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Towards the implementation Towards the implementation of SEEA-MFAof SEEA-MFA

Learning Centre on Learning Centre on Environmental AccountsEnvironmental Accounts

UNSC, New YorkUNSC, New York February 2009 February 2009

Bram EdensBram EdensUnited Nations Statistics DivisionUnited Nations Statistics Division

OutlineOutline

• What is MFA? What is MFA?

• HistoryHistory

• Policy considerationsPolicy considerations

• Different approachesDifferent approaches

• ExamplesExamples

• Statistical issues in MFAStatistical issues in MFA

• Way forwardWay forward

What is MFA?What is MFA?• Describe economy in physical termsDescribe economy in physical terms

• EW MFA vs. accounting approachEW MFA vs. accounting approach

• Principle: mass balancingPrinciple: mass balancing

• Criticized for ‘ton ideology’Criticized for ‘ton ideology’

History of MFAHistory of MFA• Beginning of 90s: First EW-MFA studies emerge Beginning of 90s: First EW-MFA studies emerge

(Austria, Japan, Germany, USA)(Austria, Japan, Germany, USA)• 1997, 2000: ‘1997, 2000: ‘The Weight of Nations’ The Weight of Nations’ (World Resources (World Resources

Institute)Institute)• 2001: 2001: Economy-wide Material Flow Accounts and Economy-wide Material Flow Accounts and

Derived Indicators. A Methodological GuideDerived Indicators. A Methodological Guide (Eurostat) (Eurostat)• SEEA 2003: chapter 3 “Physical flow accounting”SEEA 2003: chapter 3 “Physical flow accounting”• 2004: OECD Council Recommendation on Material 2004: OECD Council Recommendation on Material

Flows and Resource ProductivityFlows and Resource Productivity• 2007: EW-MFA data collection (Eurostat) 2007: EW-MFA data collection (Eurostat) • 2008: OECD guidance documents2008: OECD guidance documents• Ongoing: SEEA-MFAOngoing: SEEA-MFA

Policy considerations Policy considerations ‘The Weight of Nations’‘The Weight of Nations’

• Industrial economies are becoming more efficient in Industrial economies are becoming more efficient in their use of materials, but waste generation continues their use of materials, but waste generation continues to increase.to increase.

• One half to three quarters of annual resource inputs to One half to three quarters of annual resource inputs to industrial economies are returned to the environment industrial economies are returned to the environment as wastes within a year.as wastes within a year.

• Outputs of some hazardous materials have been Outputs of some hazardous materials have been regulated and successfully reduced or stabilized but regulated and successfully reduced or stabilized but outputs of many potentially harmful materials outputs of many potentially harmful materials continue to increase.continue to increase.

• The extraction and use of fossil energy resources The extraction and use of fossil energy resources dominate output flows in all industrial countries.dominate output flows in all industrial countries.

Source: World Resources Institute 2000

Policy considerations IIPolicy considerations II‘The Weight of Nations’‘The Weight of Nations’

• Physical accounts are urgently needed, because our knowledge Physical accounts are urgently needed, because our knowledge of resource use and waste outputs is surprisingly limited.of resource use and waste outputs is surprisingly limited.

• Neither traditional monetary accounts nor environmental Neither traditional monetary accounts nor environmental statistics are an adequate basis for tracking resource flows into statistics are an adequate basis for tracking resource flows into and out of the economy. and out of the economy.

• They record only a part of resource inputs, lose sight of some They record only a part of resource inputs, lose sight of some materials in the course of processing, and entirely miss major materials in the course of processing, and entirely miss major flows of materials that do not enter the economy at all, such as flows of materials that do not enter the economy at all, such as soil erosion from cultivated fields soil erosion from cultivated fields

• On the output side, monetary accounts and environmental On the output side, monetary accounts and environmental statistics record few material flows that are not subject to statistics record few material flows that are not subject to regulation or classified as wastes requiring treatment. Nor do regulation or classified as wastes requiring treatment. Nor do they differentiate among the many materials that are aggregated they differentiate among the many materials that are aggregated in productsin products

Source: World Resources Institute 2000

Different approaches to Different approaches to measure material flowsmeasure material flows

• Statistics: waste, energy, foreign trade, production, etc.Statistics: waste, energy, foreign trade, production, etc.• Economy Wide MFAEconomy Wide MFA

• Aggregate flows into and out of the economy (economy Aggregate flows into and out of the economy (economy black box)black box)

• Time series show decoupling, resource efficiencyTime series show decoupling, resource efficiency• Comparison of direct and indirect flowsComparison of direct and indirect flows

• Accounting approach “physical flow accounting”Accounting approach “physical flow accounting”• Disaggregation by industry and by products (black box is Disaggregation by industry and by products (black box is

opened up)opened up)• PSUT, PIOTPSUT, PIOT

• Substance or product specific Substance or product specific • Substance flow analysis, Life Cycle AnalysisSubstance flow analysis, Life Cycle Analysis

Domestic resources

How EW-MFA sees the World

Example: DMI per capita - Denmark

Biomass

Fossil energy

Non-metallic minerals

Source: Statistics Denmark

Example: Material Productivity UKExample: Material Productivity UK

Source: ONS 2005

Example: Physical trade balance by Example: Physical trade balance by material categories, 2000material categories, 2000

Source: Eurostat 2002

Example: “Environmental hot-spots" of the iron & Example: “Environmental hot-spots" of the iron & steel system, European Union, 2000 (million tonnes)steel system, European Union, 2000 (million tonnes)

Source: Source: Moll, Acosta and Schütz (2005) in OECD Synthesis Report (2008)

Example: International trade of chromium, focus on Example: International trade of chromium, focus on the United States and its major trade partners, 2000the United States and its major trade partners, 2000

Source: Johnson, Schewel and Graedel (2006) in OECD Synthesis Report (2008).

Statistical issues in MFAStatistical issues in MFA• Classification of physical flowsClassification of physical flows

• CPC vs. waste classificationCPC vs. waste classification• System boundariesSystem boundaries

• Residence vs. territoryResidence vs. territory• Cultivated crops and treesCultivated crops and trees• LandfillLandfill• Consumer durablesConsumer durables

• TerminologyTerminology• Socio-economic system Socio-economic system • Unused flowsUnused flows

Way forward?Way forward?

• Mainstream MFA within official statisticsMainstream MFA within official statistics

• Develop SEEA-MFA as a standard (UNSD Develop SEEA-MFA as a standard (UNSD in cooperation with OECD and Eurostat)in cooperation with OECD and Eurostat)

• SEEA-MFA to UNSC in 2011SEEA-MFA to UNSC in 2011

• Develop an implementation strategyDevelop an implementation strategy

• Implications for data collectionImplications for data collection

• Future research: impact weightingFuture research: impact weighting