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Environmental protection expenditure accounts (env_ac_epea)

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National Reference Metadata in Single Integrated Metadata Structure (SIMS)

Compiling agency: National Institute of Statistics Romania

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Environmental protection expenditure accounts (EPEA) describe transactions related to preventing, reducing and eliminating pollution and any other degradation of the environment. The main aggregate resulting from EPEA is national expenditure on environmental protection (NEEP), which measures the resources dedicated by resident businesses, households and government to protecting the natural environment, cover uses of environmental protection services, investment (gross fixed capital formation) for environmental protection activities, and net transfers to the rest of the world for environmental protection. Countries are required to report on: output, consumption, imports and exports of environmental protection services,  investment (gross fixed capital formation and acquisitions less disposals of non-produced non-financial assets) for the production of EP services, transfers for environmental protection.

27 December 2023

The construction of the EPEA closely follows the concepts, definitions and accounting rules of the core national accounts. The SEEA-CF 2012 (section 4.2) identifies environmental protection activities as those activities whose primary purpose is the prevention, reduction and elimination of pollution and other forms of degradation of the environment. These activities include, but are not limited to, the prevention, reduction or treatment of waste and wastewater; the prevention, reduction or elimination of air emissions; the treatment and disposal of contaminated soil and groundwater; the prevention or reduction of noise and vibration levels; the protection of biodiversity and landscapes, including of their ecological functions; monitoring of the quality of the natural environment (air, water, soil and groundwater); research and development on environmental protection; and the general administration, training and teaching activities oriented towards environmental protection proposes to use the primary purpose criterion, recognising that many economic activities are undertaken for a variety of purposes, environmental and non-environmental ones.

Environmental protection expenditure accounts present data, in a way that is compatible with the data reported under ESA, on the expenditure for environmental protection, i.e. the economic resources devoted by resident units to environmental protection. EPEA use statistical units from national accounts. National accounts define and use various statistical units and groupings of units that interact economically (see ESA 2010, §§ 1.54-1.56, 2.01-2.03).

The statistical population is the national economy as defined in SEEA CF 2012 and the European System of Accounts (ESA 2010). It includes all economic activities undertaken by resident units to produce environmental protection specific services. While some economic activities may be undertaken only for a single purpose, many activities are undertaken for a variety of purposes. Following general principles of classification, activities are deemed to be environmental activities only if the primary purpose of the activity is consistent with the definitions of the environmental protection.

The reference area is the economic territory as defined in the European System of Accounts (ESA 2010). A unit is said to be a resident unit of a country when it has been centre of economic interest in the economic territory of that country, that is, when it engages for an extended period (1 year or more) in economic activities in that territory.

The data refer to the calendar years.

We ensured a high level of accuracy for the data reported through reassessment of data sources, performed by analysis and study of relevant methodological documents required in elaborating the EPEA and evaluation of the EP field in Romania. We analyzed the linkage between the Romanian NA system and the environmental accounts, according to the indicators requested by Eurostat. We carried out a comparative analysis between data collected from the three available data sources (NA, EPE survey and SBS), we identified and we analyzed the differences.

Macro economic variables (output, intermediate consumption, investment etc.) are measured in million units of national currency.

S13_S15)  We used data from "General government expenditure by function" ‒ Table 11 ‒ from ESA 2010 transmission programme (COFOG), ESA 2010 Questionnaire 1100 ‒ General government expenditure by function (S1311 ‒ Central government) and ESA 2010 Questionnaire 1100 ‒ General government expenditure by function (S1313 ‒ Local government), for example: Other taxes less subsidies on production (D.29-D.39), Subsidies (D.3P), Other current transfers (D.7), Capital transfers: of which, Investment grants (D.92), Other capital transfers (D.99).
Also, we used data resulted from the annual Statistical Survey on EPE, performed annual by National Institute of Statistics (NIS), for 2016-2021: the questionnaires EPE for central public administration ‒ AS_CPM_CAPC and the questionnaires EPE for local public administration ‒ AS_CPM_CAP(exhaustive survey).

We considered "Market output" for GG as being the following indicators from EPE survey: "Own revenues of public institutions” (Central government) and “Revenues from EP services provided to third parties” (Local government).
For GG, total "EP output" is valued at the total costs of production, i.e. the sum of intermediate consumption, compensation of employees, consumption of fixed capital and other taxes on production and the "Non-market output" is calculated like difference of "EP output" and  "Market output".

S11_S12) Corporations as specialized and secondary producers of market EP services and Table 3) Corporations: other (also covering producers of ancillary EP services)

Survey on EPE made by nonspecialized producers”. We used data for certain indicators, such as: Total Intermediate consumption (P.2) (and Intermediate consumption: of which EP services, only for specialized producers), Compensation of employees (D.1) and Current transfers (D.3) (Subsidies received from state budget).
The sampling base for specialized and nonspecialized producers is constituted annually, based on data requested from Statistical Register (REGIS).  
Specialized producers (NACE Rev. 2 under divisions 37, 38, 39) are surveyed exhaustively.
Beside of EPE survey, we used data from National Account, respectively Input - Output table, production account and generation of income account by NACE Rev. 2 classes and by institutional sectors (ESA 2010).

"Market output" for non-specialized producers with secondary EP output (NACE Rev. 2: classes 2211, 4291, 4311, 4677, 7112 and 7490) is the sum of costs: intermediate consumption, compensation of employees, consumption of fixed capital and other taxes on production less other subsidies on production.
Following the discussion with the NA experts and the analysis of the supply-use tables, we identified the method of estimating non-market output for specialized producers (NACE Rev. 2, 37, 38, 39).
For this, we used data from supply-use tables (P.11 market output, P.13 non-market output) and data from EPE survey linked with market output. To obtain data for market and non-market output for specialized producers we also used data from EPE Survey.
"EP output" for specialized producers is valued at the total costs of production, i.e. the sum of intermediate consumption, compensation of employees, consumption of fixed capital, net operating surplus and other taxes on production less other subsidies on production. The  "market output" for specialized producers was estimated: in a first stage we calculated "EP output" (see above); after this, we calculated the share of "market output" (P.11) in "total output" (P.1 production of goods and services) from NA. This share was applied at the "EP output". The difference of "EP output" and "Market output" represents "Non-market output". For NACE 01 data source is Agriculture Accounts.
Ancillary output for non-specialized producer with ancillary EP output (NACE Rev. 2: divisions 01, 02, 05-09; 10-33, 35, 36, 41-43, 49-51,72) is valued at the total costs of production, i.e. the sum of intermediate consumption, compensation of employees, consumption of fixed capital and other taxes on production less other subsidies on production.

All the data provided by National Account, used for corporations (specialized and non-specialized producers) was received already breakdown by institutional sectors. As we asked, the Input - Output table, including production account and generation of income account by NACE Rev. 2 divisions (and classes, for some indicators) was for S.11 sector ‒ Non-financial corporations.

Ancillary output for non-specialized producers with ancillary EP output (NACE Rev. 2 is valued at the total costs of production, i.e. the sum of intermediate consumption, compensation of employees, consumption of fixed capital and other taxes on production less other subsidies on production.

Data for imports and exports of EP services was provide by the Supply - Use Balance - current prices was provide by NA breakdown by classes. For the period transmitted, data for non-specialized producers with secondary EP output (NACE Rev. 2: classes 2211, 4291, 4311, 4677, 7112, 7490) were estimated.

S1_S2) Total supply of environmental protection services
For computing the data for Import (P.7), Export (P.6) and VAT and other taxes less subsidies on EP products (D.21-D.31) we used data from NA, namely Input-Output table, Supply-Use Balance, by classes of NACE Rev. 2.

S14) Households

Table B1- PM service inputs and outputs From the table Echi_RU_CN, export, import, VAT, final consumption by specialized and secondary sectors are calculated with data from National Accounts.

Table A -National expenditure by components: Prodrom, productive consumption and total EGGS production value
The Final consumption of adapted and connected products was provide by EGSS.
The final consumption of EP services was calculated based on data from Input-Output table, Supply-Use Balance.

Transfers
For Transfers we used data from ESST source for period 2014-2016, and for the rest of the period our data source is EPE Survey.

EPE survey for public administration: CEPA domain:

Transactions as producers of EP services

  • Intermediate consumption (P.2);
  • Intermediate consumption, of which PM services (P2_EPS);
  • Compensation of employees (D.1);
  • Final consumption of EP services (P3_EPS.1);
  • Gross capital formation (P.51G);
  • Investment grants received.

Transactions as users of EP services

  • Final consumption of EP services (P.3)

National Accounts:

  • Consumption of fixed capital (P51C);
  • Other taxes on production (D29);
  • Less subsidies on production (D39);
  • COFOG (Classification of the functions of government)
  • Transfers (D3_7_92_99_R) data from COFOG (2017-2022)
  • Transfers (D3_7_92_99_P) data from COFOG (2017-2022)
  • Export, import, TVA, final consumption;
  • Consumption of fixed capital (CCF_S11).

Agricultural account:

  • Intermediate consumption; Other production subsidies, Other production taxes, Investment grants, Other capital transfers, Gross fixed capital formation.

EGGS account:

  • Environmental production value for adapted goods.

ESST account:

  • For Transfers we used data from ESST source for period 2014-2016.

National release calendar for EPEA account data: 30 March 2024 TEMPO (NIS online database), 20 December 2024 annual publication on environmental economic accounts.

Data are disseminated annually.

 

Romania transmits the data to Eurostat every year in December covering the years 2014 - n-2 (n = current year).

The average production time for data is 12 months.

Data on EPEA are compiled according to harmonized guidelines provided by Eurostat and hence comparable across European countries reporting EPEA data to Eurostat.

We have breaks in series:

  • starting with year 2017, because we added NACE Rev. 2 classes 7112 and 7490 at producers with secondary EP output. In addition, we added NACE Rev. 2 division 72 at producers with ancillary EP output .
  • we also flag transfers with b) because starting with 2016 we changed the data source (2014-2015 - ESST, 2016-2022 - EPE survey).
  • we have breaks in series at import, export and VAT, because we have added NACE Rev.2 classes 7112 and 7490 at secondary producers of EP.