Methodology Air Emissions Accounts

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1 Methodology Air Emissions Accounts Index 1. Introduction 2. Objectives 3. Theoretical conceptual method 4. Development of the Air Emissions Accounts

2 1 Introduction The fight against climate change constitutes one of humanity's most important challenges, given its effects of increasing temperatures, melting glaciers, multiplication of droughts and flooding. In 1998, the European Union (EU) signed the Kyoto Protocol of the United Nations Framework Convention on Climate Change, which fights against six greenhouse effect gases, for the purpose of reducing these emissions 8% during the period, with regard to the level in In 2005, the Commission established the bases of the EU strategy for fighting climate change, and subsequently, in the 2007 Communication, proposed more specific actions to limit the effects of climate change, and reduce the possibility of severe irreversible disturbances on a planetary level. In this context, the "Sixth Environmental Action Programme of the European Community " includes the objective of stabilising the concentrations in the Atmosphere of greenhouse effect gases (GEI) at a level that does not cause unnatural variations in the terrestrial climate. More recently, the "Europe 2020" European strategy, "A strategy towards intelligent, sustainable and integrating growth", adopted by the European Union Council in 2010, considers the reduction of greenhouse effect gas emissions, for the purpose of reducing them a minimum of 20% (beginning at the levels from 1990) from here to In order to adopt measures that reduce this type of emission, it is necessary to have access to reliable statistical information regarding the polluting substances generated by the different economic sectors. In this sense, the European Environmental Account Strategy identifies the Atmospheric Emission Accounts as a core module that should be produced on a regular basis to serve as a support for adopting policies within this scope. The European Statistical Office (Eurostat) has developed the Atmospheric Emission Accounts as part of the integrated environmental and economic accounting system, which provides a detailed description of the interrelations between the environment and the economy. The Emission Accounts are consistent with the National Economic Accounts, using similar concepts and accounting norms. From the methodological point of view, the Emission Accounts present the data regarding emissions into the Atmosphere, in a way that is compatible with the National Accounts System, broken down by branch of economic activity and Household sector. The future European Regulations for Environmental Accounts, approval of which is anticipated for 2010, will include a module for this account. The INE, for the purpose of preparing the Spanish Statistical System for future requirements foreseen in the European Statistical System, began to carry, with the nature of a pilot study, the estimates of the emission account in the year 2002, the first pilot study with series , and in the year 2006, it published new estimates, with base 2000, of the 1990 and series. In this publication, the results are published for the new base change, with the series 1990, At this time, the total adaptation to the future European Environmental Account Regulation, which considers a greater breakdown by branch of activity (A*64 of NACE Rev.2), as well as to definitively complete the study of certain

3 matters (adjustment of the principle of residence in fishing activities, and land, maritime and air transport), is pending. Moreover, in this sense, the emissions of two new pollutants shall be included: the CO2 generated in the combustion of biomass, and the particles with an aerodynamic diameter smaller than 2.5 micros (PM2.5). The methodology followed in these estimates is included in the "Manual for Air Emissions Accounts edition published by Eurostat. In the Integrated Economic and Environmental Accounts System, Integrated Environmental and Economic Accounting 2003 (SEEA 2003), satellite of the National Accounts System, and currently in revision, compiled by the United Nations, Eurostat, WMF, OECD and the World Bank, the emissions account is included in the category of physical flow accounts. 2 Objectives To implement the air emissions accounts will enable having the information available from the emissions module from the next Community Regulation on Environmental Accounts. The main objective of the Emissions Accounts consists of providing information for the analysis of the sustainability of the production models and European consumption, based on their environmental implications. From the analytical perspective, the Air Emissions Accounts present the added value of their compatibility with the National Accounts, allowing the integrated economic and environmental analysis. 3 Theoretical conceptual model 3.1 Introduction The Air Emissions Accounts form part of the Environmental Accounts, satellite accounts of the National Accounts for the analysis of the interaction between the environment and the economy. The conventions, accounting methods and classifications established in the National Accounts are a starting point for defining the principles of the Environmental Accounts. The Air Emissions accounts, physical flow accounts, may be combined within a framework with the data from the National Accounts. The joint presentation of the physical flow accounts with the monetary data from the National Accounts is called the Hybrid Flow Accounts in the SEEA 2003 (Integrated System of Economic and Environmental Accounts). The Hybrid Flow Accounts generalise the use of the model for the integration of the data of the National Accounts and the Environmental Accounts. This model is the NAMEA model, on which the Air Emissions Accounts are based. The NAMEA is the English acronym of the National Accounts Matrix (NAM) and the Environmental Accounts (EA). This is a model in which the economic and environmental statistical data is consistently organised and formulated. The NAMEA model consists of extending a simplified presentation matrix of the National Accounts (NAM) with files and columns registering the environmental-type

4 information regarding the economic transactions accounted for in the National Accounts system. The objective is to describe the pressures that the development of economic activities exert on the environment, and the responses to reduce or eliminate such pressures. The nucleus of the system is a set of matrices that contain data from the National Accounts (NAM) related to the data provided by the Environmental Accounts (EA). The Environmental Accounts are matrices of statistical data regarding some environmental aspects, valued in monetary terms and/or in physical units; the only requirement chosen in the compilation of the Accounts is that the information bear in mind the definitions and classification norms established in the economic accounts. 3.2 The Air Emissions Accounts: the NAMEA model applied to the air The NAMEA model applied to the air consists of presenting, in a coherent and orderly fashion, economic data with that of the pollutant substances emitted into the atmosphere, generated in the economic system, with both types of flow classified by economic sector. The goal is to relate the flows of the atmospheric emissions and the flows of the economic system. Those other flows that occur between the economy and the natural environment (flows on the absorption of carbon by nature) are not considered in this model, and their measurement shall be the target of study in a second phase (extension of the model) that will enable a more complete analysis than one that is purely economic. The NAMEA model on atmospheric emissions may be represented with the following schema:

5 Schema of the NAMEA model applied to the Air Emissions Accounts Chart A Chart B Economic transactions Substances Pollutants emitted by households and the productive system Substances Pollutants classified by economic activity The structure of the integrating charts of the NAMEA model applied to the Air Emissions Accounts is detailed as follows: Chart A Chart A consists of a simplified matrix of National Accounts, classified by economic activity. The concepts and definitions, accounting norms and means of recording economic flows are those which appear in the System of National Accounts, ESA-95. Thus, principles such as that of residence or that of balance, which are applied in the National Accounts, are applied in the same way in the Environmental Accounts. This model considers the following economic transactions: Production at base prices. Intermediate consumption. Added value at base prices. Total employment. Full-time equivalent jobs. Paid employment. Full-time equivalent jobs. Household final consumption expenditure (some concepts).

6 The economic transactions are broken down according to the following classifications of economic activities: AB: Agriculture, livestock, hunting, forestry and fishing C: Extractive industries CA: Extraction of energy products CB: Extraction of other ores except energy products D: Manufacturing industry DA: Food, beverage and tobacco industry DB.: Textile and clothing industry DC: Leather and footwear industry DD: Wood and cork industry DE: Paper, publishing, graphic arts, and reproduction of recorded supports industry DF: Refinement of petroleum and treatment of nuclear fuels DG: Chemical industry DH: Rubber and plastic materials transformation industry DI: Manufacture of other non-metallic ore products DJ: Metallurgy and manufacture of metallic products DK: Construction of machinery and mechanical equipment industry DL: Electrical, electronic and optical material and equipment industry DM: Manufacture of transport material DN: Various manufacturing industries E: Production and distribution of electrical energy, gas and water supply F: Construction G: Trade, repair of motor vehicles, motorcycles and mopeds and personal and household use items H: Accommodation I: Transport, storage and communications J: Financial intermediation K: Real estate and rental activities; corporate services L: Public Administration, defence and compulsory social security M: Education N: Health and veterinary activities, social services O: Other community, social and personal service activities P95: Households that employ domestic staff Chart B Chart B presents the pollutant substances emitted into the air, that is, it makes reference to the physical flow of gases or material particles from the economic system (of the economic activities considered in Chart A), that are emitted into the air. The emissions into the air includes the greenhouse effect gas emissions, as well as the emission of atmospheric pollutants, such as SO2, NOx and PM10.

7 The atmospheric gases and pollutants considered are those that appear in the following chart: Effects Greenhouse effect Acid rain or acidifiers Ozone precursors Photochemical contamination Particles Pollutant substances CO 2 Carbon dioxide CH 4 Methane N 2 O Nitrous oxide HFC Hydrogenfluorocarbon composites PFC Polyflourocarbon composites SF 6 Sulphur hexaflouride SOx: Sulphur oxides NOx: Nitrogen oxides NH 3 Ammonia HFC Hydrogenfluorocarbon composites PFC Polyflourocarbon composites SF 6 Sulphur hexaflouride CO Carbon monoxide NOx: Nitrogen oxides COVNM Volatile organic compounds (except methane) PM 10 Particles with an aerodynamic diameter smaller than 10 micras A detailed description of the tables that appear in the NAMEA model is shown below, applied to the Air Emissions Accounts. Economic tables The economic tables present the main economic transactions of the National Accounts model, through the origin and destination tables, in which also appearing is household consumption of those expenses on goods and services that contribute to the emission of polluting substances into the atmosphere (transport, heating and others). Emissions tables, classified according to their origin Household emissions Emissions of resident producers. In short, the Air Emissions Accounts consist of a statistical information system that allows for relating, using the framework of the National Accounts system, the flows on the emissions into the air, with the flows of the economic system.

8 4. Development of the Air Emissions Accounts 4.1 Introduction The NAMEA model measures the interrelations between the economy and the environment, and therefore, the economic and environmental statistical data of the model must be based on similar accounting norms and definitions. The economic data is based on the National Accounts system and the environmental data, the Air Emissions Account, must be based on similar procedures to those of the economic data, for the purpose of being able to integrate both sets of statistical data correctly. The unit of analysis of the National Accounts system is the unit of economic activity resident in the county. The economic activity units are grouped into branches of activity, and the nomenclature used is NACE-Rev1. The method used to measure the air emissions is the same used in the National Accounts system. The unit of analysis is the unit of economic activity resident in the national economic territory, and therefore, it is only necessary to quantify and assign, in the corresponding branches of activity, according to the definitions and practical norms of the National Accounts, the emissions generated by these units. This means that it must not include those emissions generated by the economic units not resident (for example, tourism) in the national economic territory, and that it must include the emissions generated by the units resident outside of the country (including the tourism of Spanish residents and Spanish transport abroad) in those branches of economic activity that have generated the production of these activities or in household consumption. 4.2 From the National Emissions Inventories to the Air Emissions Accounts The National Air Emissions Inventories, databases regarding air emissions, are used, firstly, to respond to the requirements that, relating to the information on emissions, is requested from the different international agreements on emissions of pollutants into the air and greenhouse effect gases (the United Nations Framework Convention on Climate Change - UNFCCC - and the Convention on Long-Range Transboundary Air Pollution of UNECE/EMEP). Pursuant to the Manual for the Air Emissions Accounts published by Eurostat, these National Emissions Inventories may be used as a source of primary information for compiling the Air Emissions Accounts, however, there are considerable differences between the data in the Emissions Inventories and that which is necessary for the compilation of the Air Emissions Accounts. The Inventories present the emissions of all of the sources in the country, regardless of whether they are domestic economic activities (principle of residence) or not. Moreover, it includes the emissions of non-economic agents (nature) and the absorption of substances by nature (carbon by biomass). In general, the most relevant characteristics of the Emissions Inventories are the following:

9 The data regarding emissions is related to the geographic territory of the reference country The data on the emissions is broken down into classifications aimed at technical processes Conversely, the basic characteristics of the Air Emissions Accounts are: They must be related to resident economic activities The breakdown of the data must be consistent with the classifications adopted for the economic activities. The following analyses, in greater detail, the differences between the National Air Emissions Inventory and the Air Emissions Accounts. 4.3 Differences between the Air Emissions Accounts and the National Air Emissions Inventory The Air Emissions Accounts are clearly differentiated from the National Air Emissions Inventory. The latter presents the data on greenhouse effect gases and air pollutants, according to the formats established by different international agreements (UNFCC and CLRTAP). The estimates of the Emissions Accounts are made from the National Air Emissions Inventories, whose compilation corresponds to the Ministry of the Environment. The Inventory is compiled within the broadest structure for crossing activities with pollutants, in accordance wit the SNAP nomenclature from EMEP/CORINAIR, extended with the columns corresponding to particles, according to diametric types. The SNAP nomenclature (English acronym for Selected Nomenclature for Air Pollution) was developed in the EMEP/CORINAIR project, and has been harmonised with the nomenclature of source categories of emitting activities of IPCC/OECD. This nomenclature groups the emissions into 11 categories of source, considering energy, combustion factories, industrial processes, use of dissolvent and other products, transport, waste treatment and elimination, agriculture, and other sources and sinks. The National Air Emissions Inventory does not follow a purely technological or economic criterion, but its orientation is greater towards technology, and it may serve as a database for analysis with said orientation. On the other hand, the Air Emissions Accounts have an economic orientation, and assign the emissions to those economic entities that are truly carrying out the activity that generates said emissions. Both systems are complementary. Given that the Air Emissions Accounts form part of the Environmental Accounts, the data regarding Air emissions must be comparable with the economic data registered in the National Accounts. Therefore, the registration of the data of the Air emissions must be carried out with identical accounting norms and classifications as those used in the registration of the economic transactions. The National Air Emissions Inventory, following the EMEP/CORINAIR methodology, estimates the Air emissions through combustion processes, and therefore, a priori, it can be complex to assign them to the branches of economic activity of the NACE- Rev1. classification. Some of the SNAP and CORINAIR categories can easily be classified in the branches of NACE Rev1, however, other categories present problems

10 in classification. The methods used for estimating the emissions in the EMEP/CORINAIR methodology vary from one process to the other, using different types of variable or indicator, according to the information available. The emissions not related to energy use, but related to production processes, are also accounted for in the National Air Emissions Inventory. In general, the Inventory data may be a good source of information at the time of compiling the Air Emissions Accounts for these emission processes. The Inventory includes three groups of pollutants: Group 1: Acidifiers, ozone precursors and greenhouse effect gases. Group 2: Heavy metals and particles. Group 3: Persistent organic pollutants. The information from the Inventory is different from the data regarding Air emissions presented according to the manual of the Eurostat Air Emissions Accounts. In fact, the data from IPCC and CORINAIR include only a restricted part of the emissions associated with transport services. The emissions from transport to foreign destinations and/or international areas must be accounted for in the Air Emissions Accounts, and it is necessary to establish agreements in order to assign the emissions of international territories to countries. In the Air Emissions Accounts, these emissions must be assigned to the economic activities that caused the emission. Thus, the emissions of an airline must be assigned to that airline, and not only include those emitted in its economic territory, as is done in the National Emissions Inventory. Another example could be that of ship-building companies. Another important matter to considering the Air Emissions Accounts, which does not bear an influence on the total pollutant substances emitted, but does do so in the means of distribution among households or production branches, is that the assignation of the emissions associated with a productive activity, corresponding to the secondary or auxiliary activities of the main activity must be assigned to the branch of activity corresponding to the main activity; thus, the emissions from self-employed transport and the emissions due to the combustion processes themselves, must be assigned to the branches of economic activity of the main activity that performs this service. Therefore, at the time of compiling the Air Emissions Accounts, using as the main source of information, the data from the National Emissions Inventory, it is necessary to make two basic adjustments with the data from the Inventory: the emissions generated by the resident economic units must be estimated from the emissions generated by all of the emission sources in the geographic territory; The data from the Inventory emissions, classified according to the SNAP nomenclature, must be assigned to the branches of economic activities. 4.4 Assignation of Air emissions by branch of economic activity.

11 As has been indicated previously, the National Air Emissions Inventory classifies the emissions into SNAP categories, according to the CORINAIR methodology. On some occasions, these emissions can easily be classified into the branches of NACE Rev1, however, in other cases, this assignation can be complex. Thus, even though the available version of the National Emissions Inventories presents the emissions with a detail to 6 digits of the SNAP classification, which allows their assignation to a level of different economic activities, bearing in mind that it does not follow the principle of residence, and that it includes the emissions of final household consumption, it could not be considered that, with these limitations, they would correspond to the branches of economic production in the sense of the national accounts. For example, SNAP group 7 includes the emissions from road transport, which correspond to all of the branches of activity, though this should also include those of the household sector, and without differentiating, and these are emissions within the country. The following lists the sectors that present the greatest problems in treatment. Transport The National Accounts separately identify land, sea and air transport and the activities related to transport. The quantity of pollutant substances emitted by these economic sectors must be coherent with the economic data of the economic accounts, and must only consider the emissions associated with these types of transport. In accordance with the National Accounts System, the data on emissions collected in the Air Emissions Accounts refers to economic activities in the country, including Spanish residents operating abroad, and excluding foreign nationals emitting from the country (according to the principle of residence). Thus, the emissions covered in the Air Emissions Accounts are those generated by national economic activities (resident units), and the emissions from these units abroad, tourists and international transport companies, must be included in the corresponding branch of activity accounts or in households, whereas the emissions from units that are not resident within national borders are excluded. The National Air Emissions Inventory includes data on emissions from transport such that it is necessary to carry out a series of adjustments to it in order to be able to adapt them to the needs of the Air Emissions Accounts (to the principle of residence): EMI R (d) + EMI NR (d) + EMI R (I) + EMI NR (I) Where, EMI: emissions R: resident units NR: non-resident units d: domestic commutes I: international commutes originating in Spain On the other hand, in the Air Emissions Accounts the data collected should be as follows: Where, EMIR(d) + EMIR(I) + EMIR(A)

12 A: international commutes originating in a foreign country and bound for Spain or another foreign country. Therefore in order to be able to obtain the data necessary for the Air Emissions Accounts, it is necessary to extract the emission EMI R (d) + EMI R (I) and estimate those corresponding to EMI R (A) Generally, calculation of emissions related to transport of resident units is done by means of the estimation of a WR proportion of the total for air emissions statistics for transport (EMI): EMIR(d) + EMIR(I) + EMIR(A) = WR * EMI In order to calculate W R auxiliary information is used (mainly energy data and transport statistics). Below we analyse in greater detail the different adjustments depending on the type of transport: Passenger transport by road In the National Air Emissions Inventory, emissions from passenger transport by road are included in category SNAP 07 Passenger transport by road, and more specifically in: Passenger cars 0702 light vehicles < 3.5T HEAVY VEHICLES > 3.5 Buses 0704 motorcycles and mopeds < 50 cm engine > 50cm 3 These emissions include emissions both of resident units and of non-resident units due to transfers both within and beyond the country's borders: EMIR(d) + EMINR(d) + EMIR(I) + EMINR(I) Thus, in order to be able to adapt this emission data to the requirements of the Air Emissions Accounts and for this data to be consistent with the principle of residence of the National Accounts, it is necessary to extract data exclusively from resident units: EMIR(d) + EMIR(I) + EMIR(A) In order to be able to obtain this data, it is necessary to carry out two steps: 1. Emissions from passenger transport by road for non-resident units must be excluded: -[ EMINR(d) + EMINR(I) ] 2. emissions generated by resident national units carry out transport services beyond Spain's borders should be added: + EMIR(A)

13 In accordance with the recommendations of the Air Emissions Accounts published in 2009 by Eurostat, the estimates necessary for adapting the data in the Inventory to those necessary for Air Emissions Accounts may be carried out using auxiliary information originating either from energy consumption information or from transport statistics. Thus, in order to assign the corresponding emissions to each branch of activity and to the household sector, the distribution of passenger transport by road has been compiled based on energy consumption estimates (fuels), in which different sources of auxiliary information have been used (Energy balance sheets compiled by the Ministry of Industry, data from the Spanish National Accounts compiled by the INE, data from different INE surveys, such as the Household Budget Survey, industrial surveys, etc.) Sea transport In the National Air Emissions Inventory, emissions from sea transport are included within the category SNAP 08 Other means of transport and mobile machinery, and more specifically in: National sea traffic within the EMEP area International sea traffic. (including international bunkers) In this case, the adjustment to be made is similar with regard to the focus to that made for land transport, although, rather than having used the energy consumption estimates (fuels) in order to allocate them to the resident units, sea transport statistics published by the Ministry of Development, the State Ports Public Body and the National Statistics Institute have been used. Air transport In the National Air Emissions Inventory, emissions from air transport are included within the category SNAP 08 Other means of transport and mobile machinery", and more specifically in: Domestic traffic in airports (cycles A-D; height < 1000 m) International traffic in airports (cycles A-D; International traffic in airports (cycles A-D; height < 1000 m) Domestic cruiser traffic (height > 1000 m) International cruiser traffic (height > 1000 m) The adjustment made to air transport is also similar to the previous two. As in the case of sea transport, auxiliary information used to be able to allocate gas emissions to the resident units has been based on air transport statistics, considering those published by the (INE). Personal transport Personal transport is classified in the branches of main economic activity that produces it as an auxiliary activity and the emissions given off are those corresponding to combustion of energy products used by the different means of transport used for transporting the actual goods. The emissions associated with private use of a car by households is classified as final consumption by households.

14 Household emissions Household emissions are divided into emissions from consumption of own transport services, heating and others. Emissions from use of electricity by households is not located in households. In some cases, annual variations of emissions may be explained by changes in temperature since these are closely linked to the use of fossil fuels for heating. Treatment of wastewater in industry In order to be able to allocate emissions from treatment of wastewater in industry, it is necessary to use statistical sources, specifically the Survey on the Generation of Waste in the Industrial Sector by the. Greenhouse emissions Greenhouse emissions are mainly as follows: emissions of CO 2, CH 4 and CFCs. Generally, these emissions may be located by municipality since their handling is managed by municipal councils. These emissions are allocated to the branch of economic activity NACE-Rev1 90 public sewerage, in keeping with the basic principles of the National Accounts. Another possible means of allocating these emissions is to assign them to branches of activity or to households since the economic units, companies and households, are the only ones that have generated the waste producing such emissions, however, this means does not fit in with the principles of the National Accounts. 4.5 Relationship between non-economic activities and Air emissions. Air Emissions Accounts only include emissions from economic activities. Emissions from non-economic agents (nature) are not included in the detailed tables. Therefore, absorption of substances by nature is not recorded.