Archive:Environmental protection expenditure

Data from September 2007, most recent data: Further Eurostat information, Main tables and Database.

Figure 1: Breakdown of environmental protection expenditure by the public sector, EU-25, 2002 (%)

Figure 2: Breakdown of environmental protection expenditure by industry, EU-25, 2002 (%)

Figure 3: Breakdown of environmental protection investment by industry, EU-25, 2002 (%)

Without environmental policies, the costs resulting from pollution would have to be met by society as a whole. As European Union environmental protection policies fall into place, the financial burden is shifting to those enterprises or individuals at the source of the pollution. This is the 'polluter pays' principle, which is seen as a key tool for reducing overall pollution.

This article compares the amount of money spent by the public and the private sectors and shows that, while the proportion spent by industry is on the whole is significantly lower, it has spent a relatively higher proportion on air protection.

Main statistical findings

An analysis of environmental protection expenditure shows that there are considerable differences between expenditure incurred by the public sector (see figure 1) and that incurred by industry (see figure 2). Indeed, the share of total environmental protection expenditure incurred by the EU-25’s public sector for non-core domains (administrative costs) in 2002 was 3.9 times as high as that incurred by industry.

However, a relatively low proportion (less than 2 %) of EU-25 public expenditure on environmental protection was devoted to air protection, while the share of environmental protection expenditure on tackling air pollution made by industry reached almost one quarter (23.3 %). Industry spent almost equal shares on wastewater (30.5 %) and waste (29.9 %) as a proportion of total industrial environmental protection expenditure.

An analysis of investment expenditure by industry for environmental protection shows that industry dedicated more than one third (35.9 %) of such investment to air protection, while wastewater accounted for just over one quarter (26.7 %) and waste for 15.2 % (see figure 3). The remaining share of investment for environmental protection by industry was used for none-core domains.

Data sources and availability

Data on environmental expenditure are collected from European countries through the joint OECD/Eurostat questionnaire on environmental protection expenditure and revenues. The questionnaire has been revised to have an accounting structure close to the Environmental protection expenditure account (EPEA), an internal OECD satellite account comprising production and generation of income accounts and a supply and use table for environmental protection activities and products (see ’Environmental protection expenditure accounts – compilation guide’).

Environmental protection expenditure is defined as the money spent on all purposeful activities directly aimed at the prevention, reduction and elimination of pollution or nuisances resulting from the production processes or consumption of goods and services. Excluded are activities that, while beneficial to the environment, primarily satisfy technical needs or health and safety requirements. Environmental protection expenditure is classified into different economic sectors (public, agriculture, industries, and households), financial variables (treatment and prevention investments, current expenditure, subsidies, etc.) and environmental domains (of which nine areas including air, water, waste, soil, noise, biodiversity and landscape, are distinguished in the European standard statistical classification of environmental protection activities.

Non-core expenditure consists of administrative costs, such as the labour costs associated with running environmental departments or government-funded agencies. Investment expenditure includes outlays in a given year (purchases and own-account production) for machinery, equipment and land used for environmental protection purposes.

Context

At the time of writing, the Council of the European Union and the European Parliament were considering a recast of seven Directives pertaining to air pollution to form the Industrial Emissions Directive. This recast includes the integrated pollution prevention and control directive which aims to prevent or reduce pollution of the atmosphere, water and soil, as well as the quantities of waste arising from industrial and agricultural installations, to ensure a high level of environmental protection.

According to the European Commission, the largest industrial installations in Europe account for a considerable share of total emissions of key atmospheric pollutants (83% for sulphur dioxide (SO2), 34% for oxides of nitrogen (NOx), 43% for dust and 55% for volatile organic compounds (VOC)). They also have other important environmental impacts, including emissions to water and soil, generation of waste and the use of energy.

Further Eurostat information

Publications

Main tables

Environment (t_env), see:

Environmental Accounts (t_env_acc)

Environmental expenditure by the public sector (ten00049)

Current environmental expenditure by the public sector (ten00051)

Current environmental expenditure by industry (ten00054)

Environmental investment by the public sector (ten00050)

Environmental investment by industry (ten00053)

Environmental protection expenditure by industry (ten00052)

Distribution of environmental protection expenditure by the public sector by domain - 2002 (ten00055)

Distribution of environmental protection expenditure by industry by domain - 2002 (ten00058)

Distribution of environmental investment by industry by domain - 2002 (ten00059)

Database

Environment (env), see:

Environmental Accounts (env_acc)

Monetary flow accounts (env_acm)

Environmental protection expenditure in Europe - indicators: Euro per capita and % of GDP (env_ac_exp2)

Environmental protection expenditure in Europe - indicators: % Pollution prevention, % of gross fixed capital formation, % of output (env_ac_exp3)

Environmental protection expenditure in Europe - indicators: Distribution by industries (% of total industry) (env_ac_exp4)

Environmental protection expenditure in Europe - indicators: Distribution by environmental domains (% of total) (env_ac_exp5)

Environmental protection expenditure in Europe - detailed data (env_ac_exp1)

Environmental protection expenditure in industry (NACE Rev.1.1 C to E) - reference years 1995-2000 (sbs_env_2b_95)

Environmental protection expenditure by environmental domains (NACE Rev.1.1 C to E) - from 2001 onwards (sbs_env_2b_02)

Environmental protection expenditure by size classes (NACE Rev.1.1 C to E) - from 2001 onwards (sbs_env_2o_sc01)

Environmental protection expenditures by EU institutions (env_ac_expeu)

Environmental tax revenue (env_ac_tax)

Environmental taxes by industry (NACE A31) (env_ac_taxind)

Dedicated section

Environment

Archive:Environmental protection expenditure

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