Environmental protection expenditure accounts


Data extracted in July 2017. Most recent data: Further Eurostat information, Main tables and Database. Planned article update: June 2018.
Figure 1: National expenditure on environmental protection, EU-28, 2006–15 (1)
(million EUR and % of GDP)
Source: Eurostat (env_ac_pepsgg), (env_ac_pepssp), (env_ac_pepsnsp) and (nama_10_gdp)
Figure 2: Final consumption expenditure on environmental protection services, EU-28, 2006–15 (1)
(million EUR and % of sectoral total final consumption expenditure)
Source: Eurostat (env_ac_cepsgh), (nasa_10_nf_tr) and (nama_10_fcs)
Figure 3: General government and non-profit institutions serving households (NPISH): final consumption expenditure on environmental protection services, 2014 (1)
(% of general government and NPISH total final consumption expenditure)
Source: Eurostat (env_ac_cepsgh) and (nasa_10_nf_tr)
Figure 4: Households final consumption expenditure on environmental protection services, 2014 (1)
(% of households total final consumption expenditure)
Source: Eurostat (env_ac_cepsgh) and (nama_10_fcs)
Figure 5: Investment for environmental protection, EU-28, 2006–15 (1)
(million EUR and % of total investment)
Source: Eurostat (env_ac_pepsgg), (env_ac_pepssp), (env_ac_pepsnsp) and (nasa_10_nf_tr)
Figure 6: Corporations: investment for environmental protection, 2014 (1)
(% of corporations' total investment)
Source: Eurostat (env_ac_pepssp), (env_ac_pepsnsp) and (nasa_10_nf_tr)
Figure 7: General government and non-profit institutions serving households (NPISH): investment for environmental protection, 2014 (1)
(% of general government total investment)
Source: Eurostat (env_ac_pepsgg) and (nasa_10_nf_tr)
Table 1: General government and non-profit institutions serving households: output of environmental protection services, 2014
(million EUR)
Source: Eurostat (env_ac_pepsgg)
Table 2: Corporations as specialist producers: market output of environmental protection services for CEPA 2, CEPA 3 and CEPA 4, 2014
(million EUR)
Source: Eurostat (env_ac_pepssp)
Table 3: Other corporations: ancillary output of environmental protection services, 2014
(million EUR)
Source: Eurostat (env_ac_pepsnsp)

This article provides information about expenditure to protect the environment in the European Union (EU) and in some non-EU countries, according to the environmental protection expenditure accounts (EPEA). Environmental protection covers the activities directly aimed at the prevention, reduction and elimination of pollution or any other degradation of the environment. EPEA describe production, consumption, investment, transfers and employment in environmental protection products or activities. The main aggregate is the national expenditure on environmental protection. EPEA is one of the European environmental accounts which are compiled in line with the national accounts.

More information about the supply of environmental protection services is available from the environmental goods and services sector accounts (EGSS): see the articles on environmental economy — employment and growth and environmental goods and services sector. EPEA and EGSS are part of an integrated system of environmental accounts.

Main statistical findings

National expenditure on environmental protection represents the sum of current and capital expenditure on environmental protection activities by a country (or a set of countries), including also the net financing of those services with the rest of the world.

In 2015, national expenditure on environmental protection amounted to EUR 316 billion in the EU-28. Between 2006 and 2015 it grew by 31 % at current prices, which represents an average growth of 3 % per year — see Figure 1, left scale. In the years 2006-2008 an annual growth of 5 % was registered followed by a slight decrease (0.3 %) between 2008 and 2009, as the global financial and economic crisis unfolded. During the years 2009-2015 national expenditure on environmental protection grew more strongly again, at an annual pace of 3 %.

In the EU-28, national expenditure on environmental protection relative to gross domestic product (GDP) was 2.1 % in 2015. This ratio does not show strong evolutions over the period 2006-2015. An increase was observed between 2006 and 2009, spending on environmental protection moving from 2.0 % to 2.2 % of GDP. From 2009 onwards, very little annual changes occurred, the ratio remaining almost unchanged: in other words, the development of national expenditure on environmental protection at current prices was in line with that also observed for GDP.

The rest of this article analyses some key components of national expenditure by institutional sector.

Final consumption expenditure on environmental protection

In the EU-28, households spent some EUR 68 billion on environmental protection in 2015, accounting for about 59 % of the total final consumption expenditure on environmental protection. General government (including also non-profit institutions serving households (NPISH)) spent about EUR 47 billion (41 % of the total). Between 2006 and 2015, general government expenditure at current prices grew by 15 %, which represents an average annual growth of 1.6 %. Expenditure by households grew at a higher pace with a total growth of 37 % over the whole period, i.e. an average annual growth of 3.6 % — see Figure 2, left scale. The share of environmental protection expenditure within total final consumption expenditure stood at 1.5 % for general government in 2015, compared with 0.8 % for households (see Figure 2, right scale). The share of environmental protection expenditure within total final consumption expenditure was 0.1 percentage points lower in 2015 than in 2006 for general government whereas an opposite movement was observed for households (share moving from 0.7 % in 2006 to 0.8 % in 2015).

In EU Member States for which recent data are available, general government final consumption expenditure on environmental protection services ranged from 5.3 % to 0.3 % of total final consumption expenditure by general government (see Figure 3). This ratio was more than two times higher than EU average in Bulgaria (5.3 %), Lithuania (3.4 %), the Czech Republic (3.2 %) and the Netherlands (3.0 %). At the opposite of scale, the lowest shares were registered in Sweden (0.3 %), Portugal (0.6 %), Slovenia (0.8 %), Germany, France and Belgium (1.1 % in three last countries).

For households, the share of final consumption expenditure on environmental protection over total final consumption had much smaller variations across the EU Member States than for general government: in Member States for which data are available household final consumption expenditure on environmental protection ranged between 1.1 % (Italy) and 0.3 % (Luxembourg) of the sector's total final consumption expenditure — see Figure 4.

Environmental protection investment

This section presents the capital expenditure on environmental protection for corporations and general government. EPEA refer to this as gross fixed capital formation plus acquisitions less disposals of non-financial non-produced assets, which is hereafter referred to as investment. In 2015, corporations in the EU-28 invested some EUR 35 billion on environmental protection (about 58 % of the total investment on environmental protection), compared to EUR 25 billion by general government. Between 2006 and 2015, corporations' investment on environmental protection grew on average by 0.3 % per year (at current prices), close to the average annual growth for general government (average annual growth of 0.4 %) — see Figure 5. For both sectors, investment on environmental expenditure grew at a steadier annual pace between 2006 and 2008: + 3.5 % for corporations versus + 3.9 % for general government. A turning point was observed around 2009. Over the period 2008-2015, an annual decrease of 0.6 % per year was registered for corporations as well as for general government.

The relative importance of environmental protection investment can be analysed with the ratio relating the latter expenditure to the total investment by each sector. In the EU-28, in 2015 this share stood at 2.0 % for corporations, compared to 5.9 % for general government (see Figure 5). For both sectors the share of environmental protection investment over their total investment was higher in 2006 than in 2015: in 2006 it was 2.2 % for corporations and 6.3 % for general government.

In the EU Member States, investment on environmental protection ranged between 0.3 % and 9.9 % of the total investment (see Figure 6). Investment on environmental protection is carried out by specialist producers or other producers for which investment on environmental protection is reported as ancillary activities, — see data sources, definitions and availability. Based on the latest data available for both categories of producers, the highest shares were registered in Estonia (2010 data), Lithuania, Poland and Slovenia (above 5 %) while the lowest were observed in Ireland, Slovakia, the Netherlands, France, Italy and Belgium (shares lower than 2 %).

On average in the EU-28 investment by specialist producers accounted for 53 % of the environmental protection investments by corporations in 2015. From the latest available data by countries, more than two thirds of environmental protection investment by corporations were carried out by specialist producers in Portugal (2011 data), Austria, Belgium, Germany and Slovakia while the opposite situation occurred in Slovenia, Bulgaria, Croatia (2012 data) and the Czech Republic (more than two thirds of investments carried out by non-specialist producers acting for ancillary activities).

In the EU Member States, environmental protection investment by the general government ranged between 0.6 % and 27 % of its total investment in 2015 (see Figure 7). This share was the highest in Bulgaria, Slovenia, the Netherlands and the Czech Republic (all with more than 10 %). The lowest shares were registered in Sweden, Croatia, Denmark and Austria (all with less than 2 %).

Production of environmental protection services

This part of this article presents some measures of the production of environmental protection services, analysed down by institutional sector and environmental protection activities using the classification of environmental protection activities (CEPA 2000).

In most EU Member States the output of environmental protection services by general government was concentrated in the following environmental protection activities: waste management, wastewater management and protection of biodiversity (see Table 1). As regards pollution abatement activities the highest share was registered in Poland (27 %) far above Latvia (13 %), Austria (12 %) and Slovenia (10 %). The other domains include research and development, general environmental administration and management, education, training and information relating to the environment, as well as activities leading to indivisible expenditure and activities not elsewhere classified. The share of those activities exceeded one third of total environmental protection activities in Estonia (82 % 2010 data), France (44 %), Slovenia (37 %) and Portugal (34 %, 2011 data).

As regards the specialist producers in the corporate sector only three environmental protection activities are covered: wastewater management, waste management and protection and remediation of soil, groundwater and surface water. Among these three domains, waste management was predominant in terms of market output in all Member States except in Poland and United Kingdom where wastewater management had the highest share (see Table 2). The last domain covered (protection and remediation of soil, groundwater and surface water) generally had a lower importance, Austria being the only Member State where its share (14 %) exceeded 10 %.

In most EU Member States ancillary output of environmental protection by non-specialist producers was more evenly distributed by environmental domains. The domain of protection of ambient air and climate had the highest share in Cyprus (53 %), Germany (49 %) and Poland (46 %) — see Table 3. Wastewater management activities had the highest shares in Slovakia (52 %), the Czech Republic (44 %) and Latvia (42 %). Waste management was the highest in Slovenia (58 %) and Lithuania (42 %). The other environmental protection domains include protection and remediation of soil, groundwater and surface water, noise and vibration abatement, protection of biodiversity and landscapes, protection against radiation, R&D, general environmental administration and management, education, training and information relating to the environment, as well as activities leading to indivisible expenditure and activities not elsewhere classified. Ancillary output covering those activities had a higher share than the other environmental protection domains (considered individually) in France (63 %), Latvia (33 %) and the United Kingdom (32 %).

Data sources, definitions and availability

EPEA are part of the European environmental accounts. EPEA are consistent with the international standards of the system of environmental-economic accounting central framework (SEEA CF 2012) and broadly compatible with the international system of national accounts (SNA 2008) and its European version, the European system of national and regional accounts (ESA 2010).

The legal basis for European environmental accounts is Regulation (EU) No 691/2011 on European environmental economic accounts. Accordingly, Member States will have a legal obligation to report EPEA data from 2017 onwards.

This article is based on a voluntary data collection from the EU Member States, EFTA countries, candidate countries and potential candidates: countries not shown in this article have not delivered data or have only provided a partial data set. At the time of writing, data are available for 26 countries for various time period, covering at most 1997–2014. It should be noted that at present not all national totals comprehensively cover all types of activities and all environmental domains.

Statistics on EPEA provide a wide range of data: gross fixed capital formation and net acquisition of non-financial non-produced assets, pollution treatment investment, pollution prevention investment, final consumption, intermediate consumption, exports and imports, output, taxes less subsidies, compensation of employees, consumption of fixed capital, net operating surplus, related non-EP output (receipts from by-products), employment, current and capital transfers and earmarked taxes (for financing environmental protection measures). The data are broken down by environmental domains and by institutional sectors.

In this article, the EU national expenditure on environmental protection is calculated as the sum of the following components estimated at the EU level:

  • total environmental protection output,
  • plus environmental protection investment,
  • minus intermediate consumption of environmental protection services by corporations as specialist producers.

The imports, exports and international transfers of environmental protection services between the EU-28 and the rest of the world, as well as the VAT and other taxes less subsidies on environmental protection services, are not estimated yet due to incomplete data sources. It is assumed that these components have a small impact on the total national expenditure of the EU-28 as a whole. It is expected to improve the national expenditure on environmental protection estimates in 2018.

EPEA can make use of the already existing information from the following accounts and statistics: national accounts, structural business statistics, labour statistics and trade statistics. Data sources used include surveys, administrative sources and statistical estimations. The EU results shown in this article are based on data transmitted by the Member States completed by estimates.

Sectors

Institutional sectors are defined in SEEA CF 2012 and ESA 2010. EPEA uses the following groupings: corporations, general government (and non-profit institutions serving households), households, the rest of the world (as beneficiary or origin of transfers for environmental protection). This article does not report results for the rest of the world sector.

The corporation sector covers all units classified in national accounts in sectors S.11 and S.12. It includes in particular the output of specialist producers (in other words, the units of the corporation sector whose principal activity is the production of environmental protection services — these can be found in particular in NACE Rev. 2 Divisions 37 and 39 and Groups 38.1 and 38.2). The secondary output of environmental protection services by corporations is also included in the data for specialist producers. The ancillary activities of corporations other than specialist producers are also included in EPEA as a separate heading. Environmental protection ancillary activities are undertaken by non-specialist producers in order to make their own production cleaner.

Environmental domains

The scope of EPEA is defined according to the classification of environmental protection activities (CEPA). Data are collected and disseminated using the following breakdown:

  • CEPA 1 — Protection of ambient air and climate
  • CEPA 2 — Wastewater management
  • CEPA 3 — Waste management
  • CEPA 4 — Protection and remediation of soil, groundwater and surface water
  • CEPA 5 — Noise and vibration abatement
  • CEPA 6 — Protection of biodiversity and landscapes
  • CEPA 7 — Protection against radiation
  • CEPA 8 — Environmental research and development
  • CEPA 9 — Other environmental protection activities

CEPA is a recognised international standard included in the family of international economic and social classifications. It can be downloaded from the Ramon website.

Context

The increased awareness of the need to combat environmental pollution and preserve natural resources has led to an increase in the supply and demand of environmental goods and services, in other words, products to prevent, measure, control, limit, minimise or correct environmental damage and resources depletion.

In the context of globalisation, technological change and new political priorities, policy makers have expressed strong interest in the environmental sector. This is widely seen as a sector with great potential for growth, generating wealth and creating jobs as well as playing a major role in the transition of economies towards sustainable development. See, for example, the 'Employment Package’ of the European Semester launched in April 2012 and the Decision of the European Parliament and of the Council on a General Union Environment Action Programme to 2020 (20/11/2013) "Living well, within the limits of our planet". Nationally and internationally, data from environmental goods and services sector accounts are of interest to policymakers and the research community, especially in the field of economics.

Statistics on environmental protection expenditure enable to identify and measure society's response to environmental concerns and how it is financed. Environmental protection expenditure accounts (EPEA) quantify the resources devoted to environmental protection by resident economic units. They thus report the effort made by society and businesses towards implementing the ‘polluter pays principle’. Environmental protection expenditure accounts contribute directly to the EU's policy priorities on environmental protection, resource management and green growth by providing important information on the production and the use of environmental protection services.

See also

Further Eurostat information

Publications

Database

Environmental protection expenditure accounts (env_ac_epea)
National expenditure for environmental protection by economic characteristics (env_ac_epneec)
Production of environmental protection services (env_peps)
Production of environmental protection services of general government by economic characteristics (env_ac_pepsgg)
Production of environmental protection services of corporations as specialised producers by economic characteristics (env_ac_pepssp)
Production of environmental protection services of corporations other than specialised producers by economic characteristics and NACE Rev. 2 activity (env_ac_pepsnsp)
Consumption of environmental protection services (env_ceps)
Final consumption expenditure on environmental protection services by institutional sector (env_ac_cepsgh)
Intermediate consumption of environmental protection services by institutional sector and NACE Rev. 2 activity (env_ac_cepsgc)
Environmental protection transfers by environmental protection activity and institutional sector (env_ac_eptrf)

Dedicated section

Methodology / Metadata

  • Methodological publications
  • ESMS metadata files

Source data for tables, figures and maps (MS Excel)

Other information

Regulation (EU) No 691/2011 on European environmental economic accounts amended by Regulation (EU) No 538/2014

External links