Environmental subsidies in the system of environmental accounts

1
Environmental subsidies in the system of
environmental accounts
Maja Larsson, Statistics Sweden
2
What am I going to talk about?

• Background and definitions of environmentally
  harmful subsidies
• Environmental subsidies in Sweden, project at
  Statistics Sweden in 2003
• Subsidies in the system of national accounts
  (SNA) limitations and possibilities
• Future work environmental accounts
• Sweden today

3
Background
 

• Report 20003 Environmental taxes and
  environmentally harmful subsidies
• Based on a report from the Swedish Environmental
  Protection Agency in 1997
• 3 criterias - Protection of the environment
• - Efficient use of energy and other resources
• - Sustainable supply (closed cycles)
• Difficulties to define

4
Environmentally harmful subsidies from report
20003
Tax subsidies determining a norm - Tax
subsidies for energy tax on fuels - Tax
subsidies for energy tax on electricity - Tax
subsidies in carbon dioxide taxation -
Allowances for journeys to and from work
5
Environmental subsidies in Sweden

• Purpose
• ? To identify and document the subsidies in
  Sweden that can be defined as environmental
  subsidies.
• ? To find definitions suitable not only for
  this report but also for the future work on
  environmental subsidies, internationally as
  well as in Sweden.
• ? To develop the environmental accounts further
  by including data on environmental subsidies.

6
Subsidies in SNA (System of National Accounts)

• Subsidies as defined by the European system of
  accounts (ESA 1995 4.30)
• current unrequited payments from government to
  producers with the objective of influencing their
  levels of production, their prices or the
  remuneration of the factors of production
• Possibilities total subsidies, all areas
• Limitations narrow definition.
  Not included investment subsidies, tax
  subsidies, subsidies to households.

7
The total subsidies in Sweden (SNA)
8
Environmentally motivated subsidies in Sweden
(SNA)
Percent of total subsidies in Sweden
9
Environmental subsidies in Sweden according to
different definitions
10
Comparison harmful and motivated subsidies
Agricultural, forestry and fishing sector
11
Conclusions, report 20034

• Two different definitions of an environmental
  subsidy used
• Different use of taxes and subsidies
• SNA good base, however not enough
• Many different definitions can be distinguished
  from the total subsidies in SNA

12
Future work on subsidies

• Develop methods for comparing payments with their
  environmental effect
• Starting point - the environmental accounts
  (SEEA)
• SEEA - good base for international comparisons
• Follow international work on definitions (OECD
  among others)

13
Possibilities with SEEA

• Identify, measure and estimate environmental
  effect
• How estimate effect?
• - Resource accounts. Land-, fishing- and energy
  accounts.
• - Study subsidies/transfers per industry,
  compared to other environmental statistics on
  the industry

14
Environmental Accounts

• Data from 1993--
• Relationship between environment and economy.
• Satellite system to the National Accounts.
• A base for estimating the costs of environmental
  measures and damage to the environment.
• Provide information for analyzing environmental
  and economic policies

15
Environmental accounting one system
National Accounts/
16
Sweden

• Historic reform on harmful subsidies
• - green tax reform
• Present?
• - No approved strategy for environmentally
  harmful subsidies
• - Work in progress strategy for sustainable
  development and proposition for environmental
  quality objectives

17
Green tax reform

• Tax reform can be seen as part of subsidy reform,
  since taxes on environmentally harmful activities
  increases
• Taxes on energy reduces the implicit subsidy
• Start 1990 CO2 tax introduced
• Large tax reform around 1995, SEK 18 million

18
Green tax reform

• Reform in progress
• - So far SEK 8 million in 2001-03
• SEK 6 million between 2004-05
• Exceptions from taxes are subsidies. High taxes
  high subsidies