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Material Flow Accounts (MFA) Are Considered Good Indicators of Various Types of Environmental Deterioration

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Material Flow Accounts (MFA) Are Considered Good Indicators of Various Types of Environmental Deterioration Summary Prepared by: Romualdas Juknys, Vytautas Magnus University Danguolė Krepštulienė, Statistics Lithuania Pilot project on Material Flow accounts The increasing rate of material consumption and the resulting environmental impact threats sustainability and additional measures to make use of natural resources more sustainable are necessary. It was already stressed in the Brundtland Commision raport Our common future (1987) that development can be made far less materially intensive and more economically and environmentally efficient. The Goteborg Council adopted the EU Strategy for Sustainable Development in the year 2001 and one of the six main priorities was formulated – to manage natural resources more responsibly. Decoupling environmental degradation and resource consumption from economic and social development was considered as a key issue in the strategy. The implementation of the mentioned strategic documents and political decisions increased the need for reliable and comparable information on material use. Despite the fact that the level of current knowledge in cause-effect relations is not sufficient and complex linkages between material flows and their environmental impact are not fully understood, information on material flows use could be considered as an appropriate tool for political decisions in order to make material use more sustainable. In general, for more sustainable material consumption and decoupling of resource use and environmental impact from the economic growth, two main principles – dematerialization and transmaterialization – should be implemented. The implementation of the dematerialization principle (to get more from less), is oriented to increased eco-efficiency (resource productivity) while the implementation of transmaterialization principle – to the substitution of hazardous materials with non-hazardous and non-renewable materials – with renewable ones. Material Flow Accounts (MFA) are considered good indicators of various types of environmental deterioration. The general purpose of Material Flow Accounting is to quantify material inputs and outputs of socio-economic systems. Material Flow Accounting is physical environmental accounting approach which tracks the use of materials by socio-economic systems from their extraction to manufacturing; final use and disposal of emissions and wastes. The pilot project on Material flow accounts was the first step in the implementation of Economy-Wide Material Flow Accounts (hereinafter referred to as the MFA) at Statistics Lithuania. Over the last almost twenty years Lithuania and other newly accepted Eastern EU member states have undergone dramatic reforms. Changes in political system and transition from the centralized to a market economy caused an inevitable economical and social decline. As a consequence of an essentially reduced production, consumption of natural resources and environmental pollution decreased respectively. Taking into account, that Lithuania, as well as Latvia and Estonia were mostly integrated into general soviet economy, most remarkable changes took place namely in these Baltic States. One of the most important questions in this case – are the new EU member states able to reach the level of welfare that would be similar to that of the old EU member states with less intensive consumption of natural resources? An essential attention to the process of convergence of Lithuanian material flow indicators to the level of these indicators in EU-15 countries is dedicated in this report. The Lithuanian strategy for sustainable development was adopted in 2003. The main strategic goal was formulated as follows: to balance environmental, economic and social development concerns, to ensure a clean and healthy environment, effective use of natural resources, overall economic welfare of the society and, according to economic, social and eco- efficiency indicators until 2020 to achieve the current average level of old EU countries, without exceeding allowable limits of environmental impact. Changes in material flows during 2000-2006 were analysed by professor of Vytautas Magnus University R. Juknys. Material flow accounts were compiled by specialists of Statistics Lithuania according to the Economy-wide Material Flow Accounting compilation guide (Weisz et al., 2007). Data from the Eurostat’s report “Economy-wide materials flow account, Resource productivity EU-15 1990-2004” were used for the comparison and analysis of convergence processes. Data available at Statistics Lithuania and other administrative data sources were used in the project: Official statistics • Biomass: Agriculture statistics (harvest statistics); Foreign trade statistics. • Non metallic minerals: Foreign trade statistics. • Fossil energy carriers; Energy statistics. Other data • Biomass: Directorate General of State Forests, State Forest Survey Service; Ministry of Agriculture (fish capture); Ministry of Environment (number of animals hunted, Statistics on forest berries, mushrooms, medical herbs and reeds). • Non metallic minerals: Geological Survey of Lithuania. • Fossil energy carriers: Geological Survey of Lithuania. • Emissions to air, water: Environmental Protection Agency. • Waste landfilled: Environmental Protection Agency An analysis of material flows was performed according to a simplified scheme, presented below. The analysis was based on a black box approach and no transformations of materials inside the economic sector were neither accounted nor analyzed. Domestic Domestic processed material output Economy Import Export Simplified scheme of material flow analysis 2 Domestic extraction (DE) Extracted materials usually includes a part which is used to produce goods and services and unused part of extracted materials, which is often considered as environmental rucksack (Schmidt-Bleek, 1994). Only the used part of extracted materials is included in the material flow analysis and is considered as domestic extraction. Despite the fact that the period under analysis is quite short (2001-2006), essential changes in DE volume can be noted. Alongside a very fast growth of the Lithuanian economy, a fast growth in DE volumes has started as well from the year 2002 and an increase in DE volume by 30% during the investigated 7 years was registered. Changes in extraction of different material categories were very different and the structure of DE has changed essentially during this period. The share of non-metallic minerals has increased by 22% (from 35 up to 57%), while the share of biomass has decreased consequently (from 63 to 41%). Imports Taking into account the fact that separate data on intra and extra EU trade for Lithuania are available only from 2005, joint import and export values were analyzed in the report. A much faster growth in material imports as compared to domestic extraction was characteristic for investigated period. An almost double (1.89 times) increase in the volume of imported materials was registered during the investigated 7-year period and only in the last year under investigation (2006) this fast growth almost stopped. An especially fast growth in imports of biomass (2.67 times) and metals (3.13 times) was characteristic for the investigated period. As a consequence of different trends in the imports of different material groups, the structure of imported materials was changed rather essentially. The share of metals and biomass has increased almost two times (from 6 up to 11% for metals and from 10 up to 19% for biomass) while the share of fossils decreased from 58 to 49%. Direct material input (DMI) The volume of DMI has increased almost 1.5 times in Lithuania and the share of DE, which is usually named as self-sufficiency, came down from 67.5 to 58.9% of DMI during the investigated 7-year period. Both these trends should be considered as unsustainable and result in increased Lithuanian ecological footprint. The main feature of structural changes in the Lithuanian DMI – an essential reduction in the share of renewables from 45% in the year 2000 to 30% in 2006 and fast approaching to the EU-15 average – 25%. This trend should be considered as unsustainable as well. For international comparison indicators of DMI were recalculated to DMI per capita and the Lithuanian trend was check against the EU-15 trend. Fast convergence of Lithuanian and EU-15 DMI indicators is characteristic for the investigated period. DMI per capita has increased from 11.2 tonnes up to the EU-15 level (15 tonnes) already in 2004 and reached 17.2 tonnes in 2005-2006. These figures correspond to the EU-15 DMI level in the very 3 beginning of the 1990’s. These figures reflecting fast convergence and even excess of current EU-15 DMI volumes show that warnings of some specialists (Moll et al., 2005) that accession countries, while striving to reach the EU-15 level of welfare, will face difficulties in curbing the growth in the use of resources, unfortunately were right and essential efforts will be needed to change these unsustainable trends. Physical trade balance (PTB) Physical trade balance (PTB) reflects the difference between volumes of imported and exported materials (metric tons). The European Union is a net importer of materials in physical terms and Lithuania is not an exception. A synchronic growth of physical imports and exports was characteristic for the Lithuanian economy, and PTB increased almost 1.8 times during investigated 7-year period. Biomass is only a material category with negative PTB in Lithuania, and annual exports of biomass exceeded imports by almost
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