Point 12 of the Agenda

Doc. PHARE/99/12

Original in EN

Point 12 of the agenda

STATISTICAL OFFICE

OF THE EUROPEAN COMMUNITIES

F3 – ENVIRONMENT

PHARE/99/15 P. 1

Evaluation of the Quality of Environment Expenditure Data

Version March 1999

Eurostat F3 - Kaia Oras

PHARE/99/15 P. 1

Phare Workshop on Environment Statistics

Jointly organised by the Phare Programme and Eurostat F3 - Statistics of the Environment

Meetings of 13, 14 and 15 September 1999

Bech Building – Room "Quételet"

PHARE/99/15 P. 1

Evaluation of the quality of the data on

pollution abatement and control expenditures

This report on the evaluation of the quality of the data onpollution abatement and control expenditures for CEC countries reflects the present state of work on the data. The evaluation is based on the replies from the Joint Eurostat OECD Questionnaire State of Environment part PAC1 and PAC2 and on the data available in ENVSTAT on March 8, 1999.

The quality of the data is evaluated according to the following criteria: data availability, currency (latest available year), consistency of time series, transparency, comparability in time.

Availability of data

• Components of environmental expenditures

Data from eight countries are available for analyses. Two countries out of ten have not provided any data on environmental expenditures (Slovakia and Lithuania). However, the level of environmental expenditure variables provided (investments, current expenditures, receipts from by-products, total expenditures) varies a lot, which makes it difficult to analyse and present data on a common basis (Table 1). For the latest available year, Hungary has only provided figures for end-of-pipe investments, the Czech Republic for total investments, Bulgaria, Slovenia, Romania and Poland for investments and current expenditures, Estonia for investments, current expenditures and receipts from by-products. At present Expenditure 1 (investments plus current expenditures less receipts from by-products) could be properly calculated only for Estonia. None of the countries have provided data on environmental fees and charges, which means that aggregations on level expenditure 2 are not available. (Table 1)

• Economic sectors

Availability of data on the level of variables provided as indicated above (investments, current expenditures, receipts from by-products, total expenditures) is similar for both public and business sectors (Table 1).

Concerning the main economic activities at the level of variables provided as mentioned above, the economic breakdown is in the main available for all of the countries (Table 2). Two countries - Estonia and Romania - have also provided data on environmental expenditures made on behalf of specialised enterprises.

Breakdown by branch of manufacturing industry (NACE) is provided by all of the countries for the above-mentioned variables (Table 3)

• Environmental domains

The distribution between the main environmental domains (water and soil, waste, air, noise, others) is available for all of the countries which provided data except Romania. The proportion of environmental expenditures for ground water and soil protection and waste water treatment out of total investments made for water and soil protection cannot be differentiated for Bulgaria, Czech Republic and Poland. The proportion of environmental expenditures for waste treatment and waste collection out of the total environmental expenditures for waste management is not known for Czech Republic, Estonia and Poland. The proportion of environmental expenditures for air protection and noise is provided by all of the countries providing the distribution.

Availability of time series

The level of environmental expenditure variables provided (investments, current expenditures, receipts from by-products, total expenditures) varies a lot between the countries. Accordingly, this makes it impossible to compare time series on common bases (Table 1). Hungary has the longest time coverage (end-of-pipe investments – 1990-1996), Bulgaria and Slovenia cover 1992-1996 (investments, current expenditures), the Czech Republic covers 1993-1996 (investments), Estonia covers 1994-1997 (investments, current expenditures, receipts from by-products) and Poland provided data covering different levels of variables for the years 1995-1997 (investments in 1995, investments and current expenditures 1997).

Quality of the data provided

With regard to totals and their disaggregations, total expenditure breakdown by economic activity sectors (agriculture, hunting and fishing; mining and quarrying; total manufacturing, electricity, gas and water supply; others), and breakdown by the environmental domains, did not tally in four countries of the seven presenting data.

The NSOs were contacted in order to check the discrepancies in tables and were asked for clarifications. Since some countries have not replied, corrections have not been made for all countries at present.

Consistency of time series, reliability and transparency

Due to the high inflation rate in certain countries, time series of environmental expenditures presented in national currency can not be analysed. Accordingly, deflators should be used in order to assure comparability in time series.

For the analysis of time series and validation of data, all figures are presented as a proportion of the appropriate macroeconomic aggregates:

• Total investments and current expenditures as a proportion of GDP (overview - Table 4)
• Investments as a proportion of the appropriate macroeconomic aggregate gross fixed capital formation (Overview - Table 5)
• Public sector investments as a proportion of the appropriate macroeconomic aggregate public sector gross fixed capital formation (Overview – Table 6)
• Business sector investment expenditures as a proportion of the appropriate macroeconomic aggregate business sector gross fixed capital formation (Overview - Table 7)

For a number of countries the appropriate macro economic aggregates are not available in Eurostat yet or are not available on a detailed enough level:

• Public sector gross fixed capital formation is missing for Hungary, Slovenia and Estonia; time series of gross fixed capital formation of public sector is incomplete for Romania and the Czech Republic for the years 1992-1997 and the year 1997 is missing for all of the countries.
• Business sector gross fixed capital formation is missing for the Czech Republic, Estonia, Slovenia, Latvia.
• Business sector gross fixed capital formation by main economic branches is available only for Poland and Hungary, and only for some years.
• Manufacturing industry gross fixed capital formation by branch is not available.

In order to make data analysis possible in a situation where appropriate macroeconomic aggregates are not available for many countries, all figures are also converted to millions of Euros and Euros per capita.

National Statistical Offices have been asked to provide time series and updates of appropriate macroeconomic aggregates.

Total environmental investments as a proportion of GDP has a very high value for the Czech Republic: from 1.93% in 1993 to 2.37% in 1996; for Poland the figures are 1.7 % in 1996 and 1.6 % in 1997 (Table 8). Also environmental investments per capita have a high value for the Czech Republic (from 40 in 1993 to 102.3 in 1996) and for Poland (46.3 in 1996 and 51.1 in 1997) (Table 9).

For these countries too the ratios of public and business sector investments to the relevant macroeconomic aggregate, gross fixed capital formation, are rather high:

• Public sector - Czech Republic 1994-1996 (15.5, 15.2, 14.2); Poland 14.5 in 1996 (Table 6)
• Business sector - Poland 5.7 in 1996. For the Czech Republic, business sector gross fixed capital formation is missing.

Business sector

In disaggregating the business sector's environmental investments by economic activity sectors, there is a relatively high proportion of environmental investments for manufacturing industry in Bulgaria and there is also a relatively high proportion of environmental investments for electricity, gas and water supply in Estonia (Table 12). Unfortunately total investment - gross fixed capital formation - for these sectors in these countries is not yet available, which makes further analysis impossible.

Disaggregation of business sector environmental investments by environmental domains (Table 13) shows a relatively high proportion of environmental investments for air protection for Poland (73%, 85%, 77% - 1995-1997) and the Czech Republic (43%, 56%, 67%, 71% 1993-1996). Estonia has a very big proportion of environmental investment for waste water treatment (48%, 53%, 65%, 79% - 1994-1997). Bulgaria has a fairly balanced distribution between investments for air, water and soil protection and waste management.

Disaggregation of business sector environmental current expenditures by environmental domains is available for two countries.

Public sector

In disaggregating the public sector environmental investments by environmental domains, the relatively high proportion of environmental investments for water and soil protection is noticeable for Bulgaria, Poland, the Czech Republic and Estonia. A relatively high proportion of environmental investments for air protection is noticeable for Slovenia (Table 14).

Disaggregation of public sector environmental current expenditures by environmental domains (as a proportion of collective consumption by general government) is available for two countries (Bulgaria, Slovenia) and shows that most current expenditure is for waste management (Table 11). in future whether the data refer to current expenditures for waste collection only or for waste treatment as well should be more closely specified.

The ratio of current expenditures to total investments is rather high for all of the countries which provided a figure (Bulgaria, Estonia, Romania). These figures need further clarification.

Clarifications with data providers

The National Statistical Offices have been asked to review the available time series and provide the missing figures for the relevant macroeconomic aggregates: business sector gross fixed capital formation; gross fixed capital formation in the main economic sectors and in the branches of manufacturing industry; public sector gross fixed capital formation; collective consumption by general government; and gross domestic product.

Corrections and aggregations have therefore not been used in this report, as replies and corrections have only been received from Bulgaria.

National Statistical Offices were contacted in order to check the mismatches in tables and were asked for clarification. Total expenditure breakdown by economic activity sectors (agriculture, hunting and fishing; mining and quarrying; total manufacturing, electricity, gas and water supply; others), and breakdown by the environmental domains, did not tally in five countries out of the seven which provided data (Bulgaria, Czech Republic, Poland, Slovenia and Romania).

Corrections are therefore not included at present, as replies and corrections have only been received from Poland.

Where the ratio of environmental expenditure values to relevant macroeconomic aggregates – GDP, gross fixed capital formation and collective consumption by general government – exceeded the possible range National Statistical Offices were asked to clarify the data.

Corrections are therefore not included at present, as replies have only been received from Poland.

Also where the ratio of current expenditures to total investments is too high, as in the case of Bulgaria, Estonia and Romania, data providers have been asked to clarify the situation.

Corrections are therefore not included at present, as replies have not yet been received.

Future developments

Evaluation of the quality of the data concerning environmental expenditure needs more background information both in the sense of data coverage and methodologies used.

In order to make environmental expenditure data more transparent, the following points should be clarified in further work:

• types of survey at central government, state government and local government level (budgetary analysis, specific survey - census survey, sample survey),
• types of registers used as a basis for the surveys
• sampling methods
• stratification criteria
• survey response rates
• time series comparability in scope of methodologies used, types of survey, range of enterprises, sampling methodology, stratification methodology, response rate;

Definitions or components for the types of investment expenditure should also be clarified (curative/supplementary/end-of-pipe investments, process-integrated investments).

Conclusions

In order to improve statistics on environmental expenditures at all levels, environmental expenditures should be surveyed and common harmonised methodologies used.

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Tables

Table 1. Availability of data on the level of variables provided (investments, current expenditures, receipts from by-products, total expenditures)

Table 2. Availability of data on main economic branches

Table 3. Availability of data on the branches of manufacturing industry

Table 4. Total expenditures as a proportion of GDP

Table 5. Total investments as a proportion of gross fixed capital formation

Table 6. Public sector investments as a proportion of gross fixed capital formation

Table 7. Business sector investments as a proportion of gross fixed capital formation

Table 8. Total expenditures as a proportion of GDP, by the types of expenditure

Table 9. Total expenditures (Euros per capita), by the types of expenditure

Table 10. Public sector environmental investments by environmental domains

as a proportion of gross fixed capital formation

Table 11. Public sector current expenditures as a proportion of collective consumption by general government

Table 12. Business sector, investments by main economic activities,

percentage distribution

Table 13. Business sector environmental investments by environmental domains,

percentage distribution

Table 14. Public sector environmental investments by environmental domains, percentage distribution

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For the presentation and analysis of environmental expenditure data, the following output tables were produced and are available:

TOTAL EXPENDITURES OF PUBLIC AND BUSINESS SECTOR

1. Total expenditures as a proportion of GDP
2. Total investments as a proportion of gross fixed capital formation

PUBLIC SECTOR

1. Total expenditures by components as a proportion of GDP
2. Total expenditures by components in Euros per capita
3. Total expenditures by components in million Euros
4. Total expenditures by environmental domains as a proportion of GDP
5. Total expenditures by environmental domains in Euros per capita
6. Total expenditures by environmental domains in million Euros
7. Total investment expenditures by components as a proportion of gross fixed capital formation
8. Total investment expenditures by components in Euros per capita
9. Total investment expenditures by components in million Euros
10. Total investment expenditures by environmental domains as a proportion of gross fixed capital formation
11. Total investment expenditures by environmental domains in Euros per capita
12. Total investment expenditures by environmental domains in million Euros
13. Current expenditures by environmental domains as a proportion of collective consumption by general government
14. Current expenditures by environmental domains in Euros per capita
15. Current expenditures by environmental domains in million Euros

BUSINESS SECTOR

1. Total expenditures by components as a proportion of GDP
2. Total expenditures by components in Euros per capita
3. Total expenditures by components in millions Euros
4. Total expenditures by environmental domains as a proportion of GDP
5. Total expenditures by environmental domains in Euros per capita
6. Total expenditures by environmental domains in million Euros
7. Total expenditures by economic activity sectors as a proportion of GDP
8. Total expenditures by environmental domains in Euros per capita
9. Total expenditures by environmental domains in million Euros
10. Total investment expenditures by components as a proportion of gross fixed capital formation of business sector
11. Total investment expenditures by components in Euros per capita
12. Total investment expenditures by components in millions Euros
13. Total investment expenditures by environmental domains as a proportion of gross fixed capital formation
14. Total investment expenditures by environmental domains in Euros per capita
15. Total investment expenditures by environmental domains in millions Euros
16. Total investment expenditures by economic activity sectors as a proportion of gross fixed capital formation
17. Total investment expenditures by economic activity sectors in Euros per capita
18. Total investment expenditures by economic activity sectors in millions Euros
19. Current expenditures by environmental domains percentage distribution
20. Current expenditures by environmental domains in Euros per capita
21. Current expenditures by environmental domains in millions Euros
22. Current expenditures by economic activity sectors percentage distribution
23. Current expenditures by economic activity sectors in Euros per capita
24. Current expenditures by economic activity sectors in millions Euros

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