Environmental economy – statistics on employment and growth


Data extracted: June 2020

Planned article update: June 2021

Highlights
Employment and value added in the EU environmental economy grew faster than in the overall economy between 2000 and 2017.

Development of key indicators for the environmental economy and the overall economy, EU-27, 2000–2017

This article presents statistics on employment and growth in the European Union’s (EU’s) environmental economy, as it is defined in the European environmental goods and services sector (EGSS) accounts. The environmental economy encompasses activities and products that serve either of two purposes: ‘environmental protection’ — that is, preventing, reducing and eliminating pollution or any other degradation of the environment or ‘resource management’ — that is, preserving natural resources and safeguarding them against depletion. EGSS accounts provide information on production (output) and export of environmental goods and services and the related employment and gross value added.


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Development of key indicators for the environmental economy

According to Eurostat estimates, employment in the EU-27 environmental economy increased from 3.1 million full-time equivalents in 2000 to 4.2 million full-time equivalents in 2017. The environmental economy generated EUR 698 billion output and EUR 287 billion gross value added in 2017. Between 2000 and 2017, employment and gross value added grew faster in the environmental economy than in the overall economy (see Figure 1).

Figure 1: Development of key indicators for the environmental economy and the overall economy, EU-27, 2000–2017
(2000 = 100)
Source: Eurostat (env_ac_egss1), (env_ac_egss2), (nama_10_gdp) and (nama_10_a10_e)

The first decade of the millennium was a period of almost steady job creation in the environmental economy. Employment increased on average 2 % on an annual basis. The declining employment in 2003 marks an exception in a period of growth, which came to an end in 2011. From 2012 to 2014, job numbers fell in three consecutive years. Since then, employment has grown again, reaching in 2017 similar levels as in 2011.

Between 2000 and 2017, the environmental economy has outperformed the overall economy in terms of employment and value added. Even in 2009, when the financial crisis led to a 4 % contraction in GDP, gross value added from the production of environmental goods and services remained relatively stable. In the aftermath of the crisis, the environmental economy showed a strong growth until 2011 and remained stable in the three following years. Since 2014, gross value added of the environmental sector has been growing on average 4 % annually, thereby showing a higher growth rate than GDP in that period.

Employment by environmental domain

Employment in the environmental economy can be broken down by environmental protection and resource management activities, following the classification of environmental protection activities (CEPA) and the classification of resource management activities (CReMA); see section Data sources for more information). Figure 2 presents a breakdown into three environmental protection activities (wastewater management; waste management; other environmental protection activities) and two resource management activities (water saving; renewable energy and energy efficiency) . Employment related to renewables and energy efficiency grew by a factor of 2.6 since 2000. Employment in waste management also increased while, the number of full-time jobs in the other domains decreased.

Job creation related to renewable energy and energy efficiency stems from the production of renewable energy itself as well as from the manufacturing of renewable energy and energy-efficient equipment, and the provision of pertinent installation, engineering and research services. Employment in this domain increased from 0.6 million full-time equivalents in 2000 to 1.5 million full-time equivalents in 2017. In other words: almost one million new full-time equivalent jobs have been created in the EU-27 between 2000 and 2017 through renewables and energy-efficiency measures. The second largest contribution to environmental employment came from waste management, with the number of jobs increasing from 0.8 million full-time equivalents in 2000 to 1.2 million full-time equivalents in 2017 (overall increase of 38 %). By contrast, employment related to wastewater management decreased in the same period by 23 % from 0.7 million to 0.5 million full-time equivalents. Whereas environmental protection accounted for more than three quarters (78 %) of the employment in the environmental economy in 2000, the share decreased to 62 % in 2017 following the creation of new jobs related to renewables and energy-efficiency.

Figure 2: Employment in the environmental economy, by domain, EU-27, 2000–2017
(thousand full-time equivalents)
Source: Eurostat (env_ac_egss1)

Employment, production and value added in the environmental economy

The environmental economy can also be analysed with a view on production units, using the statistical classification of economic activities (NACE). Because units producing environmental goods and services can engage in a range of activities, an analysis by economic activity provides a complementary picture to the analysis by environmental domain. Table 1 follows this alternative approach. It shows that most employment within the EU-27 environmental economy in 2017 was related to energy and water supply, sewerage, waste management and remediation activities (NACE Sections D and E) with 1.4 million full-time equivalents followed by construction (NACE Section F) with 1.1 million full-time equivalents. The environmental economy also provides 0.8 million full-time equivalent jobs related to other services activities and 0.4 million full-time equivalent jobs each in mining, quarrying and manufacturing and in agriculture, forestry and fishing.

Table 1: Employment, production and value added in the environmental economy, by activity, EU-27, 2017
Source: Eurostat (env_ac_egss3)

Table 1 also depicts total output and gross value added. Inn 2017, energy and water supply, sewerage, waste management and remediation activities generated some EUR 116 billion, or 41 % of the value added of the environmental economy (see Figure 3). Construction contributed EUR 60 billion of value added or 21 % to the total gross value added of the environmental economy. This activity includes energetic refurbishment of existing buildings and the construction of new energy-efficient buildings as well as noise insulation work, maintenance and repair of water networks, construction work for wastewater and waste treatment plants and sewerage systems. Miscellaneous services generated together EUR 56 billion of value added (19 % of the total) for the environmental economy. The remaining activities contributed 12 % (mining, quarrying and manufacturing) and 7 % (agriculture, forestry and fishing) to the gross value added of the environmental economy.

Labour productivity expressed as value added per full-time equivalent is highest for energy and water supply, sewerage, waste management and remediation activities, generating on average EUR 82 400 per full-time equivalent job (generating 41 % of the value added of the environmental economy with 34 % of the labour input). Labour productivity is lowest in agriculture and forestry, which generated on average EUR 48 400 per full-time equivalent (generating 7 % of the value added of the environmental economy with 11 % of the labour input). For more information on productivity, please refer to the article on material flow accounts and resource productivity.

Figure 3: Gross value added of the environmental economy, by activity, EU-27, 2017, (%)
Source: Eurostat (env_ac_egss3)

Evolution of gross value added of the environmental economy

Gross value added of the environmental economy increased from EUR 130 billion in 2000 to EUR 287 billion in 2017 (Figure 4; note that the trend is based on current prices as chain-linked volumes for all environmental and resource management activities are not yet available). Also the contribution of the environmental economy to GDP increased, namely from 1.6 % in 2000 to 2.2 % in 2017. Gross value added of the environmental economy rose steadily between 2000 and 2008, reaching EUR 217 billion. It declined in 2009 as a result of the financial crisis but showed robust growth in 2010 and 2011, and in all years after 2014.

Gross value added of environmental protection activities increased from EUR 99 billion in 2000 to EUR 166 billion in 2017. The contribution of environmental protection to GDP remained stable over this period at 1.2-1.3 %. Gross value added of resource management activities had a lower baseline value in 2000, namely EUR 31 billion (or 0.4 % of GDP) but grew faster to reach EUR 121 billion (or 0.9 % of GDP) in 2017, largely due to growth in the renewable energy sector.

Figure 4: Gross value added of the environmental economy, by domain, EU-27, 2000–2017, (EUR billion)
Source: Eurostat (env_ac_egss2)

Source data for tables and graphs

Data sources

This article presents data from the environmental goods and services sector (EGSS) accounts, which constitute one of the six modules of the European environmental economic accounts. Environmental economic accounts analyse the interaction between the environment and the economy by organising environmentally relevant information on the economy in a way that is consistent with the accounting principles of national accounts. Environmental economic accounts can be used, for example, to identify the most polluting economic activities or activities that contribute most to the depletion of natural resources. They also provide information on the interaction of government and households with the environment, on the expenditures for protecting the environment and, in the case of EGSS, on the economic activity dedicated to environmental protection and resource management. European environmental accounts are established by Regulation (EU) No 691/2011; Annex V of the regulation sets out the reporting requirements for Member States. The first data collection happened in 2017. Since then, data for the environmental goods and services sector are collected on an annual basis.

The accounts for the environmental goods and services sector provide information on output, gross value added, employment, and export related to the production of goods and services that help protecting the environment or preserving the stock of natural resources. Eurostat's methodology for data recording is in line with the United Nations (UN’s) system of integrated environmental and economic accounting (SEEA), which is an international statistical standard.

This article focuses on employment and gross value added; the latter is given in volume terms, as chain-linked volumes for the reference year 2010 (at 2010 exchange rates; Figure 1) and for individual activities in current prices (i.e., at prices of the year to which the data refer; Figure 4). The volume measures are overall used to analyse the economic growth over time, discounting the effect of price changes.

The scope of the environmental goods and services sector is defined in the Commission Implementing Regulation (EU) No 2015/2174, comprising an indicative compendium of environmental products and activities.

The EU aggregates reported in this article are not yet compiled as a direct sum of EU Member States estimates. Instead, Eurostat uses a standardised data integration approach combining data available from various Eurostat data collections and other international and national sources, including: national accounts, environmental expenditure statistics and accounts, structural business statistics, industrial commodity statistics, labour statistics, international trade statistics, agriculture statistics and energy statistics. The methods are documented in the EGSS Handbook and the EGSS Practical Guide.

EGSS variables

Employment is defined as in national accounts. It is measured in full-time equivalents (total hours worked divided by the average annual hours worked in a full-time job).

Output is the total value of goods and services that have been produced for use outside of the producer unit, for own final use or for inventories at the end of the reporting period. The environmental goods and services sector accounts distinguish between market and non-market output, output for own final use and for ancillary use, the latter consisting of products for further transformation in down-stream production processes within the enterprise.

Gross value added represents the contribution of environmental goods and services towards GDP. In broad terms, it is the difference between the value of production output and intermediate consumption.

EGSS scope and environmental domains

The environmental goods and services sector accounts comprise two broad groups of activities and products:

  • environmental protection — activities whose purpose is to prevent, reduce and eliminate pollution and any other degradation of the environment;
  • resource management — activities whose purpose is to preserve and maintain natural resources, hence safeguarding them against depletion.

EGSS data are collected and disseminated following established schemes for the classification of environmental protection activities (CEPA) and resource management activities (CReMA):

CEPA 1 — protection of ambient air and climate, of which,
CEPA 1.1.2 and 1.2.2 — protection of climate and ozone layer
CEPA 2 — wastewater management (aka sewerage)
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
CReMA 10 — management of water (aka water saving)
CReMA 11 — management of forest resources, of which,
CReMA 11.A — management of forest areas
CReMA 11.B — minimisation of the intake of forest resources
CReMA 12 — management of wild flora and fauna
CReMA 13 — management of energy resources
CReMA 13A — production of energy from renewable resources
CReMA 13B — heat/energy saving and management (aka energy efficiency)
CReMA 13C — minimisation of the use of fossil energy as raw materials
CReMA 14 — management of minerals
CReMA 15 — research and development activities for resource management
CReMA 16 — other resource management activities

CEPA 2000 is a recognised international standard included in the family of international economic and social classifications. It can be downloaded from the Ramon website.

Context

Climate change, environmental degradation and unsustainable resource use present an existential threat to Europe. To meet this challenge, the Commission has adopted in 2019 the European Green Deal - an ambitious roadmap for a sustainable, resource-efficient and competitive economy. The goods and services produced by the environmental economy are central to this ambition.

The accounts of the environmental goods and services sector provide the ideal framework to compile and report data on employment directly related to production activity intended to protect the environment and to manage natural resources. National and EU-wide data on the environmental economy can provide rationale for policy intervention and serve as a benchmark for policy targets under the European Green Deal. Being compatible with the concepts from national accounts, EGSS data can provide input to microeconomic and macroeconomic analyses and multi-disciplinary research initiatives.

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Environmental goods and services sector (env_egs)
Employment in the environmental goods and services sector (env_ac_egss1)
Production, value added and exports in the environmental goods and services sector (env_ac_egss2)
Production, value added and employment by industry groups in the environmental goods and services sector (env_ac_egss3)