Environment and economy

From Statistics Explained

Data from September 2009. Most recent data: Further Eurostat information, Main tables and Database.
Figure 1: Resource productivity, EU-15, 1995-2005 (1995=100)

The efficient use of resources, many of which come from outside the European Union, can contribute to relatively steady growth, whereas inefficiency and over-exploitation may put long-term growth in jeopardy. Our use of resources may also induce serious damage on the environment beyond its carrying capacity.

This article shows how indicators of resource productivity in the EU have been developed. It takes a broad definition, considering both the efficiency with which an economy uses energy and materials and an economy’s ability to produce goods and services relative to its environmental impacts. It uses the chemicals industry as an example because of its pivotal role in Europe's industrial competitiveness and its environmental impact. It also looks at the take-up of the EU's Eco-management and audit scheme.

Main statistical findings

Figure 2: Environmental protection expenditure within manufacturing industries, EU-27, 2004 (1) (% of total)
Figure 3: Production volume of toxic chemicals, EU-15 (1) (1997=100)
Table 1: Environmental expenditure, EMAS and eco-label 2005-2007.PNG

Although the GDP of the EU-15 increased on average by 2.3 % per year between 1995 and 2005, domestic material consumption grew at a much slower pace, rising on average by 0.7 % per year (with two main surges in 2000 and 2004); as a result, resource productivity in the EU-15 rose by 16.5 % overall between 1995 and 2005. This could be seen as a relative decoupling of the use of materials in relation to the economy, however, much of the economic growth during this time was due to a growth in services so any conclusions about the increasing efficiency of the EU-15 economies should only be made taking this into consideration.

An analysis of EU-27 environmental protection expenditure in 2004 within manufacturing industries shows that relatively similar amounts of expenditure were dedicated to tackling environmental concerns relating to wastewater (30.9 %), waste (27.2 %) and air pollution (25.9 %), while the remaining share (16.1 %) was used for none-core domains.

The chemicals industry is one of the largest European manufacturing sectors and it has a pivotal role in providing innovative materials and technological solutions which have a direct impact on Europe’s industrial competitiveness. Manufactured chemicals can, however, have an environment impact on soil, water and air quality, and some chemicals such as hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulphur hexafluoride (SF6) were included in the Kyoto Protocol because they contribute to global warming. Between 1997 and 2007 the total production of all chemicals in the EU-15 grew by 15.7 %. The output of chemicals classified as toxic increased at a much slower pace, rising 7.0 %, while the level of production for the most dangerous, carcinogenic, mutagenic and reprotoxic chemicals expanded by 10.0 %; the output of toxic and CMR chemicals peaked in 2004, since when both indices followed a downward trend.

Statistics on the production of toxic chemicals are available from 2004 onwards for the EU-25 (data for Bulgaria and Romania are not yet available). Toxic chemicals accounted for 58.2 % of the total output of the EU-25’s chemicals industry in 2007. The volume of CMR chemicals produced in the EU-25 was around 36 million tonnes, equivalent to 10.2 % of total chemicals’ production.

The Eco-management and audit scheme (EMAS) is a management tool for companies and other organisations to evaluate, report and improve their environmental performance. In the EU-27 there were almost 6 000 sites that had implemented EMAS by 2007 (an average of 11.9 sites per million inhabitants). The highest uptake of EMAS (relative to population size) was recorded in Austria, with 58.9 sites per million inhabitants, followed by Denmark (45.7) and Belgium (31.7); the only other countries to have ratios in double figures were Spain, Germany and Italy.

Denmark and Austria were also at the forefront of eco-label awards: with 5.3 and 3.0 awards per million inhabitants in 2007, compared with an EU-27 average of 1.0); the only other countries to have ratios above 2.0 awards per million inhabitants were Ireland, Italy and Malta.

Data sources and availability

Resource productivity measures the efficiency with which the economy uses energy and materials (the natural resource inputs needed to achieve a given economic output). Sometimes resource productivity is used as a proxy for environmental impacts, using the reasoning that if less goes into the economic system then less waste and pollution will be discharged into the environment. Using this approach it is thought that resource productivity also measures the economy’s ability to produce goods and services relative to its environmental impacts.

Data on environmental protection expenditure are collected through a joint OECD/Eurostat questionnaire. Environmental protection expenditure covers all expenditure on activities directly aimed at the prevention, reduction and elimination of pollution or nuisances resulting from production or consumption. Note that activities which may be beneficial to the environment, but that primarily satisfy technical needs, or health and safety requirements, are excluded. These expenditures may be classified according to the economic sector (agriculture, industry, services, public sector, and households) carrying out the expenditure, according to a financial breakdown of the expenditure (treatment and prevention investment, current expenditure, subsidies), or according to the environmental domain covered (air, waste, water, etc.) – of which there are nine areas distinguished in the Classification of environmental protection activities. Investment expenditure includes outlays in a given year (purchases and own-account production) for machinery, equipment and land used for environmental protection purposes. Non-core expenditure consists of administrative costs such as labour costs associated with running environmental departments or government funded agencies.

Eurostat has developed a production index of toxic chemicals. This indicator presents the trend in aggregated production volumes of toxic chemicals, broken down into five toxicity classes. The classes are derived from the Risk Phrases assigned to the individual substances in Annex 6 of the 'dangerous substances' Directive 67/548/EEC (amended in 2001 by Directive 2001/59/EC, adapting it to technical progress).

The toxicity classes, beginning with the most dangerous, are:

  • carcinogenic, mutagenic and reprotoxic (CMR-chemicals);
  • chronic toxic chemicals;
  • very toxic chemicals;
  • toxic chemicals;
  • chemicals classified as harmful.

Production volumes are extracted from PRODCOM (statistics on the production of manufactured goods) and are aggregated to the five classes according to their toxicity. EU-15 data covers the years from 1995 to 2007, while EU-25 data is available for the 2004-2007 period.

The Eco-management and audit scheme (EMAS) is an EU voluntary instrument: organisations participating in EMAS are committed to evaluate and improve their own environmental performance, comply with relevant environmental legislation, prevent pollution, and report on their environmental performance through the publication of an independently verified environmental statement. The scheme allows the use of ISO 14001 (international standard for environmental management system) as its environmental management system element. EMAS registered organisations are recognised by the EMAS logo, which guarantees the reliability of the information provided. To receive EMAS registration, an organisation must comply with the following steps:

  • conduct an environmental review;
  • establish an effective environmental management system;
  • carry out an environmental audit and;
  • provide a statement of its environmental performance.

The EU eco-label scheme, (as laid down in Regulation 1980/2000 of 17 July 2000) is now part of a wider approach on integrated product policy (IPP). The Community eco-label is awarded to products and services with reduced environmental impacts. The existing scheme has been in operation since 1993. It is administered by the European eco-labelling board (EUEB), which includes representatives from industry environmental protection groups and consumer organisations.

Context

Resources are the backbone of every economy. In using resources and transforming them, capital stocks are built up which add to the wealth of present and future generations. However, the extent of our current resource use may endanger economic growth for future generations and developing countries as they may face difficulties in accessing scarce resources. At the same time, the pace at which resources are being used may result in serious consequences for the environment. Such changes are only likely to accelerate as newly-industrialized countries and developing countries increase their economic activity.

In June 2006, the European Council adopted a comprehensive renewed Sustainable Development Strategy, the aim of which was to ‘identify and develop actions to enable the EU to achieve continuous improvement of quality of life both for current and for future generations, through the creation of sustainable communities able to manage and use resources efficiently and to tap the ecological and social innovation potential of the economy, ensuring prosperity, environmental protection and social cohesion’. In response, a set of resource productivity indicators have been developed by Eurostat; these consider both the efficiency with which an economy uses energy and materials and an economy’s ability to produce goods and services relative to environmental impacts.

In the absence of mechanisms and policies that require the polluter to pay, the costs resulting from pollution are met by society at large. However, policy development in relation to environmental and sustainable development initiatives has led to this financial burden being increasingly shifted to those enterprises or individuals who are causing/producing pollution; the ‘polluter pays’ principle.

Environmental accounts have been developed to analyse the environmental consequences of production and consumption patterns. From a production perspective, such accounts can be used to distinguish the environmental performance of different economic activities, an approach that can be extended through linking environment and economic output data, thereby providing measures of ‘environmental performance’, for example, emission intensities per unit of output.

A key component of the EU’s environment and health action programme within the Sixth Environmental Action Programme is the need for a complete overhaul of EU policy on chemicals management.

A European Regulation on the Registration, evaluation, authorisation and restriction of chemicals came into force in June 2007. The major objective of REACH is to ensure a high level of protection for human health and the environment, by increasing knowledge about the hazardous properties of chemicals.

The EU’s eco-management and audit scheme (EMAS) is a management tool for enterprises and other organisations to evaluate, report and improve their environmental performance. Enterprises have been able to participate in the scheme since 1995 (Council Regulation (EEC) 1836/93 of 29 June 1993). It was originally restricted to enterprises within the industrial economy, however, since 2001, EMAS has been open to all economic sectors, including public and private services. In addition, EMAS was strengthened by the integration of the ISO 14001 international standard, which is primarily concerned with environmental management and aims to help organisations establish or improve an environmental management system, to minimise harmful effects on the environment caused by its activities, and continually improve their environmental performance (Commission Regulation (EC) 196/2006) of 3 February 2006 amending Annex I to Regulation (EC) 761/2001 of the European Parliament and of the Council to take account of the European Standard EN ISO 14001:2004, and repealing Decision 97/265/EC). Organisations participating in EMAS are committed to evaluate and improve their own environmental performance, comply with relevant environmental legislation, prevent pollution, and provide relevant information to the public (via verified environmental audits). In July 2008 the European Commission proposed to revise EMAS to increase the participation of companies and reduce the administrative burden and costs, particularly for small and medium-sized enterprises. On 2 April 2009, the Council and the European Parliament reached agreement on a text for the revised EMAS Regulation. At time of writing, formal adoption of the Regulation and entry into force had yet to happen.

See also

Further Eurostat information

Publications

Main tables

Organisations with a registered environmental management system (tsdpc410)
Eco-label licenses (tsdpc420)
Area under agri-environmental commitment (tsdpc430)
Production of toxic chemicals, by toxicity class (tsdph320)
Environmental Accounts (t_env_acc)
Resource productivity (tsdpc100)
Environmental protection expenditure by the public sector (ten00049)
Environmental investment by the public sector (ten00050)
Current environmental expenditure by the public sector (ten00051)
Environmental protection expenditure by industry (ten00052)
Environmental investment by industry (ten00053)
Current environmental expenditure by industry (ten00054)
Environmental tax revenues - % of total revenues from taxes and social contributions (ten00064)
Environmental tax revenues - % of GDP (ten00065)
Components of domestic material consumption (tsdpc220)
Domestic material consumption by material - 1 000 t (tsdpc230)

Database

Environmental accounts (env_acc)
Monetary flow accounts (env_acm)
Physical flow accounts (env_acp)
Material flow accounts (env_ac_mfa)

Methodology / Metadata

Other information

  • Regulation 196/2006 of 3 February 2006 amending Annex I to Regulation (EC) 761/2001 and repealing Decision 97/265/EC
  • Regulation 1980/2000 of 17 July 2000 on a revised Community eco-label award scheme
  • Regulation 1836/93 of 29 June 1993 allowing voluntary participation by companies in the industrial sector in a Community eco-management and audit scheme

External links

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