The policy relevance of environmental protection expenditure accounting

Abstract

AbstractAs a result of theoretical concerns about the use of GDP as the main policy indicator, and the implications this may have for the achievement of other policy goals, the UN proposed a system of integrated environmental and economic accounting (SEEA). Part of their guidelines recommends the collection of data regarding environmental protection expenditure (EPE). Both EUROSTAT and the OECD have designed and implemented methodologies with the aim of producing EPE accounts for international comparison. While much effort has been employed in examining and refining the design and implementation, to date little has been said regarding the policy relevance of such accounts. We have applied the Eurostat and OECD methodologies to produce the first ever EPE dataset for Ireland. This work involved a detailed examination of both public and private sector environmental expenditure and estimated that EPE in Ireland was equal to just under 1% of GDP in 1998. We conclude that the main policy relevance lies in the assessment of the potential for industries involved in the supply and operation of environmental abatement services in Ireland. To the extent that expenditure can be disaggregated to sectoral level in those sectors exposed to international competition, it can also inform a discussion about the relation between environmental compliance costs and sectoral competitiveness. Copyright © 2002 John Wiley & Sons, Ltd. and ERP Environment.