Environmental goods and services sector

From Statistics Explained

Data from March 2014. Most recent data: Further Eurostat information, Database.

This article presents the main results from the statistics on the environmental goods and services sector in the European Union (EU) and its Member States for which data are available.

Environmental products are goods and services that are produced for the purpose of preventing, reducing and eliminating pollution and any other degradation of the environment (environmental protection - EP) and preserving and maintaining the stock of natural resources and hence safeguarding against depletion (resource management - RM).

According to Eurostat's estimates for the EU (28 Member States) the output of environmental goods and services per unit of gross domestic product (GDP) has grown by more than 50 % over the last decade and the employment linked to this production has risen to more than 4 million full-time equivalents.

Figure 1: Trends in EGSS total output and breakdown by market, non-market and ancillary activities for EU28
Source: Eurostat (env_ac_egss2,nama_gdp)
Figure 2: EGSS output by type of activity (market, non-market, ancillary), latest available year (% of GDP)
Source: Eurostat (env_ac_egss2)
Figure 3: Trends in environmental protection and resource management output for EU28 (year 2000=100)
Source: Eurostat (env_ac_egss2,nama_gdp)
Figure 4: EGSS market output latest available year (% of GDP)
Source: Eurostat (env_ac_egss2)
Figure 5: EGSS market output by environmental domain, latest available year (% of GDP)
Source: Eurostat (env_ac_egss2)
Figure 6: Trends in EGSS gross value added for EU28 (% of GDP)
Source: Eurostat (env_ac_egss2,nama_gdp)
Figure 7: EGSS employment for EU28 (1000 full-time equivalents)
Source: Eurostat (env_ac_egss1)

Main statistical findings

Estimates for EU show an increasing trend of EGSS output per unit of GDP over the last decade. This EGSS output indicator grew by 50 % between 2000 and 2011 (see Figure 1).

While data are not yet strictly comparable, in most of the European countries for which data are available EGSS output ranged between 2.4 % (Lithuania) and 6.2 % (Finland) of GDP (see Figure 2).

EGSS output can be sold on the market but can be also produced for own use (e.g. output produced by ancillary activities) and/or provided for free or at not significant economic prices (non-market output). Environmental products produced by ancillary activities are not intended for use outside the enterprise. They support other activities undertaken within the enterprise (e.g. waste management services carried out in-house). Non market output mainly consists of environmental services provided by general government, such as supervision and control activities for managing natural resources.

In all European countries that reported data the main part of EGSS output is produced by market activities. For the EU the share of market output is estimated to be more than 80 % of the total EGSS output (see Figure 1). Non-market activities and ancillary activities (which are not reported by all countries) accounted for only between 0.1 % (Italy) and 1.4 % (the Netherlands) of GDP (see Figure 2).

Environmental goods and services can be further broken down into environmental protection (EP) and in resource management (RM) domains (see the environmental domains in Data sources and availability). EP products are produced for combating and preventing air and water pollution, managing waste, reducing noise, etc.. RM products are produced for example for the management of water, forests, energy resources (which include the production of energy from renewable sources and the services for energy saving) and minerals (which includes recycling).

Output of EP and RM goods and services have developed differently in the EU (see Figure 3). Whereas EP output per unit of GDP increased by only 10 % from 2000 to the end of that decade, RM output grew by more than 100 %. The main driving force of the growth of RM was the increase of energy production from renewable sources (e.g. wind and solar power and biofuels) and products for energy and heat savings.

EP market activities represented in 2011 between 0.9 % (Bulgaria) and 3.7 % (Austria) of GDP, while RM market activities ranged between 0.04 % (Italy, 2009) and 6.7 % (Austria) of GDP. The differences in RM activities between countries are to a large extent due to differences in coverage of the environmental products included in the data collection (for example Italy reported only the output for management of water, while Austria included all RM output) (see Figure 4).

Figure 5 shows the distribution of EGSS market output by environmental domain in a few countries for which data are available. In all countries output associated with waste and wastewater management and the management of energy resources makes up most of the EGSS market output.

The income created by the environmental goods and services sector is evaluated in terms of gross value added, which is the difference between output and intermediate consumption. The share of EGSS gross value added in GDP is estimated to have grown from 1.6 % in 2000 to slightly more than 2.0 % in 2011 in EU28 (figure 6). This is a conservative estimate since it does not cover all resource management activities, in particular the management of forest resources, the management of wild flora and fauna and research and development for resource management are not included.

EU employment in environmental protection activities and for water and energy resources management is estimated to more than 4 million full-time equivalents by the end of the first decade of this century (see figure 7). The main driving force for the estimated increase since 2000 is the growing importance of activities that manage energy resources, in particular the production of energy from renewable sources, the production of wind and solar power stations and equipment and installations for heat and energy savings.

Data sources and availability

As part of the Central Framework of the System of Environmental-Economic Accounting (SEEA 2012) the EGSS module is broadly compatible with the international System of National Accounts (SNA 2008) and its European version, the European System of National and Regional Accounts (ESA 2010). Statistics on the EGSS provides data on output, employment, exports and value added generated in the production of goods and services that are used to measure, prevent, limit, minimise and correct environmental damage and to prevent depletion of natural resources. The data are broken down by environmental domains.

This article presents the main results from the data collection on environmental goods and services in Member States of the European Union (EU) and the EFTA. This data collection is based on a pilot questionnaire sent out in 2009 and then of two official questionnaires sent out in 2011 and 2013. The data are collected on a voluntary basis; countries not shown here have not delivered data or they have partially provided figures. Data are currently available for 16 countries and for the period 2004-2011 (different from country to country in terms of years covered). Please note that at present not all country totals comprehensively cover all types of activities and all environmental domains.

The proposal for an amendment of Regulation 691/2011 on European environmental economic accounts suggests adding three new modules of environmental accounts (environmental protection expenditure, environmental goods and services sector and energy flow accounts). If the amendment comes into force, the EGSS data collection would become obligatory for all countries. The first year where reporting of data for EGSS might be obligatory would be 2017.

Statistics on the EGSS can make use of the already existing information from the following accounts and statistics: national accounts, environmental expenditure statistics and accounts, structural business statistics, industrial commodity statistics, labour statistics, trade statistics, agriculture statistics, energy statistics, business register and VAT registers. Data sources used by countries include: surveys, administrative sources, statistical estimations. The EU results shown in this Statistics Explained have been compiled using a standardised data integration approach that combines existing data at Member State level from various Eurostat data collections and other international and national sources. This approach for the EU is chosen in order to achieve comparable results over time based on the same coverage for each of the Member States, while any country specific data shown in this article stem from the above mentioned questionnaires sent out in 2009, 2011 and 2013. The methods on which the EU results are based on are documented in Eurostat's Practical guide towards compiling EGSS statistics.

Economic variables

The EGSS statistics aim at compiling data for the following economic variables:

Output: consists of those produced goods or services that become available for use outside the producer unit, any goods and services produced for own final use and goods that remain in the inventories at the end of the period in which they are produced. In the EGSS output also includes ancillary output. Market output is to be measured at basic prices. Basic prices are the prices receivable by the producers from the purchasers for a unit of a good or service minus any tax payable on that unit as a consequence of its production or sale plus any product subsidy per unit. Output for own final use is to be valued at the basic prices of similar products sold on the market or by the total costs of production. Other non-market output is to be estimated by the total costs of production.

Gross Value Added: represents the contribution made by these activities towards gross domestic product (GDP). It is the difference between the value of the output and intermediate consumption.

Employment: the employment in environmental protection and resource management activities is measured by the full-time equivalent employment engaged in the production of the environmental output as defined above. The full-time equivalent is the number of full-time equivalent jobs, defined as total hours worked divided by average annual hours worked in full-time jobs.

Exports: consist of sales, barter, or gifts or grants, of goods and services from residents to non-residents. Countries should report exports according to NACE which is in line with the future EGSS module to be added to Regulation 691/2011 on European environmental economic accounts.

Environmental domains

The scope of EGSS is defined according to the classification of environmental protection activities (CEPA) and the classification of resource management activities (CReMA). Data are collected and disseminated using the following breakdown:

CEPA 1 - Protection of ambient air and climate, of which:

CEPA 1.1.2 and 1.2.2 - Protection of climate and ozone layer

CEPA 2 - Wastewater management

CEPA 3 - Waste management

CEPA 4 - Protection and remediation of soil, groundwater and surface water

CEPA 5 - Noise and vibration abatement

CEPA 6 - Protection of biodiversity and landscapes

CEPA 7 - Protection against radiation

CEPA 8 - Environmental research and development, of which:

CEPA 9 - Other environmental protection activities

CReMA 10 - Management of water

CReMA 11 - Management of forest resources, of which:

CReMA 11.A - Management of forest areas

CReMA 11.B - Minimisation of the intake of forest resources

CReMA 12 - Management of wild flora and fauna

CReMA 13 - Management of energy resources

CReMA 13A - Production of energy from renewable resources

CReMA 13B - Heat/energy saving and management

CReMA 13C - Minimization of the use of fossil energy as raw materials

CReMA 14 - Management of minerals

CReMA 15 - Research and development activities for resource management, of which:

CReMA 16 - Other resource management activities

CEPA 2000 is a recognised international standard included in the family of international economic and social classifications. It can be downloaded from the Ramon website.

No internationally agreed standard classification for resource management activities exists yet. However, the Classification of resource management activities (CReMA) developed by the EGSS task force is in use for EGSS purposes.

The suppliers of the environmental goods, services and technologies are scattered over many NACE divisions. Data by NACE are not currently published.

Context

The increased awareness of the need for combating environmental pollution and preserving natural resources has led to an increase in the supply and demand of environmental goods and services, i.e. products to prevent, measure, control, limit, minimise or correct environmental damage and resources depletion. In the context of globalisation, technological change and new political priorities, policy makers have expressed strong interest in the environmental sector. This is widely seen as a sector with great growth potential, generating wealth and creating jobs as well as playing a major role in the transition of economies towards sustainable development. See, for example, the 'Employment Package’ of the European Semester launched in April 2012 and the Decision of the European Parliament and of the Council on a General Union Environment Action Programme to 2020 (20/11/2013) "Living well, within the limits of our planet". At national and international level EGSS data are interesting for policymakers and the research community especially in the field of economics.

The EGSS domain is the ideal framework to collect data on employment that directly depends on the production of outputs intended to protect the environment and to manage natural resources. Due to its compatibility with the boundaries and definitions used in the national accounts the EGSS database is an indispensable input to microeconomic and macroeconomic analysis of the green economy, environmental and resource policy analysis and the monitoring of policy targets. For most of the countries the EGSS is important for analysing issues related to green growth and green employment.

Output and employment data are widely used indicators for analysing economic sectors and for monitoring their performance and growth. Gross value added is mainly used to compare the income added by the EGSS to the national income. Export data are important for the evaluation of the competitiveness of an economic sector within the global economy.

The concepts of EGSS are described in the 2009 EGSS handbook which is a reference tool for developing a data collection system on the environmental goods and services sector at national level. It is a step forward with respect to the OECD/Eurostat manual on the "Environmental goods and services industry" produced in 1999. A practical guide recently developed by Eurostat complements the 2009 EGSS handbook with practical methods towards compiling EGSS statistics using already existing statistics.

See also

Further Eurostat information

Database

Environmental accounts (env_acc)
Monetary flow accounts (env_acm)
Employment in environmental goods and services sector (env_ac_egss1)
Production, value added and exports in the environmental goods and services sector (env_ac_egss2)
Production, value added and employment by industry groups in the environmental goods and services sector (env_ac_egss3)

Dedicated section

Methodology / Metadata

Source data for tables, figures and maps (MS Excel)

Other information

  • Regulation 691/2011 of 6 July 2011 on European environmental economic accounts
  • Regulation 549/2013 of 21 May 2013 on the European system of national and regional accounts in the EU (ESA2010)

External links


Views