Classification of natural resource management activities of the EGSS

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1 Department for Statistical Production and Technical-Scientific Co-ordination Economic accounts for the environment Eurostat Task Force on Environmental Goods and Services Sector (EGSS) Classification of natural resource management activities of the EGSS Derived by adapting Istat s CRUMA Federico Falcitelli Rome, the 10 th December 2007

2 Table of contents 1. INTRODUCTION GENERAL REMARKS COMMENTS ON THE STRUCTURE AND MAIN CONTENTS OF THE CLASSIFICATION COMMENTS ON PARTICULAR GROUPS OF ACTIVITIES (RENEWABLE ENERGY, SUSTAINABLE AGRICULTURE, ETC.) AND DETAILED COMMENTS ON OTHER SPECIFIC ISSUES CLASSIFICATION OF THE NATURAL RESOURCE MANAGEMENT GROUP OF THE EGSS, DERIVED FROM THE ITALIAN CRUMA... 6 List of Tables Table 1 Regrouping environmental protection and resource management activities by policy relevance... 5 Table 2 Classification of the natural resource management group of the EGSS, consistent with the SERIEE framework, derived from the Italian CRUMA

3 1. Introduction During its 4 th meeting (Luxembourg, ), the TF on EGSS agreed on considering the possibility to use Istat's CRUMA as a tool to classify the resource management activities of the EGSS. TF members were asked to provide (until 31 October 2007) comments on whether and how the Italian CRUMA could be adapted to the needs of identifying/describing resource management activities in the EGSS. Italy was asked to propose a possible adjusted version of CRUMA to be circulated among TF members for approval. Comments have been provided by France, Spain, Sweden and United Kingdom. Broadly speaking, the comments received on Istat s CRUMA can be categorised as follows: 1. comments on the structure and main contents of the classification; 2. comments aiming at stressing the need of highlighting in the classification some particular groups of activities, such as, mainly, renewable energy and sustainable agriculture; 3. a number of detailed comments on specific issues concerning singular categories (or part of singular categories) of the classification. The present document aims at providing a proposal for a classification for the resource management activities of the EGSS, based on Istat s CRUMA as well as comments of TF members. The comments on Istat s CRUMA have been analysed and discussed together with ICEDD during the visit in Italy that took place on the 19 th of November (see the related country fact sheet). The aim was to explore the possibility to set up a new/adapted version of the Italian CRUMA by taking into account all the commentaries received by Italy. The common conclusions that have been reached during the visit in Italy are reported in the following paragraphs. Paragraph 2 includes some general remarks on the approach proposed for classifying the resource management activities of the EGSS. Paragraph 3 reports the proposed classification obtained by adapting the Italian CRUMA. 2. General remarks 2.1 Comments on the structure and main contents of the classification There is a general agreement on the structure and main contents, i.e. on the idea to develop a classification which has: the same structure and classification principles as those of CEPA contents consistent with SERIEE and SEEA. 3

4 2.2 Comments on particular groups of activities (renewable energy, sustainable agriculture, etc.) and detailed comments on other specific issues The general impression is that not all the proposed adjustments/changes of CRUMA can be accepted without affecting the consistency with the CEPA and SERIEE framework. In particular there are a number of proposed changes that lead to overlapping with CEPA, such as those stressing the need of highlighting in the classification some particular groups of activities, like e.g. renewable energy and sustainable agriculture. A compromise seems necessary and the following conclusions have been reached during the ICEDD visit in Italy: The consistency with the SERIEE is a Eurostat priority; If a standard and international agreed CRUMA already existed the TF would adopt it in addition to CEPA 2000; A standardised and internationally agreed CRUMA is reasonably expected to be consistent with CEPA, i.e. a multi-purpose classification to be used for classifying activities, products, producers and whatever kind of transactions related to the use and management of natural resources; the structure and classification principles should be also the same as (or consistent with) those of CEPA; Although the Italian CRUMA complies these requirements, a number of comments by TF members give the idea that this classification is not seen as a multi-purpose one i.e. to be used for classifying activities, goods, services, producers and transactions even though the structure, the principles and the wording are the same as those of CEPA; Thus a possible solution is not to include among the tasks of the TF on EGSS and hence among the purposes of the compilation guide the development of a new classification like CRUMA, and to wait for that such a new standard is set up and internationally agreed; In the meantime, a categorisation of natural resource management activities can be established for the purpose of the EGSS compilation guide, starting from the Italian CRUMA and taking into account the most part of the comments received from the TF members. Such a categorisation has been set up during the ICEDD visit in Italy and is shown in next paragraph, Table 2. While it encompasses the main comments received like e.g. the need of grouping together all the activities for the production of energy from renewable sources it does not deal with the commentaries related to a number of very detailed issues; a more detailed discussion could be done later in the context of the Eurostat works for developing the natural resource use and management account of SERIEE. The rationale underlying the classification of Table 2, derived by the Italian CRUMA, is to create categories that are complementary respect of CEPA, i.e. without any overlapping with CEPA classes. This does not allow to show as a separated category activities such as sustainable agriculture, sustainable transport, etc. These kinds of activities are identified according to a policy relevance concern; as a matter of fact they include several kinds of environmental protection as well as resource management activities and their definition could vary over the time. What is possible is to regroup environmental protection and resource management activities according to other criteria as shown in Table 1. In order to ensure consistency between countries, a qualitative matrix such as that shown in Table 1 must be developed and agreed so that the same definition, for example of sustainable agriculture, apply for all countries. One of the major adjustment of the Italian CRUMA included in the categorisation proposed in Table 2 concerns the fact that all the activities related to the production of energy from renewable sources are grouped together in a unique category (13.A). In principle, according to the main purpose criterion, such activities can fall within CEPA 1 when they are mainly aiming at reducing air emissions. It is worth noting that as far as general government is concerned (included in the scope of the EGSS), the COFOG electronic discussion group and the TF on general government and specialised producers EPE agreed upon a general rule: i.e. to classify, by convention, energy 4

5 conservation and renewable energy sources as COFOG 5.3 Pollution abatement (that corresponds to CEPA 1). This general rule should be taken into account for consistency and comparison purposes. A practical way for managing possible inconsistency between countries could be to ask countries to clarify if and to what extent production of energy from renewable sources is classified within category 13.A and/or under CEPA 1 (see footnote of Table 2). For example, in countries like Italy, activities concerning energy saving can be mainly considered for air protection (CEPA 1), not for a resources management purpose, as the reserves are not national ones. It should be highlighted in the compilation guide that the classification of resource management activities derived from the Italian CRUMA is just a temporary classification and that a more official classification is waited for. Anyway, the development of a resource management activities classification is a high priority at international level and in the Eurostat agenda as the Working Group o Environmental Expenditure Statistics decided at its last meeting (may 2007). Thus, the adaptation of the Italian CRUMA to the scope of the Compilation Guide on EGSS would allow using a resource management activities classification consistent with the SERIEE approach. Therefore the use of a classification which respect the standards set by the SERIEE would facilitate the use in the next future of any classification for resource management activities that will be set at European/international level. Table 1 Regrouping environmental protection and resource management activities by policy relevance Environmental protection and resource management activities 1 protection of ambient air and climate Environmental protection activities (e.g CEPA) Resource management activities (e.g. CRUMA) Sustainable agriculture 2 waste water management 3 waste management 4 protection and remediation of soil.. 5 noise and vibration abatement 6 protection of biodiversity and landscapes use and management of inland waters 11 use and management of natural forest resources 13 Use and management of fossil energy, reduction of the intake Policy relevance Sustainable Sustainable energy forestry Sustainable transport 5

6 3. Classification of the natural resource management group of the EGSS, derived from the Italian CRUMA Table 2 Classification of the natural resource management group of the EGSS, consistent with the SERIEE framework, derived from the Italian CRUMA Groups of natural resource management activities and products Content Relationship with the Italian CRUMA 10. Management of inland waters 11. Management of natural forest resources 12. Management of wild flora and fauna 13. Management of fossil energy 13.A Production of energy from renewable sources (*) 13.B Heat/Energy saving and management Activities and products aiming at the minimisation of the inland waters intake trough in-process modifications as well the reduction of water losses and leaks, the installation of facilities for water reuse and savings, etc. Restoration activities are included: Ex.: recharge of groundwater bodies to increase/restore water stocks (not to improve water quality or fight salinity CEPA 4.4); land improvement, development of vegetal cover in order to increase water infiltration and recharge phreatic water bodies (not for the protection of soil against erosion CEPA 4.3) Water abstraction, conduction and distribution are excluded natural forest resources trough in-process modifications as well as the recycling, reuse or savings of forest products and by-products. Restoration activities are included (reforestation and afforestation) as well as the prevention and control of forest fires (concerning forest areas relevant mainly as economic resource and not as habitats CEPA 6.2) Management and maintenance of forest areas for forestry and logging purposes as well as of forestry and nursery plants are excluded wild flora and fauna trough in-process modifications as well as withdrawals reduction and regulation measures Restoration activities are included (replenishment of wild flora and fauna stocks) Management and maintenance of, e.g., fish and game reserves are excluded non-renewable energy sources through the production of energy from renewable sources and Heat/Energy saving and management Reduction of non-renewable energy sources exploitation through the production of energy from renewable sources, including solar, wind, tidal, geothermal or biomass sources as well as hydroelectric power (production of energy from renewable sources mainly aimed at reducing air pollution is excluded CEPA 1.1) non-renewable energy sources trough in-process modifications as well as the minimisation of heat and energy losses and through energy savings (energy savings mainly aimed at reducing air pollution is excluded CEPA 1.1) Exploitation, management and maintenance of the stocks of nonrenewable energy sources (including exploration and discovery of new reserves) are excluded 6 = Class 10 less 10.4 category = Class 11 less 11.5 category = Class 12 less 12.3 category = Class 13 less 13.3 category (part of) = 13.1 category (part of) (part of) = 13.1 category (part of)

7 Groups of natural resource management activities and products Content Relationship with the Italian CRUMA 14. Management of raw materials 15. Research and development activities for natural resource management 16. Other natural resource management activities raw materials trough in-process modifications as well as the reduction of scraps and the production and consumption of recycled materials and products Management of quarrying sites as well as exploitation, management and maintenance of raw material stocks (including research and exploration activities) are excluded Creative work undertaken on a systematic basis in order to increase the stock of knowledge and the use of this knowledge to devise new applications in the field of natural resource management and savings. Excluded are R&D activities related to environmental protection CEPA 8 Natural resource management activities and products not classifiable in the previous classes, i.e. general administration, education, training and information activities that relate to two natural resources or more, as well as other kind of activities lead to indivisible output If these activities and products concern both environmental protection and natural resource management, they should be broken down between this position and the corresponding CEPA class ( CEPA 9). If this is impossible, they should be classified alternatively in this position or in the CEPA one according to the main purpose criterion; if this is impossible as well, they should be classified within the corresponding CEPA class ( CEPA 9) = Class 14 less 14.3 category = Class 15 = Class 16 (less parts concerning the use of natural resources) (*) Countries should clarify if and to what extent production of energy from renewable sources is classified in this position and/or under CEPA 1 7