The Development of Regional Hybrid Environment Accounts

Tsunenori Ashiya

tsunenori_ashiya@pref.hyogo.lg.jp Data & Analysis division, Policy Planning & Coordina

tion OfficeHyogo Prefectural Government , JAPAN

CONTENTS

1. Establishment and Development of Regional Hybrid Accounting System

2. Framework and Features of Regional Hybrid Accounting System

3. Estimation Results for Regional Accounting System

4. Application of Regional Hybrid Accounting System

Profile of Hyogo Prefecture・ Hyogo Prefecture contains a rich variety of communities ranging 　 from large cities to rural villages. ・ Hyogo Prefecture has become known as a Japan in Miniature.

・ Hyogo has an overall area of 　　　　 　 8,392 square kilometers, with a population of about 5.6 million as of January 2007.

Backgrounds

１　 The Japanese hybrid accounting system fails to specify the process for disposal of wastes from household and industry sectors as part of economic activities or a physical cyclulation.

２　 A regional hybrid account system should be developed to detect emerging environmental problems and to plan effective environmental and economic policies.

The purposes of this study are

• to model the waste-disposal process in Hyogo Prefecture in a detailed way

• to develop a regional hybrid accounting system prototype

　　 (a Hyogo Prefecture pilot-case version)

The purposes of this study were

• to aim at helping

　 prefectural government (statistical and environmental administration departments) ,

researchers at universities ,

　 other institutes– to estimate a Hyogo Prefecture pilot-case vers

ion of the regional hybrid accounting system prototype to specify the waste disposal process.

Overview of research activities on environmental accounting in the

Cabinet Office of Japan　 2005 ～ 2007

１　 Developing the common framework of Regional Hybrid Accounting System Prototype (research on interactions between economy and environment)

２　 To estimate a Hyogo Prefecture pilot case version of the regional hybrid accounting system

Features of Japanese Hybrid Accounting System

１　 It attaches the stock accounts to the capital accounts and records the various social capitals and environmental protection plants.

２　 It estimates the emission of pollutions not only by households, but also by the government.

３　 It introduces the land use accounts.

４　 It adds coal, forests, water, and fish to the category of natural resources.

Note) “ The Development of Japanese NAMEA”

http://www.esri.cao.go.jp/en/sna/sateraito/041012/text.pdf

Outline of the common framework of Regional Hybrid Environment Accounts

１　 It is based on the original NAMEA

estimates for 1990, 1995, 2000 and 2003

* NAMEA : National Accounting Matrix including Environmental Accounts.

２　 It has twofold parallel structure: national accounting matrix (NAM) in the monetary term and environmental accounts (EA) in the physical term.

Figure 1 Concept of Basic Table for Regional Hybrid Accounting System

Economic accounts Environmental accounts

NAM on monetary value basis Attached NAM table on quantitative basis EA on quantitative basis

Prefectural NAM(recording economic activities)

Input

Disposal of air pollutants

Disposal of water pollutants

Input of goods for internal disposal

Transportation to incineration or final disposal sites

Emission

Waste account (recording waste emissions)

Air

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Economic accounts Environmental accounts

NAM on monetary value basis Attached NAM table on quantitative basis EA on quantitative basis

Prefectural NAM(recording economic activities)

Input

Disposal of air pollutants

Disposal of water pollutants

Input of goods for internal disposal

Transportation to incineration or final disposal sites

Emission

Waste account (recording waste emissions)

Air

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Structure of Basic Table for Regional Hybrid Accounting System

NAM

Prefecture NAM(recording economic activities)

Attached NAM table

Waste account (recording waste

emissions)Air pollutants

Water pollutantsGoods for

internal disposalWaste goods

disposal

Emitted environment

accounts

EA

Quantitative account

(recording wastes subjected to

internal disposal)Table for

accumulations in economy and environment

(recording wastes for final disposal)

feedback

Estimation Results for Hyogo pilot-case (Hybrid Accounting System)

Environmental protection service supply and use tables

– to allow viewers to see easily which parties provide sewage treatment, waste disposal, recycling and other environmental protection services

– to see how these services are provided and utilized.

Feature 1 　 Quantitative illustration of waste disposal

process 1. The table is designed to quantitatively

record details of the process.

2. The process is as follows;

Waste goods for disposal are emitted through economic activities.

Waste goods are put into a recycling path or transported to incineration or final disposal sites.

Feature 2 　 Illustration of internal disposal operations

1.The table is designed to quantitatively record the process in which air and water pollutants emitted through economic activities are reduced by internal disposal operations.

2. This table would shed light on internal disposal activities before being emission.

3. These activities the efforts by producers and consumers to reduce environmental pollutions (they might be the results environmental policies) .

Feature 3 Economic tabulation of waste disposal and internal operations

The NAM includes a mechanism to specifically record the economic activities.

That is on a monetary value basis.

Feature 4 Potential ApplicationsThe regional hybrid accounting system is

different from the Japanese hybrid accounting system.

The former fails to include

・ details of materials accounts, environmental problems, environmental indicators.

・ stock accounts.

Regional System of Integrated Environmental and Economic Accounting

1. Basic Table for Regional Hybrid Accounting System (Table 1) see page 4

2. Regional Environmental Protection Service-Supply Table (Table 2)

3. Regional Environmental Protection Service-Use Table (Table 3) see page 5

Framework of Regional Hybrid Accounting System

Attached NAM table (on Quantitative basis )

１ Air pollution ： CO2 、 Nitrogen oxide, Sulfur oxide

2 Water pollution: Chemical oxygen, Total phosphorus, Total nitrogen

3 Wastes: Goods for Internal disposal, Recyclable goods, Goods for incineration, Goods for Final disposal, Final waste disposal

Application of Regional Hybrid Accounting System

１　 The regional hybrid account system gives a prototype Environmental Efficiency Improvement Index

2 　 It is the SAM Multiplier Analysis Based on Regional Hybrid Accounting System

3 　 It is the comparison of Regional and Japanese Hybrid Accounting Systems

１　 If NDP has larger growth rate than imputed environmental cost, EDP is increasing while the imputed environmental cost is increasing. Therefore, EDP is not adequate indicator for sustainability.

２　 We need other indicators such as OECD’s decoupling indicator.

What does EDP indicate?

EP: Environmental Pressures

DF: Driving Forces ( ex. GDP )

Closing DF／ Opening DF

Closing EP／ Opening EP) X 100EEII ＝（１

－

EEII 0≧ EP’s growth rate DF’s growth rate ⇒ ≦”Environmental efficiency is ⇒ improving”

EEII ＜ 0 EP’s growth rate ⇒ ＞ DF’s growth rate ”Environmental efficiency is ⇒ deteriorating”

Environmental Efficiency Improvement Index (EEII)

Remarks on EEII１　 EEII represents the relationship between

economic activities and environmental pressures .

２　 OECD calls this type of index "decoupling indicator."

３　 EEII does not represent a strong sustainability because environmental pressures may be larger than sustainable flow level even if environmental efficiency is improving.

Remarks on EEII４　 EEII is flow a indicator and not a stock

indicator. Stock of EP (environmental pressures) is increasing as long as EP occurs every year, even if EP’s growth rate is on the downward trend ( EEII is on the upward trend) year by year.

５　 Therefore, the stock of EP might increases over the sustainable stock level of EP. EEII is efficiency indicator, not necessarily adequate indicator for sustainability.

(continued)

Decoupling 　 index improving: wastes final disposal volume deteriorating:CO2,NOx,SOx emissions Decoupling index ( Hyogo Prefecture )

21.29

29.3824.64

-11.81

16.38

28.65

-16.63

-5.85

-0.46

-2.07

-8.72

27.67

- 20.00

- 10.00

0.00

10.00

20.00

30.00

40.00

CO2 emission total NOX gross emissions SOX gross emissions Wastes final disposalvolume

％

1995/ 1990 2000/ 1995 2003/ 2000

Degree of Improvement in Environmental Efficiency Improvement Index

The index is designed to measure the changes in pollution level for the environmental themes.

1 wastes : final waste disposal volume per unit GDP

2 greenhouse gas effects (global warming)

3 acidification or any other themes.

SAM Multiplier Analysis• We can use for analyzing economic spillover effects in

following situations.

– greater export growth

– greater internal-disposal activities

– greater consumption of recycled products by households

• We use the model for simulation under following conditions.

– a 10% increase in other goods and service

– greater export growth case

– industry for goods and services other than those specified below

SAM model analysis1 We can analyze the case

– greater export growth– greater internal disposal activities – greater consumption of recycled products by

households

2 We can record

– pollutants emitted through economic activities– waste disposal processes– waste accumulations

Result: SAM Multiplier Analysis of Greater Export Growth Case (FY 2000)

Table 5 SAM Multiplier Analysis of Greater Export Growth Case (FY 2000)Estimation results Baseline

Gap Ratio(%)1a 51,299,302.3 3,463,718.3 7.2 47,835,584.01b 2,474,787.0 11,383.0 0.5 2,463,404.0

1c 719,267.1 32,077.1 4.7 687,190.0

1d 113,222.1 7,601.1 7.2 105,621.01e 82,055.7 4,172.7 5.4 77,883.0

Market 1f 7,941.0 514.0 6.9 7,427.0Non-market 1g 65,965.7 4.7 0.0 65,961.0Market 1h 71,783.0 4,320.0 6.4 67,463.0Non-market 1i -5,172.9 72.1 -1.4 -5,245.0

2a 36,929,269.8 2,493,456.7 7.2 34,435,813.1

Recycl i ng act i vi t i es 2b 94,495.9 6,343.9 7.2 88,152.0Other waste di sposalact i vi t i es 2c 78,015.3 3,967.3 5.4 74,048.0

2d 19,975.6 1,348.7 7.2 18,626.92e 2,443,637.8 11,239.8 0.5 2,432,398.0

Other waste di sposalact i vi t i es 2g 73,906.7 518.7 0.7 73,388.0

Sewage treatmentact i vi t i es 2h 66,605.9 4,391.9 7.1 62,714.0

2j 693,329.4 30,920.4 4.7 662,409.0Pri vate fi nalconsumpti on

Pri vate fi nalconsumpti on 3a 11,289,176.6 623,425.4 5.8 10,665,751.0

4 12,164,186.4 655,056.4 5.7 11,509,130.06 1,781,584.2 117,738.2 7.1 1,663,846.07 4,808,745.2 373,467.2 8.4 4,435,278.08 18,372,443.4 904,011.4 5.2 17,468,432.0

9 37,126,959.2 2,050,273.2 5.8 35,076,686.0

10 20,756,850.8 1,146,261.8 5.8 19,610,589.0

Capital transfer (net) 11 219,152.0 0.0 0.0 219,152.0Non-financial asstets 12 5,262,745.3 267,660.3 5.4 4,995,085.0Institutional sector (net prefecture savings) 13 5,315,474.0 270,342.0 5.4 5,045,132.0

Econ

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acc

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s

NAM(

mone

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val

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Goods andservi ceaccount

Goods andservi ces other

than thosespeci fi ed on the

ri ght

Consumpti on account

I ncome di stri buti on and useaccount

Governmentservi ce

producers

Governmentservi ce

producers

I ndustry

For househol ds and pri vate non-profi t servi ce producers

Recycl ed products

Waste di sposal servi ce

Sewage

Waste di sposal

I ndustry

Government servi ce producers

For househol ds and pri vate nonprofi torgani zat i on

Producti onaccount

(broken downby category)

I ndustry

I ndustry act i vi t i es other than thosespeci fi ed bel ow

Externalenvi ronmental

protect i onacti vi t i es

I nternal di sposal act i vi t i es i n i ndustry

Government servi ce producersExternal

envi ronmentalprotect i onacti vi t i es

I ncomeaccrualaccount

Gross val ue added

Empl oyee i ncome

Taxes on producti on and i mports - Subsi di es

Operati ng surpl us, mi xed i ncome

Current transfer (by category)I nst i tut i onal sector (net prefecturalaccrual i ncome)I nst i tut i onal sector (net prefecturaldi sposabl e accrual i ncome)

Accumulationaccounts

Result: SAM Multiplier Analysis of Greater Export Growth Case (FY 2000) Table 5-2 SAM Multiplier Analysis of Greater Export Growth Case (FY 2000)

Emissions Disposal AccumulationｓEstimation results Baseline Estimation results Baseline Estimation results Baseline

Gap Ratio(%) Gap Ratio(%) Gap Ratio(%)CO2 etc 15a 83,081.4 5,418.4 7.0 77,663.0 82,586.0 4,923.0 6.3 77,663.0 0.0 0.0 － 0.0

NOx 15b 125,725.5 8,381.5 7.1 117,344.0 125,242.8 7,898.8 6.7 117,344.0 0.0 0.0 － 0.0SOx 15c 52,213.7 3,490.7 7.2 48,723.0 52,057.4 3,334.4 6.8 48,723.0 0.0 0.0 － 0.0COD 15d 31,649.8 1,931.9 6.5 29,717.9 30,728.6 1,010.7 3.4 29,717.9 0.0 0.0 － 0.0T-P 15e 2,064.6 128.4 6.6 1,936.2 2,015.3 79.2 4.1 1,936.2 0.0 0.0 － 0.0T-N 15f 31,897.0 2,005.8 6.7 29,891.2 31,232.9 1,341.7 4.5 29,891.2 0.0 0.0 － 0.0

16 0.0 0.0 － 0.0 0.0 0.0 － 0.0 0.0 0.0 － 0.00.0 0.0 － 0.0 0.0 0.0 － 0.0 0.0 0.0 － 0.0

17 10,170.2 683.8 7.2 9,486.4 10,169.1 682.7 7.2 9,486.4 1.1 1.1 － 0.018 3,419.8 213.0 6.6 3,206.8 3,206.8 0.0 0.0 3,206.8 213.0 213.0 － 0.019 2,501.9 144.9 6.1 2,357.0 2,357.0 0.0 0.0 2,357.0 144.9 144.9 － 0.020 2,357.0 0.0 0.0 2,357.0 0.0 0.0 － 0.0 2,357.0 0.0 0.0 2,357.0

CO2 etc 21a 82,659.2 4,996.2 6.4 77,663.0 0.0 0.0 － 0.0 83,154.6 5,491.6 7.1 77,663.0NOx 21b 125,242.8 7,898.8 6.7 117,344.0 0.0 0.0 － 0.0 125,725.5 8,381.5 7.1 117,344.0SOx 21c 52,057.4 3,334.4 6.8 48,723.0 0.0 0.0 － 0.0 52,213.7 3,490.7 7.2 48,723.0COD 22a 30,728.6 1,010.7 3.4 29,717.9 0.0 0.0 － 0.0 31,649.8 1,931.9 6.5 29,717.9T-P 22b 2,015.3 79.2 4.1 1,936.2 0.0 0.0 － 0.0 2,064.6 128.4 6.6 1,936.2T-N 22c 31,232.9 1,341.7 4.5 29,891.2 0.0 0.0 － 0.0 31,897.0 2,005.8 6.7 29,891.2

Goods f ori nci nerat i onGood f or fi nal

di sposalFi nal waste di sposal

Water pol ut i on

Goods f or i nternal

Total emi ssi ons

Recycabl e goods

Envu

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Comparison of Hyogo Prefecture and Japanese Hybrid Accounting Systems

1. Economic activities and their environmental pressures (Table 6)

2. Air pollutant emissions (Table 7)

3. Water pollutant emissions (Table 8)

4. Waste emissions (Table 9)

Table 6 Comparison of population ,GDP • Hyogo prefecture accounts for

– 4.4% of Japan’s population

– 4.0% of nation’s production value and GDP

– 3.8% of nationwide final consumption expenditure

Table 6 Comparison of Production Value, Gross Domestic Product and Final

Consumption Expenditure Data (between J apan and Hyogo Prefecture for 2000)

Population Production value Gross domestic Final consumption

(in producer prices) product expenditure (for private

(in producer prices) and government sectors)

1,000 persons 1 billion yen 1 billion yen 1 billion yen

J apan 126,887 941,271 506,373 369,770

Hyogo Prefecture 5,551 37,882 20,188 13,943

Hyogo's share (%) 4.4 4.0 4.0 3.8

Table 7 　 Air Pollutant Emissions1)Production activities CO2,NOx, SOx emissions: accounting for 6.0% of nationwide emission

s 2)Final consumption

NOx,SOx emissions: accounting for 6.0% of nationwide emissions Air Pollutant Emissions per Unit Production Value and Final Consumption

Expenditure(per 100 million yen for 2000)

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

CO2,etc Nox Sox CO2,etc Nox Sox

Production activities Final consumption Expenditure

ｔ

J APAN Hyogo Prefecture

Table 8 　 Water Pollutant Emissions1)Production activities COD and T-N emissions :accounting for 4.0% of Japan’s total

T-P emissions : accounting for 4.8% of Japan’s total 2)Final consumption expenditure COD ,T-N and T-P emissions : accounting for 4.0% of Japan’s total

Water Pollutant Emissions per production value and finalconsumption expenditure (per 100 million yen for 2000)

0.0

20.0

40.0

60.0

80.0

100.0

120.0

COD T- P T- N COD T- P T- N

Production activities Final consumption expenditure

kgJ APAN Hyogo Prefecture

Table 9 　 Waste Emissions1) Production activities

totaled 27,337,000 tons accounting for 6.4% of the national total 2) Final consumption expenditure

totaled 1,806,000 tons accounting for 5.0% of the national total

Waste Emissions per unit production value and finalconsumption expenditure (per 100 million yen for 2000)

0

25,000

50,000

75,000

100,000

Production activities Final consumption expenditure

kg

J APAN Hyogo Prefecture

Table 10 Recyclable Goods Emissions1)Recyclable goods

totaled 9,486,000 tons accounting for 4.9% of the national total 2) Recyclable volume per unit production value in recycling industry

10,761 tons per 100 million yen, equivalent to 87.6% of national level

Recyclable volume per production value in recycling industry (per million for 2000)

0

2,500

5,000

7,500

10,000

12,500

15,000

Production activities Final consumptionexpenditure

Total

t

J APAN Hyogo Prefecture

Table 11 Emissions of Wastes for Final Disposal

1) Final waste disposal volume totaled 2,357,000 tons accounting for 4.2% of Japan’s total2) Final disposal volume per production value in the waste disposal industry 1,599 tons per 100 million yen, equivalent to 97.6% of the national level

Final waste disposal volume per production value in wastedisposal industry (per million yen for 2000)

0

500

1,000

1,500

2,000

Production activities Final consumptionexpenditure

Total

t

J APAN Hyogo Prefecture

Examples of Regional Environmental Assessment Indexes Index Item

Input-ouput ratio Benefit/cost

Goal attainment ratio Achievement/Goal

Environmental pressure indicators

Others Wastes

Air environment

Corporate activity index Environmental conservation

Environmental assessment

Environmetnal loss from internal factors

Environmental loss from external factors

Environmental conservation cost

Raw materials cost for disposal

Capital cost for disposal

Labor cost for disposal

Other indexes Others Economic efficiency indicator

Induced final disposal volume

General social indicators

Source: "Manual for Developing Regional Hybrid Accounting System," Cabinet Office, 2007

Hybrid accountingsystem indexes

Environmental conditions

Waste disposal activities

Environmentalconservation activities

Research issues for the future１　 The regional hybrid account system should

include more regional specific features.

２　 The account system fails to include details of materials accounts, environmental problems environmental indicators or stock accounts. Prefecture governments may be encouraged to add these contents to make their own hybrid accounts system.

I think that International exchange of information is extremely useful.

Especially on this party, I would extend my best thanks to organizing this conference and giving me the opportunity of this presentation.

Closing remarks

Thank You for Your Attention