Making the environment count

Making the environment count
Making the environment count
– Nordic accounts and indicators for analysing and integrating environment and economy
Making the environment count
– Nordic accounts and indicators for analysing
and integrating environment and economy
Olle Björk, Viveka Palm, Nancy Steinbach, Øyvind Lone,
Kristine Kolshus, Ole Gravgård Pedersen, Signe Krarup,
Leo Kolttola and Annika Lindblom
TemaNord 2016:507
Making the environment count
- Nordic accounts and indicators for analysing and integrating environment and economy
Olle Björk, Viveka Palm, Nancy Steinbach, Øyvind Lone, Kristine Kolshus, Ole Gravgård Pedersen,
Signe Krarup, Leo Kolttola and Annika Lindblom
ISBN 978-92-893-4466-1 (PRINT)
ISBN 978-92-893-4467-8 (PDF)
ISBN 978-92-893-4468-5 (EPUB)
TemaNord 2016:507
ISSN 0908-6692
© Nordic Council of Ministers 2016
Layout: Hanne Lebech
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However, the contents of this publication do not necessarily reflect the views, policies or recom­
mendations of the Nordic Council of Ministers.
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Preface ........................................................................................................................................................ 7
Foreword by the chair of the Ad Hoc group ............................................................................... 9
Summary ................................................................................................................................................. 11
The mission of the Ad Hoc Group .......................................................................................... 12
The recommendations of the Ad Hoc Group..................................................................... 12
Improvements in the future..................................................................................................... 15
List of abbreviations ........................................................................................................................... 17
1. Introduction.................................................................................................................................... 19
Purpose and the mandate ........................................................................................... 19
Linking economy, environment and social issues ............................................ 20
International developments of integrated policy and indicators............... 26
Measuring sustainable development ..................................................................... 28
The indicators in this report ...................................................................................... 32
Structure of the report ................................................................................................. 36
2. The Nordic countries – an overview .................................................................................... 37
Summary ............................................................................................................................ 37
Integrating the economy and the environment ................................................. 38
3. Driving forces – from the economy and society .............................................................. 47
Summary ............................................................................................................................ 47
The economy and our population............................................................................ 49
Use of energy .................................................................................................................... 51
The need for materials ................................................................................................. 55
Other drivers of environmental pressures .......................................................... 61
Recommendations and future use........................................................................... 62
4. Pressures on the environment ............................................................................................... 65
Summary ............................................................................................................................ 65
Preconditions for climate change policy in the Nordic countries .............. 66
Acidifying emissions in the Nordic countries ..................................................... 69
Emissions of particles to our atmosphere............................................................ 72
Other environmental pressures ............................................................................... 74
Recommendation and future use ............................................................................. 74
5. Responses – environmental economic instruments...................................................... 77
Summary ............................................................................................................................ 77
Environmental taxes ..................................................................................................... 78
The EU Emissions trading system (EU ETS) ....................................................... 81
Producers of environmental goods and services (EGSS) ............................... 84
Environmental protection expenditure ................................................................ 87
Other environmental policy responses ................................................................. 91
Recommendation and future use ............................................................................. 92
6. Extensions and analysis – options for data and policy use ........................................ 93
Summary ........................................................................................................................... 93
Consumption – or demand-related environmental impacts ....................... 94
Analysing drivers of greenhouse gas emissions ............................................... 97
Environmental economic instruments – the price of CO2 emissions ....... 99
Environmental economic modelling .................................................................... 102
Recommendations and future use ........................................................................ 105
7. Social indicators ......................................................................................................................... 107
Summary ......................................................................................................................... 107
Introduction ................................................................................................................... 108
Sustainable development indicators (SDI) ....................................................... 109
Recommendations and future use ........................................................................ 112
8. Ecosystem services ................................................................................................................... 113
Summary ......................................................................................................................... 113
Introduction ................................................................................................................... 114
UN SEEA experimental ecosystem accounts .................................................... 115
TEEB – Economics of Ecosystems and Biodiversity ...................................... 118
Recommendations and future use ........................................................................ 121
9. Discussions and conclusions................................................................................................. 123
Thoughts on indicators – and the framework to use .................................... 123
Recommendations ....................................................................................................... 127
References ............................................................................................................................................ 129
Sammanfattning ................................................................................................................................. 133
Ad hoc-gruppens uppgift ........................................................................................................ 134
Rekommendationerna från ad hoc-gruppen.................................................................. 134
Förbättringar i framtiden ....................................................................................................... 137
Appendix 1: Methodology .............................................................................................................. 139
GDP and beyond ......................................................................................................................... 139
National accounts: GDP and value added ........................................................................ 142
Energy accounts ......................................................................................................................... 143
Economy-Wide Material Flow Accounts .......................................................................... 143
Air emissions accounts ............................................................................................................ 144
Environmental taxes ................................................................................................................ 147
Environmental goods and services sector ...................................................................... 149
Environmental protection expenditure ........................................................................... 150
The NACE classification .......................................................................................................... 151
Appendix 2: On-going initiatives and processes .................................................................. 153
The Nordic Council of Ministers (NCM) ........................................................................... 153
National initiatives including Statistical Offices ........................................................... 154
Outside the Nordic region ...................................................................................................... 159
To follow the developments and trends in our economy is vital. Just as
vital, however, is to enhance our understanding of how economic de­
velopment links to broader aspects of welfare, such as environmental
sustainability. Therefore, it is pertinent to start looking beyond eco­
nomic indicators such as GDP to find useful and relevant complements
to these indicators. GDP, while important, is not sufficient or suitable
to reflect the environmental challenges of our time.
In 2013, the Nordic Ministers for the Environment decided to
strengthen the measurement of green estimates of welfare and socioec­
onomic developments. Today, we can celebrate the results of the work
of experts from the Nordic countries in environment, economics and
statistics in the form of this report, Making the environment count Nordic accounts and indicators for analysing and integrating environ­
ment and economy. For the first time, a wide set of indicators linking the
environmental development to the socioeconomic progress is compiled
to reflect the trends in the Nordic region.
Developing appropriate indicators and accounting systems for the
integration of economic information with environmental issues and
policy targets has long been a focus of attention for environmental pol­
icy, internationally, in the Nordic countries and in the Nordic Council
of Ministers. In recent years, several major initiatives have been taken
internationally in order to move towards integrated analysis and de­
cision making; the EU has established a regulation on the monitoring
of environmental economic information and the United Nations has
defined a new set of goals for sustainable development. The report at
hand provides an ambitious input to the international debate on the
integration of alternative aspects of welfare to the economic deci­
sion·making. It delivers a Nordic contribution to the important and
complex work that aims at setting the stage for measuring and follow­
ing up the newly reinforced sustainability commitments.
On behalf of the secretariat of the Nordic Council of Ministers, I thank
the Ad hoc Group on Complementary Measures for Welfare for its contri­
bution and dedication in general and regarding this report, in particular.
I look forward to further progress in this field. In the Nordic region, we
aim to continue as forerunners in integrating economic and environmen­
tal data and information.
Copenhagen, November 2015
Dagfinn Høybråten
Secretary General
Nordic Council of Ministers
Making the environment count
Foreword by the chair of the
Ad Hoc group
The Nordic ministers for the environment decided at their meeting the
7th February 2013 in Jukkasjärvi, Finland to strengthen the measurement
of green estimates of welfare and socioeconomic developments to move
beyond the constraints of economic development. The ministers decided
to establish an Ad Hoc working group to promote this work and invited
the representatives from ministries of finance and industry as well as the
statistical offices to take part in this work.
The Ad Hoc Group on Complementary Measures for Welfare was given
a mandate consisting of tasks to point out directions on how to integrate
economic and environmental information and analysis through existing
statistics. The present report is a contribution to the important and com­
plex works that aims at setting the stage for measuring and follow up the
sustainability commitments that have decided upon in the wake of the Rio
plus 20 conference. The group was asked to focus on environmental mat­
ters but also mandated to consider the future potential of also including
social issues into the realm of integration.
In this spirit the Nordic Council of Ministers is hereby recommended
to take steps to pave the way for a yearly integrated follow-up of the de­
velopment of the economy, the environment and social conditions in Nor­
dic countries. Such coordination will help to bring forward a more inte­
grated discussion of society’s development.
Viveka Palm and Nancy Steinbach, Statistics Sweden, provided the
project lead and secretariat. Members of the group are Øyvind Lone,
Ministry of Climate and Environment, Norway and Kristine Kolshus, Sta­
tistics Norway, Leo Kolttola, Statistics Finland and Annika Lindblom,
Ministry of the Environment, Finland, Ole Gravgård Pedersen, Statistics
Denmark and Signe Krarup, Ministry of Environment, Denmark, Ingrid
Hasselsten, Ministry of Environment and Energy, Sweden and
Anette Askerøi-Waldmann, Nordic Council of Ministers (secretariat).
Members of the group have also been Satu Reijonen at the Nordic Coun­
cil of Ministers and Sigrid Døvling Søndergaard formerly at the Nordic
Council of Ministers, Petronella Troselius, and Teresa Hellgren Swedish
Ministry of Environment and Energy, Ida Björk, Sebastian Constantino,
Statistics Sweden and Maja Cederlund and Michael Troyanovsky for­
merly at Statistics Sweden.
I thank the members of the Ad Hoc Group for their contributions and
dedicated work.
Olle Björk
Chair of the Ad Hoc Group
Making the environment count
The Nordic Council of Ministers is taking steps to make a yearly coordi­
nated follow-up of the development of the economy, the environment and
the social conditions in Nordic countries through the committees under
its umbrella. Such coordination will help to bring forward a more inte­
grated discussion of these topics. Despite many efforts at measuring sus­
tainable development from different angles, more efforts are needed to
provide a consistent basis for the discussion of what a green, inclusive and
prosperous development can look like.
The results by the Ad Hoc Group for Complementary Measures of Wel­
fare show how far the Nordic region and separate Nordic countries in the
areas of environmental economic statistics and accounts have come. It
also shows initiatives to expand the knowledgebase of ecosystem services
and the expansion to environmental economic modelling. The access of
economic data on production and consumption, combine these with data
on energy use, emissions of climate gases and extend the knowledgebase
to economic instruments allows for analyses of policies. At the same time
these data provides comparable overarching indicators.
The results and recommendations in this report are directed to and
could be used by a range of stakeholders. Ministries, such as those of Fi­
nance, Environment and Industry could benefit from the evidence-based
approach of the proposed indicators. Research institutes could benefit
from using the same input-data into different types of environmental and
economic models.
It is important to note that the data needed for the proposed monitor­
ing indicators already exist in Nordic countries. No added reporting re­
quirements or data collection will be necessary. The proposal focuses on
demonstrating the use of existing data in new contexts. The only area
where international comparable data are not currently available in the
Nordic countries is related to ecosystems.
The mission of the Ad Hoc Group
The group was mandated to consider eight tasks. This consisted of, e.g., to
provide suggestions on how to increase the use of already existing indica­
tors and statistics. These should be used to complement the Gross Domes­
tic Product (GDP) measure starting with how to use the known infor­
mation in a broader analysis of welfare, focusing initially on the environ­
mental dimension.
An inventory of ongoing efforts and international processes within
the Nordic countries in the field of integrating environmental and eco­
nomic accounts was made. Policy needs are strengthening the develop­
ment towards an integrated environmental and economic platform for
decision making. From policy and strategy initiatives from the UN, the
OECD and the European Union, it is becoming clear that the knowledge
base for the assessment of sustainable development is expanding (and im­
proving when it comes to statistical quality).
For over 25 years the global statistical community has developed the
area and framework of the System of environmental-economic accounts
(SEEA). With the publications of SEEA central framework (SEEA-CF 2012)
in 2014 and its approval as a statistical standard, a consensus has been
reached within the statistical community on how to produce statistics us­
ing this statistical framework. Simply put, the framework takes economic
statistics and links them to environmental statistics. The link between the
two statistical areas is established using common classifications, for eco­
nomic actors in production and consumption activities, such as industries,
public authorities and households. This means that economic analysis
methodologies, such as input-output analysis, can be extended to include
environmental aspects.
The recommendations of the Ad Hoc Group
The main recommendation from the Ad Hoc Group is to continue the de­
velopment of the environmental-economic accounting. With regards to
the issue on how to use existing data in new areas and in new contexts,
the recommendation is to integrate economic data with environment sta­
tistics using the UN System of Environmental and Economic Accounts
(SEEA-CF) and related sub-systems.
This is an area where the Nordic countries are already in the fore­
front among the countries worldwide. The Ad Hoc Group therefore pro­
Making the environment count
pose an annual Nordic Environmental and Economic Account to be pro­
duced by the Nordic Council of Ministers. Constructing and regularly
publishing a basic Nordic Environmental and Economic Account would
mean new indicators and tables capturing economic and environmental
information together.
For example, industry level profiles could be developed which com­
bine statistics on value added with energy use or air emissions or envi­
ronmentally related taxes paid.
The Ad Hoc Group proposes that the Nordic countries will further ex­
plore how to apply a more integrated approach in their statistical sys­
tems. It should also be visual in government decision-making procedures,
taking into account the economic, environmental and social aspects in a
balanced way.
Hopefully the work can also trigger similar endeavours in other re­
gions and parts of the world. In particular, contribute to the necessary
monitoring and review process of the global work on the recently adopted
UN Sustainable Development Goals.
Such SEEA data and accounts, consistent, exhaustive and exclusive, at
detailed, disaggregated level, linked to national accounts, provide a mul­
tipurpose information basis for revealing the interactions between the
economy and the environment. Examples of such analyses in the Nordic
countries can be found in the main chapters of this report.
There is EU legislation that stipulates the reporting of data for certain
SEEA data that are required to be reported yearly by European countries
(the European Statistical System), i.e. air emission accounts, energy ac­
counts, environmental taxes by industry, material flow accounts, environ­
mental goods and services sector and environmental protection expendi­
ture accounts. The system is designed so that the main economic actors
and their production and consumption activities can be followed from an
economic and an environmental perspective. The basic data for these ar­
eas are produced by most Nordic countries and are readily available.
These data provide a coherent basis from which Nordic EnvironmentalEconomic accounts can be constructed.
In summary, the most important conclusions and recommendations are:
To produce a yearly Nordic level Environmental and Economic
Account on the web and publish it through the Nordic Council of
Ministers. Existing statistical frameworks, the national accounts
and the environmental accounts should be used to integrate
economic data with environmental data, fully consistent and
Making the environment count
coherent with one another. The indicators proposed are presented
in Chapter 1, Table 1.2.
The Nordic Environmental and Economic Account can be used as a
tool to analyse important policy issues, such as (i) the greening of
all sectors (not just “green” sectors), (ii) analysis of structural
changes and important factors contributing to environmental
pressures, (iii) assessments of “footprints”, and (iv) policy
instrument design.
The Nordic Environmental and Economic Accounts should begin
with issues related to the use of natural resources, the use of
renewable and non-renewable energy, emissions to air and climate,
environmentally related economic activities such as environmental
taxes and the production of environmental goods and services. As
these statistics already exist and are produced on a regular basis in
each of the Nordic countries, there is no need for any broad
initiatives or additional resources at the national level.
Considering that the System of Environmental-Economic Account is
still an evolving field, where new fields of data are explored on a
global basis, it is pertinent to review new development periodically,
such as every 3 years, to ensure that new developments are quickly
incorporated in the structure of measurement indicators as
proposed by the Ad Hoc Group.
The recommendation from the group concerning environmentaleconomic models is to increase the awareness of the availability of
environmental-economic accounts towards model builders, in order
to improve the consistency of the models. This awareness raising
could be done through seminars or workshops.
The group also recommend the establishment of a new platform
where the integration of social issues into the economic and
environmental sphere can be discussed and further enhanced.
The Ad Hoc Group plans to stimulate such an effort through a
workshop gathering relevant expertise. There is a statistical
framework established already, social accounts which, just as
with the case of environmental accounts is a satellite account to
the national accounts.
Making the environment count
Improvements in the future
This report shows how an environmental-economic data set can be
used for a Nordic follow-up of the environmental economic develop­
ments. With an integrated statistical system there are many more pos­
sibilities to create relevant indicators, answer specific questions and
make harmonized assessments of environmental-economic issues
within the Nordic countries or comparisons between the Nordic region
and EU for example.
The data are also in a format that allows using them as input for envi­
ronmental economic modelling and some of the existing modelling efforts
in the Nordic countries are briefly described in the report. By continuing
the development of new modules in the accounts there are possibilities to
include new areas in the future. Such possible areas could be the develop­
ment of water or forestry accounts or even new types of land accounts
that could underpin studies on ecosystem services. Another interesting
area is accounts for the environmental economic instruments, which
could serve to enhance knowledge in the design of new policy initiatives.
An area for future development is to integrate more social data with
the environmental and economic data in order to derive indicators that
could be used to complement GDP in a broader analysis of welfare. There
are some areas that are relatively easy to include, for example, employ­
ment and education.
Our present report and work is in line with new developments in
the field of sustainability, most notably the work within the framework
of the new UN Sustainable Development Goals. An early Nordic envi­
ronmental economic account could serve as pioneering effort when it
comes to develop reliable measures of progress towards these new
sustainable development goals. It would also be in line with and con­
tribute to the work conducted by the OECD within the strategy for
Green Growth and the progress of the Nordic Council of Ministers on
the “circular economy”.
Making the environment count
List of abbreviations
Classification of Environmental Protection Activities
Convention on Long-range Transboundary Air Pollution
Domestic Material Consumption
Environmental Goods and Services Sector
Environmental Protection Expenditure
European Union (in 2015 consisting of 28 member countries)
European Union Emission Trading Scheme
Economy-Wide Material Flow Accounts
Gross Domestic Product
Greenhouse gases – includes carbon dioxides, methane and
nitrous oxides
Statistical classification of economic activities in the
European Community
Sustainable Development Indicators
System of Environmental Economic Accounting – Central
UN System of National Accounts
United Nations
United Nations Framework Convention on Climate Change
1. Introduction
Purpose and the mandate
The purpose of this project and the task of the Ad Hoc Group consisted of
the following 8 tasks. The initial focus is on complementing the economy
with the environmental dimension:
1. Suggest how to increase the use of already existing indictors and
other measures that can complement GDP, initially with a focus
on the environmental dimension, but to touch on the social di­
mension as well.
2. The group should look at the possibility to include a social- and
health perspective within this project.
3. Investigate the possibilities and make a suggestion for a Nordic highlevel event with a theme of environmentally related welfare indica­
tors that complement GDP.
4. Suggest a way to report an overview of ongoing Nordic initiatives
on the theme of establishing regular measurements to comple­
ment GDP.
5. Suggest ways to follow-up recommendations from the TEEB Nordic
report and how to apply the results of other current Nordic work on
the beyond GDP theme.
6. Exchange information about functioning systems, services and prac­
tices in the different Nordic countries.
7. Investigate the possibilities for a strengthened communication about
the Nordic regions and its states and trends through indicators, to be
published on the web or through the Nordic statistical yearbook.
8. Suggest other possible ways of strengthening the discussion on com­
plementing measures within the Nordic Council of Ministers such as
for example economy policy overviews.
The group and the project was initiated by the Ministers of Environment in
the Nordic countries, during a Nordic ministerial meeting in Jukkasjärvi in
2013, as a means to strengthen the cross-sectorial work of complementing
the GDP measure with environmental and socioeconomic aspects.
The first, second, fourth, fifth and seventh task of the project are in
effect dealt with in this report. The report describes existing indicators,
their connection to the economy and their use as complements to the GDP.
It also describes how strengthened communication of these indicators
can be achieved by publishing annual Nordic environmental-economic ac­
counts by the Nordic Council of Ministers.
Task 3 is a process oriented task, and has been on the agenda through­
out the project. Several suggestions of events have been put forward to
the Nordic Council of Ministers. These proposals are not described any
further in this report.
Task 4 has been discussed during the work of the Ad Hoc Group and
the result has led to an inventory of the ongoing efforts to develop indica­
tors from measurement systems that link the economy to the environ­
ment, which is available in Annex 2 of this report. The inventory goes
through some new areas of developments such as measuring environ­
mentally related subsidies, some initiatives on ecosystem management
but also existing work underway on how to base policies on such infor­
mation in innovative ways. Some examples are aligning the economy with
green strategies or efforts to use the accounts to measure the environ­
mental pressure from consumption.
Suggestions on how to include aspects on ecosystems services (task
5) with basic statistics are included. The work has been based on expe­
riences from research studies from the Nordic countries such as e.g. the
TEEB Nordic report.
Tasks 6 and 8 have been process oriented and taken up at each meet­
ing of the Ad Hoc Group. Minutes from those meetings are available
upon request.
Linking economy, environment and social issues
The project builds on existing statistical systems, services and practices
in the Nordic countries, more specifically the statistical system of National
Accounts and the System of Environmental and Economic Accounts
(SEEA). Instead of separate indicators looking only to their own field, the
aim here is to connect the economic, environmental and possibly later on
social information and use it for integrated analyses.
Making the environment count
The indicators presented in this report are mainly based in a statisti­
cal framework called the System of Environmental and Economic Ac­
counts (SEEA). Its strength is based on the link to the System of National
Accounts (SNA), the statistical system in which the GDP has its foundation
and the economic data contained therein. The system is formed so that
the economic actors of a nation, industries, government and households,
are described through their activities of production and consumption.
This allows for new integrated environmental economics statistics to be
obtained. The system can include resource use and emissions as well as
relevant economic instruments and so be used to analyse the related pol­
icies that are in place or planned.
Such disaggregated data, linked to national accounts, are required to
analyse several important policy issues, such as (i) greening of all sec­
tors (not just “green” sectors), (ii) decomposition analysis, i.e. looking
for explanations to specific changes in emissions, or energy use, (iii) as­
sessment of “footprints”, e.g. consumption related analysis, and (iv) pol­
icy instrument design. For example, this report shows if the industries
and services of the economy are working towards improved efficiency
in terms of resources or energy use. It shows how the industries choose
to invest in improved green technologies and changes in the use of fossil
fuels to produce the same amount of value added while reducing their
impact on the environment (see for example chapter 4). Examples of
how the statistics can be used to explain or to illustrate assumed causal­
ities between production of emissions and production of goods and ser­
vices and how Nordic consumption can be linked to emissions in other
countries are shown in chapter 6. In chapter 5 the report indicates the
type of statistics available for the follow-up and design of environmental
economic policy.
For social issues the accounts have not been used to the same extent.
The approach can incorporate social data for issues like employment,
gender in working life and working environment. For other aspects,
such as unemployment, and for groups which are outside the workforce,
such as children and retired people, further development is needed. This
report has a separate chapter on social aspects that are beyond the is­
sues of environmental-economic accounts, but that could be added in
future developments.
Making the environment count
Focusing on the link between economy and
The national accounts keep track of the economic activities in a nation
during a year and the environmental accounts link them to drivers of en­
vironmental pressures, the pressures themselves and responses to com­
bat or mitigate the pressures.
Companies producing goods and services, within all types of areas,
ranging from agriculture production, to manufacturing, to restaurants,
hotels and financial activities are covered. The same goes for govern­
ment use of economic instruments and households consumption of
food, transport services etc. All of us can, through our actions, cause
negative environmental effects for example by using fossil fuels, which
increases levels of emissions of greenhouse gases in the atmosphere,
or by choosing renewable energy sources which do not cause added
impact to our climate.
We can also decrease environmental pressures, for example, by
changing production methods and consumption patterns through in­
creasing the prices on harmful substances through taxation policies or
cap and trade systems.
In statistical terms indicators are sometimes described within the
framework of a model named by the acronym DPSIR. According to the
DPSIR-model information can be grouped under the following labels:
Drivers, Pressures, State, Impact and Response. The purpose of the model
is to capture information that show how different activities in society af­
fect environment or the environmental state and what is done to prevent
continued degradation. A driver for an environmental pressure is then
typically energy use, population size, transport volume or changes in land
use for example. Pressures can be tonnes of emissions to air or the
amounts of waste produced. State show, for instance, the concentration
of environmentally harmful substances in air, water or land. Impacts are
the problems that the changes in concentrations are causing, such as sick­
nesses, corrosion or similar. Responses finally, can be environmental
taxes, legislation or subsidies.
The environmental accounts can above all contribute with information
that show drivers, pressure and response, the light colours in figure 1 as
these groups can be described easily with statistical data. The impacts can
be described through estimates of how much damages the environmental
impacts are causing society. These estimates are normally produced by re­
search institutes or government authorities. To describe the state of the en­
vironment, e.g. concentrations of various pollutants in certain habitats,
measurements and research close to the environment itself is required.
Making the environment count
The groups of impact and state are shown as grey colour in figure 1 and
these are more difficult to describe with statistical information. It is rather
based on real measurements in nature (tests need to be taken from lakes,
soil etc.) and research studies linking environmental degradation to e.g. hu­
man health.
Figure 1: DPSIR-model
Note: Light coloured groups can be described through statistics, grey colour groups can be
described through measurements in nature and research studies.
What is the System of Environmental-Economic
The System of Environmental-Economic Accounts (SEEA) is an interna­
tionally acknowledged statistical framework which enables linking eco­
nomic statistics and environmental statistics. It is based on an interna­
tionally agreed standard1 that provides the compiler of the accounts
with a common set of concepts, definitions, classifications and more. It
builds on the System of National Accounts which means that links be­
tween the environment and the economy can be made in consistent
ways. By using the accounts that are compiled following the principles
SEEA central framework, approved by the UN Statistical Commission in 2012, with final version pub­
lished in 2014 by the United Nations, European Commission, Food and Agriculture Organization of the
United Nations, Organization for Economic Co-operation and Development, International Monetary Fund
and World Bank.
Making the environment count
of SEEA Central Framework (SEEA CF, United Nations et al., 2014), a
number of policy relevant questions can be answered including ques­
tions related to the use of natural resources as well as responses made
by governments to minimise environmental pressures. Basically, the
SEEA CF includes:
Physical flows of materials through the economy, e.g. the use of
energy and chemicals, together with the emissions and waste to
which these flows give rise.
Economic variables that are already included in the National
accounts but are of obvious environmental interest, such as
investments and expenditure in the area of environmental
protection, environment-related taxes and subsidies and
environmental classification of activities and the employment
associated with them.
Natural resources: Environmental accounts should make it possible
to describe stocks and changes in stocks of selected finite or
renewable resources.
Outside of the SEEA CF are other aspects that are still covered within the
frame of environmental-economic accounts. For example, the environ­
mental accounts should deal both with questions related to the mone­
tary valuation of this natural capital and qualitative aspects that do not
have any market or other defined monetary value, e.g. the value of out­
door life and biodiversity. The SEEA experimental ecosystem accounts,
which consider these issues, will be further described in chapter 8 in
this report.
The SEEA brings into direct focus the relationship between the envi­
ronment and well-being not revealed through traditional measures of
economic activity, such as GDP and national income. The SEEA allows for
multiple purposes and multiple scales of analysis.2
The SEEA was created to start a process of making sustainable assess­
ments of the economy. In the beginning of the development of SEEA, there
was a focus on creating a green net national product as an indicator from
the system, but after pilot efforts in many countries, the work then moved
on to explore the many different issues that are now part of the accounts
(Statistics Denmark 2013, Palm, V.3 & Samakovlis, E.4 2004).
UNSD Briefing note:
At Statistics Sweden.
4 At the National Institute of Economic Research.
Making the environment count
Figure 2 depicts some of the flows captured within the SEEA frame­
work. The input to the economy can be anything necessary to make the
economy run, for examples capital investments, energy products, materials
or the work force. The economy itself buys and sells products they need to
make their own production possible, called intermediate consumption, the
government interacts with both companies and households through envi­
ronmental economic instruments, such as the taxation system or providing
subsides. The output from the activities is goods and services, measured in
monetary terms, but also emissions of different kinds measured in tonnes
or cubic meters (in the SEEA referred to as residuals).
Figure 2: Some important environmental and economic components described by the SEEA
The system allows us to identify which actors in society are contributing to
the economy, to the environmental pressure and how the business structure,
energy systems and policies form the resulting development. Does the econ­
omy grow more or less than the emissions from production or consumption?
Which actors are obliged to respond to different kinds of economic instru­
ments, and which are these instruments (i.e. taxes, subsidies, transfers and
licenses). How is employment influenced through the establishment of
“green sectors”? The results of these types of questions are relevant for sev­
eral ministries, such as those of finance, environment and industry.
Making the environment count
An important classification used within the environmental accounts is
the classification of economic activities (known as “NACE” in the European
Statistical System). The NACE is a statistical classification that groups eco­
nomic activities into different industries, such as agriculture, manufactur­
ing and services. The terminology industry applies to all production sectors
in this report, whether it is a manufacturing industry or transport services.
The list of industries included in the NACE is shown in Annex 1.
International developments of integrated policy
and indicators
The European Statistical System and environmental
Within the European Statistical System work on environmental accounts
makes progress each year. Annual data for six modules of the SEEA have
to be reported yearly to Eurostat, from 2017 onwards. This reporting is
required base on EU Regulation 538/2014 (with EFTA relevance).5 The
modules cover: Air emission accounts (14 pollutants)6, Energy accounts
(natural resource input, energy products and residuals), Environmental
taxes, Environmental protection expenditures, Environmental goods and
services sector and Material flow accounts. These areas form the core of
the data used in this report.
The regulation was put in place in order to secure the flow of infor­
mation as regards sound information on the pressures and driving forces
on the environment and on the policy responses. The further develop­
ment of SEEA within the Europe Statistical System is described in the Eu­
ropean Strategy for Environmental Accounts.
In the European Strategy, water and waste accounts, as well as environ­
mental subsidies, are important modules which are prioritised for further de­
velopment within the European Statistical System New inspiration is also el­
evating ecosystem accounting in Europe and world-wide. In Denmark, the
work on developing all these areas, and others, are well underway due to re­
newed efforts by Statistics Denmark. Sweden has for many years produced
accounts for environmentally motivated subsides and is now exploring the
5 Regulation (EU) No 538/2014 of the European Parliament and of the Council of 16th April 2014 amending
Regulation (EU) No 691/2011 on European environmental economic accounts.
6 Carbon dioxide without emissions from biomass, Carbon dioxide from biomass, nitrous oxide, methane,
perfluorocarbons, hydrofluorocarbons, sulphur hexafluoride, nitrogen oxides, non-methane volatile organic
compounds, carbon monoxide, particulate matter <10 and <2,5, sulphur dioxide and ammonia.
Making the environment count
development of accounts for ecosystems through land use accounts. Norway
improving statistics on environmental protection expenditure and is devel­
oping statistics on the environmental goods and services sector and environ­
mentally motivated subsidies. Finland has for many years produced forestry
accounts, yet another area of growing interest by policy makers in Europe
and the FAO.7 Finland has also included in their material flow accounts addi­
tional information about “hidden flows” abroad of the use of materials in Fin­
land and unused extraction of materials.
In addition, the EU 2020 strategy includes several (flagship) initia­
tives and “road maps”, such as the one on resource efficiency. The EU
work on circular economy8 also involves work on and further develop­
ment of indicators for resource efficiency and circular economy.9
The OECD and Green Growth
Both the European Union (EU) and the OECD have developed strategies
for green growth and/or green economy which also include proposals for
indicators and accounts that are highly relevant for Nordic work and as
has been pointed out in Bruvoll et al. (2012): “Green growth is not about
green or not-green sectors, but about whether the economy as a whole
develops in a more environmentally friendly direction given their relative
starting points”.
The OECD Green Growth Strategy is accompanied by extensive work
on developing indicators about green growth (see for example OECD
Green Growth Indicators 2014).10 The member countries are now picking
up the work. In Finland for example, a study by several research institutes
and Statistics Finland will be released in 2016 evaluating the proposed
OECD indicators in a Finnish context.
During 2012, a “reflection group” with representatives from three OECD
bodies (from statistics, environment and economics) developed a proposal
for six “headline indicators” (and a seventh “placeholder”) which is aimed at
providing a general overview of the development for use in future OECD pub­
lications on green growth. The six indicators and the placeholder are:
A new SEEA manual on agriculture, forestry and fishery is under development:
8 Circular economy in this context refers to resource flows in the economy and how renewable energy and
reuse of material can help to decrease the pressure from the economy on the environment.
10 The OECD provides recommendations and measurement tools to support countries’ efforts to achieve eco­
nomic growth and development, while at the same time ensure that natural assets continue to provide the
ecosystem services on which our wellbeing relies (OECD Towards Green Growth 2011).
Making the environment count
CO2 productivity (GDP divided by tonnes of CO2 emissions).
Non-energy material productivity (GDP divided by Domestic
Material Consumption).
Multifactor productivity including environmental services.11
Index of natural resource use.
Changes in land use and land cover.
Air pollution (population exposure to PM2.5).
Placeholder for economic opportunities and policy responses
stemming from green growth.
For both CO2 productivity and non-energy material productivity it is pro­
posed to include both production-based and consumption-based data.
The latter focus on the global “footprint” caused by or rather linked to, our
consumption i.e. import-export adjusted CO2 data, etc.
In addition, the OECD is currently developing a data collection vehicle
in order to respond to the Green Growth strategy. Part of the data collec­
tions will be based on the SEEA. Currently data are available for air emis­
sion accounts, environmental protection expenditure and material flows.12
Measuring sustainable development
“Where resources and data permit, an annual report and an audit on changes
in environmental quality and in the stock of the nation’s environmental re­
source assets are needed to complement the traditional annual fiscal budget
and economic development plans. These are essential to obtain an accurate
picture of the true health and wealth of the national economy, and to assess
progress towards sustainable development”
(World Commission on Environment and Development 1987,
the Brundtland report).
In 1990 the UN recommended the world to begin the measurement of de­
velopment from a broader perspective than just economics by including
environmental and social issues. The work set out in two different
strands. Through the UN Agenda 21, one strand focused on setting up
Calculated as the difference between the rate of change of output and the rate of change of total inputs
(calculated as volume indices of combined labour and capital inputs for the total economy).
Making the environment count
broader measurement from a local perspective with a range of indicators.
The other approach was to develop an analytical measurement system
that used data from the economic statistics in a satellite system. This sec­
ond approach has now led to a common practice, a UN manual and a com­
mon reporting format for the EU – the SEEA (see more below).
There are several reasons for wanting to compile a specific set of in­
dicators to measure sustainable development. Broad policy statements
and strategies, such as, the EU Sustainable Development Strategy require
monitoring and follow-up in order to point out directions for future steps
and adjustments to responses. Another reason is to inform a broader au­
dience how a specific country fares in the context of sustainability. The
new UN goals regarding sustainability reinforce the need for relevant and
reliable indicators.
The Nordic countries on sustainable development
In recent years the world has seen initiatives on many different scales;
regions, nations, cities, enterprises etc. In 2013, the Nordic Council of
Ministers reported on a Nordic set of Sustainable Development indica­
tors with the purpose to provide measures linked to the objectives of
the Nordic Strategy for Sustainable Development.13 The Nordic coun­
tries themselves also have their own national indicator sets.14 It differs
between the Nordic countries how they are used and how often they are
updated. In Norway, the indicators, with the exception of 2014, have
been used in national budget analysis and most of the indicators are up­
dated annually. In Sweden the national sustainable development indica­
tors were first formulated in 2001 then updated in 2004.15 Since 2004,
Sweden has only used the EU Sustainable Development indicator set.16
Finland carries on their commitment from the RIO+20 agreement and
provides annual updates of their indicators. In 2014, Denmark launched
23 sustainable development indicators that will be up-dated in 2016
and thereafter every second year.
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The European Union on sustainable development
The EU has an extensive set of indicators measuring sustainable develop­
ment. The Sustainable Development Indicators (SDIs) are used to monitor
the EU Sustainable Development Strategy (EU SDS) in a report published
by Eurostat every second year. They are presented in ten themes.17
EU themes measuring sustainable development
1. Socio-economic development.
2. Sustainable consumption and production.
3. Social inclusion.
4. Demographic changes.
5. Public health.
6. Climate change and energy.
7. Sustainable transport.
8. Natural resources.
9. Global partnership.
10. Good governance.
The United Nation and the Sustainable Development
Eradicating poverty through the increased levels of education, women’s
empowerment, maternal health and the preservation of the environment
has been on the agenda worldwide for many years. In 2000 the United
Nations Millennium Declaration was adopted. It was considered as a new
global partnership to reduce extreme poverty and the goals became
known as the Millennium Development Goals (MDGs), consisting of sev­
eral long term goals ending in 2015 (UN 2015). Building on the MDGs are
now the Sustainable Development Goals (SDGs) (UN 2014). The SDGs con­
sist of 17 goals, each with several targets, which have been adopted by the
UN General Assembly. The adopted goals, which are applicable for all
countries, are:
Making the environment count
Table 1: Adopted sustainable development goals
Goal 1.
End poverty in all its forms everywhere
Goal 2.
End hunger, achieve food security and improved nutrition and promote sustainable agriculture
Goal 3.
Ensure healthy lives and promote well-being for all at all ages
Goal 4.
Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all
Goal 5.
Achieve gender equality and empower all women and girls
Goal 6.
Ensure availability and sustainable management of water and sanitation for all
Goal 7.
Ensure access to affordable, reliable, sustainable and modern energy for all
Goal 8.
Promote sustained, inclusive and sustainable economic growth, full and productive employment
and decent work for all
Goal 9.
Build resilient infrastructure, promote inclusive and sustainable industrialization and foster
Goal 10.
Reduce inequality within and among countries
Goal 11.
Make cities and human settlements inclusive, safe, resilient and sustainable
Goal 12.
Ensure sustainable consumption and production patterns
Goal 13.
Take urgent action to combat climate change and its impacts*
* Acknowledging that the United Nations Framework Convention on Climate Change is the primary
international, intergovernmental forum for negotiating the global response to climate change.
Goal 14.
Conserve and sustainably use the oceans, seas and marine resources for sustainable development
Goal 15.
Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage for­
ests, combat desertification, and halt and reverse land degradation and halt biodiversity loss
Goal 16.
Promote peaceful and inclusive societies for sustainable development, provide access to justice for
all and build effective, accountable and inclusive institutions at all levels
Goal 17.
Strengthen the means of implementation and revitalize the global partnership for sustainable
Source: UN 2015.
The United Nations Statistical Division (UNSD) has identified several in­
dicators under the SDGs that could be monitored through the frame­
work of environmental accounts (UNSD 2014). It is highlighted that it is
important that the framework can ensure consistency and coherence of
indicators calculated from multiple data items. It was also highlighted
that the central framework of the system of environmental accounts is
now a statistical standard which facilitates harmonized comparisons
Making the environment count
At the same time the United Nations Environment Programme iden­
tified material flow accounts as a potential indicator candidate to follow
sustainable production and consumption patterns under the SDGs
(UNEP 2015).
The indicators in this report
Despite the comprehensive work to define common and harmonized in­
dicator sets for sustainable development, there still remain some major
challenges: the indicators are difficult to use for integrated assessments
In some instances it is not possible to judge whether a positive change in
the indicator should be regarded or interpreted as a sign of a positive or
negative development. Therefore, approaches focusing on one aspect at
the time are still prevailing both in research and policy-making.
It is the hope and proposal of the Ad Hoc Group that the Nordic coun­
tries will further explore how to apply a more integrated approach in
their statistical systems as well as in their decision-making procedures,
taking into account the economic, environmental and social aspects in a
balanced way. Hopefully the Nordic work can also trigger similar en­
deavours in other regions and parts of the world, and ultimately con­
tribute to the monitoring and review process of the global sustainable
development goals.
The indicators in this report build on the framework of the environ­
mental-economic accounts. The underlying data are a straight forward
complement to GDP and provide insights on how the economy is depend­
ent on the environment (e.g. using the natural resources as input to in­
dustries for further processing) but also from an environmental perspec­
tive of how the economy influences the environment (either through air
emissions or by investing in technologies that reduces the environmental
burden). Some areas are well developed, such as indicators for air emis­
sions and environmental taxes by industry (economic activity classifica­
tion NACE). Other areas within the environmental accounts are still under
development, such as indicators for energy use by industry (NACE cate­
gories) or indicators that reflect ecosystem services and functions.
Making the environment count
The chosen indicators follow the idea of Drivers, Pressure, State, Im­
pact and Response. Some indicators in this DPSIR framework can be de­
rived from statistics and some require more analysis/research. In this re­
port, the focus lie with those indicators that can be derived through sta­
tistics, and therefore only the areas of Drivers, Pressure and Responses
are included.
It should be noted that indicator is a term which most often is used to
describe a number (data) linked explicitly to certain scientifically deter­
mined thresholds or political goals or to phenomena, which are otherwise
difficult to define or measure in an uniform way (sustainability, economic
performance, welfare, etc.). Indicators should normally be seen in a spe­
cific context, which makes it possible to assess whether it is “good” or
“bad” if the indicator goes up or down. Obviously this is not case for e.g.
environmental tax revenues, a change of which could reflect environmen­
tal detriment as well as improvement. This also means that an aggregate
can be a good indicator in one context but less useful in another depend­
ing on which goals are in focus. However, the term “indicator” is used
more loosely in this report as a synonym for aggregates or data that often
will be of interest in a policy context when it comes to assessments of the
linkages between the economy and the environment. Keeping that mean­
ing in mind, the indicators in this report can therefore be seen as an initial,
informed selection that can be expanded on with the aid of international
development of the statistical methodologies and national strategies.
Such an expansion should be based on a focus on usefulness, continuity
and consistency. The indictors highlighted in this report, and which are
proposed to be developed at a Nordic regional level, are as follows:
Making the environment count
Table 2: The indicators presented in this report
Environmental economic and
social information
Shows population, number
of employees, GDP environ­
mental taxes and carbon
dioxide emissions
Contributions of environmental,
economic and social components
Per cent of
Population, number of employ­
ees, GDP, environmental taxes
and carbon dioxide emissions
Country contributions to selected
environmental, economic and so­
cial components
Per cent of Nordic
Population, number of employ­
ees, GDP, environmental taxes
and carbon dioxide emissions
Domestic extraction by material
Kilos per EUR GDP
Type of material
Imports of products, by material
Kilos per EUR GDP
Type of material
Energy fossil fuel use intensity,
by industry
TJ per EUR value
Greenhouse gases from produc­
tion of goods and services,
including households
Tonnes CO2 equiv­
alents per capita
Real GDP growth rate
Per cent change
Growth rate of the population
Energy intensity
1,000 tonnes oil
equivalents by GDP
Gross inland energy consump­
tion by GDP
Share of renewable energy in
gross final energy consumption
Per cent
Structural indicator
Share of biofuel use of total
fuel use
Per cent
Structural indicator
Domestic extraction by material
Kilos per EUR GDP
Imports of products by material
Kilos per EUR GDP
Exports of products, by material
Kilos per EUR GDP
Domestic material consumption,
by material category
Kilos per EUR GDP
Overview indicators at Nordic level
Drivers of environmental pressures
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Volume of GDP
Greenhouse gas emission
Kilos CO2e per EUR
Carbon dioxide equivalents
Share of total greenhouse gas
emissions, by industry (NACE) and
Per cent
Structural indicator
Acidifying emission intensities
Kilos SO2e per Euro
Sulphur dioxide equivalents
Acidifying emissions per capita, by
industry aggregates (NACE) and
Tonnes SO2e per
Sulphur dioxide equivalents,
NACE aggregates
Emissions of particulate matter,
<2.5 µm, by industry (NACE)
Per cent
Environmental taxes as share
of total taxes and social
Per cent
Structural indicator
Energy taxes paid, by industry ag­
gregate (NACE) and households
EUR per capita
Structural indicator
Value added and employment in
the environmental goods and ser­
vices sector
Contributions to the EU of pro­
duction values from market activi­
ties within environmental goods
and services sector
Per cent of EU28
Environmental protection ex­
penditures by industry aggregate
Total Environmental protection
investments by domain and by in­
dustry aggregate (NACE)
Per cent
Share of pollution prevention in­
vestments of total environmental
protection investments
Per cent
Pressures on the environment
Responses to the drivers
Areas are: air, water, waste,
Indicators based on extended analysis
Greenhouse gas emissions
that could linked to Swedish con­
Tonnes CO2e
Carbon dioxide
Factors affecting carbon dioxide
emissions in Sweden – a decom­
position analysis
Change in per cent
Average tax (Implicit price) on car­
bon dioxide emissions by industry
Euro CO2 tax reve­
nue by Tonnes CO2
Including spot price of emission
permit (EUA)
Making the environment count
Structure of the report
This report uses the idea of the DPSIR model, to explain the drivers, the
pressures and the response to the phenomenon of the pressure created
through human activities. Each chapter is followed by recommendations
proposed by the Ad Hoc Group on each area, and a discussion about the
benefits and care that should be taken when looking at specific indicators.
Chapter 2 begins with the provision of main Nordic indicators stem­
ming from the proposed framework of environmental accounts.
Chapter 3 begins by using the DPSIR model to describe the main driv­
ers of environmental pressures composing of economic and population
growth, energy use and the use of materials in the economy. Chapter 4
shows different aspects of air pollution and climate change. Chapter 5 fo­
cuses on responses, not only actions by governments, but also from other
actors within the economy.
Chapter 6 describes some of the models used to incorporate environ­
mental and economic information and address interactions between the
environment and the economy.
Chapter 7 discusses the aspect of social issues moving beyond GDP
but which are part of the national accounts although some of these topics
are outside the framework of environmental-economic accounts.
Chapter 8 looks into the new and emerging field of ecosystem ac­
counts and the current international and Nordic initiatives of construct­
ing and compiling data on ecosystems and ecosystem services.
Chapter 9 finally provides a platform for discussion and thoughts that
the Ad Hoc Group has dealt with during the time of the project and pre­
sents some final conclusions.
Appendix 1 describes how the statistics presented in this report has
been compiled and the underlying methodology that follows the statistics.
It also provides a brief account of the beyond GDP debate.
Appendix 2 presents activities and processes that are on-going in the
Nordic countries, under the Nordic Council of Ministers’ auspices and out­
side the region, which area part of Task 4.
Making the environment count
2. The Nordic countries –
an overview
This chapter brings together data from the environmental and national
accounts at a Nordic level. The indicators presented cover times series
combining drivers, pressures and responses to environmental degrada­
tions, foremost greenhouse gas emissions.
The environmental economic profiles, as shown in Figure 5, illustrate
specific contributions of several factors. In this case, statistics on environ­
mental taxes and GDP are shown together with statistics in physical terms
such as carbon dioxide emissions. Through this kind of profile the magni­
tude of each aspect is visualised and can be compared nation-wide and
The statistics can be shown using different levels of aggregation. Fig­
ure 8 shows energy intensities by industries and services according to
the NACE classification. Whereas in Figure 9, the statistics are aggre­
gated to show total emissions from the national production of goods,
production of services and consumption by households. Since the detail
in the underlying data is conserved, it is possible to make these types of
aggregations provided that the standard statistical categories are used
for the aggregations.
The development of the integrated system for environmental and
economic accounts in the Nordic countries is now at a stage where the
data can be combined to give a yearly overview of the environmentaleconomic situation of the Nordic countries. For the following macro in­
dicators we have compiled and discussed the data and recommend that
they inform policies of the region about the pace of the greening of the
Nordic economy.
The Ad Hoc Group recommends that the Nordic Council of Ministers
should provide an annual publication of indicators visualised below by:
Environmental, economic and social information. See Figure 3.
Contributions to selected environmental, economic, and social
information. See Figure 4.
Contributions to the Nordic region, by country, environmental taxes,
CO2 emissions, number of employees, GDP and population, per cent.
See Figure 5.
Domestic extraction by material category Kilos per Euro GDP, Year.
See Figure 6 below.
Imports of products, Kilos per Euro GDP. See Figure 7.
Energy fossil fuel use intensity, TJ per Euro, by industry, NACE. See
Figure 8.
Greenhouse gas emissions by industry (NACE) and households.
Million tonnes per capita. See Figure 9.
Integrating the economy and the environment
The Nordic countries, Iceland, Norway, Denmark, Finland and Sweden
share many things. They share a similar background of social democ­
racy, free speech and access to good healthcare and education. Our
countries also have a wealth of natural resources including forests, min­
erals and water in Finland, Sweden and Norway; wild fish stocks in Ice­
land, Norway and Denmark; and Denmark and Norway have oil and nat­
ural gas resources.
The countries also share a history of willingness to take care of the
land and nature and take responsibility for our part in reducing climate
change and its impacts. The trends show that it is possible to do this and
maintain healthy economies.
The Nordic countries cooperate in many areas and have had an inter­
est in promoting sustainable development for a long time. The countries
are different in their industrial development but still share values on the
importance of the healthy environment, sustainable economic growth
and wellbeing for all citizens. From a statistical point of view the Nordic
countries share a long history of sharing practises and ideas on the fur­
ther developments of statistics and accounts environmental-economic ac­
counts, the Nordic countries have been close partners in testing and de­
veloping this integrative area of statistics since the early 1990s. In 1995
the Nordic Natural Resource and Environmental Accounting report was
published, in 2000 the publication Nordic environmental economic indica­
tors and in 2003 Energy taxes in the Nordic countries – does the polluter
Making the environment count
pay was published under the auspices of the Nordic Council of Ministers
and the European Commission.
The Nordic region was the first geographical region in the world
adopting a Strategy for Sustainable Development in 2001. The most
recent Strategy “A good life in a sustainable region” was adopted in
2013 by the Nordic Council Ministers. The strategy explains that all
work conducted by the Nordic Council of Ministers will incorporate a
sustainability perspective. This strategy provides not only a direction
but also guidelines for the Nordic countries to continue to improve the
welfare and quality of life for present and future generations. The
strategy will take us into 2025 with focus areas such as: the Nordic
welfare model, viable ecosystems, changing climate, sustainable use of
the earth’s resources, and education, research and innovation (Nordic
Council of Ministers, 2013).
The natural resources dependent activities such as oil and natural gas
extraction, mining, timber and pulp, paper and wood industries, fishing
and agriculture are important in the Nordic region. It is also a region that
has invested in renewable energy and has established carbon taxes as an
incentive to steer development towards a greener energy system. Crosssectoral working groups on Environment and Economy as well as climate
change mitigation have been established under the Nordic Council of Min­
isters to deal with relevant environmental economic matters of common
Nordic interest.
The statistical offices in the Nordic countries have a long history of
working with environmental accounting and in modelling. Nordic coun­
tries have also identified national indicators for sustainable develop­
ment, encompassing a wide range of socio-economic and environmental
indicators to better serve the policy-makers on emerging issues and
trends. The need to develop broader measures of progress and more in­
tegrated statistical systems and analyses has been identified at the Nor­
dic level.
An overview of some of the challenges, polices, achievements and re­
maining problems in combining economic development and ambitious
environmental policies in the Nordic Countries over the past few decades
is given in the report “Greening the economy: Nordic experiences and
challenges” (Magne Skjelvik, Bruvoll & Ibenholt, 2011).
The challenges described in that report include the need for the en­
hancement of environmental economic instruments including the pricing
of pollution, and how these different instruments can be combined in a
cost-effective manner.
Making the environment count
The Nordic situation
Being part of the European Economic Area (EU + EFTA countries) means
that our economies have free access to larger markets and free movement
of people. But this also means new demands and restrictions. Some re­
strictions can relate to taxation systems, emission levels, employment
conditions, etc.
Generally speaking the overall trends in the Nordic region are posi­
tive, both in terms of economic growth, and also importantly, in the re­
duction of carbon dioxide emissions, an important Greenhouse gas, as
seen in Figure 3. The population is increasing steadily, but employment is
unchanging. Interesting to notice is that the income generated through
environmental taxes is on the increase. The impact of the financial crisis
is seen in the Nordic region. Examining GDP, employment and environ­
mental tax revenues all decreased in 2009. Employment did not recover
until after 2010.
Figure 3: Environmental, economic and social information 2008–2014; Nordic countries total,
Indexed 2008=100
To add the Nordic countries, GDP at current prices has been used.
Source: Eurostat and Statistics Iceland.
Making the environment count
The Nordic countries contribute to the European Economic Area (EEA) in
many ways. For our joint population (Denmark, Finland, Iceland and Swe­
den), we account for 5% of the EU and EFTA population and 6% of carbon
dioxide emissions.
In 2013, our joint contribution to the EEA GDP is just below 10%. This
can be considered a large share in view of our small share of the EEA pop­
ulation. The same thinking can be applied to the considerable share of en­
vironmental tax revenues the Nordic countries have within the EU and
EFTA region.
Figure 4: Contributions of environmental, economic and social components from the Nordic
countries to the EU28+NO+IS, 2013. Environmental taxes, CO2 emissions, number of employees,
GDP and population, per cent
CO2 emissions year 2012. Data for Iceland follow UNFCCC definitions.
Source: Eurostat and Statistics Iceland.
There are differences between the Nordic countries in population size,
energy systems, industrial structure and environmental policies. And fol­
lowing on figure 4 a country breakdown can be made to visualise how
each of the Nordic countries looks like.
Denmark and Sweden account for just below 60% of the environmen­
tal taxes paid to governments in the Nordic countries. The emissions of
carbon dioxides from Denmark are dominated by the shipping industry,
and the production of electricity is heavily dependent on coal-fired power
plants but the energy system is changing due to large investments in wind
turbines and biofuels. Norway’s emissions of carbon dioxide are mainly
Making the environment count
coming from the petroleum industry, which is also a very important con­
tributor to the GDP, while the national energy system is almost entirely
using hydro power for the production of electricity.
Figure 5: Country contributions to selected environmental economic components in the Nordic
region, by country, 2013, environmental taxes, CO2 emissions, number of employees, GDP and
population, per cent of Nordic total
Environmental tax revenues
CO2 emissions*
Number of employees
Nordic countries
CO2 emissions year 2012. Data for Iceland follow UNFCCC definition.
Source: Eurostat and Statistics Iceland.
Table resources are an important base of the economy. The Nordic coun­
tries are richly endowed with natural resources and these have been the
base for industries such as the pulp and paper industry, the steel industry,
petroleum industry and for agriculture.
Compared to the EU average, and put in relation to the GDP, Finland,
Sweden and Norway have a larger domestic extraction and production
of biomass and other natural resources from their natural endowments.
In contrast to the EU and to the other Nordic countries, Denmark ex­
tracted fewer natural resources. For EU28 the yearly extraction and pro­
duction of biomass employed to produce EUR 1 of GDP was 0.43 kilos in
2013. Denmark, Finland, Sweden and Norway were at 0.38, 0.81, 0.52
and 0.81 kilos per Euro GDP, respectively. The high numbers for Finland
and Norway are due to the structure of their economies which are
largely based on the extraction of non-metallic minerals and biomass
from forestry, and natural gas and crude oil, respectively.
Making the environment count
Figure 6: Domestic extraction by material category. Kilos per Euro GDP, 2013
Metal ores (gross ores)
Non-metallic minerals
Fossil energy materials/carriers
Source: Eurostat.
In Denmark the production of biomass relates first of all to crop produc­
tion, while wood accounts for a bigger part of the biomass in Finland and
All Nordic countries, and especially Finland, had substantial levels
of extraction of non-metallic minerals, which are predominantly used
for construction activities. Sweden, and to some extent Finland, also had
high levels of extraction of metal ores, including iron, copper and pre­
cious metals.
In addition to domestic extraction are the imports of products,
measured as their mass weight, when crossing the border. All Nordic
countries had substantial material inputs from abroad. Denmark and
Finland are the two Nordic countries with the highest level of per Euro
GDP imports at 0.23 and 0.29 in kilos per Euro GDP, while the imports
to Sweden and Norway were at 0.18 and 0.10 kilos per Euro GDP, re­
spectively. Denmark and Finland are both importing substantial quanti­
ties of fossil fuel, while especially Norway had lower levels of imports of
these products.
Making the environment count
Figure 7: Imports of products. Kilos per Euro GDP, 2013
Metal ores (gross ores)
Non-metallic minerals
Fossil energy materials/carriers
Other products
“Other products” are mostly products that are highly processed and consist of a complex
mix of materials for which it is not possible to determine a main material component
(Eurostat 2013a).
Source: Eurostat.
The most prominent source of climate change related greenhouse gas
emissions is the burning of fossil fuels. The Nordic countries are work­
ing extensively on combating the emission levels, through taxation, capand trade systems and other policy measures as well as technological
In the Nordic region, the largest users of fossil fuels are the transport
industry in all countries, the electricity and gas producers in some coun­
tries and the manufacturing industry in other countries. All of these in­
dustries are becoming more and more efficient in their use of fossil fuels.
The largest reduction of energy intensities comes from the electricity, gas,
steam and air conditioning supply industry and within the manufacturing
industry in Denmark and Finland.
Making the environment count
Figure 8: Energy fossil fuel use intensity, TJ per million Euro value added, by industry, NACE 2008–
2011, Nordic countries total, excluding Iceland
Water supply; sewerage, waste
Electricity, gas, steam
Mining and quarrying
Agriculture, forestry and fishing
TJ per million euro
Source: The Nordic statistical offices and Eurostat, data for Iceland are not available.
It is also possible to view the emissions by group of activities. Figure 9
shows that overall in the Nordic countries, the direct emissions from heat­
ing homes for households together with household emissions from trans­
portation are relatively small, and that the emissions are relatively even
between the production of goods and production of services. The excep­
tion is Denmark where the shipping industry is noticeable in the produc­
tion of services.
Making the environment count
Figure 9: Greenhouse gases emissions, 2012, tonnes per capita, Nordic countries (excluding
Iceland), NACE aggregates and Households
tonnes per capita
Nordic countries
Goods=includes NACE Agriculture, forestry, fishery, mining, quarrying, manufacturing and
construction. Services= includes NACE electricity, gas, heating, waste water and waste
management, financial services, transport, health and education. Households= direct
emissions from household activities, e.g. vehicles, heating and other activities. Data for
Iceland is not available.
Source: Eurostat.
Making the environment count
3. Driving forces – from the
economy and society
Important driving forces that determine the size of the environmental pres­
sure is the size of the production and consumption activities in a region. Of
importance and closely connected to the environmental pressure from the
economy is also the energy system infrastructure, i.e. how electricity and
heat are generated, and the use of fossil fuels. The analytical starting point
is the national accounts – where we find the basis for calculating the mac­
roeconomic indicator, GDP. The description of the economy needs to be
“opened up” so that the structure of production and consumption can be
seen, since the environmental pressure is very different depending on the
type of economic activity analysed. The Nordic countries differ in their eco­
nomic structure but they all have developed electricity and heat systems
that have relatively little fossil fuel input. Whereas, the extractive industries
in the Nordic countries make the material flows from the region unusually
high as compared to the mean of the EU countries.
The Ad Hoc Group recommends an annual publication of below visu­
alised indicators by the Nordic Council of Ministers:
Real GDP growth rate – volume, percentage change from the
previous year. See Figure 10 below.
Growth rate of the population, indexed. See Figure 11 below.
Energy intensity, kilos of oil equivalents per EUR 1,000. See Figure
12 below.
Share of renewable energy in gross final energy consumption. Per
cent. See Figure 13 below.
Share of biofuel use in total fuel use. Per cent. See Figure 14 below.
Domestic extraction, by material category. Kilos per Euro GDP. See
Figure 15 below.
Imports of products, by material category. Kilos per Euro GDP. See
Figure 16 below.
Exports of products, by material category. Kilos per Euro GDP. See
Figure 17 below.
Domestic Material Consumption, by material category, DMC. Tonnes
per Euro GDP. See Figure 18 below.
It should be emphasised, that these indicators are aggregate indicators,
which can cover up more diversified developments seen at more detailed
levels. For instance, the GDP growth rate focuses on the overall economic
activity, but tells nothing about the structural development of the econ­
omy and the development in income or wealth distribution, etc. Similarly,
the aggregates for natural resource extractions and foreign trade of prod­
ucts sum up the weight of different resources and types of products with
no regard for environmental pressures. As with the example of the mate­
rial consumption, a measure that contains fossil fuels as well as sand and
gravel, the environmental pressures need to be assessed separately. As
such the indicators should be interpreted with care and always be put into
a specific context.
The indicators on energy intensities and share of renewable energy in
gross final energy consumption should, like others, be revisited in a cou­
ple of years to establish a changeover to indicators that follow the frame­
work and definitions of environmental accounts. It is important that the
indicators align to the same framework for a full and comprehensive anal­
ysis to be made.
Mandatory annual data reporting of energy accounts to Eurostat, the
European statistical office, starting in 2017, means that this data will be
readily available soon. All Nordic statistical offices are currently working
to establish regular routines to produce and disseminate these statistics.
The present work of the Ad Hoc Group links to the work in the StiglitzSen-Fitoussi report (2008) and the OECD report (2011) on measurements
of green GDP. Rather than to dig deep into the intricacies of a green GDP,
the thrust of the effort is on developing a Nordic set of already existing
indicators and measures, which relate to the SEEA Central Framework.
This can be used besides GDP, as a satellite environmental account, that
could be combined with traditional SNA national accounts and provide
input for thorough, transparent and reliable analysis of the interplay be­
tween economy and environment. A common Nordic effort in this field
would be a path-breaking contribution to the follow-up of the new UN
sustainable development goals.
Making the environment count
The economy and our population
Economic growth and development has led to and still lead to severe and
critical environmental pressures. They are seen as drivers to environmen­
tal degradation. Breaking the link between growth and environmental deg­
radation, by “delinking” or “decoupling”, has become a central element in
environmental and green growth policies internationally.18 Ecosystem
thresholds, critical loads, carrying capacities and planetary boundaries
mean that in many cases even this may not be sufficient to reach environmental targets,19 but indicators of decoupling, relative or absolute, are very
useful to track trends and demonstrate progress.
Further, our use of materials has economic, social and environmental
consequences, which extends beyond our Nordic borders. Thus, our im­
ports of products from other countries do not only create income and jobs
around the world, but also affects resource extraction and environmental
pressures in the exporting countries. Likewise, exports by the Nordic coun­
tries contribute to our economic welfare but serve at the same time as a
driver for environmental degradation and depletion in the Nordic area.
Useful indicators include resource use intensities and efficiencies,
which are also linked to the concept of “eco-efficiency” at the product and
company level. The most recent trends, at least for most OECD countries,
are that energy and materials intensities show relative decoupling, some
countries have achieved absolute decoupling while most countries still
are a long a way from goals based on planetary boundaries, such as the
two-degree target.20 It should be underlined that decreasing intensities or
decoupling on national or sectoral levels do not necessarily constitute
necessary conditions for a resource efficient or cost effective develop­
ment at a global level and therefore should be interpreted with due cau­
tion Actually, in some instances even increasing national intensities could
signal improvements in global resource efficiency.
There is an increasingly global nature of economic activities, where
natural resources are more and more mobile and where national econo­
Relative decoupling implies reduced environmental pressure (e.g. energy/resource use or emissions) per
unit of production or Gross Domestic Product (GDP), while absolute decoupling means that the total volumes
or amounts of resource use or emissions are reduced, even with economic growth.
19 On “planetary boundaries” a recent report, from the Stockholm Resilience Centre, was published in
”Science” in January 2015.
20 A 2 C° increase in temperature, measured against pre-industrial temperature levels.
Making the environment count
mies rely more and more on international trade cooperation. Compara­
tive advantages of production are exploited through expanding world
trade generally resulting in a more over all efficient use and allocation of
scarce resources.
The aftermath of the financial crisis of 2009 is still visible as the
growth in gross domestic product (GDP) is not yet stabilised across the
EU nor in the OECD. The EU has seen the potential of increasing the notion
of a “green economy” and promoting manufacturing in the EU towards
more efficient production processes leading to a reduced environmental
burden.21 In turn the OECD launched the “Green Growth Strategy” where
the OECD put emphasis on improving resource productivity and ensuring
a sustainable resource and materials management.22
The Nordic situation
Each of the Nordic countries felt the effect of the financial crisis in 2009
and Finland is still experiencing economic contraction with a negative
GDP growth rate. The indicator “Real GDP growth rate” allows for com­
parisons of the dynamics of economic development both over time and
between economies of different sizes.
Figure 10: Real GDP growth rate – volume, percentage change from previous year
Percentage change on previous year
Source: Eurostat.
The 7th environment action programme to 2020.
For a discussion of the GDP concept see appendix 1.
Making the environment count
As the population increases so may also the labour force. A growing pop­
ulation also increases the potential for growing national income and/or
further environmental damage depending on economic and political de­
velopment. In all Nordic countries populations are growing, with the high­
est rate seen in Iceland.
Figure 11: Growth rate of the population, indexed 2002=100
EU28*: break in times series in 2007, 2011 due to the succession of a pre and post census
reference year. EU28 2013–2014 are provisional.
Source: Eurostat.
Use of energy
In modern economies, energy is an essential input factor. However, en­
ergy production, use of fuel in transportation and in production processes
has consequences irrespective of the energy source. These include air pol­
lution and climate change, water pollution, solid waste problems and im­
pacts on landscape and biodiversity. Efficient use of energy is particularly
important in the context of sustainability.
The EU is aiming for an EU-wide reduction in energy use, setting the
targets at 20% energy savings by 2020 – the EU compare the target to the
amount generated by 400 power stations.23 Contributions to these targets
are implemented through policies and measures in the Nordic countries.
23 Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of
the use of energy from renewable sources (2009/28/EF)
Making the environment count
Monitoring and managing the use of energy resources are important
from various perspectives. Firstly, the continued uses of fossil energy re­
sources are important to monitor as these are still the main energy sources
as inputs into production and consumption processes. Important interna­
tional trade flows of energy products have placed a focus on the risk of sup­
ply disruptions and on price volatilities. Secondly, the link between burning
fossil fuels and climate change requires a far reaching and extensive effort
from society to limit emissions and avoid effects of climate change. Thirdly,
good energy resource management and increased energy productivity are
important for companies to strengthen their competitiveness.
When it comes to monitoring countries’ overall energy use, statisticians
have developed the so-called physical energy accounts, which measure the
total supply and use of energy during a year.24 This differs from the estab­
lished framework on energy balances and more information about the dif­
ferences in these two approaches is described in Annex 1. The accounts
have more disaggregated data by industry when compared to the energy
balances. The energy balances are designed to show the national amount of
energy produced and how it links to the energy used, with the losses that
occur in the transformation and has been developed to answer questions
from of the energy sector. The accounts are aligning this data with the in­
dustries, e.g. the transportations sector is more detailed and the transports
are connected to the industries that use them. This makes it possible to
measure energy intensity or energy productivity of the economic activities.
The intensity measures, e.g. the fossil fuel use per value added, shows the
amount of fossil fuels used to produce the value added. The productivity
indicator measure value added to fossil fuel use, i.e. how much value added
does X amount of fossil fuels bring to the economy.
The Nordic situation
The Nordic countries keep increasing their energy consumption in abso­
lute terms. One driving factor of the increase of final energy consumption
in Iceland is due to an increase in the production of non-ferrous metals
(e.g. aluminium). Although total energy use keeps increasing, all Nordic
countries are becoming more and more efficient in their use of energy. In
the Nordic countries, except Iceland, and in the EU28, the energy intensity
is decreasing. The energy intensity, measured as energy consumption per
unit GDP in Euros, is shown in Figure 12.
The UN is about to publish the handbook on energy accounts – SEEA-Energy.
Making the environment count
The energy intensity has decreased the most in Sweden, Denmark and
Finland, while it has increased by about 40% in Iceland compared to the
2001 level. The intensity measure shows how much energy is needed to
produce the value added to the economy, the GDP. The lower the inten­
sity, the less amount of energy is required for input to the economy.
Figure 12: Energy intensity, Kilos of oil equivalents per 1,000 Euro GDP Nordic countries and EU28.
Gross inland consumption of energy divided by GDP
kg o.e./1 000 EUR
EU (28 countries)
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Gross inland consumption of energy divided by GDP.
Source: Eurostat.
While it is an important indicator, the viewpoint of gross energy con­
sumption and the need we have for a secure and stable electricity supply
can be supplemented with knowledge about what type of energy sources
we are drawing from. Statistics show that the share of renewable energy
in the energy consumption has increased in all the Nordic countries and
in EU (Figure 13). The share of renewables has become an increasingly
explicit policy targets in the Nordic and EU countries. This has been moti­
vated by the EU as a mean to combat climate change in Europe. However
when looking at energy from a climate change policy point of view it
should be also taken into account that nuclear power while not falling un­
der the definition of renewables still is a low or zero greenhouse gas emis­
sions energy source alternative. The drawback of radioactive waste is the
on the other hand also to be considered.
Making the environment count
The highest shares for energy produced from renewable sources are
found in Norway and Sweden, two countries with a lot of electricity pro­
duced using hydropower. The EU has established the overall target of a
20% share of renewable energy in the European Union by 2020, but all
the EU countries also have individual targets concerning the increase in
the share of renewable energy. Norway and Iceland, as members of the
European Economic Area (EEA) agreement, also have targets for 2020
(the targets are indicated in Figure 13).
Figure 13: Share of renewable energy in gross final energy consumption, Nordic countries and
EU28. 2004–2012. Per cent
Per cent of gross final energy consumption
Share of renewable energy in gross final energy consumption
EU28 (target 20)
Denmark (target 30)
Finland (target 38)
Sweden (target 49)
Norway (target 67,5)
This indicator is calculated on the basis of Directive 2009/28/EC on the promotion of the
use of energy from renewable sources. Data for Iceland is not available.
Source: Eurostat.
The use of fossil fuels is still a major driving force for emissions of green­
house gases, but more and more alternative energy sources are becoming
available on the market, to industries and to households.
In the Nordic countries the share of biofuels used is increasing and is
often replacing the use of fossil fuels. Between 2008 and 2011 households
were steadily replacing fossil fuels with biofuels, as were most of the in­
dustries of the Nordic economies. The electricity, gas and steam suppliers
are increasing the share of biofuels mostly along with the water and waste
management, construction and transport industries. However, agricul­
ture and the manufacturing industry have not yet been able to substan­
tially replace their use of fossil fuels.
Making the environment count
Figure 14: Share of biofuel use of total fuel use. The Nordic countries (combined), 2008–2011.
Per cent
Agriculture, forestry and fishing
Mining and quarrying
Electricity, gas, steam supply
Water supply; sewerage, waste
Source: Nordic statistical offices, data from Iceland not available.
The need for materials
Human activities cannot persist without the use of materials in one form or
another. It is the use of millions of tonnes of raw materials, energy, food,
water, etc. that provides the foundation our economies and well-being.
While natural resources and material supplies to some extent are still
regarded by many as being available in abundance it is increasingly rec­
ognized that there is a need to ensure good management of the natural
resources and the use of materials in order for economies to develop suc­
cessfully and fulfil the goals of society, regardless of whether these goals
are formulated in terms of economic growth, green growth, sustainable
development, or development of welfare. Concerns regarding the supply
of exhaustible resources are increasing but so is the potential for finding
substitutions for these types of resources.
Making the environment count
Monitoring and managing the use of materials is important from var­
ious perspectives. Firstly, the continued availability of natural resources
and materials are obviously important to ensure inputs for production
and consumption. Increasing international trade flows of commodities
has placed a focus on the risk of disruptions in supplies and increasing
raw material prices. Secondly, it is recognised that there is a close rela­
tionship between the use of materials and the generation of waste and
other residuals (pollution). These residuals can have a harmful effect on
the environment or, alternatively, requires an expensive effort from soci­
ety to avoid these harmful effects. Thirdly, good materials management
and increased resource productivity are important for companies to in­
crease their competitiveness.
At the policy level natural resource and material use management is
addressed in various national sustainable development strategies and en­
vironmental policies, including initiatives for waste prevention and inte­
grated product policies. Companies address it by highlighting material
use in green accounts, investing in research and development and ecodesign leading to reduced resource intensity and quality of production.
When it comes to monitoring countries’ overall material use, statisti­
cians have developed the so-called economy-wide material flow accounts
(part of the SEEA CF), which measure the total use of materials during a
year. The statements that can be made based on these accounts corre­
spond, for instance, to the familiar statements about the total national en­
ergy use during the year, but now focusing on natural resources and ma­
terials instead.
The supply of materials to the economy consists of domestic resource
extraction, changes in inventories and imported products. Domestic ex­
traction and imports are the two main sources of material inputs to a na­
tional economy. The economy-wide material flow accounts indicator, di­
rect material input, DMI, is the sum of all domestic resources extracted
plus the imports. If the exports of materials are subtracted, the indicator
called domestic material consumption, DMC, is obtained. The latter can be
seen as an indicator of the total amount of materials, which have been
used by the economy during that time period and remains on the national
territory. In that sense, it can also be considered as an indicator of the
amount of waste and other residuals, which the economy at some point in
time needs to take care of.
Making the environment count
More information about the statistical methodology used is available
in Appenidx 1. And similarly to the measurement of energy intensity or
energy productivity it is possible to measure materials intensity or mate­
rial productivity of the economic activities, for example as GDP to domes­
tic material consumption.
The Nordic situation
Compared to the EU, and put in relation to the GDP, Finland, Sweden
and Norway had a larger domestic extraction of biomass and other nat­
ural resources from their natural endowments. In contrast, Denmark
extracted fewer natural resources. For EU the yearly extraction and
production of biomass employed to produce EUR 1 of GDP was 0.43
kilos in 2013. Denmark, Finland, Sweden and Norway had a total ex­
traction and production of biomass per Euro GDP at 0.38, 0.81, 0.52
and 0.81 kilos, respectively. The higher intensities for Finland and Nor­
way are due to the extraction of non-metallic minerals, natural gas and
crude oil, respectively.
Figure 15: Domestic extraction, by material category, Kilos per Euro GDP. Nordic countries
and EU 2013
Metal ores (gross ores)
Non-metallic minerals
Fossil energy materials/carriers
Source: Eurostat.
Finland and Sweden had per Euro GDP production of biomass above the
EU level, while Denmark produced less biomass than the average EU
level. In Denmark the biomass relates first of all to crop production,
while wood accounts for a bigger part of the biomass extraction in Fin­
land and Sweden.
Making the environment count
All Nordic countries, and especially Finland and Norway, had a sub­
stantial extraction of non-metallic minerals, which are predominantly
used for construction activities. In contrast to the EU and the other Nordic
countries Sweden had a large extraction of metal ores, including espe­
cially iron, copper and precious metals.
The domestic extraction is augmented by the import of products
measured as their mass weight when crossing the border. All Nordic
countries had substantial material inputs from abroad. Denmark and Fin­
land are the two Nordic countries with the largest per Euro GDP imports
at 0.23 and 0.29 kilos per Euro GDP, while the imports to Sweden and
Norway were at 0.18 and 0.10 kilos per Euro GDP. The main difference
between these two groupings of Nordic countries (Denmark and Finland;
Sweden and Norway) can best be explained by the degree of dependency
of imported fossil fuels. Denmark and Finland are both importing sub­
stantial quantities of fossil fuels, while especially Norway had lower im­
ports of these products.
Figure 16: Imports of products, by material category, Kilos per Euro GDP. The Nordic countries and
EU, 2013
Metal ores (gross ores)
Non-metallic minerals
Fossil energy materials/carriers
Other products
“Other products” are mostly products that are highly processed and consist of a complex
mix of materials for which it is not possible to determine a main material component
(Eurostat 2013a).
Source: Eurostat.
The imports of products of the EU were 0.24 kilos per Euro GDP, i.e. at a
level almost the same as in Denmark but significantly higher than the im­
ports of Norway. However, the EU28 number includes the intra EU im­
ports (i.e. imports from one EU country to another). If intra-EU imports
are excluded so the area EU28 is treated more like a “country” when
counting, the imports per Euro GDP of the EU28 were 0.13 kilos.
Making the environment count
Imports together with the domestic extraction form the direct mate­
rial input (DMI), i.e. the amount of materials that is actually available to
the country as a physical basis for all economic activities. In 2013 the DMI
was 0.67 kilos per Euro GDP for the aggregated EU economy. For Den­
mark, Finland, Sweden and Norway the DMI per Euro GDP was 0.61, 1.10,
0.69 and 0.91, respectively.
Figure 17: Exports of products, by material category, Kilo per Euro GDP, Nordic countries
and EU 2013
Metal ores (gross ores)
Non-metallic minerals
Fossil energy materials/carriers
Other products
“Other products” are mostly products that are highly processed and consist of a complex
mix of materials for which it is not possible to determine a main material component
(Eurostat 2013a).
Source: Eurostat.
Compared to EU28 and the other Nordic countries, Norway had a huge
export of products, and especially fossil energy products. If the export of
oil and natural gas is excluded the Norwegian exports measured at kilos
per Euro GDP would be closer to the other Nordic countries. The exports
without fossil energy products were 0.09, 0.17, 0.16 and 0.12 kilos per
Euro GDP for Denmark, Finland, Sweden and Norway, respectively. If fos­
sil energy products are included, the corresponding numbers are 0.15,
0.22, 0.19 and 0.53 kilos per Euro GDP. Sweden had the highest exports of
metal ores and concentrates at 0.08 kilos per Euro GDP, while Norway
exported non-metallic minerals (mainly sand and gravel) corresponding
to 0.06 kilos per Euro GDP.
One main aggregate indicator derivable from this type of statistics is
the indicator Domestic Material Consumption (DMC). By adding domestic
extraction and imports and subtracting exports, the indicator can provide
information on how much material a specific country uses for production
and consumption during one year when the exports of products from the
Making the environment count
country are excluded. The DMC is in no way a precise indicator of the nat­
ural resources used, especially if the country in question has a large ex­
port of the natural resources. The indicator should rather be seen as a
pointer towards the amounts of waste and other residuals that will result
sometime in the future
The magnitude of this indicator is very much influenced by the use of
construction minerals like sand and gravel, and other non-metallic min­
erals. In fact, for most countries, the main driver of the change in DMC
from one year to another is the fluctuations in the construction activities
and subsequent use of construction minerals.
In 2013, Denmark, Sweden and Norway had DMC’s at more or less the
same level, at 0.4–0.5 kilos per Euro GDP, although the compositions were
different. Denmark had, in contrast to Finland and Sweden, no DMC of
metal ores, while Finland and Denmark’s DMC of fossil energy carriers
were much bigger than Sweden’s. Norway’s domestic consumption of fos­
sil energy was the highest at 0.14 kilos per Euro GDP.
The DMC of Finland was much higher than in the other countries, 0.88
kilos per Euro GDP. This high number was mostly due to the use of nonmetallic minerals, 0.49 kilos per Euro GDP.
Figure 18: Domestic Material Consumption (DMC), by material category. Kilo per Euro GDP,
Nordic countries and EU 2013
Metal ores (gross ores)
Fossil energy materials/carriers
Other products
“Other products” are mostly products that are highly processed and consist of a complex
mix of materials for which it is not possible to determine a main material component
(Eurostat 2013a).
Source: Eurostat.
Non-metallic minerals
Making the environment count
Other drivers of environmental pressures
The indicators shown in this chapter cover several different types of drivers
of environmental degradation and depletion. With examples of energy use
and the growth of the economy itself the drivers of environmental degra­
dation has been viewed from different angles as has depletion with aspects
such as consumption and trade of materials. However, the world is not oneor two-facetted; it is complex. Aspects that have not been touched upon
here can be, for example, how our culture is affecting our behaviour, or how
the geography can enhance or dampen the impact of drivers.
Culture as a driver of environmental issues requires research and is
difficult to respond to from national statistical offices. However, other as­
pects are easier to map through statistics.
The consumption of water, land use statistics and the development of
the accounts in these areas are one step towards providing additional in­
formation about drivers. For abstraction and use of water resources,
many OECD countries have achieved impressive absolute decoupling and
reductions. Australia and the Slovak Republic increased efficiency the
most in the OECD community in terms of abstractions of freshwater re­
sources per capita (OECD 2013). Even though the Nordic countries are
generally considered well-endowed with water resources a couple of Nor­
dic countries have followed the OECD average of 5% reduction since the
mid-1990s and reduced water abstractions per capita.25 In Denmark the
statistical office developing what is called water accounts. This type of ac­
count focuses on water use and water supply within the economy and is
part of the SEEA.26 The results will bring the statistics of water use and
abstraction in line with the national accounts.
The land we occupy is central to us. Land is also a component in the as­
sessment of national and institutional sector wealth. Land (property) is
traded along with the natural resources attached. In the Nordic countries,
land accounts within the framework of environmental accounts have been
tested (SCB 2003, SCB 2002) but it has so far created little interest within
policy or research institutes. However, in the frame of ecosystem services
land accounts have come into focus again. Statistics Sweden and the Swedish
University of Agriculture Science (SLU) tested an experimental methodology
to look at land important for biodiversity and who the owners are. The re­
sults showed that there is a viable methodology for bringing together data on
Denmark reducing water abstraction per capita by 29%, Sweden by 7%. Finland increased the water ab­
straction per capita by 146% and Norway increased by 16% since the mid-1990s (OECD 2013).
26 SEEA Water
Making the environment count
land inventories with economic information through Geographical Infor­
mation System (GIS) tools (SCB 2015b).
Other drivers of environmental pressures not described in this chap­
ter relate to our consumption patterns. Detailed statistics are available
on expenditure from household consumption and also through the na­
tional accounts on final demand. A consumption perspective is highly
relevant with the increase in globalisation. The environmental pres­
sures are dependent on where goods and services are bought and how
they are used. In chapter 6 there is an example of how consumption re­
lated emissions of greenhouse gases can be visualised based on an anal­
ysis combing the national accounts input-output models and environ­
mental accounts. The analysis examines a pressure indicator but the
drivers could be explained through the underlying information in the
input-output tables.
Data about consumption in monetary terms are defined by the system
of national accounts and could easily be incorporated into the structure
of the Nordic environmental economic accounts. It would however re­
quire additional time and knowledge to bring them together.
Recommendations and future use
The national accounts, being mature and readily available include the
Gross Domestic Product (GDP) as an indicator of the overall economic ac­
tivity. Gross Domestic Product (GDP) reflects the value (measured in mar­
ket prices) of the national production of goods and services during a time
period (see Appendix I). GDP summarizes a myriad of results from the
production activities of a national economy in one single number. From
the very beginning it has been clear that GDP has weaknesses as a meas­
ure of welfare. It does not account for e.g. leisure, natural resource deple­
tion, environmental degradation or household production. Other topics
such as income distribution and wealth and also not evident from the GDP
figure, but it was never intended for these purposes.
Instead one can look towards complementary measurements that are
adapted to provide a broader picture. When it comes to use of natural re­
sources and environmental pressures, energy and material flows are rel­
evant drivers to include. To follow the flow of energy through our econ­
omy and monitor the changes in the composition of the different energy
carriers are important in order to answer questions about policy imple­
mentation, e.g. are policy strategies to reduce fossil fuel use being imple­
mented fast enough by the users addressed.
Making the environment count
Another measure to follow relates to the overall flows and uses of
materials. The material flow accounts do not reflect the economic value
of natural resources or show the flows of specific hazardous materials.
But they do show the form of the natural resource basis and correspond­
ing extractions in a country and they show the material dependencies
on imports from other countries. The accounts are instrumental for the
analysis of how much material the economy needs in order to be able to
support the functioning of the economy. It also points at how much
waste that eventually needs to be reused or redirected back to the envi­
ronment. It should be emphasized, however, that the aggregate indica­
tors, which sum up the weight of different resources and types of prod­
ucts, should be interpreted with care. As an aggregate of very heteroge­
neous materials they do not indicate what the environmental pressures
or impacts are.
At best the aggregated indicators serve as signals, which may indicate
a need for further analysis of the development in material uses and natu­
ral resource extraction. Thus, a steadily growing material use per capita
or per GDP may be a sign of economies which becomes more dependent
on materials, and the reasons for this need to be analysed in more detail.
Does it, for instance, reflect that more fossil fuels or metallic minerals are
used, or does it reflect that construction activities are increasing? De­
pending on the results of such analysis appropriate policy measures can
be considered.
As a step towards a policy oriented use of the accounts, the so-called
material resource productivity indicator is often presented. This indica­
tor, which is defined as GDP/DMC indicates how much GDP that is gener­
ated per tonne of total domestic material consumption, DMC. The indica­
tor has gained quite a lot of attention at the policy level, and is, for in­
stance, used as an EU sustainable development indicator for policy evalu­
ation and it is linked to the so-called Flagship initiative on a resource-ef­
ficient Europe as part of the Europe 2020 Strategy.
An increase in the resource productivity is often interpreted as a sign of
a more efficient use of resources and as an indicator of environmental sus­
tainability in the sense that we can have economic growth while reducing the
resource use and environmental pressures. There is a need to be very scepti­
cal about such interpretations and uses of the resource productivity indicator
since increases can also be due to the reduction of extraction on the national
territory with materials being replaced by imports. In addition, it is not en­
tirely clear why it is the DMC and not the so-called direct material inputs
(DMI), which include exported materials, that is used as the denominator
when the indicator is calculated.
Making the environment count
Since it is hard to discard the criticism of the aggregate indicators for
material consumption and resource productivity it is recommended that
in a Nordic context (and also generally) that most emphasis is put on dis­
aggregated accounts and indicators highlighting more homogenous
groups of materials. At the same time, care should be taken not to assume
that there is a one-to-one relationship between material flows as drivers
and environmental pressures or impacts.
The standard EW-MFA, which are published on a regular basis by
the Nordic countries and reported by European statistical system mem­
bers to Eurostat do include the necessary details for making interesting
analyses of the domestic extraction of various natural resources and the
imports and exports of various product types. Currently there is re­
search focusing on how the foreign trade flows of products can be con­
verted into the underlying natural resources that have been used in or­
der to produce the traded products. Also, work on more detailed mate­
rial flow accounts which make it possible to follow the physical flows
through the economy is being carried out. As these further develop­
ments of the material flows accounts advance the possibilities of doing
analysis of the physical and material basis of our economy increase.
Making the environment count
4. Pressures on the
Pressures on the environment such as greenhouse gas emissions or air
pollution are among the most developed in the SEEA where economic ac­
tivities are visualised.
Useful indicators include carbon and pollution intensities and effi­
ciencies at the national level, industries and product groups. The most
recent trends are that most countries are still a long way from goals that
together would fully take account of planetary boundaries, such as the
1.5 degree target.
Within the environmental accounts there are still developments in the
area of producing and publishing data on pressure indicators. As such this
chapter focuses on climate change and air pollution indicators, for which
there are harmonized data available.
Areas that measure other pressures, such as statistics on waste gen­
eration or emissions to water are still being developed both nationally
and internationally. The EU regulation on waste statistics is only now at­
taining stable data collection processes where definitions and scope no
longer change. With regards to water statistics it is recognised that there
are large data gaps in the reporting instrument that the OECD and Euro­
stat jointly uses. The Nordic statistical offices encounter different levels
of interest in water statistics and accounts from policy makers. In Sweden
the statistical office assists in the reporting of data to the Water Frame­
work Directive and has done so since the early 2000s, while in Denmark
a renewed interest in water accounts have brought forward new develop­
ments in the field.
The Ad Hoc Group therefore thinks that it would benefit the set of ac­
counts that the areas of water and waste accounts to be revisited in a cou­
ple of years to establish new indicators on a Nordic level if they are avail­
able. Such periodic re-evaluations are recommended by the group.
The Ad Hoc Group recommends an annual publication of the following
indicators by the Nordic Council of Ministers:
Greenhouse gas emission intensities. CO2-equivalents in kilos per
Euro GDP. See Figure 19.
Share of total greenhouse gas emissions, by industry (NACE) and
households. See Figure 20.
Acidifying emissions (SO2 equivalents), in Kilos per Euro GDP. See
Figure 21.
Acidifying emissions (SO2 equivalents) tonnes per capita, by industry
(NACE). See Figure 22.
Emissions of particulate matter, <2.5 µm, per cent of total PM2.5
emissions, by industry (NACE) and households. See Figure 23.
Preconditions for climate change policy in the
Nordic countries
The starting points for the climate policy are very different for Nordic
countries: Norway and Denmark have significant production of fossil
fuels (oil and natural gas). Norway and Sweden have large scale hydroe­
lectric power production. Sweden and Finland also produce nuclear en­
ergy and Finland is currently building a new nuclear plant and has plans
for another one and thus increases the nuclear power based electricity
production significantly. Finland and Sweden have large production of bi­
oenergy and a big technical potential to increase production and use of
energy from renewables. Denmark and Sweden have a considerable share
of wind power in their electricity sectors. Iceland has heating systems
largely based on GHG emissions free geothermal energy sources.
As was noted in the previous chapter, fossil fuels are still a dominant
source of energy in several economic sectors, such as e.g. in the transpor­
tation sector, construction and mining and quarrying industries.
Making the environment count
The Nordic situation
Greenhouse gas emissions in the Nordic economies have decreased the
last few years.27 Between 2008 and 2012 the decrease amounted to 12%
or just above 39 thousand tonnes of CO2-equivalents measured as its
global warming potential. This can be compared to an 8% decrease in the
EU area as a whole. Denmark has seen the largest decrease of the Nordic
countries. The emissions of greenhouse gases have decreased by 16%
from 2008 to 2012. For most Nordic countries an increase in emissions
was seen in 2010, which was largely due to higher economic activities
compared with 2008 and 2009 but also weather variations. Annex 1 de­
scribes the data sources and the relevant delimitations of them.
In 2012, when examining the Nordic countries, greenhouse gas emis­
sions were highest in Denmark with just above 90 million tonnes CO2
equivalent, or 32% of all Nordic greenhouse gas emissions in 2012. Nor­
way had the lowest greenhouse gas emissions in the Nordic region with
62 million tonnes or 22% of the Nordic share.
Compared with GDP and the economic development for the period
2008–2012, the greenhouse gas emissions per GDP have decreased in
the region. The largest decrease can be seen for Norway with a reduc­
tion of 26% for the period 2008–2012, followed by Denmark (-22%) and
Sweden (-20%).
Transportation and storage accounted for the majority of greenhouse
gas emissions in 2012, by 30% in the Nordic region. Next to follow are
manufacturing, electricity, gas, steam and air conditioning and house­
holds. In EU as a whole, larger shares of the emissions can be ascribed to
production of electricity, gas, steam and air conditioning, manufacturing
industries as well as for activities of households.
27 The study object of GHG emissions follow the SEEA CF and includes total economy and households, for
more information, read Appendix 1.
Making the environment count
Figure 19: Greenhouse gas emission intensities. Nordic countries and EU, CO2-equivalents in kilos
per Euro GDP, 2008–2012
Includes carbon dioxides, methane and nitrous oxides. Data for Iceland is not available.
Excludes GHG emissions from households. Euro GDP in current prices is used to calculate
the ratio for each year.
Source: Eurostat.
Figure 20: Share of total greenhouse gas emissions, by industry (NACE) and households, in EU28
and Nordic countries, 2012
Electricity, gas, steam and air conditioning
Agriculture, forestry and fishing
Nordic countries
Mining and quarrying
Water supply; sewerage, waste
Includes carbon dioxides, methane and nitrous oxides. Iceland is excluded.
Source: Eurostat.
Making the environment count
The Nordic region, as a whole, has a relatively small share of fossil fuels
in their heating and electricity systems compared to other countries
within the EU. The policies have been geared towards using hydro power,
biofuels, geothermal and wind power as well as nuclear power and to
phase out fossil fuels.
The fossil fuels are still important in the transportation sector, in
land, sea and air transports as well as in the mining and extraction in­
dustry, as was indicated above in Figure 14, that the share of biofuels is
still low.
Acidifying emissions in the Nordic countries
Acidification of the environment is caused by inputs of acidifying sub­
stances with rain and snow or direct deposition of gases or particles on
vegetation (dry deposition). Both of these processes are normally in­
cluded in the definition of acid rain. Acid rain is caused mainly by emis­
sions of sulphur dioxide (SO2) and nitrogen oxides (NOx) from the com­
bustion of fossil fuels. In addition, ammonia and ammonium ions (NHx)
contribute to acidification through various chemical processes that take
place in soil and water.
The agriculture sector is an important emission source for ammonia.
Air pollutants are often transported for long distances, for example from
central Europe, Russia or Britain, before ending up as acid rain in the Nor­
dic countries.
Acidification of soils results in leaching of nutrients and metals (espe­
cially aluminium). Fresh-water organisms, e.g. fish, may suffer serious
damage. In addition to its impact on the flora and fauna, acid rain results
in corrosion damage to buildings and cultural monuments.
Acidifying emissions have been estimated to still have very serious
health effects in Europe. The largest source of NOx-emissions is transport
and heat and power production.
The most important sources of SOx-emissions are transport and in­
dustry. Ammonia is also an acidifying gas; its most important source is
animal production. While other pollution sources have decreased acidify­
ing emissions, focus has moved to the sulphur emissions from shipping.
The new EU sulphur directive came into force in the beginning of 2015 in
Making the environment count
the (Nordic and) Baltic Sea area.28 The new directive aims at further re­
ductions of sulphur dioxide emissions from ships. This will mostly affect
northern Europe.
For acidifying emissions, the difference between emissions and depo­
sition must be recognized. The acidification of Nordic land is dependent
on the rate of downfall of acidifying substance largely stemming from
sources abroad and only partly on indigenous Nordic emissions which, on
the other hand also cause acidification outside the Nordic area. In the Nor­
dic countries the highest concentrations of nitrogen oxides in 2011 were
in the big city-areas and for sulphur dioxide in the Oslo region. The only
area where the nitrogen dioxide concentrations increased from 2002–
2011 was the border between Finland and Russia (EEA 2013).
Nowadays the acidifying emissions from stationary sources are less
significant for the concentrations than from moving sources, because the
emissions from manufacturing and power production have decreased. It
is also important to note that much of the downfall originates from sta­
tionary sources outside the Nordic region.
The Nordic situation
In Denmark, soil and water contains lime that naturally neutralises the
effects of acidification, much more than in any other Nordic country. The
critical load is not exceeded anywhere in Iceland, and acidification is not
a problem there. The Swedish and Norwegian areas, which are lime-defi­
cient, are more vulnerable to acidification of soil, lakes and watercourses.
(Nordic Council of Ministers 2014).
Measured with accounting data, the emission intensities of acidifying
substances are decreasing in the Nordic countries. Between 2008 and
2012 the acidifying gases were cut with just shy of 22% in absolute terms,
the intensity has come down from 2.5 to 1.7 kilos acidifying emissions per
Euro GDP. This indicates that fewer emissions are required to produce the
same amount of goods and services within the economy, i.e. the produc­
tion is more efficient. The EU reduced the acidifying emissions during the
same period, in absolute terms by 17%, but has had a lower intensity dur­
ing the whole period, below that of the Nordic countries. Observe that the
high intensity of Denmark is due to a very high international sea transport
activity and that a substantial part of this activity is carried out outside
the Danish territory.
EU Sulphur Directive 2012/33.
Making the environment count
Acidifying gases comprise of sulphur, nitrogen oxides and ammonia.
Out of the three, nitrogen oxides which are a combination of several gases
contribute the most to acidification. Nitrogen dioxide is toxic also by in­
halation. The sources of these pollutions are often internal combustion
engines, thermal power stations and pulp and paper manufacturing.
Figure 21: Acidifying emissions (SO2 equivalents) intensities. Kilos per Euro GDP, Nordic countries
and EU28+Norway, 2008–2012
SO2e per GDP
Nordic countries
Sulphur oxides, Nitrogen oxides and Ammonia. Data for Iceland is not available.
Source: Eurostat.
Figure 22 provides information about the type of industries that are pro­
ducing acidifying emissions, divided by the population to normalise that
data. The group “services” which contain economic activities such as ship­
ping, trade, and financial activities are most prominently visible in the fig­
ure. Almost all of the acidifying emissions in the services can be attributed
to the shipping industry where the fuel used is highly acidic. New rules for
shipping in the Baltic Sea requires the shipping industry to reduce the
acidifying content of the fuels or use flue gas desulphurisation and the re­
sult is reduced amounts of acidifying gases.
Households contribute very little to the acidifying emissions; it is
mainly from their use of lawn movers and other vehicles. As oil based
heating systems become less common the emissions of acidifying gases
are reduced.
Concerning the emissions of ammonia (NH3), agriculture is by far the
most important emission source in all the Nordic countries and EU28.
The emissions stem from livestock, the management of manure and the
use of fertilisers.
Making the environment count
Figure 22: Acidifying emissions (SO2 equivalents), tonnes per capita, Nordic countries, 2012, NACE
aggregates and households
tonnes per capita
Denmark Finland
Sweden Norway
Sulphur oxides, Nitrogen oxides and Ammonia. Data for Iceland is not available.
Source: Eurostat.
Emissions of particles to our atmosphere
Pollution of particles in our atmosphere is a source of health problems for
people. As such the Nordic countries and the EU have agreed to set a limit
to the levels of emissions of particles. However, the sources of the pollu­
tion are from both the nature and from human activities. Particulate mat­
ter from the nature comes from forest and grassland fires, living vegeta­
tion and even from the sea. Human-made pollution stem from road abra­
sion, wear and tear from tyres, and burning of fossil fuels.
Known human health effects are decreased lung capacities and the ef­
fect on normal development of lung capacities in children. Studies have also
shown that people with heart or lung diseases, as well as children and older
adults are more vulnerable to the exposure of particle pollution.29
US EPA:, Swedish EPA:
Making the environment count
The Nordic situation
The statistics on particulate matter show that in 2012 the households
were the group contributing the most to particulate matter below
2.5 microgram per cubic meter. Use of fossil fuels, such as diesel, as well
as wood and other biomass for heating explains the large emissions by
households. In the EU28 households contribute with over 50% of total
PM2.5 emissions, while in the Nordic region the share is a little lower,
about 47%.
The transport sector in the Nordic region emits more PM2.5 than in the
EU28 average. This is mainly due to the fact that in the Nordic region the
use of studded winter tyres are more common than in Europe.
Figure 23: Emissions of particulate matter, <2.5 µm, by industry (NACE), Nordic countries and
EU28, per cent of total PM2.5 emissions, 2012
Data for Iceland is not available.
Source: Eurostat.
Making the environment count
Other environmental pressures
The indicators shown in this chapter cover three different types of pres­
sures on the environment. With the examples of greenhouse gas emis­
sions, acidifying emissions and particulate matter by industry a picture
emerges. It has shown who the emitter is (by industry and households)
and how emission levels change over time in relation to their economic
However, there are many more pressures on the environment, be­
sides air emissions but the reason for these pressures not to be included
in this report is that the data are not yet available in an environmental
accounting context. Pressure indicators that are missing are for example
waste generation, water pollution and land degradation.
The Nordic statistical offices are however aiming at increasing the
availability of pressure indicators within the environmental accounting
As mentioned in the previous chapter, Denmark has embarked on
new developments of both water and waste accounts, and these accounts
will be published before the end of 2016. It is expected that a yearly up­
date will be carried out in Denmark.
Statistics Sweden has produced water accounts in the past on com­
mission; the most recent study available is from 2012.
With time, additional accounts measuring pressure on the environ­
ment will be available. Increasing policy applications of the data visualis­
ing the economy and household pressure on the environment increases
the demand for these types of integrated statistics.
Recommendation and future use
In this chapter we have shown a few indicators that can show some of the
pressures the economies in the Nordic countries put on our atmosphere.
It has been limited to air pollution and greenhouse gases because this is
where most data are currently available.
We recommend that a Nordic Environmental Account will use the
pressure indicators that are already reported to Eurostat with the sup­
port of legislation as they are harmonised and regularly collected. The
greenhouse gases are very closely related to the economic activity and
with the accounts it is possible to distinguish the production and house­
hold consumption details and how they may be linked to environmental
and economic policy. Air pollution from transportation and heating is also
Making the environment count
a problem that can be informed by the environmental accounts. The issue
of particulate matter by industry is vital to understand how to protect the
population in the Nordic countries and our environment alike.
Other types of pressures, like waste and emissions to water do not
have a legal reporting obligation to Eurostat in the accounts. Waste statis­
tics are slowly coming to a stage where times series can be built although
they are not yet fully ready to be included in the accounting framework
on a Nordic basis.
Water statistics, and especially water pollution statistics, are covered
by international agreements such as the Baltic Marine Environment Pro­
tection Commission (HELCOM) and The Convention for the Protection of
the Marine Environment of the North-East Atlantic (OSPAR). The interna­
tional community, with the UN, the OECD and Eurostat, is driving the in­
terest towards the compilation of water accounts. In progress now in the
Nordic countries is the development of water accounts in Denmark.
While useful in relation to giving an overall view of the economies’
dependence on water and the economics of water supply and use, it
should also be mentioned that much interest lies in information on the
local management of water and institutions managing the water. Thus the
water accounts cannot stand alone. An interesting aspect in relation to
bridging the water accounts with more detailed information at the local
and regional level is the development of regional water accounts, which
highlights the supply and use of water and the economics of water at a
regional level. Also for other types of environmental accounts (both for
drivers and pressures) the regional aspect is interesting and deserves
more research also in a Nordic context.
The institutional set-up of environmental statistics is similar across
the Nordic countries. The main responsible institution is generally Minis­
tries of the Environment and/or national environmental protection agen­
cies. Many pressure data are not sourced from within the statistical office.
Thus, it is recommended that further developments of the pressure data
within an environmental-economic accounting context are furthered
through a close cooperation between different institutions and that the
obstacles of limited financial resources for the work are addressed.
Making the environment count
5. Responses – environmental
economic instruments
Environmental economic policy responses that a government can use to
change consumption and production patterns range from pollution taxes
and tradable permits, to administrative and legal initiatives.
International evaluations have shown that environmental economic
instruments such as taxes and subsidies can accomplish important
changes in market dynamics (e.g. UNEP 2004, NCM 2014). For example,
taxation has the possibility to price all units of pollution, while laws re­
stricts and allows pollution below a certain threshold.
To monitor and follow the development of environmental economic
instruments, the Ad Hoc Group recommends an annual publication of the
following indicators by the Nordic Council of Ministers:
Environmental taxes, percentage of total revenues from taxes and
social contributions. See Figure 24.
Energy taxes, paid, by industry and households, per capita. See
Figure 25.
The Ad Hoc Group recommends that the following indicators should be
reviewed in about three years to have a new evaluation regarding their
incorporation into the set of indicators to be recommended for the an­
nual publication by the Nordic Council of Ministers on Environmental
Value added and employment in Environmental Goods and Services
Sector, (EGSS), and total GDP, EU, indexed. See Figure 26.
Contributions to the EU of production values from market activities
within EGSS, share of total EU EGSS. See Figure 27.
Environmental protection expenditures by industry by GDP. See
Figure 28.
Type of environmental area of investing by the industry. See
Figure 29.
Type of environmental investment by the industry: Pollution
prevention investments as share of total environmental protection
investments. See Figure 30.
Market-based or related instruments, such as cap-and trade, taxes and
subsidies are in most cases implemented by national governments as a
means to respond to the pressures that arise on the environment. These
instruments can also simply be a way to increase government revenues.
There are also other ways to respond to the pressures on the environ­
ment, such as through means of technological and innovative advance­
ments and investments in these technologies.
Response indicators to environment degradation such as the trends
and developments of the environmental goods and services sector (the
green sectors of the economy) are under development within the envi­
ronmental accounts in the Nordic countries. In Europe, the EU regulation
on environmental accounts expects well developed statistics to be re­
ported by 2017 when the first required reporting cycle begins.
On the other hand, response indicators such as environmental taxes
have been established for some time now and are regularly published in
all Nordic countries, except Iceland.
Environmental taxes
Taxing the use of environmentally harmful products is one way for a gov­
ernment to change the purchasing behaviour of consumers or use of prod­
ucts for intermediate consumption by businesses.
The use of environmental taxes, which include so-called pollution,
transport, energy and transport taxes, has been recognized as an efficient
means to limit the use of harmful substances; in particular the tax on CO2
has had an impact on the use of fossil fuels (OECD 2014). However, issues
such as business competitiveness in a globalized world economy, a need
for governments to balance state budgets and general public opinion in­
fluences the decisions taken to implement such measures.
The statistics on environmental taxes provide information on the rev­
enues collected by the government and on who pays the tax. It should be
underlined that environmental tax revenues do not necessarily reflect a
Making the environment count
measure of the state of the environment or the level of ambition of envi­
ronmental policy, e.g. the Swedish tax on gravel is not an expression of the
environmental impact gravel has but is a means to enhance the sustaina­
ble extraction of the gravel. In other cases the environmental taxes, espe­
cially energy and transport taxes, are in fact introduced or increased at
least partly in order to raise revenues for governments.
Detailed information about environmental economic instruments
used in the Nordic countries as well as the methodology for the data pro­
duction is presented in Annex 1.
The Nordic situation
A recent report from the Nordic Council of Ministers on environmental
economic instruments (Bragadóttir et al., 2014) The Use of Economic In­
struments – In Nordic Environmental Policy 2010–2013 presented the
Nordic region insights into the use and implementation of environmen­
tal economic instruments. For example, almost all Nordic countries have
implemented taxes on energy and air pollution, ranging from excise
taxes to taxes on products such as fuel oil. Exceptions are Iceland and
Finland, which do not have taxes on sulphur dioxide and nitrogen diox­
ide emissions. With regard to taxes on waste, the Nordic countries have
applied different approaches. Norway and Denmark are the only two
countries in the Nordic region that apply taxes on incinerated waste
(Bragadóttir et al., 2014).
The overall trend in the EU on the topic of environmental taxes is that
they have been declining as revenues for the governments both in relation
to GDP and to the revenues from other taxes and social contributions.
Such a decline does of course not necessarily indicate weakening environ­
mental ambitions.
There are far more taxes on energy than any other source of environ­
mental pressure, e.g. than on transport, resources or pollution in the EU
and in the Nordic countries (Eurostat 2015).
This reflects the multitude of aims for energy taxation, including fiscal
revenues, security of energy supply, climate change mitigation and envi­
ronmental improvement.
Making the environment count
Figure 24: Environmental taxes as a share of total revenues from taxes and social contributions,
Nordic countries and EU28, Per cent. 2008–2012
Source: Eurostat.
The main contribution to energy taxes stem from businesses that contrib­
ute to the tax revenues through their purchase of fuels, but households are
almost equal in their contributions. In Denmark the total revenue from en­
vironmental taxes paid by households exceeds even the revenues paid by
businesses. Interestingly the businesses in the Nordic countries contribute
almost equally, EUR 0.5 per capita, or EUR 0.01 per million Euro GDP.
Figure 25: Energy taxes, paid, by industry (all NACE) and households per capita, Nordic
countries, 2012
Euro per capita
Industry (all NACE)
Data for Iceland is not available.
Source: Eurostat.
Making the environment count
In Denmark and Norway transportation taxes have a prominent place
among environmental taxes; this group of taxes are second after energy
taxes in terms of revenues. Transport taxes mainly include taxes related
to the ownership and use of motor vehicles.
Pollution and resource taxes cover different types of taxes such as
taxes on the extraction of raw materials; on measured or estimated emis­
sions to air (e.g. nitrogen oxides (NOx) and sulphur dioxides (SO2) and wa­
ter; on noise and on the management of waste. However, these taxes have
not been used much and in 2012, only 3% of the Nordic countries’ total
environmental tax revenue was raised by pollution and resource taxes.
The EU Emissions trading system (EU ETS)
The EU Emission Trading Scheme or the European Union Greenhouse
Gas Emissions Trading System started operating in January 2005.
Since then there has been continued development of the trading sys­
tem and expansion of its scope. It now covers around half of Europe’s
emissions of mainly CO2 but also other greenhouse gases (e.g. nitrous
oxides and perfluorocarbons) are covered by the trading system. The
system includes emissions from combustion plants, oil refineries, coke
ovens, iron and steel plants, and factories making cement, glass, lime,
brick, ceramics, pulp and paper. Aviation was included in 2012 into the
trading system.30
A fundamental feature of the EU ETS is that the system works on a
supranational level where the developments of the emission under the
whole EU cap is what matters when it comes to climate mitigation. The
possibility to trade emission permits means that reductions are distrib­
uted in a cost effective way among countries and businesses. The devel­
opment when it comes to specific industries of the economy and countries
should be seen in this light.
The economic crisis 2008 and a lax common EU emissions ceiling has
led to a persistent surplus of allowances (permits to emit) in relation to ac­
tual emissions. This situation has resulted in permit prices being lower than
The legislation was adopted in 2008. To allow time for negotiations on a global market-based measure ap­
plying to aviation emissions, the EU ETS requirements were suspended for flights in 2012 to and from nonEuropean countries. For the period 2013–2016 the legislation has also been amended so that only emissions
from flights within the EEA fall under the EU ETS. Exemptions for operators with low emissions have also
been introduced. DG Clima:
Making the environment count
originally expected. The EU ETS is, however, still considered to be the cor­
nerstone of EU climate policy covering more than half of the GHG emissions
of the EU. Measures have however been decided to address the surplus.
Recently it has been decided that the ceiling – the yearly distribution
of allowances – should be reduced from minus 1.74% per year to minus
2.2% per year meaning a total reduction by 40% by 2030. Part of the
current surplus will also be withheld from the market in a so called mar­
ket stability reserve and further structural reform is under way (DG
Clima 2015).
The trading aspects
Within the cap, companies receive or buy emission allowances which
they can use themselves or trade with one another. Until 2020 they can
also acquire and use limited amounts of international emission reduc­
tion credits from emissions-saving projects around the world that
have been certified in accordance with a thorough and meticulous UN
process. The limit on the total number of allowances available ensures
that they have a value and that a price is established by supply and
demand for emission allowances in the market. The market value of
the permit is independent of whether it is acquired through purchase
or distributed free of charge. The share distributed through auctioning
will be increased over time.
Due to the economic crisis of 2008 emissions particularly in the en­
ergy intensive branches, fell more than expected which resulted in a per­
sistent surplus of allowances and prices lower than expected. The EU
ETS, however, still functioned in accordance with its aim to distribute
emission reduction in a cost effective way but low prices also meant that
less action was taken to prepare for a long term low emission path. Thus
the system has been reformed by the introduction of a market stability
reserve which will hold back part of the allocation of new allowances
from the market and increase scarcity of supply of allowances and sup­
port prices.
Additional structural reforms within the EU ETS are under way with
the aim to strengthen the system to secure its function as a central part of
the EU climate policy.
Making the environment count
The statistical aspect
Since 2011 Statistics Norway are publishing data on how the industries
are trading emission permits.31 In Sweden, the Environmental Protection
Agency is publishing a list of entities showing their allocated emission
permits and if there has been a surplus of emissions or not. The Finnish
Energy Authority is publishing data on the amount of emissions of entities
and enterprises of the trading scheme.
The UN has through the SEEA established a theoretical framework for
incorporating the ETS in the accounts. One aspect is that the use of emis­
sion permits is regarded as a payment of a tax according to the national
accounts. In addition, accounts can be made for the number of emissions
permits available and the surrender of these permits. Denmark tested the
suggested approach in 2006 and concluded that including a description
of the flow of permits in the Environmental-Economic Accounting frame­
work provides useful insights and creates further possibilities for a thor­
ough analysis of the relationship between the use of energy, resulting air
emissions, emission allowances as well as energy related taxes, carbon
taxes and other similar taxes. Also, Statistics Norway has included the rev­
enues of emission permits as taxes, both in the National Accounts and as
part of their annual statistics on environmental taxes.32 In Sweden there
is currently a project testing data from the trade on emission permits to
see what can be done with the data in a statistical way that can be incor­
porated in the environmental accounts. In Finland, the auction revenues
of emission permits have been recorded as tax revenues in the national
accounts from 2014.
The Nordic situation
From 2013 and onwards the free distribution of allowances is partly
based on benchmarks reflecting relative carbon effectiveness (emis­
sions per produced unit), a distribution key which has so far been ad­
vantageous to carbon efficient Nordic companies. Plants and companies
that are more efficient than the average receive an allocation of that is
more generous than that of less carbon efficient plants. Thus the distri­
bution of allowances serves as an incentive and a driver for companies
to become more carbon effective in a way that the current prices on the
market do not. This price introduces a cost for emissions and incomes
Making the environment count
related to reductions that make it possible to sell resulting surplus al­
lowances. It is intended that the benchmark distribution system should
be replaced by a gradually increasing share that is auctioned to plant
owners presently with the target that all allowances should be distrib­
uted by auctioning in 2027.
Producers of environmental goods and services
The production of goods and services results in pressures on our environ­
ment. The consumption of goods and services also results in environmen­
tal impacts. The choices made before purchasing an item, be it a pair of
socks or a complex production system installation, affect the environ­
ment. If consumers choose alternatives which have lower environmental
impacts, it is better for societies and the earth.
The statistics on environmental goods and services aim at measuring
the activities of the economic units, private enterprises or government ac­
tors that produce goods and services in order to combat pollution and
provide tools for a better management of natural resources. This area of
statistics are defined as follows:
The purpose of environmental goods and services is to prevent, reduce and
eliminate pollution and any other form of environmental degradation (envi­
ronmental protection) and to conserve and maintain the stock of natural re­
sources, hence safeguarding against depletion (resource management)
(Eurostat 2009).
More information about the statistical methodology is available in Annex 1.
With globalization, the production of goods and services from the
Nordic countries can contribute to making a difference worldwide. Statis­
tics to track the trends of these activities are becoming more widely avail­
able, at least at the European level.
According to Eurostat's estimates for the EU28, the output of environ­
mental goods and services per unit of gross domestic product (GDP) has
grown by more than 50% over the last decade. The employment linked to
this production has risen to more than 4 million employees (full-time
Making the environment count
The activities are measured by companies’ output/value added of
environmental goods and services and the employment engaged in
these activities.
Figure 26: Value added and employment in EGSS, GDP. EU28, indexed to 2003=100
Value added
Value added includes the value from market and non-market activities (i.e. private and
government owned companies), in current prices.
Source: Eurostat estimate.
The Nordic situation
The Nordic Council of Ministers has identified green growth as a key pri­
ority for Nordic co-operation in the coming years.33
The statistics showing the trends and developments of enterprises
that produce the goods and services to reduce the environmental impact
and the use of natural resources are still under development in the Nordic
countries and around the world. One needs to be careful when comparing
the EGSS statistics between countries due to different measurement
methods used. The example shown in Figure 27 can however be used to
indicate the contribution of environmental goods and services sector
from the Nordic EU members’ economies to the EU.
Making the environment count
Figure 27: Contributions to the EU of production values from market activities within EGSS, 2012,
share of total EU28 EGSS
Source: Eurostat, data for Norway and Iceland not available.
It is challenging to statistically define and delineate which sectors and
products can be called “green”. Although a special focus on EGSS can be
useful, even more important for green growth and greening the economy
is to figure out to what degree the whole economy is turning greener. A
frequent recommendation is therefore that data on the degree of “green­
ness”, that is, the absolute and relative environmental impacts, from all
sectors, is a necessary supplement and in some ways more relevant and
important than the relatively small, if growing, percentage of value added
and employment in the specifically “green” (EGSS) sectors. Reductions in
impact from the “black” or “brown” sectors may, overall, be much more
important than any growth in “green” sectors.
Disaggregated data from the environmental accounts are particularly
well suited to such tracking and analysis of how green all economic sec­
tors are, and how they are changing. Such recommendations are found,
inter alia, also in two earlier NCM reports (Hass & Palm, 2012 and Bruvoll
et al., 2012). Important messages from these reports, that the Ad Hoc
Group adheres to, are that the interpretation of the statistics on EGSS
should be drawn with care. For instance, it is not necessary that a high
share of production values in Denmark within the EU in relation to EGSS
is a result of a higher awareness and priority of a greener economy in
Denmark than in the rest of the EU. It does however indicate that more
enterprises are specializing their business activities within EGSS than in
many other countries. Therefore the indicator can be viewed as an oppor­
Making the environment count
tunity for Denmark to enhance the policies that can encourage these in­
dustries to grow and expand, both nationally and internationally. Danish
enterprises can then assist other countries in receiving relevant technol­
ogy and services to reduce their environmental pressures and become
more resource efficient.
The Ad Hoc Group also sees the importance of developing and improv­
ing the statistics on EGSS. The analytical value using the currently available
statistics on a Nordic level is limited, especially due to problems of compa­
rability of the statistics between countries. But by enhancing the level of
detail in the statistics, such as the industries involved (the NACE break­
down), type of activity the EGSS are involved with (e.g. air, waste, renewa­
ble energy and sustainable tourism) much more can be said about the sec­
tor at large in terms of value added, employment and export.
With the new EU regulation on environmental accounts also encom­
passing the environmental goods and services sector it is anticipated that
the data will improve in terms of comparability and coverage become
fuller in the short time span.
The Ad Hoc Group also recognises that the communication of these
types of statistics needs to improve. The report on measuring green jobs
(Bruvoll et al., 2012) identifies several important gaps in the statistics but
also some misconceptions. One example is that the EGSS ought to cover
also household activities. However, as the EGSS measure those entities
(enterprises) who are producing the equipment or the services required
to combat environmental pressures, the households are by default not in­
cluded. Households are of course contributing to the reduction of for ex­
ample greenhouse gases by switching their energy sources from fossil to
renewable energy sources.
Environmental protection expenditure
Opportunities arise from the production of goods and services but they
also arise due to the deterioration of the local environment. Many enter­
prises have, either via government regulations or as company policies, to
reduce their natural resource use and their environmental pressures with
can lead to degradation of the environment.
Environmental protection expenditure (EPE) statistics is a meas­
urement or assessment of how much money, enterprises and govern­
ment, are spending to protect the environment. It includes both large
Making the environment count
and small investments in green technologies and current expenditure
for running costs related to the environment. The EPE statistics meas­
ure how much has been invested and spent on environmental technol­
ogy and equipment. These statistics also show the demand for these
products and services. Since these statistics also cover government ex­
penditures, they provide a platform to compare expenditures allocated
to the environment.
This measure does not necessarily reflect the impact of policy on the
state of the environment or the social cost of environmental policy, but it
does indicate the measures taken by private and public actors to reduce
their environmental impacts. It also provides an indication as to what
type of technology they are relying on, whether it may be conventional
technologies that clean already produced emissions such as pollution
treatment equipment (end-of-pipe) or more process oriented technolo­
gies that look to prevent pollution from arising in the first place (pollution
prevention or integrated technologies).
The data collection on environmental protection expenditure has
been made by Eurostat and the OECD through a joint reporting arrange­
ment since the early 1990s. In Europe, the regulation on environmental
accounts will replace this extra reporting procedure. In the European Sta­
tistical System it will become mandatory to report EPE for a selected num­
ber of economic actors. The figures collected will include their invest­
ments (gross), current expenditures, subsidies and other transfers on en­
vironmental protection. The sectors covered in the new regulation are:
the government sector, mining and quarrying, manufacturing, electricity,
gas and water supply, waste management and waste water management.
The Nordic situation
The statistics in the Nordic countries for environmental protection ex­
penditure varies in coverage and depth. Denmark has so far focused on
covering the public sector while Sweden has focused on the mining, quar­
rying, manufacturing and electricity and water supply industry. Norway
and Finland have covered both industries and the government sector. Ice­
land does not report any data to Eurostat and the OECD. This means that
the chosen indicators in this section lack one or more countries from the
Nordic region.
It has also been seen in evaluations that the coverage of environmen­
tal protection expenditures in the public sector varies between the Nordic
countries (SSB 2013, SCB 2014).
Making the environment count
The main trend in EU28 regarding EPE in industries (defined as: min­
ing, quarrying, manufacturing and electricity, gas and water supply) is
that it is stable and accounts for 0.4% of GDP.
In the Nordic countries the situation is different. Norway shows a
sharp decline of EPE by GDP, while Finland shows an increase and had in
2012 the highest share of EPE by GDP of the Nordic countries.
Figure 28: Environmental protection expenditures by industry, as share of GDP, 2008–2013
Data for Denmark and Iceland are not available, in current prices. “Industry” includes:
mining and quarrying, manufacturing, and electricity, gas and water supply.
Source: Eurostat.
The Nordic countries show a similar pattern regarding the environmental
domains that are the focus of the investments in green technology, with
the exception of Norway.
Figure 29 show that the Nordic industries are focussing up to 50% of
their investments for environmental protection to reduce and manage
emissions to air and climate protection. The second highest investment
area involves waste water management including minimising, monitoring
and preventing pollutants to reach water sources.
Making the environment count
Figure 29: Total EPE investments, by environmental domains, by industry, (NACE) 2012, EU28 and
the Nordic countries
Ambient air and climate protection
Waste water
* Sweden 2013, data for Denmark and Iceland are not available, in current prices. “Indus­
try” includes: mining and quarrying, manufacturing, and electricity, gas and water supply.
Source: Eurostat.
Examining the types of investments in more detail, Figure 30 shows
how much the manufacturing, mining and extraction, and energy pro­
ducing industries in the Nordic countries Norway, Finland and Sweden
are using their investments to technology and equipment that reduces
emissions from occurring in the first place. The figure shows that in
the mining and quarrying industries in Finland, Norway and Sweden,
the focus is on investments that treat already proven emissions and
pollutions rather than on investing in pollution prevention technology.
In 2012, the share of pollution prevention technologies in relation to
total environmental protection investments ranges from 20% in Nor­
way, to 12% in Finland, to 3% in Sweden. In the electricity, gas and wa­
ter supply industry in the countries, there is a higher focus on prevent­
ing pollution from arising in the first place. The share of pollution pre­
vention investment to the total EPE amount invested ranges from 78%
in Finland, 62% in Norway and 41% in Sweden.
Making the environment count
Figure 30: Share of pollution prevention investments of total environmental protection
investments, 2012, the Nordic countries, by some industries (NACE)
% pollution prevention of total EP
Mining and quarrying
Electricity, gas, steam and air conditioning supply; water collection, treatment and supply
Data for Denmark and Iceland are not available. Denmark expect to have data available by
the end of 2016.
Source: Eurostat.
Other environmental policy responses
Other statistics on environmental policy responses are most notably
subsidies related to environment. These subsidies can be subsidies that
are aimed at bettering the environmental situation, such as economic
support to farming methods to maintain biodiversity in the farming
landscape, or for demonstration projects for environmentally beneficial
There can also be economic support aimed at non-environmental pur­
poses but which have an unwanted environmental effect, such as the
wide-spread subsidies for fossil fuel production and consumption.
Sweden publishes statistics on environmentally motivated subsidies
yearly. Denmark has also started to publish data on environmentally moti­
vated subsidies on a yearly basis. Over the years Statistics Sweden has
made a number of studies showing how environmentally damaging subsi­
dies can be measured. Development on the definition and identification
methodology for these types of subsidies is needed before statistics can be
produced in an internationally harmonised and comparable way.
Making the environment count
Recommendation and future use
Statistics on environmental taxes are defined in the SEEA-CF and included
in the EU environmental accounts regulation. Regular reporting and pub­
lication of environmental taxes occurs for the countries within the Euro­
pean Economic Area. The basic statistics stem from the national accounts
and can be used within the context of environmental economic accounts
easily, with the benefits that go with a globally accepted set of statistics.
In this report it has been described both the strength of the indicators re­
lated to environmental tax revenues and the limitations. The recommen­
dation from the Ad Hoc Group is to annually follow the indicators on en­
vironmental tax revenues as presented earlier.
The statistics for environmental goods and services basically
measures the supply of products and services that reduce environmental
pressures that can lead to environmental degradation and reduces the
rate of depletion of natural resources. This statistical area is still under
development but with the help of the EU regulation on environmental ac­
counts the data for developing these statistics will soon become more
readily available in Europe. It is recommended by the Ad Hoc Group to
revisit this area in the short term. As these EGSS statistics are developed
further, additional value added will be brought to the community.
It is possible to also look at the demand for environmental technologies
and services. The statistics on environmental protection expenditure look
at the demand side and measure how much companies have invested and
used as intermediate consumption goods and services to reduce their own
environmental pressures. Although these statistics have been under devel­
opment a number of years, not all Nordic countries have implemented
them. Since this is the case, it is recommended by the Ad Hoc Group to re­
visit this area in the short term. A driving force for full Nordic coverage of
environmental protection expenditures comes from the new reporting re­
quirements under the EU regulation on environmental accounts.
Additional statistics on other environmental economic instruments
such as subsidies and the EU emission trading scheme are still in the de­
velopment stage. The Ad Hoc Group recommends revisiting the area in
the medium term to evaluate the possibility to include these areas in a
Nordic environmental account.
Making the environment count
6. Extensions and analysis –
options for data and
policy use
This chapter focuses on the uses of data from the environmental accounts
that extend beyond straight forward indicators. The Nordic statistical of­
fices have tested the approaches of using national accounts input-output
analyses to identify structural changes or to examine consumption re­
lated emissions.
The Ad Hoc Group recommends that the Nordic Council of Ministers
revisit the area of analysis of decomposition and consumption as was sug­
gested in Bruvoll (2007) as data are readily available. The lack of re­
sources has hampered the progress of analysis of impacts abroad derived
from Nordic consumption, imports and exports, but also looking into the
aspects of drivers of pollution within a country.
With regards to environmental and economic modeling, these exer­
cises are largely performed on an ad hoc basis on occasions when a spe­
cific question has been posed. It is now simply recommended that basic
data from the environmental accounting framework are used to ensure
and assist consistent environmental and economic modeling.
For several decades, macroeconomic models have included energy
and air-pollution (including greenhouse gases) modules or sub-models in
forward-looking analysis and scenario evaluations. Analyses to identify
which factors were most important quantitatively behind the trends for
various emissions or for the changes observed in the energy mix of the
economy are made using decomposition analysis techniques. A major ad­
vantage and strength of environmental accounts is that they are well
suited for being linked directly to and being integrated with both national
accounts and such macroeconomic models and analysis techniques.
Such modelling is useful for policy analysis, development and dis­
cussions. These approaches can serve as a common framework for dif­
ferent ministries, including finance or treasury ministries and integra­
tion with economic policies. Mostly the modelling and calculations have
been one-way, from economics to environmental effects, but some at­
tempts, including most recently the OECD’s project, Consequences for
Long-term Economic growth (CIRCLE), have been performed to model
economic effects of human-induced or anthropogenic environmental
change, e.g. climate change.
Consumption – or demand-related
environmental impacts
Environmental “footprinting”, estimating the global impacts of a nation’s
consumption, including imports (and disregarding exports for con­
sistency), has been increasingly proposed and much discussed in recent
years. “Footprint” type indicators are gaining in popularity in spite of the
uncertainties inherent in the calculation methodologies. The OECD, the
EU and the UN Sustainable Development Goal indicators are all including
these types of indicators in their various indicator sets. The OECD’s sug­
gested set of Green Growth indicators and for the indicators envisaged for
the EU Roadmap on Resource Efficiency and the circular economy include
footprint indicators. It must be strongly emphasized that such calcula­
tions ideally requires detailed data both on energy use, resource use and
emissions in individual sectors from all exporting countries, and prefera­
bly recent import/export data for the whole supply chain, not just (tradi­
tional) bilateral trade data.
Ecological footprints, where use of resources for consumption is
weighted by and converted to the assessed acreage needed to maintain
and renew natural resources that are used for consumption, have re­
ceived a lot of attention but has also met severe and well-founded criti­
cism from the statistical and scientific communities. In particular
weighting methods are often highly questionable.
In the context of this report, it is worth noting that environmental
accounts data at disaggregated level (or similar data) are required for
such estimates, or, positively put, that environmental accounts data are
both very useful and also necessary for such analyses of footprints and
global impacts.
Making the environment count
The Nordic situation
A Nordic Council of Minister’s report on carbon footprints demonstrates
some of these methodological requirements (multiregional input-output
modelling), including the need for sectorally disaggregated data of exactly
the type offered by the environmental accounts (Peters & Solli, 2010).
This means, that if national accounts type input-output tables are used,
then the data on e.g. air emissions that should ideally be used for calculat­
ing footprints can come from the environmental accounts. The reason for
this is that the air emission accounts follow the same definitions and
scope as the national accounts. The above mentioned report (Peters &
Solli, 2010) recommended that future studies in the field of demand based
environmental impacts should be benchmarked against multiregional in­
put-output modelling. This is highly commendable in order to reach a
global balanced input-output model. The issue is that all global databases
available, may it be Exiopol,34 Eora35 or any other model including envi­
ronmental extensions in their global work, are research driven and the
long term aspect and regular updating of the models are uncertain.
A new NCM report under preparation will look more closely on re­
quirements, challenges and opportunities for footprinting, for carbon
and greenhouse gases and for other resources and issues such as mate­
rials, land and water. It is anticipated that the results will be available in
2016 or 2017.
Also in the Nordic context, a much larger and more comprehensive
Swedish project, led by Statistics Sweden with strong participation from
world-leading experts in this field of research, including the Norwegian
University of Science and Technology (NTNU) in Trondheim, has recently
started the PRINCE project (Policy-Relevant Indicators for National Con­
sumption and Environment).36 The project aims to develop a sound and
repeatable methodology to monitor the environmental impacts of Swe­
dish consumption, both inside and outside Sweden’s borders, using the
latest modelling and statistical techniques. Results will become available
during the course of the project, which finishes in 2018.
In 2016 Statistics Denmark will start a project aiming at analysing
Danish footprints abroad by using available multi-country input-output
models. The project follows up on a similar project carries out some
years ago.
34 Exiopol: multiregional environmentally extended (EE) Input-Output (I-O) framework, with links to other
socio-economic models:
35 Eora: a multi-region IO database provides a time series of high resolution input-output (IO) tables with
matching environmental and social satellite accounts
Making the environment count
Emissions in Nordic countries are not the whole story of how the produc­
tion and consumption pattern are drivers of environmental pressure. To cal­
culate the total impact of Nordic final use, we need to look outside the Nordic
area and study what and how much we import, and what environmental im­
pact that production has in other countries. Impact on climate change is a
global phenomenon and effect of emissions reductions remains the same re­
gardless of where the emissions occur geographically.
The negotiations on reductions of climate gases have so far been
largely based on a national geographical perspective, calculating the
emissions within each party’s national border. This perspective has ad­
vantages in the sense that the legislation and the responsibility for the
economy within the national borders are within the jurisdiction of the na­
tions. However the insight that global warming is a true global externality
where the impact of emissions and emissions reductions on climate
change is independent of in which country’s territory it occurs has some­
what changed the national perspective of climate policies.
The UN climate convention is based on the principle of cost effective­
ness, which seeks to achieve emissions reductions in the most cost effec­
tive manner by opening for international cooperation and joint imple­
mentation of measures to curb climate change. Based on this marketbased approach, the EU has, through its ETS system, established a com­
mon EU target – or cap – for the sectors and companies covered by the
system. The UNFCCC and the Kyoto protocol also provides for the possi­
bility of taking responsibility through action beyond national borders.
The consumption perspective has the advantage of illustrating, in
broad terms, how patterns of our consumption behaviour can be seen as
a driving force.
The following figure is an assessment of the greenhouse gases that
could be linked to Swedish consumption, both within Sweden’s borders
and the emissions produced in the countries where the imported goods
were made. It should be emphasized that such an assessment is based on
simplifying assumptions and the emissions connected to the imported
products are especially uncertain.
Making the environment count
Figure 31: Greenhouse gas emissions that could be linked to Swedish consumption, 1993–2012,
million tonnes CO2-equivalents
Greenhouse gases caused in other countries
Greenhouse gases in Sweden
*GHG emissions include carbon dioxide (CO2), methane (CH4), nitrous oxides (N2O).
Emissions of CH4 and N2O are normally converted into CO2-equivalents so that they can be
added to the total. Emissions related to exports are excluded.
Source: Statistics Sweden and the Swedish EPA, SCB 2015a.
Analysing drivers of greenhouse gas emissions
In trying to green our economies by decoupling environmental pressures
from economic growth, both at national aggregate level and at the level of
individual economic sectors, it is necessary to analyse the different fac­
tors, including policy instruments, behind the evolution and trends in en­
vironmental impacts for different emissions and for different sectors.
Such decomposition analysis, looking at the relative weight or contribu­
tion, e.g. to changing emission patterns, from population growth, eco­
nomic growth, changes in the structure of the economy, changes in the
use of energy products and natural resources, technological changes, and
other factors, also require SEEA-type data.
An earlier report by the Nordic Council of Ministers (Bruvoll, 2007)
provided an overview and introduction to some of the work done in the
Nordic countries at that time. Their recommendations were that the
methodology and data availability would make the analysis practical to
implement. Other work presented the work done by the statistical agen­
cies in the Nordic countries at that time, particularly in Norway (Bruvoll,
Making the environment count
A. & H. Medin (2003), Denmark (Jensen, P.R. & T. Olsen (2003) and Swe­
den (Wadeskog, A. & V. Palm (2003).
The Nordic situation
A Swedish example
From an economic production perspective (the environmental ac­
counts), carbon dioxide emissions are influenced by the type of goods
and services produced, e.g. real estate services and transport. The figure
below shows that the manufacture of less emission-intensive products
is on the increase (distribution between goods and services) and that
the fuel mix has been changed (the emissions intensity). We have gone
from using fossil fuels to using e.g. biofuel, wind power and geothermal
energy instead.
Another factor that is helping to reduce climate impact is that produc­
ers are starting to change the types of input materials they use in produc­
tion (e.g. plastic, steel and wood) and also from where they buy them (do­
mestically or abroad). These factors, the purchase of input goods, are
shown in the figure as trade in production. The reduction in the frequency
of input goods may have something to do with the goods being imported
instead of being purchased in Sweden. This is something that must be con­
sidered separately in the analysis.
Despite the fact that several of the factors, such as increased produc­
tion in services and lower carbon content in fuels, should lead to reduc­
tions of carbon dioxide emissions, total emissions are not changing to any
great degree.
This is because the driving forces of the emissions are cancelling each
other out on the national level. A growing population and greater produc­
tion of goods and services, measured as GDP, are factors that have an im­
pact in the opposite direction, towards increased emissions.
The figure below shows the change in actual carbon emissions in pro­
duction 1993–2012 and how contributory factors have developed during
the same period.
Making the environment count
Figure 32: Factors affecting carbon dioxide emissions in Sweden – a decomposition analysis,
per cent, 1993–2012
Emission intensity
Trade exchange in production
Distribution between goods and services
Sale of goods and services
Change in population
CO2 emissions from production
The figure shows the change in actual emissions in production compared to the 1993 level
and how contributory factors have developed during the same period. For example, the fig­
ure shows how the emissions intensity has decreased since 1993 and hence contributed to
a reduced increase in actual emissions. The sale of goods and services is expressed in terms
of GDP growth.
Source: Statistics Sweden, SCB 2015a.
Environmental economic instruments –
the price of CO2 emissions
The same system boundaries and definitions are used throughout most of
the environmental accounts. This enables different modules, like air emis­
sions and environmental taxes, to be used together. An interesting exam­
ple combines emissions of CO2 and tax revenue from the CO2 tax. Using
these two together creates an implicit average tax rate, Euros per tonnes
of CO2 emissions, which is also a type of price for CO2 emissions that can
be compared between countries. This measure should however not be
confused with a reflection of damage costs of emissions.
There is also another instrument with the purpose of decreasing CO2
emissions, the EU ETS. For a more comprehensive price of CO2 emissions,
regard should also be given to emission permits. However there is at the
Making the environment count
moment no NACE industry allocation of emission trading for the Nordic
countries combined.
All the Nordic countries have a tax on CO2 emissions; it is actually a
tax on the carbon content of different fuels. It is levied on top of the price
of the fuel when it is bought by the end consumer.
In the Nordic region as well as in the EU, where the tax on carbon exist,
both the CO2 emissions and CO2 tax revenue statistics are allocated to dif­
ferent NACE industries. This enables calculation of not only a type of price
of CO2 in the country but also within different industries and sectors.
The Nordic situation
A pilot study was made in 2014 and the results are presented in figure 33.
The figure depicts CO2-taxes paid by the industries and by the households,
and their respective CO2 emissions. As a comparison the maximum price of
an emission permit for 2011 has been added to the figure.
As can be seen, there exists clear differences between the industries
and also between the countries in terms of Euros per ton CO2 emissions.
At the country level the average tax per ton of CO2 is highest in Sweden,
then Norway and lowest in Denmark.
Households and service industries appears to be paying more for CO2
emissions in all three countries. From a damage cost point of view it does
not matter from where the emissions origin. Therefore an optimal policy
should imply that the cost to emit should be the same regardless of from
where it occurs within and between countries. An optimal international
carbon tax is obviously difficult to agree upon and establish. Other aspects
than an optimal policy design might affect national carbon tax levels and
the differentiation of these levels.
It should be noted that the CO2 emissions cover both industries within
the EU-ETS and beyond. In the future a distinction of each instrument and
the related emissions will be possible to show.
Making the environment count
Figure 33: Average tax (implicit price) on carbon dioxide emissions, Nordic countries, by industry
(NACE) and spot price of emission permit. 2011
*Other services consists of industries such as construction, waste and waste water man­
agement, wholesale and retail, public administration and financial institutes.
**Average of CO2 tax paid per tonnes of CO2 emission.
Source: The statistical office in the Nordic region. Data for Finland and Iceland are not available.
Manufacturing industries are paying less than households for their emis­
sions of CO2. Some of these are included in the EU Emission Trading
Scheme and as a comparison; the maximum price of an emission permit
has also been placed at the bottom of the figure. The industries that have
lower implicit tax rates for CO2 emission differ somewhat across the coun­
tries. In Denmark; transport, mining and energy production are the indus­
tries paying the least. In Sweden it is manufacturing and energy produc­
tion. In Norway it is agriculture, forestry, fishing, manufacturing and
transport that have the lowest implicit tax rates.
New methods for industry allocation of tax revenue and air emission
statistics is constantly being developed by the statistical offices. In time
these type of implicit tax rates can be produced more regularly and hope­
fully also include Finland and Iceland.
Making the environment count
Environmental economic modelling
For several decades, macroeconomic models have been combined with
energy and air pollution (including greenhouse gases) modules or submodels, used for forward-looking analysis as well as for backward-look­
ing analysis. A major advantage and strength of environmental accounts
is that they are well suited for direct linking to and integration with both
national accounts and such macroeconomic modelling.
Modelling environmental pressures have generally proved easier to do
for energy, air emissions and pollution, and partly for waste and material
production, including toxic materials, than it has been for water, land use
and biodiversity, where geographically disaggregated and spatially explicit
models are often required. Biodiversity has proved among the more chal­
lenging environmental issues to link to macroeconomic models.
The Nordic situation
In Norway there is a long tradition of linking environmental accounts and
national-accounting-based macroeconomic models to make projections,
first for energy demand and particularly electricity, as a basis for planning
further hydropower development. From the 1980’s this was also done for
air pollution (the SIMEN project), and since the 1990’s also, and with in­
creasing emphasis, for greenhouse gases (starting with the KLØKT project).
In Norway, macroeconomic models have been developed and used for eco­
nomic policy-making at least since 1960, both short- and medium-term
models (for demand management): KVARTS-MODIS-MODAG,37 and the
many longer-term, general equilibrium models in the MSG family (MultiSectoral Growth), also from around 1960. New models have now been de­
veloped to replace MSG: SNoW (Statistics Norway World model, in two
main versions, SNoW-No (rest of the world exogenous) and SNoW-W
(World). These models build on the economic structure of the MSG models
and are much easier to use, update, compare and link with other national
and international models. The SNoW models also link to GTAP (Global
Trade Analysis Project) data, i.e. for analysis of trade-climate-environment
issues, and possibly also for environmental “footprints”.
Quarterly model – MOdel of DISaggregated type, 1960 – MODel of AGgregated type, from 1980.
Making the environment count
The three main economic (but not including environment and energy)
models that are used in Denmark are ADAM from Statistics Denmark,38
DREAM which is financed by the Ministry of Finance39 and SMEC from the
economic council.40
However there are also a number of other environmental economic
related models that are based on these models (Miljøstyrelsen 2013).
EMMA is an energy and environmental macroeconomic model cou­
pled to ADAM. It is used mainly by the energy agency to calculate the en­
ergy use and to quantify the effect on the environment of financial plans
for the climate and energy policy.
IntERACT is used to investigate new policies for climate and energy and
their consequences for the energy system and the economy. The IntERACTmodel has two parts. One is an economic model and the other is a detailed
technical energy model. similar to the international TIMES-model.
MUSE (MUlti SEctor model of the Economic Councils) is a CGE-model
that has been used to analyse green fees and its distributional conse­
quences in 2009. In 2010 it was used to analyse the agricultural sector
and the environmental pressure from the agriculture.
ENVIMATscen is an environmentally extended long-term simulation
model. The base year is 2010 and the model is solved to the chosen ter­
minal year assuming that the relevant variables develop along steady
growth paths from the base year to the terminal year. The principal ter­
minal years are 2030 and 2050.
The model is very detailed. It has 147 industries, 230 product
groups, 61 household consumption commodities, 7 institutional sectors,
21 kinds of income flows, 57 types of energy, 34 types of raw-materials
from the nature and 39 types of emissions into air and waters. Besides
domestic raw-material use and emissions, the model contains estimates
of the life cycle or upstream resource use and emissions abroad of the
174 imported products.
Making the environment count
The ENVIMATscen core model is constructed in conformity with the
structure of the national accounts.
According to a study by Statistics Finland and then Thule Institute us­
ing the ENVIMAT model, interesting results were seen in the case of
greenhouse gas emissions. The theorem around the commonly accepted
opinion that living in city centre causes fewer environmental pressures
than living in suburbs or at countryside was tested. The results showed
that this seems not to be the case in Finland. The results of the study show
that there is no difference between the emissions of households living in
cities or countryside.
Table 3: Greenhouse gas emissions of households 2012, Finland, kilos of CO2 eq
Type of region
GHG per household
Inner urban area
Outer urban area
Peri-urban area
Local centres in rural areas
Rural areas close to urban areas
Rural heartland areas
Sparsely populated rural areas
GHG per
consumption unit
GHG per
consumption of EUR 1
Source: Nurmela and Mäenpää (2014).
Interesting result is that the GHG-emissions of households for housing and
energy are highest in urban areas. The reason for this is that in Finland most
of the households in urban areas are connected to district heating. Most of
the district heat in urban areas is produced by fossil fuels or peat. In rural
areas, much fuel wood is used and electricity, which today has much lower
greenhouse gas content. The average GHG-emissions for housing and en­
ergy of the households in rural heartland areas and sparsely populated ru­
ral areas are the lowest. On the other hand, traffic emissions are highest of
the households in rural areas close to urban areas.
The study was done by using input-output tables of National Ac­
counts; it was possible to estimate the greenhouse gas emissions of dif­
ferent commodity groups of consumption. From Statistics Finland’s
Household Budget Survey it was possibly to collect the consumption data
of different kinds of households by a disaggregated breakdown. By using
the coefficients available from the input-output tables, the consumption
of household in Euros was transformed into emissions. Coefficients were
calculated by the ENVIMAT-model. In addition, data on the use of raw ma­
terials exists and could be analysed as well.
Making the environment count
The National Institute of Economic Research has developed a Computable
general equilibrium model, EMEC,41 which is used for analysis by the Minis­
try of Finance and is using environmental account data. It is used by the fi­
nance ministry to assess environmental economic issues. It has been used in
the long term planning and informed the environmental tax investigations.
Statistics Sweden and the Swedish Environmental Protection Agency
has also been using the Cambridge Econometrics model E3ME. This is an
econometric model that is also using environmental accounts data and
was used to assess the emission allowance trading schemes in 2004.42
The Swedish Energy Agency is also using models that have more tech­
nical content such as the international optimization model MARKAL and
then align them with economic information in their projections.43
Recommendations and future use
The Ad Hoc Group recommends that the Nordic Council of Ministers re­
visit the area of decomposition analysis and consumption models as was
already suggested in already in 2007 (Bruvoll, 2007) since the data
needed for these exercises are readily available.
With regards to environmental and economic modeling, it appears
that they are performed mostly on an ad hoc basis. The Ad Hoc Group
makes the recommendation that whenever the question is right for an en­
vironmental economic model to be used then the input data should be
based on data from the environmental accounting framework to ensure
consistent results from environmental and economic modeling.
ganglighet-och-forbattringsmojligheter.pdf and
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7. Social indicators
The Ad Hoc Group finds that the existing work and follow-up of the Euro­
pean sustainable development policy has helped clarify the types of sta­
tistics that are necessary to be able to follow the trends of the social pillar
of sustainable development. With the work of establishing a new post2015 sustainable development agenda there is now a push to truly inte­
grate the analyses. How to integrate social aspects with economic and en­
vironmental aspects is the next substantial step to take. The accounting
framework that is used to integrate environment and economic statistics
could be a possible framework for such integration. The Nordic countries
would be well placed to take such a step. In sustainable development in­
dicators sets there are some commonly chosen social indicators that
could also be part of an integrated statistical framework for policy analy­
sis. Including general social indicators in an accounting framework is pos­
sible, but not a standard practice in the SEEA.
With detailed enough data and using the framework of SEEA it is pos­
sible to calculate some environmental pressures arising from household
consumption by different types of households. This is an established type
of analysis that involves environment, economic and social aspects. Anal­
ysis of the so-called green jobs is another established analysis that has
aspects of all three areas (environmental jobs, employment by sex and re­
gion as well as investments or trade data) assuming that all of these data
parameters are collected and kept with the primary data.
In economic models the inclusion of data about the employed per in­
dustry is common and some Swedish pilot studies show that many other
social statistics can also be added as long as some additional categories of
people are added. In order to cover the whole population, the people out­
side of the workforce were represented as not employed, children and el­
derly in the studies made.
We suggest that this area needs to be further developed. Statisticians
with expertise in social statistics are needed. One way to assist in this de­
velopment would be to hold a workshop inviting people from NMR’s Com­
mittees to initiate such cooperation.
The following areas would be of interest to develop in order to make
an integrated sustainability account:
Social-economic aspects.
To analyse in detail data that can be easily incorporated into the
SEEA: e.g. number of employed persons, consumption patterns of
types of households by gender or income, education.
Social-environmental aspects.
Integrate health and other relevant data (or model through
research) and relate this to environmental pressures such as
emissions, noise exposure, smoking, work environment, traffic
accidents, access to nature, etc. Some type of geographical
referencing of the data may be needed to make sense of the analyses.
Other social aspects.
Social issues identified as important for sustainable development.
For example poverty, self-reported health, threats of violence,
unemployment and political influence.
The mandate of the Ad Hoc Group stated that social issues that belong to
sustainable development should also be considered. There has been little
international work on including social issues in the SEEA framework, but
Sweden has been interested in exploring this path and some pilot studies
have been made.
In 2004 Statistics Sweden made an inventory of social studies within
the context of the SEEA. This review was presented at the London Group
meeting and it showed that there are some different approaches to doing
this.44 The inventory divided the studies into three different types, econ­
omy-social, environment-social and social-social.
The first type makes a link between the economy and households, such
as when the accounts are used to calculate the environmental pressure
from consumption. Different types of households consume different types
of products and therefore different types of households are possible to dis­
tinguish. The second type makes the link between environment and health,
and can show the health dimensions of the persons employed in different
The London Group is a UN City group with SEEA practitioners that meet yearly to harmonise and cooper­
ate to develop the SEEA system.
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industries or in the development of a given population’s health in heavily
polluted areas. The third type relates to purely social issues such as loneli­
ness or smoking habits but reported by industry.
Sustainable development indicators (SDI)
A number of social indicators are part of the SDI sets. For some systems
they are ranked, so that there are different levels of indicators, in order to
facilitate the communication. The headline indicators are then indicating
the general trends whilst the underlying indicators are dealing with im­
portant trends that can explain differences between countries or over
time. Developing and developed countries have focussed on different is­
sues and the new post-2015 indicator system is now designed to address
issues that are high on the agenda in all countries.
The headline indicators for the social aspects of sustainable develop­
ment in most SD indicators sets are typically healthy life years, where life
expectancy at birth is weighted with data on how many of those years are
estimated to be healthy.
Also the subjective indicator on how many people consider their life
to be ok is often incorporated in the indicator sets. Other important ex­
planatory indicators are employment, education, income and health-re­
lated indicators that can be regarded as important factors that can deter­
mine the trend on healthy lives.
The EU sustainable development indicator set is divided into ten
themes of which three are very clearly social in their focus; namely Public
Health, Social Inclusion and Demographic Changes. These three themes
have one headline indicator each.
The EU social headline indicators:45
Healthy life years and life expectancy at birth, by sex.
People at-risk-of-poverty or social exclusion.
Employment rate of older workers.
There are also other types of indicators that follow the operational policy
goals of the EU and some other indicators that are contextual so do not
have a particular goal (such as public expenditure of education).
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Nordic Council of Ministers’ social indicators46
Nordic Sustainable Development Indicators show long-term trends in the
following focus areas: the Nordic welfare model; viable ecosystems; chang­
ing climate; sustainable use of the earth’s resources; and education, re­
search and innovation. Most social indicators are presented under the Nor­
dic welfare model focus area, and one (exposure to air emissions) under
viable ecosystems. The social indicators on the website for the Nordic coun­
tries present some important facts about the trends of the populations in
the Nordic countries, such as Life expectancy at birth, by sex.
Other topics that are covered in the NCM SDI-set concern populations
development since 1990, urbanisation, risk of poverty for families with
children, gender differences in salaries and percentage of employed and
unemployed of the population 15–64.
The statistical office in Sweden has investigated if the social issues can be
included in the accounts in a similar way as is done in Corporate Social
Responsibility reporting. By going to the social statistics data sources it
was possible to distribute the social data by industry.47
The project chose indicators from most of the dimensions that make
up the social statistics. In order to cover the whole population some new
categories were added such as unemployed, children and retired people.
The work shows that it is possible to include many different aspects of the
social field in the environmental accounts. This is demonstrated by pre­
senting data distributed by industry from the Living Conditions Survey
(ULF) in Sweden, surveys which have industry as a background variable
for those employed. Including this social dimension in the environmental
accounts also makes it possible to analyse the social data together with
the system’s economic and environmental data. This can be done using
methods frequently used in the environmental accounts, such as different
kinds of industry profiles and decoupling diagrams, in which social data
are treated in the same way as economic and environmental data. Adding
social data on industry level to the environmental accounts also adds the
social dimension of sustainable development to the environmental ac­
counts, which makes it possible to make industry level analyses. The por­
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tion of the population that are not connected to an industry, such as chil­
dren, non-employed and unemployed persons, the elderly, etc. would not
be part of the analysis.
In the Finnish indicator set for sustainable development, there is a wide
spectrum of indicators featuring social sustainability.48 Social sustainabil­
ity is mainly reflected in such social goals as equal opportunities for wellbeing, society of participating citizens, sustainable work and sustainable
communities and local communities. In addition to indicators commonly
used in international indicator sets, such indicators are also included like
subjective well-being, voting turnover, corruption, work absences due to
sickness and average commuting distance.
Norway has since 2005 reported annually on a national set of indicators
for sustainable development, proposed by a national commission (NOU
2005:5), and further developed since then. Out of 17 indicators for sus­
tainable development reported on in Norway’s National Budget 2014,
there are four social indicators, on Income distribution, Education level,
Social exclusion (e.g. percentage of the population 16–66 years receiving
disability pensions), and Life expectancy at birth.
In Denmark a research project explicitly aimed at combining environmen­
tal accounts with socioeconomic and social data in order to analyse the
environmental performance of various household or family types. The
analysis showed that that families living in urban flats and especially
young and elderly families had the most environmentally friendly con­
sumption pattern, while middle income families living in houses have the
least environmentally friendly consumption pattern. The analysis was
carried by combining family budget statistics, input-output tables and en­
vironmental accounts (energy, material flows, and various types of air
emissions). (Wier et al., 2005).
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Out of Denmark’s 23 sustainable development indicators launched in
2014, there are 10 social indicators. These focus on Education, Crime
rates, Homeless people and Drug uses.
Recommendations and future use
Further systematic development of this area is needed before data can be
interlinked to environmental and economic statistics and accounts, in re­
liable and consistent ways. As the Ad Hoc Group have limited knowledge
of the social sphere it can see a couple of potential ideas to further the
area in an accounting context.
The development could be started with a workshop to which other
committees of the NCM can be invited to discuss what types of integrated
analyses would be of greatest policy value.
Another suggestion is to include as a regular indicator, employment
for men and women by industry. There is also a possibility to develop in­
dicators with levels of education by industry.
Making the environment count
8. Ecosystem services
Work on describing ecosystem services has been under development for
some time now. The Convention on Biological Diversity (CBD) and the
Millennium Ecosystem Assessment (MEA) have driven the area forward
considerably. However, work on developing indicators is still experi­
mental and depend on data availability. The Nordic national statistical of­
fices are divided as to the role of the statistical community in the further
development of this area.
The Ad Hoc Group recommends that the Nordic countries make pilot
studies and experiments to further the information needs in this area.
These pilot studies could be organized in a multidisciplinary way and may
include several government agencies as well as research institutes.
The ideas of SEEA experimental ecosystem accounts should be further
developed and integrated with the ecosystem assessment approach. The
aim of the pilots and experiments should be to find methods to link the
ecosystems and their services to economic and social considerations.
In the Nordic countries national biodiversity strategies are in place to
follow the CBD and European strategies. The Nordic countries take differ­
ent approaches in monitoring and assessing the strategies. Finland has
come far in measuring ecosystem services through indicators to monitor
the development of the services. Sweden has for many years held on to
the environmental quality objectives which include a specific target to
maintain and stop loss of biodiversity. One problem, however, is that eco­
system services are not being measured on a regular basis. Norway mon­
itors the development through the Nature Index.49 In Denmark two of the
key areas of ecosystems are the protection and increase of forest areas
and the reduction of invasive species. Iceland has sharpened its strategy
to focus on invasive species, restoration of degraded habitats and conser­
vation measures (Mazza et al., 2013).
The statistical community has until now been involved to a limited ex­
tent in the provision of data for the national strategies and the develop­
ment of indicators related to ecosystem services. Agriculture and tourism
statistics, water and fishery related statistics have been used in assess­
ments. It is common to use research related studies for the monitoring
and assessment of ecosystem services. The availability of data from the
various research studies helps the assessments. However, research on
small areas is difficult to aggregate to macro scale and it is also not possi­
ble to use the studies as a basis for establishing a time series.
The UN has developed a tool within the environmental accounts to fa­
cilitate a comprehensive data production that can link the ecosystems
with the economy at large. Tests have been undertaken through pilot
studies around the world, including Australia and Sweden to see how the
environmental accounts can respond to the increased need for more data
on ecosystems.
There is a great potential to use the large amounts of data and under­
standing available at the statistical offices to increase the knowledgebase
on ecosystem services. However, as this is a new area there is little room
for experimental work and developments within the operating budgets of
the statistical offices. In order to continue to follow the work on the Eco­
nomics of Ecosystems and Biodiversity (TEEB), indicators that are relia­
ble and of sound quality have to be incorporated.
Issues that are still debated concerns the weight put on valuation of
ecosystem services and the lack of internationally agreed standards on
how to measure them in monetary terms. The fact that data on the physi­
cal attributes come a long way when used appropriately and should not
be under estimated in the discussion. The physical attributes (hectares,
amounts and tonnes) are what they are while a value of recreation or par­
ticular services depends highly on the tool of measurement and the
weights applied.
In recent years increased attention and policy priority has been given to
analysing, mapping and monitoring ecosystems and biological diversity,
perhaps most importantly related to the Convention on Biological Diver­
sity at the Rio Summit in 1992. The UN Millennium Ecosystem Assess­
ment (MEA) in 2005, and the work on TEEB, The Economics of Ecosys­
tems and Biodiversity, since 2007, has led to a large amount of work and
research on these issues, focusing on the concept of ecosystem services.
Making the environment count
However, when it comes to constructing accounting systems and link­
ing such accounts or even indicators to national accounts, ecosystems and
biodiversity have proved to be particularly challenging, compared to other
environmental issues and resources, such as energy use and air pollution.
The OECD has produced projections of biodiversity loss by 2030 and
2050 in its two most recent Environmental Outlooks (OECD 2008 and
OECD 2012) using the indicator Mean Species Abundance (MSA). This in­
dicator was linked to OECD’s economic model ENV-Linkages with the IM­
AGE model (Integrated Model to Assess the Global Environment).
Based on the modelling results, mean species abundance at the global
level is projected to decline by a further 10% between 2010 and 2050,
with the majority of loss occurring before 2030. The steepest decline in
MSA is in scrubland and savannah (19%), temperate forests (19%) and
tropical forests (14%) (OECD, 2012).
In the Nordic countries national biodiversity strategies are in place to
follow the CBD and European strategies. The Nordic countries are taking
different approaches in monitoring and assessing the strategies. Finland
has come far in measuring ecosystem services through indicators to mon­
itor the development of the services. Sweden has for many years used the
environmental quality objectives which include a specific target to main­
tain and stop loss of biodiversity. The main problem is that ecosystem ser­
vices are not being measured on a regular basis. Norway monitors the de­
velopment through the Nature Index. In Denmark one of the key areas of
ecosystems are the protection and increase of forest areas and the reduc­
tion of invasive species. Iceland has sharpened their strategy to focus on
invasive species, restoration of degraded habitats and conservation
measures (Mazza et al., 2013).
UN SEEA experimental ecosystem accounts
SEEA – Experimental Ecosystem Accounting (EEA) is an integrated statis­
tical framework for organizing biophysical data, measuring ecosystem
services, tracking changes in ecosystem assets and linking this infor­
mation to economic and other human activity. SEEA EEA provides a com­
plementary perspective to the accounting approaches described in the
SEEA Central Framework (CF) but does not have the status of an interna­
tional statistical standard. It provides a synthesis of current knowledge in
this area and is a starting point for the development of ecosystem ac­
counting at national and sub-national level.
Making the environment count
The SEEA – Experimental Ecosystem Accounting was presented to the
UN Statistical Commission in 2013.50 The Commission welcomed it as an
important first step in the development of a statistical framework for eco­
system accounting, and encouraged its use by international and regional
agencies and countries wishing to experiment in this new area.
In the SEEA CF environmental assets and natural resources are
measured from the perspective of “individual” environmental assets,
such as timber resources, land, mineral and energy resources, and water
resources. In SEEA EEA environmental assets are measured from the
perspective of ecosystems. SEEA EEA assesses how different individual
environmental assets interact as part of natural processes within a spa­
tial area to provide a range of services for economic and other human
In the development of the SEEA – Experimental Ecosystem Account­
ing, several organisations and institutions were involved. The UN Statis­
tical Division, UNEP, the CBD secretariat, the European Commission and
a number of interested countries, also from the Nordic region, developed
experimental pilot accounts using the SEEA EEA.
The Nordic countries both participate in and follow this work closely,
and it may be possible to develop common Nordic work also on this issue
in the future. Norway has contributed with funding to the UN work. Sta­
tistics Sweden made a study where wetlands, grasslands and taiga that
are reported as important for biodiversity were being mapped and re­
lated to the sector that owns the land.51
Figure 34 shows that the majority of land important for biodiver­
sity is owned by the agriculture and forestry industry. As such the land
is not protected. Interesting to note is the absence of the ownership of
the government.
The UN statistical commission comprises of the world’s general directors of national statistical offices.
Making the environment count
Figure 34: The four largest landowners of the habitats Grass- and pasture, Western taiga and
Wetlands. Hectares, industry NACE/ISIC 2007
Source: SCB 2015b.
Statistical units are the entities about which information is sought and
about which statistics is ultimately compiled. The statistical units of eco­
system accounting are spatial areas about which information is col­
lected and statistics are compiled. Examples of methods include remote
sensing, on-ground assessment, surveys of landowners and administra­
tive data. Geo-coded data that can be used for ecosystem accounting is
accumulating rapidly as so-called big data in various Information and
communications technology-applications, administration and by envi­
ronmental monitoring.
A debate on the focus of valuing ecosystem service is occurring from
time to time, statisticians are not in favour due to the difficulties of meas­
uring experiences, while policy makers often see the valuation as key to
monitoring and change decision making processes. Eurostat has put in a
word in the debate on valuation and sees that what the economic theory
can provide is not enough to monitor sustainable development. Evidence
based decision making requires real life applications otherwise it has no
relevance (Eurostat 2014). Eurostat proposes that statisticians have the
capacity to further develop integrated systems about the state and condi­
tions which can easily feed into environmental accounting.
Making the environment count
TEEB – Economics of Ecosystems and
The international study on the Economics of Ecosystems and Biodiversity
– known as TEEB – reviewed the status of biodiversity and ecosystem ser­
vices and emphasized the need to both incorporate natural capital in
standard national accounting as well as developing a broader set of eco­
nomic and development indicators integrating biodiversity and ecosys­
tem concerns. An extensive synthesis and analysis of existing information
on the socio-economic importance and value of nature in the Nordic coun­
tries was released 2013.
Key conclusions of the Nordic TEEB was that policy response should
not be limited to environmental policies, but should also be part and
mainstreamed into sectoral policies, to be integrated. The study also high­
lighted that one way of doing this would be to develop a set of national
ecosystem services indicators. In Finland the work on developing indica­
tors measuring ecosystem services has come a long way along.
TEEB in Finland
The ecosystem indicator project of Finnish Environment Institute, SYKE,
has developed a framework for monitoring the state and trends of ecosys­
tem services in Finland. The aim has been to increase awareness of the
sustainable use of ecosystems by identifying important ecosystem ser­
vices nationally and developing indicators for them.
The idea is that by identifying the ecosystem services additional infor­
mation becomes available in a user friendly format. The results can be
used for
framing and clarifying the big picture of ecosystem services
monitoring the state and trends of ecosystem services
evaluating policies affecting ecosystems and their services
after further development: environmental impact assessment and
land use planning.
Making the environment count
Indicators were developed for 28 ecosystem services (10 provisioning, 12
regulating and maintenance, and 6 cultural services), a set of four indica­
tors for every stage of the cascade model; altogether 112 indicators in co­
operation with stakeholders and experts.
Results of the project were published in 2015 on
The indicators are based on two international frameworks. CICES52
classification was used as a starting point in classifying ecosystem ser­
vices. In order to achieve a balance between the ecological and social per­
spectives involved, the Cascade model was applied in developing indica­
tors. Four indicators were defined which highlight the structure and func­
tions of ecosystems as well as benefits and values of ecosystem services
for the people.
Figure 35: Cascade model with integrated ecosystem service indicators
Extensive work on breaking down the indicators resulted in 5 main groups:
structure, function, ecosystem service, benefit and value. In the cascade
model the ecosystem service is seen as the overarching group with the rest
following beneath. The indicators are therefore grouped accordingly.
The Common International Classification of Ecosystem Services
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Below follow three examples of groups of indicators measured under Pro­
visioning services, Regulating services and Cultural services:
Figure 36: Example1: Provisioning services: Berries and mushrooms
Figure 37: Example 2: Regulating services: Climate regulation
Figure 38: Example 3: Cultural services: Nature tourism
Making the environment count
Recommendations and future use
Work on describing ecosystem services has been developed for some time
now. The Convention on Biological Diversity (CBD) and the Millennium
Ecosystem Assessment (MEA) have driven the area forward considerably.
However, work on developing indicators is still experimental and there is
still work underway to facilitate the data availability.
The Ad Hoc Group recommends that the Nordic countries make pilot
studies and experiments on the basis of a large number of Nordic studies
on ecosystem services and biodiversity. These pilot studies should be
organized in a multidisciplinary way and cover several government
agencies including national statistical offices. The ideas of SEEA EEA
should be further developed and integrated with the ecosystem assess­
ment approach. The aim of the pilots and experiments should be to find
methods to link the ecosystems and their services to economic and so­
cial considerations.
The statistical community has until now been involved to a limited ex­
tent in the provision of data for the national strategies and the develop­
ment of indicators related to ecosystem services. Agriculture and tourism
statistics, water and fishery related statistics have been used in assess­
ments. It is common to use research related studies for the monitoring
and assessment of ecosystem services. The availability of data through the
studies helps the assessments, but they are difficult to compare and it is
not common for the results of the research to carry on for several years
thus leaving the assessment with old data quickly.
The UN has developed a tool within the environmental accounts to fa­
cilitate a comprehensive data production that can link the ecosystems
with the economy at large. Tests have been undertaken through pilot
studies around the world, including Australia and Sweden to see how the
environmental accounts can respond to the increased need for more data
on ecosystems.
There are great potentials to use the large amounts of data and under­
standing available at the statistical offices to increase the knowledgebase
on ecosystem services. However, as this is a new area there is little room
for experimental work and developments within the operating budgets of
the statistical offices. In order to continue to follow the work on the Eco­
nomics of Ecosystems and Biodiversity (TEEB) indicators that are reliable
and of sound quality has to be incorporated.
Making the environment count
Issues that are still debated, concern the weighting used in the valua­
tion of ecosystem services and the lack of internationally agreed stand­
ards on how to convert them into monetary terms. The fact that data on
the physical attributes come a long way when used appropriately and
should not be under estimated in the discussion. The physical attributes
(hectares, amounts and tonnes) are what they are while a value of recre­
ation or particular services depends highly on the tool of measurement
and the weights applied.
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9. Discussions and conclusions
Thoughts on indicators – and the framework
to use
Throughout this report the reasoning has been to use existing frame­
works on accounts and statistics that are established, not only in the Nor­
dic countries but worldwide and where the Nordic countries are at the
forefront. It is well known that there is a need for a range of indicators to
follow the measures and targets put in place by our governments and par­
liaments. On the other hand a main task given to the Ad Hoc Group from
the Nordic Council of Ministers was to “suggest how to increase the use of
already existing indicators that can complement GDP initially with a focus
on the environmental dimension”.
It is impossible to have one indicator or index that will give the ulti­
mate answer to policy issues that are complex in nature.
The aggregate known as Gross Domestic Product (GDP) has long been
the most used indicator for measuring economic performance but it has
also since long been widely agreed that GDP, while important, is not a
measure of welfare or well-being. It provides at best a partial indication
of average material standard of living here and now.
In the wake of Rio and Rio+20 a plethora of suggestions for comple­
mentary measures and indicators have been put forth. Now that the sus­
tainable development goals have been accepted by the UN General As­
sembly, the next step is to establish indicator for monitoring progress.
Time has come to formulate and decide how to monitor and track pro­
gress towards these goals. Reliable and relevant statistics will be core el­
ements in these efforts. The establishment and regular publication of Nor­
dic environmental-economic accounts would provide a good example that
could inspire other countries to follow.
On the micro level, environmental aspects are taken into account
when cost benefit analyses are made for a specific project although
measures of environmental consequences are assessed right away with­
out reference to the use of these measures as indicators.
On the macro level the outlook is somewhat different. Criteria for
evaluating the usefulness of indicators at this level focus on whether they
are relevant, reliable and transparent. Moreover, they should be produced
on a regular basis and be comparable internationally.
Choice or selection of indicators should be dependent on purpose, in
what context the indicators should be used, target group (audience) and
properties. Policy makers, researchers and lobbyists are all using a vari­
ety of tools to assess what decisions to take and to describe the problems
and opportunities at hand.
A recent report for the Nordic Council of Ministers (Hass & Palm,
2012) has arrived at conclusions regarding use of indicator complemen­
tary to GDP, with which the Ad Hoc Group agrees:
Indicators need to be used appropriately. For example, indicators
which are best used for awareness-raising cannot always be
appropriately used for monitoring policies. Indicators used for
monitoring need to be constructed specifically to address and keep
track of policy goals.
Complex, aggregated indicators are typically only appropriate for
awareness-raising, and data quality and international comparability
are often questionable.
Attempts to develop “Green GDP” figures encounter a range of
problems, above all that all valuation methods proposed for
assigning prices to environmental goods and services yield prices
that are not consistent with and cannot be added to the marketbased prices in the present system of national accounts.
These problems also arise for attempts to integrate the value of
ecosystem services in national accounting. While much useful work
has been done and can be further developed on identifying and
describing physical ecosystem services, in measuring the amounts
and the importance of such services to human users and
stakeholders, and in analysis and evaluation of the different types of
“value” of these services, the fundamental problem of incompatible
types of prices remains a stumbling block to full integration in
national accounting.
The statistical offices of the Nordic countries have a long history of
working with “satellite accounts” for the environment, in
combining national accounts with environmental information and
in modelling and analysis of a range of environmental issues, based
on linking such national accounting and environmental data. These
Making the environment count
environmental accounts may be the best approach to respond to
the needs and demands of policy-making that require the link
between environment and the economy to be made.
In relation to further development of existing modules, the report
strongly recommends that priority on material flow accounting
move from overall economy-wide figures to substances with less
mass but higher environmental impacts, such as hazardous
chemicals and waste.
The bottom line of these observations is that while it is important to de­
velop analysis and methods to value eco-systems services and elements
of a green GDP, the main effort when it comes to developing indicators
complementary to GDP should be to develop the SEEA framework and
thus the use thereof so as to provide a solid and reliable basis for economy
environment analysis and policy formulation through build-up and
maintenance of consistent satellite accounts.
It provides not only a base for a multitude of indicators but also a
variety of options for in-depth analysis that all sum up to the headline
indicators. It can be indicators on e.g. energy use, that measures how
much energy is used in an economy and if the use of energy by industry,
sector or household, even by type of fuel, is becoming more efficient.
That is, do the economy and the companies driving the economy become
better at managing the resources in their production processes while
still engaging in creating value added and economic growth? The statis­
tics show that for the Nordic countries the material intensity is becom­
ing better with each year.
The SEEA is still evolving and expanding with new areas of environ­
mental economic information. For example, the statisticians around the
world and in the Nordic countries are now looking into how to include as­
pects of ecosystem services and functions into the accounting framework
and how to interlink this information with the economy. In 2014, the UN
published a first result of that work in the publication System of Environ­
mental-Economic Accounting 2012: Experimental Ecosystem Accounting.
Other important areas that are developing with more and better ac­
counts and statistics are within the water and waste area as well as envi­
ronmental economics such as environmentally related subsidies and infor­
mation on monetary flows of investments in environmental protection.
Making the environment count
Interpretation of statistics in general and indicators in particular must be
done carefully. It is commonplace nowadays that an increase in GDP,
whether conventional or “green”, does not necessarily imply an increase
in well-being. Actually this is why the demand for complementary indica­
tors has arisen. We need however to observe that some of these indicators
are not unambiguous either, in the sense that an increase or decrease of
its numerical value immediately can be interpreted as an improvement.
This is the case for some of the indicators discussed in this report. For
instance, could an increase in environmental protection expenditures re­
flect the increase of national policy demands in combating environmental
degradation, or is it just the level of money spent that year for reducing
the degradation of the environment.
Another instance where interpretations need to be done with care is
with regards to the indicator domestic material consumption, DMC,
where weights of different resources and products are summed up with­
out any consideration of their heterogeneity or their impacts on the envi­
ronment. Another caveat concerns international comparisons.
GDP summarizes the economic activity in one single number but it is im­
portant to be aware of that the national accounts as a framework and ac­
counting system provide for a much broader picture of the economy and
its development as a basis for policy analysis and decisions. Other aspects
covered by the national accounts include the economic structure, employ­
ment, inflation, foreign trade, balance of payments, etc. The strengths of
the national accounts are that these aspects of the economy can be seen
within the same framework and that data and indicators based on the na­
tional accounts are coherent and integrated.
Therefore, it is also important to note, that the further development
of our information basis for a broader analysis of the development of wel­
fare, wellbeing and more broadly sustainable development should be
based on further extension of an integrated multipurpose framework,
which can provide relevant data for the different aspects of the develop­
ment. This is much more important than focusing on the unrealistic goal
of providing on alternative catch-all indicator that should be used instead
of the GDP.
Making the environment count
Ambitions to integrate and summarize such a broader mapping in a
single number such as genuine savings or ecological footprints are fraught
with difficulties and uncertainties in particular when assessments of fu­
ture development are involved. When it comes to systematically integrat­
ing environmental aspects into policy decisions and strike a balance be­
tween sometimes conflicting goals, SEEA environmental accounts will po­
tentially have an increasingly important role, depending on the efforts put
into this approach.
Throughout this report, recommendations have been proposed in each
chapter. They range from proposing a common Nordic Environmental Ac­
count to be published annually through the Nordic Council of Ministers to
arranging an event for policy makers. The event would provide a platform
for a thematic discussion on environmentally related welfare indicators
that has been proposed in this report.
The continued work recommended in the report could be taken up
through new or existing cross sectoral networks and committees within
the Nordic Council of Ministers such as the environment and Economic
working group (MEG).
The conclusions and recommendations in the report are:
It is recommended to produce a yearly Nordic Environmental and
Economic Account. The existing statistical frameworks, the national
accounts and the environmental accounts, will be used to integrate
economic data with environmental data, in a fully consistent and
coherent manner. The particular indicators are described in Table 2
in Chapter 1.
The Nordic Environmental and Economic Account can be used as a
tool to analyze important policy issues, such as (i) greening of all
sectors (not just “green” sectors), (ii) analysis of structural changes
and important factors contributing to environmental pressures,
(iii) assessments of “footprints”, and (iv) policy instrument design.
The Nordic Environmental and Economic Accounts are
recommended to start on issues related to the use of natural
resources, the use of renewable and non-renewable energy,
emissions to air of greenhouse gases and air pollution,
environmental economic aspects such as environmental taxes and
the production of environmental goods and services. All of these
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areas will be complemented with information on the economy
through GDP, population, employment and other aspects in line
with the national accounts.
Considering that the Nordic Environmental and Economic Account
is still an evolving area where new fields of data are explored, it is
pertinent to revisit the area e.g. every third year to ensure that
newly developed indicators are quickly incorporated in the
structure of measurement indicators published by the Nordic
Council of Ministers.
The recommendation from the group concerning environmentaleconomic models is to increase the awareness of the availability of
existing models to a larger group of users in order to expand on the
knowledge and the development of models that can answer a
broader range of questions. It could for example be done through
seminars or workshops.
It is also recommended to create a new platform where the
integration of social issues into the economic and environmental
sphere can be discussed and further enhanced. The Ad Hoc Group is
planning to arrange a workshop gathering relevant expertise and
provide input to such an effort.
It is also recommended to continue the development of the statistics
so that they can help in answering the questions that the policy
institutions and the researchers are raising.
Making the environment count
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Nordiska ministerrådet föreslås ta steget att årligen genomföra en koor­
dinerad uppföljning av utvecklingen av ekonomin, miljö och sociala för­
hållanden i de nordiska länderna genom relevanta ämbetsmannakommit­
téer och arbetsgrupper under dess paraply. Sådan samordning kommer
att bidra till en mer integrerad diskussion inom dessa områden. Trots
många initiativ att mäta hållbar utveckling från olika infallsvinklar krävs
ytterligare drivkrafter för att ge goda förutsättningar för en konsistent
diskussion om hur en grön, inkluderande och ekonomiskt gynnsam ut­
veckling kan se ut.
Den här rapporten av Ad hoc-gruppen för kompletterande välfärds­
mått behandlar några av den nordiska regionens resultat inom miljöeko­
nomisk statistik och räkenskaper. Den presenterar sedan olika initiativ
till utökning av kunskapsbaser inom ekosystemtjänster och miljöekono­
miska modeller. Integreringen av ekonomisk statistik för att mäta pro­
duktion och konsumtion med data om energianvändning, utsläpp av kli­
matpåverkande gaser i kombination med ekonomiska styrmedel möjlig­
gör en djupanalys av policies rörande miljöekonomi och hållbar utveckl­
ing samtidigt som den tillhandahåller jämförbara makroindikatorer.
Resultaten och rekommendationer i denna rapport är avsedda för och
kan bli användbara för olika intressenter. Ministerier, såsom finans-miljöoch näringsdepartment kan få användning av den evidensbaserade ansat­
sen som de föreslagna indikatorerna är. Forskningsinstitut kan förbättra
sina miljö- och ekonomiska modeller genom att använda samma indata
till dessa.
Viktigt att notera i den här diskussionen är att statistiken och räken­
skaperna som föreslås i den här rapporten redan finns tillgänliga i de allra
flesta nordiska länderna. Det medför att det inte finns behov av nya rap­
porteringskrav eller ny datadatainsamling, utan rekommendationerna fo­
kuserar på en demonstration av statistiken i nya kontexter.
Ad hoc-gruppens uppgift
Gruppen gavs ett mandat att arbeta med åtta olika uppgifter. Dessa bestod
i t.ex. av att föreslå hur det vore möjligt att utöka användningen av redan
framtagna indikatorer och statistik. Dessa skulle då komplettera måttet
för Bruttonationalprodukten (BNP) med startpunkt i ett vidare grepp för
att mäta välfärd med ett initialt fokus på miljödimensionen.
En kartläggning av pågående initiativ och processer har gjorts som
täcker internationella och nordiska arbeten inom området integrering av
miljö och ekonomistatistik till räkenskaper. Nordisk och internationell
policy stärker riktningen mot ett integrerat sätt att tänka på miljö och
ekonomiska plattformar för beslutsfattande. Mångfalden av olika policyoch strategiinitiativ från FN, OECD och Europeiska Unionen visar på att
kunskapsbasen utökas (och förbättras när det gäller statistikens kvalitet).
I över 20 år har den globala statistiska gemenskapen utvecklat områ­
det och ramverket för miljöekonomiska räkenskaper (System of Environ­
mental-Economic Accounts (SEEA). Nu har en samsyn etablerats inom det
statistiska samfundet och hos FN, hur denna typ av information ska be­
räknas och produceras. Enkelt formulerat använder ramverket ekono­
misk statistik och ekonomiska modeller, såsom input-output tabeller, och
integrerar detta med miljöstatistik. Denna länkning mellan de två statist­
iska områdena är vanligast att göra genom en gemensam klassifikation,
för ekonomiska aktiviteter för deras produktion eller konsumtion, t.ex.
industrier, offentliga myndigheter och hushållen.
Rekommendationerna från ad hoc-gruppen
Huvudrekommendationen från ad hoc-gruppen är att fortsätta med ut­
vecklingen av miljöekonomiska räkenskaper. När det gäller rekommen­
dationen och förslaget rörande användningen av existerande data inom
nya områden och i nya kontexter är att integrera data genom att använda
FN:s system för miljöekonomiska räkenskaper (SEEA).
Det här är ett område där de nordiska länderna är föregångsländer
globalt. Ad hoc-gruppen föreslår därför att årliga nordiska miljöekono­
miska räkenskaper produceras inom ramen för Nordiska ministerrådet.
Att årligen producera en nordisk sammanställning baserad på miljöeko­
nomiska räkenskaper betyder nya indikatorer och tabeller som fångar
ekonomisk och miljö relaterad information tillsammans.
Rent praktiskt betyder det att statistiken kombinerar t.ex. ekonomins
förädlingsvärde för en specifik industri eller en serviceverksamhet med
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t.ex. deras respektive energianvändning, eller utsläpp till luft eller miljö­
relaterade skatter.
Ad hoc-gruppen föreslår att de nordiska länderna kommer att fort­
sätta att vidareutveckla möjligheterna att använda ett mer integrerat an­
greppssätt genom statistiksystemet. Detta även inom sina processer för
beslutsfattande i syfte att ta hänsyn till ekonomi, miljö och sociala förhål­
landen på ett balanserat sätt. Förhoppningen är att detta arbete kan vara
en startpunkt för liknande arbeten i andra regioner och delar av världen
och t.ex. bidra till övervakningen och uppföljningsprocessen av det glo­
bala arbetet med FN:s hållbarhetsmål.
De miljöekonomiska räkenskaperna är konsistenta, uttömmande
och fokuserade på information på en detaljerad branschnivå, som länkar
till nationalräkenskaperna. De tillhandahåller en mångfacetterad in­
formationsbas för att tydliggöra interaktioner mellan ekonomi och
miljö. De är instrumentella för att förstå strukturen och funktionen av
vår ekonomi och de är både efterfrågade och högst användbara för att
kunna analysera flera viktiga policyfrågor. Exempel på sådan analys
finns i denna rapport.
EU har skapat en förordning för några av statistikområdena som
täcks av ramverket för miljöräkenskaperna. Sådana data ska rapporte­
ras av Europeiska statistiksystemet på årlig basis över: luft-, energi- och
miljöskyddskostnadsräkenskaper, miljöskatter per bransch, miljöföre­
tag och materialflödesräkenskaper. Systemet är designat så att statisti­
ken följer ekonomiska aktörer, deras produktion och konsumtions­
mönster och detta kan följas från både ett miljö- och ett ekonomiskt per­
spektiv. Statistiken produceras idag av nästan alla nordiska länder och
kan därför anses vara lättillgänglig. Dessa data ger en förutsättning för
en sammanhängande bas från vilka nordiska miljöekonomiska räken­
skaper kan produceras.
Sammanfattningsvis är de viktigaste slutsatserna och rekommendat­
ionerna i rapporten:
Att producera årliga nordiska miljöekonomiska räkenskaper och
publicera dessa via Nordiska ministerrådets hemsida. Existerande
statistiska ramverk, nationalräkenskaperna och miljöekonomiska
räkenskaper är fullt konsistenta med varandra. Indikatorer som
föreslås publiceras presenteras i kapitel 1, tabell 2 i denna rapport.
Nordisk miljöekonomiska räkenskaper kan vara användbara verktyg
för att analysera viktiga policyfrågor, såsom: (i) graden av en
grönare ekonomi, inom alla sektorer och inte bara den ”gröna
sektorn” (miljöföretag), (ii) den globala påverkan av nationella
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konsumtionsmönster, som är justerade för import och export, eller
”fotavtrycksanalys”, (iii) ”dekomponeringsanalyser”, som belyser
vikten av olika faktorer, inklusive policyinstrument, bakom trender
och förändringar från alla sektorer i ekonomin. (iv) detaljerad analys
på sektors- och branschnivå, som en bas för att utforma effektiva
instrument och mått för miljöpolicy.
Nordiska miljöekonomiska räkenskaper kan påbörjas med
information som är relaterad till användning av naturresurser,
användning av förnyelsebar och icke förnyelsebar energi, utsläpp till
luft och klimat, miljöekonomiska instrument såsom miljöskatter och
produktion av varor och tjänster inom miljösektorn. Eftersom denna
statistik finns tillgänglig idag behövs inga bredare initiativ. Alla
dessa områden kompletteras med existerande information om
ekonomin, genom mått som BNP, befolkning and andra aspekter i
linje med nationalräkenskaper.
Miljöekonomiska räkenskaper är ett område som vidareutvecklas,
där nya områden undersöks för att inkluderas i ramverket på en
global basis. Därför är det av vikt att överväga, kanske vart tredje år,
rekommendationerna om vilka indikatorer som tas fram för att
hantera nya områden genom revidering.
Beträffande miljöekonomiska modeller framhåller ad hoc-gruppen
att det är viktigt att utöka kunskapen om tillgängligheten av
miljöekonomiska räkenskaper för att kunna förbättra konsistensen
mellan olika modeller. Det kan t.ex. göras via seminarier eller
Gruppen rekommenderar även att en ny plattform skapas där en
diskussion och utveckling av integrering av sociala frågor till
ekonomi och miljöfrågorna kan ske. Ad hoc-gruppen planerar att
stimulera ett sådant arbete genom en workshop som samlar relevant
expertis. Det finns idag ett ramverk för sociala räkenskaper, som
liksom miljöekonomiska räkenskaper är ett satellitsystem till
nationalräkenskaperna som möjliggör en integrering av frågorna.
Making the environment count
Förbättringar i framtiden
Den här rapporten visar hur ett miljöekonomiskt statistiksystem kan an­
vändas i ett nordiskt perspektiv för att följa upp miljöekonomisk utveckl­
ing. Med ett integrerat statistiksystem finns det många möjligheter att ut­
veckla relevanta indikatorer, som svarar mot specifika frågor och möjlig­
gör harmoniserad utvärdering inom och mellan de nordiska länderna och
i förhållande till exempelvis EU.
Statistiken är också i ett format som möjliggör användning av dem
som indata till miljöekonomiska modeller och några av användningsom­
rådena beskrivs i denna rapport.
Genom att fortsätta utvecklingen av nya områden inom miljöekono­
miska räkenskaper finns det möjligheter att expandera kunskapsbasen
och dataunderlaget. Några sådana möjliga områden är t.ex. utvecklingen
av vatten- och skogsräkenskaper, eller nya typer av markräkenskaper
som kan ligga till grund för studier av ekosystemtjänster. Ytterligare ett
intressant område inom miljöekonomiska räkenskaper är vidareut­
vecklingen av statistik över miljöekonomiska instrument. Dessa kan an­
vändas för att expandera kunskapen för att designa nya policyinitiativ
och uppföljningsstrategier.
Att integrera mer sociala data med miljö- och ekonomisk statistik för
att utveckla och visa på indikatorer som kan användas som ett komple­
ment till BNP i en bredare analys av välfärd är ett område som behöver
fortsätta att stärkas. Det finns redan idag några områden som är relativt
lätt att inkludera, sysselsättning och utbildning är ett par sådana.
Det här arbetet är i linje med ny utveckling som sker idag. Noterbart
är arbetet med de nya av FN:s generalförsamling beslutade globala håll­
barhetsmålen. Tidiga nordiska miljöräkenskaper blir ett banbrytande bi­
drag till att utveckla tillförlitliga och relevanta mått på framgång mot håll­
barhetsmålen. Det är också i linje med det arbete som OECD gör inom ra­
men för grön tillväxtstrategi och de framsteg som Nordiska ministerrådet
gör inom området om cirkulär ekonomi.
Making the environment count
Making the environment count
Appendix 1: Methodology
GDP and beyond
The Gross Domestic Product (GDP) is – at least in principle – the value
(measured in current market prices) of the national production of goods
and services during a time period (see below, headline National accounts:
GDP and value added). It summarizes a myriad of results from the pro­
duction activities of a national economy in one single number. From the
very beginning it has been clear that GDP has weaknesses as a measure of
welfare. It does not account for e.g. leisure, natural resource depletion,
environmental degradation or, for instance, household production. In ad­
dition most of the contribution by the public sector is measured by the
costs of production since market valuations in this part of an economy are
largely lacking. Simon Kuznets, Nobel prize winner, noted already in 1934
that the welfare of a nation can scarcely be inferred from a measurement
of national income. Neither can increases in GDP be considered to in­
crease human welfare. Income distributions as well as other socio-eco­
nomic aspects have to be taken into account. Despite this longstanding
common understanding, GDP is still often used as a simple measure of
progress and wealth.
In the 1970s the drawbacks of using GDP as a catch-all measure of
progress or welfare came increasingly to the fore in the wake the oil crisis
and growing awareness of perceived limits to growth due to resource
scarcity. There are two central aspects that come into focus when looking
at GDP from an environmental sustainability point of view:
Market prices that are used to measure the value of production, for
example in the national accounts, do not reflect the social economic
value of production of goods if not corrected for negative or
positive external effects on the environment. An important
application of this principle is the need for adjusting carbon pricing
to reflect the negative external effects on the environment in
relation to curbing climate change. Such a price on GHG emissions
could be achieved through a global carbon tax or an international
net of emission restrictions and trading systems, which is now
emerging. The price on carbon (i.e. on emissions of greenhouse
gases) should optimally reflect the global sum of marginal social
damage costs of global climate change which is of course very
difficult to assess. In practice the shadow price on emissions
restrictions that are sufficient to curb climate change below a
politically set level 2°C will do. Presently however the implicit price
of carbon is negative in many parts of the world due to
governments’ subsidies of the consumption of fossil fuels.
GDP is a flow measure and does not account for depreciation of
capital beyond the extent to which such depreciation is reflected in
current market prices. The assessment of the yearly depreciation of
capital that is needed to arrive at a Net National Product (NNP) is, in
itself, a difficult exercise that requires some simplifying assumptions.
Traditionally no costs for the use of natural resources are subtracted
when the NNP is calculated. This means that the NNP does not
account for the depletion of natural resources, be they renewable
(e.g. fish or timber) or non-renewable (e.g. oil or metallic and nonmetallic minerals). Thus, it can be argued that the economic result of
all economic activities, measured by the NNP, is overstated, since not
all capital costs are included in the calculations.
Although some corrections could be introduced to try to take account of
environmental costs of production these would not be sufficient to estab­
lish whether the economic development is on a sustainable path since so­
cial concerns (income distribution etc.) as well as long term resource de­
pletion, environmental deterioration and “planetary boundaries” are
mainly left out of the calculations.
To assess whether it is possible to sustain standards of living and a
country’s current use of scarce resources, the World Bank has devel­
oped “genuine savings” which is defined as current income minus cur­
rent consumption levels. If this is positive, then there is a sustainable
contribution to wealth (real, human and natural capital). This assess­
ment would however, given all the uncertainties regarding the esti­
mated economic costs and benefits involved, only serve as a rough indi­
cation of sustainability.
Nevertheless it might be worth noting that the World Bank in its anal­
ysis of genuine savings found that developed countries showed a positive
genuine saving (build-up of human capital) tended to have a negative de­
velopment due to high levels of extraction of raw materials and natural
Making the environment count
It is also worth emphasizing that genuine savings and other purely
economic measures can show positive trends but could well coincide with
environmental degradation and depletion of natural resources.
It should also be observed that, although no countries have established
green GDP calculations and the UN statistical community does not provide
a methodology for these types of calculations in either the SNA or SEEA sta­
tistical standards, some pilot assessments of “green GDP” by Nordic coun­
tries seem to show that if these calculations are relatively stable or “well
behaved” it would not lead to a dramatic shift in the picture of the develop­
ment given by traditional national accounts. On the other hand if the green
GDP is not well behaved but shows large annual fluctuations it would be
problematic to use it for policy making for that reason.
Against this backdrop a common conclusion has been that for the time
being and the foreseeable future the lack of reliable monetary assessments
of costs and benefits of variables involved in a calculation of a green GDP as
well as the inherent uncertainties that besets such an endeavour, environ­
mental accounts should rather stick to the physical units for the measure­
ments of physical flows and stocks i.e. tonnes, cubic metres, litres etc. To
the extent that market transactions of the physical quantities take place it
is of course also possible to measure the transactions by market prices.
The Stiglitz-Sen-Fitoussi Commission on measurement of economic
performance and social progress, appointed by the French president
Nicholas Sarkozy in 2008, thus concluded that a valuation of sustainable
development should be based on a well-defined “dashboard” of indicators
showing variations of underlying stocks of capital, real, human or natural.
The commission noted that the assessment of sustainability is comple­
mentary to the question of current well-being and must be examined sep­
arately. Confusion may arise when one tries to combine current well-be­
ing and sustainability into a single indicator. The commission provides a
telling analogy; “when driving a car, a meter that added up in one single
number the current speed of the vehicle and the remaining level of gaso­
line would not be of any help to the driver. Both pieces of information are
however critical and need to be displayed in distinct clearly visible areas
of the dashboard”.53
See Report by the Commission on the Measurement of Economic Performance and Social Progress, page 17.
Making the environment count
The OECD has reached similar conclusions in its report from 2011 on
green growth – Towards Green Growth: Monitoring Progress, OECD indi­
cators (OECD 2011) and some of its “headline indicators” coincide with
those presented in our report.
The present work also links to this vein of thought. Rather than to dig
deep into the intricacies of a green GDP, the thrust of the effort is on de­
veloping a Nordic set of already existing indicators and measures, which
relate to the SEEA Central Framework and could be used besides GDP as
a satellite environmental account that could be coupled to traditional SNA
national accounts and provide input for thorough transparent and relia­
ble analysis of the interplay between economy and environment. A com­
mon Nordic effort in this field would be a path breaking contribution to
the follow-up of new sustainable development goals.
National accounts: GDP and value added
The general purpose of the national accounts is to provide a systematic
statistical framework for summarising and analysing economic events,
and wealth of an economy and its components, such as industries and
public sectors. The national accounts are described in detail in the Sys­
tem of National Accounts (UN) and the European System of Accounts
The gross domestic product is a key indicator defined as: an aggregate
measure of production equal to the sum of the gross values added of all
resident institutional units engaged in production (plus any taxes, and mi­
nus any subsidies, on products not included in the value of their outputs).
The sum of the final uses of goods and services (all uses except interme­
diate consumption) measured in purchasers’ prices, less the value of im­
ports of goods and services, or the sum of primary incomes distributed by
resident producer units (OECD dictionary).
The area is covered by EU Regulation No 549/2013 of the European
Parliament and of the Council on the European system of national and re­
gional accounts in the EU.
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Energy accounts
The energy accounts belong to the system of environmental accounts
(SEEA) main area of physical flow accounts (see SEEA-CF chapter 3). As
such they aim at describing the physical flows of energy within the econ­
omy and between the natural environment and the economy. The ac­
counting framework is a set of supply and use tables that are based on the
expansion of monetary supply and use tables used in the SNA.
There is a conceptual difference between the energy accounts and
the energy balances. The simplest explanation is that the energy ac­
counts follow the definitions of national accounts, while the energy bal­
ances follow its own guidelines. The most significant difference are that
energy accounts are presented according to industries within the econ­
omy (by NACE) with the system boundary being resident units and the
energy balances are presented according to their own definition of “sec­
tors” within the economy with the system boundary being the national
Energy accounts are covered by EU Regulation 691/2011 consoli­
dated version on European Environmental Economic Accounts. By 2017
Eurostat will have made their first data collection under this regulation.
Economy-Wide Material Flow Accounts
Economy-wide material flow accounts (EW-MFA) is a statistical/account­
ing tool, which is used to describe the physical flows of natural resources,
products and waste, etc. in and out of a domestic economy. The EW-MFA
reporting to Eurostat describes the extraction of natural resources from
the environment to the domestic economy and the foreign trade flows be­
tween the domestic economy and the rest of the world. The accounts in­
clude all types of natural resources, which can be measured by tonnes and
all types of products imported and exported. If the material flow accounts
also include so-called residuals, i.e. waste, air emissions, etc., and accumu­
lations of materials in the domestic economy, a more complete the picture
of the flows to and from the economy to the environment can be devel­
oped. When calculating Total Material Flows, all types of natural re­
sources and products, with the exception of water, are included in the ac­
counts. A specific classification, including approximately 60 categories of
materials, has been developed by Eurostat for the reporting of the EWMFA accounts that include resource extraction and trade flows.
Making the environment count
Only flows crossing the system boundary (between the environment
and the economy) are included in the economy wide material flow ac­
counts. This means that material flows within the economy, for instance
flows from one industry to another, are not represented in EW-MFA.
The economy is demarcated by the conventions of the national ac­
counting system (resident units).
EW-MFA is covered by EU Regulation 691/2011 consolidated version
on European Environmental Economic Accounts.
Air emissions accounts
The area is covered by EU Regulation 691/2011 consolidated version on
European Environmental Economic Accounts and contains the collection
of data for 14 pollutants: Carbon dioxide, nitrous oxide, methane, per­
fluorocarbons, hydrofluorocarbons, sulphur hexafluoride, nitrogen ox­
ides, non-methane volatile organic compounds, carbon monoxide, partic­
ulate matter <10 and <2,5, sulphur dioxide and ammonia.
The national emissions inventories are calculated according to the
so-called territory principle, i.e. the emissions are attributed to the
country where the fuel sales occurred and are distributed on technical
emission sources.
The air emission accounts, however, are prepared according to the
residence principle, i.e. the emissions are attributed to the country in
which the economic operators causing the emissions are resident, and the
emissions are classified according to economic activities (the NACE indus­
try classification).
The statistics on emissions may differ significantly depending on
whether the national inventory or air emissions accounts method is used.
In Norway and Denmark, international maritime navigation contributes
to a large degree to the differences between these two approaches, see
the example below in Figure 39.
In Box 1 the differences in definitions are explained.
Making the environment count
Box 1. Territory versus residence principle
National emissions inventories. Territory principle (UNFCCC and CLRTAP)
The emissions are attributed to the country where the emissions takes place.
Emissions are assigned to processes which are classified according to the
technical nature.
Emissions from international ships and aircrafts are allocated to countries
in which the fuel is sold.
Air emission accounts. Residence principle
The emissions are attributed to the country in which the economic operator
is resident.
Emissions are classified according to the economic activity following the
NACE classification of the system of national accounts.
Emissions from international ships and aircrafts are allocated to countries
in which the operator of the ship/aircraft is resident.
Source: Eurostat Statistics Explained 2015.
Figure 39 visualises the difference between the greenhouse gas emis­
sions as reported to the UNFCCC (national inventories) and to Eurostat
via the environmental accounts (air emissions accounts). For all coun­
tries, the data reported to Eurostat are always slightly higher than those
reported to UNFCCC. This is due to the adjustments for the residence
principle for the data under the environmental accounts framework. It
basically means that transportation activities carried out by national
residents abroad are accounted for within the environmental accounts
and they are not included in the reporting to the UNFCCC. The reason
for the large difference in Denmark is due to the importance of the ship­
ping industry.
Making the environment count
Figure 39: Greenhouse gas emissions in Nordic Countries 2011
Below, in figure 40, data reported to the LRTAP convention and to Euro­
stat via regulation 691/2011 are described in the same way.
Figure 40 illustrates the differences between the inventory emission
figures and the air emission accounts figures for NOx and SOx in 2012.
The most conspicuous feature is the large difference between the
Danish inventory and Danish accounts data. According to the environ­
mental accounts emission data, the Danish emissions of NOx in 2012,
were 1,069 thousand tonnes. This level was the third highest among the
European countries. Only Germany and UK had higher emissions. The by
far most important emission source when classified by NACE, for the Dan­
ish NOx emissions is “Transportation and storage” with 997 thousand
tonnes in 2012. No other European country had such high emissions from
this NACE. For comparison, the total Norwegian NOx emissions from
NACE activities this year were 255 thousand tonnes and of this “Trans­
portation and storage” made up 150 thousand tonnes.
Making the environment count
Figure 40: Emissions of NOx and SOx, according to inventory data and accounts data. Thousand
tonnes. Nordic countries. 2012
1 200
NOx and SOx
1 000
Accounts NOx
1 000 tonnes
Accounts SOx
No data for Iceland.
Source: Eurostat/EEA (National totals for the entire territory) and Eurostat, environmental accounts
Environmental taxes
The area is covered by EU Regulation 691/2011 consolidated version on
European Environmental Economic Accounts.
Environmental taxes must first of all be classified as taxes in the na­
tional accounts (ESA 2010) and consist of compulsory, unrequited pay­
ments, in cash or in kind, which are levied by general government or by
the institutions of the European Union. They fall within the following ESA
95 categories: taxes on production and imports (D.2), current taxes on in­
come, wealth, etc. (D.5), capital taxes (D.91).
An environmental tax is a tax whose tax base is a physical unit (or a
proxy of it) of something that has a proven, specific, negative impact on
the environment. (SEEA-CF 2012: §4.150).
Data on environmentally related taxes need, as other data, to be seen
in context and interpreted with care. There is, first, the question of
whether to include and how to interpret taxes that may have been intro­
duced for other purposes, including not least fiscal motives, and not nec­
essarily as a “Pigovian” tax on an environmental externality. Many ana­
Making the environment count
lysts tend to conclude that the effect of taxes, and other economic instru­
ments on behaviour, should be the deciding criterion, and would include
taxes motivated by energy policies as well as fiscally motivated duties
as “environmentally related”, as the effect is in practice not dependent
on the name or stated motivation for a tax or charge, as long as it has a
positive environmental effect.
Indicators for environmentally related taxes are most frequently ex­
pressed as a percentage of total tax revenues or total government reve­
nues or as a percentage of Gross Domestic Product (GDP). For interna­
tional comparisons, these indicators need to be seen in the context of
other economic instruments used nationally, such as fees for collection
and treatment of waste streams such as for car batteries, tires, packag­
ing, EE-waste and deposit/refund schemes that are privately adminis­
tered, following on contractual agreements between environmental au­
thorities and business sectors. Above all, any revenue from auctions of
greenhouse gas emission permits may be very important supplemen­
tary information to data on carbon or greenhouse gas taxes levied in dif­
ferent countries.
Because of very different economic and energy structures, as well as
different tax systems in different countries, evaluation of environmental
policies in each country is probably best seen in relation to the trend, ra­
ther than just the level, of environmentally related taxes in relation to to­
tal revenue or to GDP.
Making the environment count
Table 4: Economic instruments used in the Nordic countries
Energy and air pollution
Excise tax on electricity consumption
Excise tax on fuel oil products etc.
Excise tax on transportation fuels
CO2 tax on fuel oil
CO2 tax on transportation fuels
Inclusion of GHG-intensive sectors in the EU ETS
SO2 tax
NOX tax
Subsidy schemes for renewable energy, energy efficiency etc.
Water pollution
Water effluent tax
Water supply tax
Tax on waste put in landfill
Tax on incinerated waste
Taxes, deposit-refund systems or other collection systems on beverage
Taxes on other packaging
Charges to finance collection and treatment, or deposit-refund systems for
products: ELVs, batteries, tyres, lubrication oil or pesticides
Tax on GHGs (industrial gases)
Tax on PVC, phthalates and chlorinated solvents
Vehicle registration or sales tax
Annual circulation tax
Environmental related or noise charges on aviation
Road congestion tax
Inclusion of aviation in the EU ETS
Agriculture and natural resources
Tax on extraction of raw materials
Tax on pesticides
Tax on fertiliser use
Tradable fishing quotas
(X) means that the economic instrument has been removed since 2009.
Source: Bragadóttir et al. (2014).
Environmental goods and services sector
The area is covered by EU Regulation 691/2011 consolidated version on
European Environmental Economic Accounts.
The environmental goods and services sector (EGSS) module of the
European Statistical System aims to collect data on the output, employ­
ment, 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 manage natural resources.
Making the environment count
Environmental protection (EP) includes all activities and actions
which have as their main purpose the prevention, reduction and elimina­
tion of pollution and of any other degradation of the environment. Those
activities and actions include all measures taken in order to restore the
environment after it has been degraded. Activities which, while beneficial
to the environment, primarily satisfy the technical needs or the internal
requirements for hygiene or safety and security of an enterprise or other
institution are excluded from this definition.
Resource management (RM) includes the preservation, maintenance
and enhancement of the stock of natural resources and therefore the safe­
guarding of those resources against depletion.
The first and most important criterion for a product to be an environ­
mental good or service is that its “main purpose” (the terms “prime objec­
tive” or “primary purpose” or “end purpose” are used with the same
meaning) is environmental protection or resource management, whereby
the main purpose is mainly determined by the technical nature of the
product (2009 EGSS handbook, p. 29–31).
Environmental protection expenditure
Since the 1990s, data on environmental expenditures have been collected
by the OECD and Eurostat. In its most recent form, reporting of environ­
mental protection expenditures are covered by EU Regulation 691/2011
consolidated version on European Environmental Economic Accounts.
Data on environmental protection expenditure measure how much an
individual company, a government and households have paid to reduce
its own environmental burden, such as expenditures to reduce emissions
to air and water or to protect landscape and biodiversity. Some of these
measures are taken to comply with environmental policy or laws; some
of these measures are taken because the company or the household has
identified a specific need through their own environmental concerns.
Data are reported according to the Classification of Environmental Ac­
tivities part for environmental protection (see Annex 1 of SEEA-CF 2012)
and are broken down by aggregated NACE industries, governments and
Making the environment count
The interpretation of data needs to be done carefully. For example: high
environmental expenditure as a percentage of Gross Domestic Product
(GDP) could be due to a combination of (i) a large backlog of environmental
problems, i.e. hot spot that need to be remedied (ii) ambitious efforts from
governments to reach stringent targets, (iii) inefficient and wasteful prac­
tices, and (iv) policies which give priority to measures that are easily meas­
ured, such as end-of-pipe and clean-up and remediation measures rather
than integrated technologies and preventative measures which are more
difficult to measure and report. The same factors, in the other direction,
could explain low figures. Thorough analysis is needed to clarify which fac­
tors are behind both low and high figures.
What is known from the statistics are the actual levels spent on reduc­
ing the environmental burden and degradation.
The NACE classification
Table 5: Statistical Classification of Economic Activities in the European Community(NACE)
Agriculture, forestry and fishing
Mining and quarrying
Electricity, gas, steam and air conditioning supply
Water supply; sewerage, waste management and remediation activities
Wholesale and retail trade; repair of motor vehicles and motorcycles
Transportation and storage
Accommodation and food service activities
Information and communication
Financial and insurance activities
Real estate activities
Professional, scientific and technical activities
Administrative and support service activities
Public administration and defence; compulsory social security
Human health and social work activities
Arts, entertainment and recreation
Other service activities
Activities of households as employers; undifferentiated goods- and services-producing activities
of households for own use
Activities of extraterritorial organisations and bodies
Making the environment count
Appendix 2: On-going initiatives
and processes
This is an inventory of the many initiatives and processes that are currently
on-going in various institutions that have green economy or sustainability
issues on their agenda. It is the contribution to the action point 4, to suggest
a way to report an overview of on-going Nordic initiatives on the theme of
establishing regular measurements to complement GDP. During the meet­
ings of the Ad Hoc Group we have discussed the various processes that are
on-going in this field and decided to report them in this annex.
The main recommendation from the group is to continue the develop­
ment of the statistics so that it can help answer some of the questions that
the policy institutions and the researchers are discussing. We will start with
the Nordic initiatives and then go on to international initiatives that we are
also following. The sustainability discussion has been on-going for a long
time, but the terminology and the focus vary over time. The focus in this
report is to understand how the knowledge can be institutionalised, so that
it continues to be updated and used by many actors.
Ideally the new measurements that prove valuable should be taken up
and used in order to inform policy at the national or international level.
The Nordic Council of Ministers (NCM)
Green Growth has been on the agenda since 2010, when the Nordic minis­
ters discussed this theme at the session of the Nordic Council. This year a
new project on the “circular economy” is highlighted as part of this work.
The concept of circular economy is gaining more and more prevalence in
current economic and environmental thinking. The discourse is focussing
on reusing and “upcycling” as well as a thinking of the way we organize
our societies.
Indicators have been chosen to follow-up the sustainable develop­
ment, in the broad categories of welfare, ecosystems, sustainable use of
resources and education & research and innovation.
Reports from NCM group for environmental economy (MEG) are avail­
able online. It is a treasure trove of reports that investigate the use of eco­
nomic instruments and environmental technologies and new concepts in
the environmental economic sphere with a focus on the Nordic countries.
Some reports of particular interest are:
1. The Use of Economic Instruments in Nordic Environmental Policy
2. Natural Capital in a Nordic Context:
3. Measuring Green Jobs?:
4. Using the right environmental indicators:
5. Global carbon footprints:
6. Bioeconomy. The Nordic Council of Ministers have established a Nor­
dic Bioeconomy Initiative (2013–2018), inter alia to develop and im­
prove methods for sustainable production and use of living marine
and terrestrial resources, while reducing environmental impacts and
National initiatives including Statistical Offices
The statistical offices of Denmark, Finland, Norway and Sweden are all
committed to the development of the System of Environmental and Eco­
nomic Accounting. Annual statistics are sent to Eurostat on air emissions,
environmental taxes and economy-wide material flows. Also statistics on
energy use by industry, Environmental goods and services sector (size,
employment and export) and Environmental protection expenditures will
soon follow.
Making the environment count
Report on Green national accounts (environmental-economic
accounts) from Statistics Denmark (DST):
During the period 2015–17 Statistics Denmark will develop a full
system of Green National Accounts (environmental-economic
accounts) according to the System of Environmental and Economic
Accounts as the Danish Parliament decided in the 2015 budget to
finance the development. Statistics Denmark’s homepage for the
Environmental and Economic Accounts:
Report on mapping and valuing ecosystem services in Denmark.
DCE – Danish Centre for Environment and Energy:
Report on Environmental Goods and Services. Statistics Denmark:
A Sustainable Denmark. Ministry of Finance:
Statistics Finland annually publishes data on environmental accounts. The
areas that are covered as regular statistics are emissions to air accounts,
physical energy flow accounts, economy-wide material flow accounts, en­
vironmental protection expenditures and environmental taxes:
TEEB published early 2015
This report presents the results from the research project National Assess­
ment of the Economics of Ecosystem Services in Finland (TEEB Finland). The
report offers an overview of the steering mechanisms related to ecosystem
services and the need for their reform. It also provides an assessment of the
current state of national accounting of natural capital and some recommen­
dations on developing this accounting. The data in the study can be used, for
example, in implementing Finland’s National Biodiversity Strategy and Ac­
tion Plan and in meeting our international obligations. The report also fea­
tures a summary of the most significant ecosystem services in Finland and
the factors that affect their provision. Additionally, it includes recommenda­
Making the environment count
tions for assessing the status of ecosystem services and developing the ser­
vices through the use of various indicators. In connection to the report, an
Internet site “Finnish ecosystem service indicators” (www. was established, presenting information
on the development of various ecosystem services:
This project aimed to initiate a systematic national process for the
integration of ecosystem services and related biodiversity (i.e. natural
capital) into all levels of decision-making. TEEB for Finland was exe­
cuted according to the models of previous international TEEB studies
(e.g. TEEB Nordic) and alongside with EU’s MAES project (Mapping
and Assessment of Ecosystems and their Services). The TEEB for Fin­
land provides preliminary estimates on the economic importance of
some key ecosystem services. The main focus has been on those so far
under-recognized regulating and cultural services, but not forgetting
traditional provisioning services, the value of which has been tradi­
tionally recognized due to their vital importance for the Finnish econ­
omy and society.
Bioeconomy strategy
The objective of the Finnish Bioeconomy Strategy is to generate new eco­
nomic growth and new jobs from an increase in the bioeconomy business
and from high added value products and services while securing the op­
erating conditions for the nature’s ecosystems:
The NORwegian Economic and Environmental Accounts Project
(NOREEA) was first established in 1997 as a cooperative project between
the Division for National Accounts and the Division for Environment Sta­
tistics at Statistics Norway. Funding for this project has come from Euro­
stat, Statistics Norway and the Norwegian Ministry of the Environment.
There were initially three major areas included in the larger NOREEA
system. One area of development focused on connecting the environmen­
tal statistics to the economic statistics (NAMEA). A second area involved
separating out environment related information already included in the
economic statistics. A final area included was the valuation of important
natural resources.
Making the environment count
Now the areas that are covered as regular statistics are emissions to
air accounts, physical energy flow accounts, economy-wide material flow
accounts, environmental protection expenditures and environmental
economic instruments like environmental taxes and emissions permits.
As part of the publications of emissions to air and physical energy flow
accounts, also indicators like emission intensities and energy intensities
are presented as well as decomposition analysis.
Valuation of important natural resources is included in analysis of SDI
and National wealth calculations.
Environmental accounts websites:
Specific website for the regular publications:
Air emissions accounts:
Energy accounts:
Environmental instruments:
Sustainable development indicators
A web-site was established in 2014 describing the development within
each of the indicators in the Norwegian SDI. The indicators will be up­
dated on a regular basis. See
In 2012, a report was published including addition information relevant
to a broader analysis of each of the indicators (see
Research seeks to refine sustainable development indicators at Statis­
tics Norway. Projects include:
BIOPOLICY is an interdisciplinary project with the purpose of
analyzing appropriate economic policy means for biodiversity
protection in open lowlands and forests, with biodiversity targets
specified in the context of the Nature Index for Norway.
Making the environment count
Nature index:
ECONOR – The Economy of the North. The purpose of the ECONOR
project is to provide an updated overview of economy, living
conditions and environment in the circumpolar Arctic, with data and
knowledge provided by the circumpolar ECONOR network of
statisticians and researchers.
Natural resource wealth and ecosystem services. The purpose of the
project is to further develop and apply the research expertise of
Statistics Norway on natural research wealth and ecosystem
services, in interdisciplinary cooperation with other research
institutes and government agencies.
Sustainable development indicators (SDI) in the context of the
precautionary principle. The project aims at strengthening the
sustainable development indicators by establishing early warnings
based on expert opinions on uncertainty and critical developments
and the need for immediate action. The objective is to integrate the
precautionary principle into sustainable development analysis in
situations where there are uncertain and potentially serious
consequences for the environment and other societal concerns.
Statistics Sweden (SCB)
The System for Environmental and Economic Accounts started to develop
an information system in 1993. Now the areas covered are emissions to
air and to water, energy use, chemicals use, material use, environmental
protection expenditure, environmental goods and services, and environ­
mental economic instruments like environmental taxes, environmentally
related subsidies and emissions rights. Within the system the same defi­
nitions of industries, product groups and sectors are used as in the eco­
nomic national accounts. This makes it possible to also use the economic
statistics and calculate the environmental pressure from consumption.
Making the environment count
PRINCE (Policy Relevant Indicators for National Consumption and
Research project on the environmental pressure from consumption fi­
nanced by the research funding of the Environmental Protection
Agency. SCB, Chalmers, KTH, SEI, CML and NTNU research how to create
a follow-up of the environmental pressure from consumption in this
three year project.
Outside the Nordic region
Stiglitz-Sen-Fitoussi-commisions report
The work is now being followed up by the OECD. The High Level Expert
Group brings together an independent group of members of international
standing with relevant experience in the field of well-being and progress
measurement. These include: Joseph E. Stiglitz, Nobel Prize in economics,
Professor, Columbia University; Jean-Paul Fitoussi, Professeur émérite,
Sciences-Po Paris; Angus S. Deaton, Professor, Princeton University; Mar­
tine Durand, OECD Chief Statistician; Jil Matheson, UK National Statisti­
cian; Thomas Piketty, Professor, Paris School of Economics; Walter Rader­
macher, Director-General, Eurostat; and Arthur A. Stone, Professor, Psy­
chiatry and Psychology Departments, Stony Brook University.
Europe 2020: a strategy for smart, sustainable and inclusive growth was
presented by the European Commission in 2010.
Europe Sustainable development strategy
The strategy is being followed up with an extensive indicator set for the
European statistical system and the countries:
Making the environment count
Beyond GDP
The commission presented 2009 a plan for modernising the measuring sys­
tem. The aim is described on the website as: “The Beyond GDP initiative is
about developing indicators that are as clear and appealing as GDP, but more
inclusive of environmental and social aspects of progress.”­
As part of that modernising process a legal framework for reporting
environmental accounts data was decided on in 2011:­
EU: Indicators for resource efficiency:
Examples of EU research projects
They asked among other topics: Is there a demand for Beyond GDP
indicators? And if there is, where is it? Through desk research,
interviews and workshops with policy actors in five European
countries, as well as at the OECD and EU, they concluded that there is
demand for what could be called Beyond GDP policy-making, but this
has not yet been linked very well to a demand for Beyond GDP
e-Frame, European Framework for Measuring Progress, aims at
fostering the on-going debate on the measurement of well-being and
the progress of societies, and involves four major National Statistical
Institutes. The project has involved major stocktaking activities of
Beyond GDP indicators, as well as attempts to harmonise
measurement approaches:
NETGREEN (Network for a Green Economy) started in 2013, and to
create a database of indicators relevant for the measurement of
different conceptions of the green economy. The project held
workshops and discussed different conceptual ideas on how to reach
a sustainable economy:
New Climate Economy
The Global Commission on the Economy and Climate is a major interna­
tional initiative to analyse and communicate the economic benefits and
costs of acting on climate change. Chaired by former President of Mexico
Felipe Calderón, the Commission comprises former heads of government
and finance ministers and leaders in the fields of economics and business.
The New Climate Economy is the Commission’s flagship project. It pro­
Making the environment count
vides independent and authoritative evidence on the relationship be­
tween actions which can strengthen economic performance and those
which reduce the risk of dangerous climate change. The project is under­
taken by a global partnership of research institutes and a core team led
by Programme Director Helen Mountford. An Advisory Panel of worldleading economists, chaired by Lord Nicholas Stern carried out an expert
review of the work.
UNSD United nation statistical division are working on the indicator
system framework for the post 2015 process.
The UN city group, the London Group on environmental accounting
( meets regu­
larly to discuss the implementation and harmonisation and development
of environmental economic accounting:
See for example paper from the meeting in 2014: Do we need natural
capital accounts, and if so, which ones?
World Bank
Adjusted Net Savings (including/excluding particulate emissions
The Waves project: Wealth Accounting and the Valuation of
Ecosystem Services. WAVES is a global partnership that aims to
promote sustainable development by ensuring that natural
resources are mainstreamed in development planning and national
economic accounts:
Club of Rome
A case study which uses the Swedish economy as a case study for circular
economy and discusses employment and climate gases has been pub­
Making the environment count
OECD environmental indicators
Over the years, the OECD has accumulated practical experience not only
in developing, but also in using environmental indicators in its policy
work. The indicators are used as a specific tool for evaluating environ­
mental performance, and for monitoring the implementation of the OECD
Environmental Strategy for the first decade of the 21st century.
OECD Task Force for Environmental Accounts
OECD is working on setting up environmental data in the SEEA format. So
far, emissions to air have been published. Work on fossil fuel resources is
also underway for selected countries.
GGGI (Global Green Growth Institute),
GGGI was founded on the belief that economic growth and environmental
sustainability are not merely compatible objectives; their integration is
essential for the future of humankind. We work with partners in the pub­
lic and private sector in developing and emerging countries around the
world to put green growth at the heart of economic planning.
An article from “Nature” on alternatives to GDP:
Making the environment count
Making the environment count
In 2013, the Nordic Ministers for the Environment decided
to strenghten the measurement of green estimates of
welfare and socio-economic developments. The report
Making the Environment Count is describing how statistics
on the environment and the economy thorugh the System
of Environmental-Economic Accounts can be used to enable
cross-sectorial analysis. The report proposes indicators that
can be compiled annually in a Nordic context through existing
statistics linking economic statistics to environmental statistics.
TemaNord 2016:507
ISBN 978-92-893-4466-1 (PRINT)
ISBN 978-92-893-4467-8 (PDF)
ISBN 978-92-893-4468-5 (EPUB)
ISSN 0908-6692
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