legal unit. Another break occurs in 2016 in Table 1 for almost all variables and CEPA, due to the fact that in 2020  the COFOG 05 2016-2019 time series for the 2020 reporting was revised to improve the estimates, but in most cases the 2008-2015 time series was not revised. The CPA product 39 'Remediation services and other waste management services' is entirely allocated to CEPA 4. Possibile improvements would be: to single out 39.00.13 'Remediation and clean-up services, air' (CEPA 1), 39.00.14 'Building remediation services' (not EP service), 39.00.2 'Other remediation and specialised pollution control services' (all CEPA). NEEP calculated for CEPAs other than 2 and 3 is less reliable because not all calculation items are available. Similarly, NEEP calculated for CEPA 2 and 3 for years 2008-2011 is less reliable.

 

Korea) 2019 data is provisional. Final consumption expenditure for households is partial (some CEPA categories are missing), and so is the national expenditure on environmental protection.

Luxembourg) CEPA 3 only includes activities from NACE groups 38.1 and 38.2.

Mexico) "Protection of ambient air and climate" in the public sector includes measures to reduce air emissions through energy savings and efficiency, hydroelectric production and other renewable energy projects, as well as investments in cleaner transports (including maintenance). Expenditure on climate is included in CEPA 9 (other environmental protection activities). "Protection and remediation of soil, groundwater and surface water" in 2010-11 include investments in water and soil conservation activities such as tree planting and replenishment of degraded soils. In following years these expenditures have been classified under CEPA 9. Data on final consumption expenditure of households for waste management refers to household waste collection fees.

Norway) Break in series: in Table 3, oil and gas extraction are included as of 2008; in Table 4 break in 2015 due to a new data source for household consumption; in Table 1 break in 2013 for government budget for CEPA 4 and 6,

Portugal) Break in series in 2017 due to a change in the reference year (2016) in the National Account sources, and revisions due to new reporting guidelines.

Sweden) Break in series in 2015. Due to confidentiality rules, Swedish EPEA is based on modelling, and thus subject to errors.

Switzerland) Breaks in series in Table 1 due to the introduction of the revised financial statistic in 2008.

Türkiye) Break in series in 2013

Unit of measure usedNational currencyPower codeMillions