Integrated Environmental and Economic Accounting for Water Resource

Alessandra Alfieri United Nations Statistics Division 1

Outline

• • • SEEA • The framework • Advantages of the accounting approach (SEEAW) UNCEEA and other international mechanisms 2

SEEA

SEEA-2003 is being jointly published by UN, the European Commission, IMF, OECD and the World Bank SEEA-2003 represents a major step forward in the harmonization of concepts and methods in environmental-economic accounting SEEA to become a statistical standard by 2010 as recommended by the UN Statistical Commission 3

SEEA

• • • • Satellite system of the

System of National Accounts

(1993 SNA) Brings together economic and environmental information in a common framework to measure the contribution of the environment to the economy and the impact of the economy on the environment Provides policymakers with indicators and descriptive statistics to monitor these interactions Provides an information system for strategic planning and policy analysis to identify more sustainable paths of development 4

Satellite accounts

• • • • Information systems that, while maintaining consistent with the SNA, are more flexible and expand the analytical capacity of national accounts Systems which describe in depth aspects that are hidden in the accounts Enlarge the boundaries of the SNA Include complementary elements (e.g. physical information, etc.) 5

Why an accounting approach?

• • • • • • Encourages the adoption of standards Introduces accounting concepts to environmental statistics Improves both economic and environmental statistics by encouraging consistency Implicitly defines ownership and hence responsibility for environmental impacts Encourages the development of comprehensive data sets Facilitates international comparisons 6

Strengths of the accounting approach

• • • Organised body of information facilitates integrated economic-environmental analysis (complements sustainable development indicators, modelling) Comprehensive and consistent, routinely produced Provides a system into which monetary valuations of environmental costs can be incorporated 7

Environmental-Economic Accounting vs Environment Statistics

• • • Environment statistics: Often developed to answer one particular question or problem Difficult to figure out if all information is included Not always easy to see the whole picture, or how it relates to other things 8

Environmental-Economic Accounting vs Environment Statistics

• • • Environmental accounts: Help to make sense of the larger picture Help to identify pieces that are missing Can make connections to other statistics especially economic statistics 9

The SEEAW

The SEEAW is a satellite system to the System of National Accounts  • Links economic accounts with hydrological information • Uses standard definitions, concepts, classifications common to economic accounts • • Is expected to become a statistical standard Allows for the derivation of coherent and consistent indicators 10

Global Hydrological Cycle

Water in atmosphere Water on land surface and subsurface Water in oceans and seas Liquid/solid flows Vapor flows UNESCO (1989) Comparative Hydrology: an ecological approach to land and water resources

Flows between the economy and the environment Atmosphere Territory of Reference upstream basins and aquifers outside the territory of reference Inflows Sea In situ use of precipitation Physical Water Resource System The system of inland surface (rivers, lakes, r e s e r v o i r s , e t c . ) a n d g r o u n d w a t e r resources and the natural flows between them.

Outfl Outflo ws downstream basins and aquifers outside the territory of reference ows Sea Abs trac tion Economy Evapo transpiration Re tur ns RoW Economy Imports The system, which abstract water for production and consumption purposes and puts in place the infrastructures to store, treat and distribute water.

Exports RoW Economy

Flows within the inland water system and the economy Atmosphere Inland Water Resource System upstream basins and aquifers outside the territory of reference Inflows Surface water (reservoirs, lakes, rivers, snow, ice and glaciers)

Natural transfers (e.g. infiltration, seepage, etc.)

Groundwater Soil water Outflows downstream basins and aquifers outside the territory of reference Sea Collection of precipitation Abstraction Rest of the World Economy Imports Evapo transpiration Sea Sewerage Households Water collection, treatment and supply Economy Other Industries (incl. Agriculture) Exports Rest of the World Economy 13

The SEEAW and the 1993 SNA

• SEEAW is a satellite system of the 1993 SNA. It expands the 1993 SNA by: • Expanding the asset boundary to include all water assets and their quality and produced assets related to water • • Juxtaposing physical info to monetary accounts Separately identifying • Identifying EP 14

Water accounts comprise:

• • • Flow accounts • Physical supply and use tables • Emission accounts • Hybrid and economic accounts (EPE accounts) Asset accounts • Produced assets (infrastructure related to water storage, exploitation, distribution and treatment) • Quantity accounts • Quality accounts Valuation 15

Framework of water resources accounts

Industries Households and Government Assets by ISIC

Economic assets. In particular assets related to water, opening stock: infrastructures for the storage, explotation, distribution and treatment of water Water resources opening stocks

Rest of the World

Output of products (inlcluding those related to distribution, treatment and disposal of water) Supply of distributed water to other industries and Households Supply of return flows to the environment Supply of pollutants to the environment Supply of return flows to the environment Supply of pollutants to the environment Return flows Imports Imports Intermediate consumption (including those related to water use) Current expenditures for water protection and management Use of distributed water (within the economy) Abstraction of Water Resources (from the environment) Treatment of pollutants Final consumption Expenditures for water protection and management Use of distributed water Abstraction of Water Resources (from the environment) Treatment of pollutants Gross fixed capital formation Capital expenditures for water protection and management Water abstraction, depletion/degradation Exports Exports SNA Supply Table (monetary units) Supply Table (physical units) Emission accounts (monetary, physical units) SNA Use Table (monetary units) Expenditure accounts (monetary units) Use Table (physical units) Emission accounts (monetary, physical units) Consumption of fixed capital Other changes in volume and holding gains (losses) on economic assets Other changes in volume (precipitation, evapotranspiration, inflows, outflows, etc.) Economic assets, closing stock Water resources, closing stocks SNA accounts Physical/monetary acccounts

Physical Flow Accounts

Describe the physical flow of water within the economy and between the environment and the economy • • Who is using water and how much they use Abstraction of water by sector and by resource • • • Returns of water by sector and destination Water efficiency –recycled water Import/export of water 17

Flow accounts

Returns of water to the environment Imports

Of which:

ISIC 37 Sewarage Industries (ISIC)

Of which

: ISIC 36 Water collection, treatment and supply Rain Households Abstraction of water as raw material Exports

Indicators

• • • • • • • Water abstraction by sector and by sources Water discharge by sector Water abstraction/GDP by sector Water abstraction/number of employee Water abstraction per capita Water consumption by sector Cost recovery – Is the government recovering the costs of collection, purification, distribution and treatment of water through the fees charged?

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Index of water use in Botswana

1993 = 1.00

1.30

1.25

1.20

1.15

1.10

1.05

1.00

0.95

0.90

1993/94 1994/95

Pula of GDP per m3 water

1995/96

Volume of water Per capita water use

1996/97 1997/98 1998/99

50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Env-Eco Profiles: water use, VA, employment by industry Water use National income Employment A g ri cu ltu re M in in g M an u fa ct.

W ate r & e le ctr ic ity C o n str u cti o n Se rv ic es G o ve rn m en t

Value-Added per m3 water use

1600.0

1400.0

1200.0

1000.0

800.0

600.0

400.0

200.0

0.0

A g ri cu ltu re 1993 Pula VA/m3 1998 constant price pula VA/m3 M in in g M an u fa ctu ri n W g ate r & e le ctr ic ity Se rv ic es G o ve rn m en t G D P

RANDS of VALUED-ADDED per M3 of WATER, 1996 (7 rands = US$1 in 2000) NAMIBIA Agriculture Mining Manufacturing Services,Trade, Govt.

Households GDP per m3 of water input 8 72 252 722 na 60 SOUTH AFRICA BOTSWANA 2 10 59 130 437 564 403 989 na 27 na 147

Emission accounts

• • Record the emissions by industries and households into the water directly or into the wastewater treatment plants Linked with the expenditure accounts will allow to assess the effectiveness of investment to reduce pollution 24

Asset Accounts

O in C an C an

Water resources

• EA.13 Water Resources • EA.131 Surface Water • EA.1311 Reservoirs • EA.1312 Lakes • EA.1313 Rivers • EA.1314 Glaciers, Snow and Ice • EA.132 Groundwater • EA.133 Soil Water 26

Main flows within the physical water resource system Atmosphere upstream basins and aquifers outside the territory of reference Inflows Sa lt i ntr us ion Territory of Reference Physical Water Resource System

Surface runoff

Rivers Lakes and Reservoirs

Natural transfers infiltration

Groundwater

infiltration

Outflows downstream basins and aquifers outside the territory of reference Ou tflo ws Sea Sea Economy

Indicators

• • • Total renewable resources per capita Total water available per capita Abstraction/Total renewable resources >1 not sustainable >0.4 water stress • Depletion of ground and surface water 28

Quality Accounts

• • • They are very important as the quality of water limits its use Define quality classes according to their relevance in the region/country (i.e. salinity level, BOD, etc.) Result of modeling exercises – more removed from the conventional accounting approach 29

Water Accounts: some data issues

• • • • Supply and use tables • • Estimation of water use and returns in agriculture and industry Water re-use Hybrid accounts • Information on water fees and taxes for access of water • Financing of water Asset accounts • Measuring stock levels for groundwater • • Defining stocks for rivers Potential double counting between surface and groundwater • it is often useful to have a matrix of natural transfers Quality accounts • Definition of quality classes • • Aggregation over time and space Link between emissions and quality is non-linear 30

General Issues - 1

It is widely recognized the importance of the water basin as a basic unit for water management • • hydrological data are collected at river basin level economic data are usually for administrative regions How to reconcile the data?

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General Issues - 2

The hydrological year may not coincide with the accounting period. How to reconcile the temporal dimension between hydrological and the economic data?

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General Issues - 3

How to include spatial and temporal components of water cycle ?

• • • seasonal vs annual accounts how to incorporate long water cycle into yearly accounts?

How to reflect in the accounts the spatial variability of water scarcity/availability?

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General Issues - 4

Terminology is not always consistent among economists, environmental statisticians, hydrologists and policy makers => Need to use a clear, agreed terminology One of the SEEAW main contribution is the standardization of terms and definitions 34