SERIEE Ud Fra Nationalregnskab

STATISTICAL OFFICE ACCT-EXP/99/4.2.2 OF THE EUROPEAN Item 4.2 of the agenda COMMUNITIES eurostat B1 - National accounts methodology, statistics for own resources Luxembourg, November 1999SERIEE Accounts for Environmental Services Denmark 1994Prepared for Eurostat and DG Regional Policy by: Ole Gravgård Pedersen Statistics DenmarkJoint meeting of the Working Party ‘ECONOMIC ACCOUNTS FOR THE ENVIRONMENT’ and the Sub-Group ’ENVIRONMENTAL EXPENDITURE STATISTICS’Meeting of 6 and 7 December 1999 BECH building – Room ‘Quételet’ 2 Contents1. Introduction...... 32. Definitions and concepts...... 43. National accounts and Characteristic Environmental Services...... 6 3.1. General Government...... 6 3.2. Non-Financial Corporations and Households...... 11 4. Current Transfers to Producers...... 16 4.1. General Government...... 16 4.2. Non-Financial Corporations and Households...... 17 5. Capital Transactions...... 17 5.1. General Government...... 17 5.2. Non-Financial Corporations and Households...... 18 6. Production of Characteristic Environmental Services...... 20 6.1. SERIEE Table B by producers...... 20 6.2. SERIEE Table B by CEPA Groups...... 23 7. The Use of Characteristic Environmental Services...... 26 7.1. Use of Output from General Government...... 26 7.2. Use of Output from Non-Financial Corporations and Households...... 27 8. Supply and Use Tables for Environmental Characteristic Services...... 31 8.1. SERIEE Table B1 by Producers...... 31 8.2. SERIEE Table B1 by CEPA Groups...... 33 9. National Expenditure - SERIEE Table A...... 3510. Financing - SERIEE Table C...... 3911. Financial Burden - SERIEE Table C1...... 41References...... 433 1. Introduction This report presents a statement for the Danish production, use, expenditure and financing in 1994 of selected so-called characteristic environmental services. The work has been made possible by financial assistance granted by the European Community and brought about by Eurostat, Unit B11.National Accounts The main focus in the report is on showing how and SERIEE the SERIEE tables A, B, B1, C and C1 (cf. Eurostat, 1994) can be filled with respect to characteristic environmental services entirely by using data from the Danish national accounts and the databases underlying this. By using only data from the national accounts a full consistency between the SERIEE tables and the national accounts is obtained for data as well as for concepts and definitions.Selected activities ... It must be observed that the statement in this report only concerns a part of the environmental protection activities. There are several reasons for this. One reason is that only characteristic environmental services are dealt with. No statement of e.g. use of and expenditures for adapted or connected products (cf. Eurostat, 1994 p. 32) is made. Another reason is that only those environmental services which are clearly identifiable and separable from the national accounts have been included. Thus, some characteristic environmental services have been left outside the statement. ... and integrated Most important, however, is the widespread environmental existence of environmental protection activities protection... which are integrated with other activities. New machinery and equipment are often constructed with due respect to environmental protection and in many cases it is impossible to find out the costs of these embedded or integrated environmental protection activities. Shifts in the dissemination of non-observable integrated environmental protection activities make it very difficult to draw any firm conclusions for a single country about the development over time in the real environmental protection costs, real financial burden, etc. Likewise, differences in the degree of non-observable integrated costs make it difficult1 The author wish to thank Anton Steurer, Eurostat B1, for useful comments and suggestions for changes to the first draft of this report. to compare different countries with respect to real environmental protection costs, etc. ...prevents a complete Thus, the statement of selected environmental statement protection activities shown in this report must be seen only as a partial statement, and the tables must be treated with extreme caution when it comes to a more broad interpretation of Danish expenditures for environmental protection.3 2. Definitions and conceptsTwo definitions are used in the following: characteristic environmental services and specialised producers.Characteristic Characteristic environmental services are defined environmental as the output, which results from a characteristic services environmental activity. The purpose of a characteristic environmental activity is to protect the environment, and for identification of environmental protection purposes the CEPA classification (Single European Standard Statistical Classification of Environmental Protection Activities - Eurostat, 1994 p. 30) is used. CEPA classifies the activities by 9 main fields: CEPA 1. Protection of ambient air and climate 2. Waste water management 3. Waste management 4. Protection of soil and groundwater 5. Noise and vibration abatement 6. Protection of biodiversity and landscape 7. Protection against radiation 8. Research and development 9. Other environmental protection activitiesSpecialised producers In order to obtain a further delimitation of the area of environmental protection activity specialised producers are defined as producers, which undertake characteristic activities as their main activities. In relation to much of the activity by general government it can be questioned whether the activity is a main activity or not. Within general government it is obvious that the Ministry of Environment, the Environmental Protection Agency and the National Environmental Research Institute carries out characteristic environmental activities as their main activity. It is not obvious, however, that e.g. environmental research is a main activity if it is carried out by the Ministry of Agriculture. For the sake of simplicity, however, in the present context all characteristic activities carried out by general government is considered as main activities of general government as a whole.Institutional sectors In relation to SERIEE specialised producers are divided into two groups: One group includes4 ESA's (European System of Accounts, Eurostat, 1996) functional sectors general government (S.13) and non-profit institutions serving private households (NPISH, S.15), and the other group includes all other producers (i.e. producers belonging to institutional sectors S.11 Non- financial corporations, S.12 Financial corporations, and S.14 Households).Market and non- General government is characterised by being market defined as a non-market producer, while the other producers are characterised as market producers. The difference between the two concepts relates to whether or not the major part of the producers' output is non-market output or market output (i.e. whether sales cover less than 50 per cent of costs or not (ESA 3.14-3.45)). It should be observed, however, that even though general government is a non-market producer, part of its output can be marketed output.Concrete split of In the present context the division and specialised producers delimitation of the specialised producers is carried out by placing S. 13 General government in one group and four national accounts industries (NACE/activity based) in the other group. Concerning the other group, however, the parts of the industries' activities, which belong to the functional sector general government are subtracted in order to avoid double counting (see section 3.2).No attempt has been made to include units/activities belonging to S. 15 Non-profit institutions serving households (NPISH). In Denmark this sector is very small and not sufficiently covered statistically.5 3. National accounts and Characteristic Environmental Services The following sections and chapters highlight the production of selected characteristic environmental services. Chapter 3 overview Section 3.1 deals with the production within general government and section 3.2 with the production within non-financial corporations. Chapter 4 shows current transfers which contribute to the financing of the production of characteristic environmental services. Finally, in chapter 5 a statement of capital transactions (gross fixed capital formation, etc.) is found. All information shown in this chapter and chapters 4 and 5 is drawn from the Danish national accounts and the underlying databases. The information leads immediately to the filling out of the so-called SERIEE table for production characteristic environmental services in chapter 6. Furthermore, the information is used for filling out the other SERIEE tables (B1, A, C and C1) found in chapters 7-11. 3.1 General GovernmentCost based estimation The output of characteristic environmental of output services from general government sector equals per definition the sum of intermediate consumption (in purchasers prices), compensation of employees, other taxes on production less other subsidies on production, plus consumption of fixed capital. This follows from the fact that in the Danish national accounts, the general government sector includes only producers classified as non-market producers whose output is valued from the point of view of costs. This relation by definition between output and the mentioned components can be found by combining the ESA production account (ESA, table A.IV.2.1) and the generation of income account (table A.IV.2.II.1.1) and using the fact that net operating surplus and mixed income are zero when we look at a cost based estimation of output. 6 DIOR database As the environmental part of general government output and its components (intermediate consumption, etc.) are not presented as such in the Danish national accounts it has been necessary to go behind the national accounts and extract the information from Statistics Denmark's database with public finance accounts (called DIOR), which form the basis for the general government part of the national accounts. Statistics Denmark's In connection with Statistics Denmark's regular "old" labelling of statements of general government's environmental environmental expenditures and revenues a expenditures and labelling of the government finance accounts in revenues DIOR has been made in order to separate environmental revenues and expenditures from other expenditures and revenues. Furthermore, within the environmental expenditures and revenues the labelling is done in a way which enables a division into domains (Waste, Waste Water, Research and Development, Management of Forests, Buildings, Traffic and Environment, etc.). This labelling was used for the extraction of information for the SERIEE projects which were carried out in connection with Statistics Denmark's first SERIEE projects (Nordentoft and Vesselbo, 1996). New SERIEE and In the present context, a new environment CEPA oriented labelling of the DIOR accounts has been carried labelling out. The new labelling focuses directly on the SERIEE system and the CEPA classification. In some cases, the new labelling excludes activities which are included in the old labelling. This is the case e.g. for job training in the Ministry of Environment and in the Environmental Protection Agency. In other cases, the new labelling includes activities which were not included in the old labelling. This means for example that the new labelling (but not the old) includes some environmental research activities which are carried out at research centres outside "pure" environmental research institutions. The new labelling has been carried out by going through all the accounts of the central and local Government accounts and selecting those accounting items, which by definition falls under the CEPA classification. At the same time, the relevant CEPA group has been chosen. 7 Shares of For some institutions whose primary activities are environmental not related to environmental protection it has protection activities been necessary to estimate the part of the institution's activities which are related to environmental protection. This has been done from detailed information in the government accounts about the specific activities. As an example, it has been estimated that 47 per cent of activities by the Geological Survey of Denmark and Greenland in 1994 were related to environmental protection activities, while the remaining 53 per cent were related to natural resource management and research, which falls outside the CEPA classification. Only partial It must be observed, however, that not all statement environmental protection activities by central government are "caught" by this labelling. It is not possible from the government accounts to identify environmental protection activities embedded in other activities unless they have been stated explicitly in the text belonging to the accounts. By way of example, it is impossible from the government accounts fully to identify Statistics Denmark's' activities for developing environmental statistics and environmental accounts even though they can be interpreted as part of central governments' environmental protection activities in a broad sense. Thus - as mentioned in the introduction - the statement of environmental protection activities will always be a partial statement.Cost components and The result of the new environmental labelling of output - table 1 the government accounts and the corresponding extraction from the DIOR database of information relevant for a cost based estimation of output are shown in table 1. 8 Table 1. Central and local government's environmental protection activities by accounting items 1994ESA P.2+D.2-D.3 ESA D.1 ESA K.1 ESA P.1 Government Intermediate Compensation of Consumption Output Accounting No. consumption employees of fixed 1 (DIOR) capital 1,000 DKK CEPA 1-9 Central and local government, total 1,059,850 1,216,645 227,650 2,504,145Central government, total 454,850 485,131 93,998 1,033,979 Local government 605,000 731,514 133,651 1,470,165C 3,530 0 353 3,883 E CG 23.21.01.30 Danish Environmental Agency - CFC Dev. Programme 3,530 0 P A C 23,667 31,814 5,548 61,029 1E CG 23.22.06.00 Remedial measures, Law on losses of Value 63 0 .P CG 23.61.01.10 Geological Survey of Denmark and Greenland 23,604 31,814 PA4C 306,118 130,756 43,687 480,561 .E CG 23.51.01.10 The National Forest and Nature Agency - operation 79,135 77,083 P CG 23.51.01.51 The National Forest and Nature Agency - maintenance 4,987 0 A CG 23.51.01.60 The National Forest and Nature Agency - gov. assets sale 562 0 6 CG 23.51.01.70 The National Forest and Nature Agency - game license fees 3,374 0 . CG 23.52.01.10 Nature management et cetera; projects - operation 26,060 1,673 P LG 38 Nature conservation 17,000 4,000 LG 48 Water course management 173,000 48,000 LG 55 Various expenses 2,000 0C 132,619 225,310 35,793 393,722 E CG 19.31.01.00 Risø National Laboratory 37,085 75,538 P CG 23.11.01.60 Min. of Env. - Strategic Env. Research Programme 5,400 21,600 A CG 23.21.01.20 Danish Environmental Agency - unravelling 16,777 3,811 8 CG 23.21.01.21 Danish Environmental Agency - research, groundwater 6,654 0 . CG 23.25.01.00 Research on water environments 7,160 0 R CG 23.31.01.10 National Env. Res. Institute - operation 58,378 103,085 CG 23.31.01.52 National Env. Res. Institute - improvement and renovation 1,165 0 CG 24.33.02.10 Various grants - agricultural research 0 21,276C 593,916 828,765 142,268 1,564,949 E CG 23.11.01.10 Min. of Env. - general activity 37,711 44,242 P CG 23.11.01.30 Min. of Env. - provisional commissions and committees 103 0 A CG 23.11.01.90 Min. of Env. - commercial activity 35 247 9 CG 23.11.11.00 Environment Complaints Board 1,583 3,607 . CG 23.11.21.00 Nature Complaints Board 1,201 11,334 O CG 23.21.01.10 Danish Environmental Agency - operation 126,390 88,296 CG 23.21.01.90 Danish Environmental Agency - commercial activity 2,366 1,525 CG 23.23.11.00 Cleaner technologies 2,707 0 CG 23.24.31.00 Biocides related activities 8,820 0 LG 52 Other environmental activities 413,000 74,000 LG 00 General administration 0 605,5141 Consumption of fixed capital is estimated as 10 per cent of other inputs Source: The DIOR data base9 The table shows the relevant government accounts and the corresponding amounts for intermediate consumption (ESA P.2+D.2-D.32), compensation of employees (ESA D.1), consumption of fixed capital (ESA K.1) and the sum of these components which make up total output (ESA P.1). Intermediate The amounts for intermediate consumption include taxes less subsidies on consumption products as well as other taxes less subsidies on production paid by general government itself.CFC For the present statement consumption of fixed capital has been estimated as 10 per cent of the sum of intermediate consumption and compensation of employees. The 10 per cent correspond to the relation between consumption of fixed capital and other inputs for total general government3. The total output of characteristic environmental services is estimated at 2,504 Mill. DKK of which central government produces 1,033 mill DKK and local government 1,470 Mill. DKK. CEPA groups Broken down into environmental domains (CEPA classes) the production of characteristic environmental services split up into 4 Mill. DKK on protection of ambient air and climate, 61 Mill. DKK on protection of soil and groundwater, 481 Mill. DKK on protection of biodiversity and landscape, 394 Mill. DKK on research and development and 1,565 Mill. DKK on other environmental protection activities. The latter group includes e.g. general administration connected to environmental protection activities by the Mini- stry of Environment and by local government. Furthermore, activities which have no unambiguous connection to one of the other CEPA groups are found in the group for other environmental protection activities. Comparison with In order to throw further light on the output of characteristic environmental total general services from general government the main totals from table 1 are juxta- government - table 2 posed in table 2 with corresponding figures for total general government, i.e. for all units and activities within general government. The output of characteristic environmental services amounts to 0.9 per cent of total output from general government. For intermediate consumption the environmental service part is 1.4 per cent of the total, while 0.7 per cent of general government's compensation of employees is used for the production of environmental services. Thus, we can conclude that the production of environmental services is more intensive with respect to intermediate consumption and less intensive with respect to labour than the average activities within general government. Again, it must be noted that the numbers for environmental protection activities by nature are understated.Table 2. Output from general government sector 1994 Total of which: S.13 General Characteristic Environmental Government Services ESA Mill. DKK Per cent of total2 The numbers refer to the ESA concepts and definitions which can be found in Eurostat, 1996. 3 Calculated on basis of table 2 below. P.1 Output (=P.2+D.2-D.3+D.1+K.1) 269,675 2,505 0.9 P.2 + D.2 - D3 Intermediate consumption 76,446 1,060 1.4 D.1 Compensation of employees 168,715 1,217 0.7 K.1 Consumption of fixed capital 24,514 228 0.9Source: Danish National Accounts and table 1Market and Non-Market OutputMarket output of In this section focus is on the part of output form general government which characteristic is market output (ESA P.11). For general government the market output is environmental determined as the revenue from sale of characteristic environmental ser- services - table 3 vices. As in the case of the cost components of characteristic environmental services the information about sales by government accounts have been ex- tracted from the DIOR database and assigned to CEPA classes. The result is shown in table 3.Market output Market output of characteristic environmental services from general government amounted to 150 Mill. DKK. Total market output from general government was at 29,746 Mill. DKK4. Thus, the share of characteristic environmental services corresponded to 0.5 per cent.Broken down to central government and local government we find that 89 per cent (133 Mill. DKK) of all characteristic environmental services came from central government and 11 per cent (17 Mill. DKK) from local government. Research and development (CEPA 8) had the largest share of the market output - 60 per cent of the market output of characteristic environmental services were related to research and development. Risø National Laboratory (research institution for energy and environment) and the National Environmental Research Institution were the largest providers of market output.Both protection of soil and groundwater (CEPA 4) and protection of biodiversity and landscape (CEPA 6) contributed to 12-13 percent of the market output of characteristic environmental services.Non-market output The non-market output (ESA P.12+P.13) from general government is calculated as the difference between total output as found in table 1 and the market output as found in table 3. The calculation is undertaken for central and local government and for CEPA classes. The numbers are not shown in this section but are presented below in tables 9 and 10. Table 3. Market output of characteristic environmental services from general government by accounting items 1994 Government Accounting ESA P.11 No. (DIOR) Market output 1,000 DKK Per cent Central and local government, total 150,135 100 Central government, total 133,135 894 Source: Statistics Denmark, 1998. 11 Local government, total 17,000 11CEPA 4. Protection of Soil and Groundwater 18,408 12 CG 23.22.06.00 Remedial measures, Law on losses of Value 464 CG 23.61.01.10 Geological Survey of Denmark and Greenland 17,944CEPA 6. Protection of Biodiversity and Landscape 19,387 13 CG 23.51.01.10 The National Forest and Nature Agency - operation 14,504 CG 23.52.01.10 Nature management; projects - operation 685 CG 23.52.02.20 Encouragement of deciduous forest - project grant 198 LG 38 Nature conservation 1,000 LG 48 Water course management 3,000CEPA 8. Research and development 89,603 60 CG 19.31.01.00 Risø National Laboratory 24,051 CG 23.31.01.10 National Env. Res. Institute - operation 65,444 CG 24.33.02.10 Various grants - agricultural research 108CEPA 9. Other Environmental Protection Activities 22,737 15 CG 23.11.01.10 Min. of Env. - general activity 280 CG 23.11.01.90 Min. of Env. - commercial activity 153 CG 23.21.01.10 Danish Environmental Agency - operation 5,082 CG 23.21.01.90 Danish Environmental Agency - commercial activity 4,037 CG 23.23.11.00 Cleaner technologies et cetera 185 LG 52 Other environmental activities 13,000 Source: The DIOR data base3.2 Non-Financial Corporations and Households Four Danish national accounts industries are included here as other specialised producers within the institutional sectors S.11 Non-financial corporations and S. 14 Households. Four industries The four industries are: included 370000 Recycling of waste and scrap 900010 Sewage removal and disposal 900020 Refuse collection and sanitation 900030 Refuse dumps and refuse disposal plantsNACE Rev. 1 In relation to the NACE Rev. 1 classification 370000 is an aggregation of 37.10 Recycling of metal waste and scrap, and 37.20 Recycling of non- metal waste and scrap. 900010, 900020 and 900030 are an disaggregation of NACE rev. 1 90.00 Sewage and refuse disposal services, sanitation and similar services.Other industries not Besides the activities carried out by the four national accounts industries, included units in other NACE rev. 1 industries carry out environmental protection activities. Particularly relevant is NACE, rev. 1 51.57 Wholesale of waste and scrap which has a turnover of approx. 2.5 bill. DKK (1996). Furthermore 74.20 Engineering consultancy activities, etc. include units, which contribute to environmental protection.12 Presently, however, it is considered as very difficult to separate the environment protection activities from other activities within these industries. Furthermore, it must be assumed that the four "pure" industries 370000, 900010, 900020 and 900030 together with general government cover the main part of the output of characteristic environmental services. Thus, no attempt is made to estimate any further output in addition to this.Industries and The industries 900010 and 900030 are "clean" in the sense that they only institutional sectors include activities which belong to institutional sector S.11 Non-financial corporations. The activities in 370000 are carried out by S.11 Non-financial corporations as well as S.14 Households. However, the activities by households within 370000 are negligible (0.7 per cent of output).Table 4 Table 4 shows the main national accounting entries for 370000 Recycling of waste and scrap, 900010 Sewage removal and disposal, and 900020 Refuse collection and sanitation.Accounting items The entries start with the output (ESA P.1), which is then split up by intermediate consumption (at basic prices plus taxes less subsidies on products, ESA P.2+D.21-D.31), compensation of employees (ESA D.1), other taxes less other subsidies on production (D.29-D.39), and gross operating surplus and mixed income (ESA B.2g+B.3g). The latter component is further split up by consumption of fixed capital (ESA K.1)on one side and net operating surplus and mixed income (ESA B.2n+B.3n) on the other side.370000 Recycling of For recycling of waste and scrap output was at 756 Mill. DKK. The main waste and scrap part of this output was made up by intermediate consumption at 597 Mill. DKK. Gross operating surplus and mixed income were 85 Mill. DKK corresponding to approximately 11 per cent of output. Most of the gross operating surplus is due to consumption of fixed capital.It should be observed that part of the output from 370000 Recycling of waste and scrap does not consist of environmental services as such but of recovered materials for further use. However, no attempt has been made to separate the environmental and non-environmental output. 13 Table 4. Output from 370000 Recycling of waste and scrap, 900010 Sewage removal and disposal and 900030 Refuse dumps and refuse disposal plants 1994 370000 900010 900030 Recycling of Waste Sewage Removal Refuse Dumps and Scrap and Disposal and Refuse Disposal Plants (CEPA 3. Waste (CEPA 2. Waste Water (CEPA 3. Waste Management) Management) Management) ESA Mill. DKK P.1 Output 756 4,172 1,133 P.2+D21-D.31 Intermediate consumption 597 1,820 550 D.1 Compensation of employees 81 1,352 416 D.29 Other taxes on production 2 9 4 D.39 Other subsidies on production 9 12 7 B.2g+B.3g Gross operating surplus and mixed income 85 1,003 170 (=P.1-P.2-D.1-D.29+D39) K.1 Consumption of fixed Capital 76 34 74 B.2n+B.3n Net operating surplus and mixed income 10 969 96 (=B.2g+B.3g-K.1) Source: Danish National Accounts Rounding errors may occur 900010 Sewage Output from sewage removal and disposal was 4,172 Mill. DKK. Intermedi- removal and disposal ate consumption of the industry was 1,820 Mill DKK or approximately 44 per cent of output. 1,352 Mill. DKK of the output were used for compensation of employees, whereas gross operating surplus amounted to 1,003 Mill. DKK, of which only 34 Mill. DKK were consumption of fixed capital.900030 Refuse dumps Services provided by refuse dumps and refuse disposal plants correspond to and refuse disposal an output of 1,133 Mill. DKK. Close to half of the output is made up by the plants industry's intermediate consumption and a little more than one third by compensation of employees. Out of 170 Mill DKK of gross operating surplus and mixed income 74 Mill. DKK were consumption of fixed capital and 96 Mill. DKK net operating surplus and mixed income.Other taxes less other For all three industries other taxes on production and other subsidies on pro- subsidies duction were small, but with other subsidies exceeding other taxes in all cases.Corresponding CEPA Activities of 370000 Recycling of waste and scrap and 900020 Refuse col- groups lection and sanitation fall under CEPA 3 Waste management, while Activi- ties of 900010 Sewage removal and disposal belong to CEPA 2 Waste water management. 900020 Refuse Activities in 900020 are carried out by units within both the institutional collection and sector S.13 General government and the sector S.11 Non-financial corpora- sanitation tions. As the general government part is quite large it is necessary to exclude it in order to arrive at a statement for output of characteristic environmental services connected to refuse collection and sanitation by the SERIEE category consisting of S.11 Non-financial corporations and S. 14 Households5. 5 The activities by general government within 900020 include road sweeping, snow clearing, gritting, and salting of roads. These activities are, in any case, not included in the CEPA classification of environmental protection activities. 14 Table 5 Table 5 shows the main entries for 900020 Refuse collection and sanitation. It is seen that the total output amounted to 5,014 Mill. DKK. Of this 7 per cent corresponded to activities within general government and 93 per cent to activities within non-financial corporations. For intermediate consumption the shares were 11 per cent and 89 per cent, respectively. Compensation of employees, taxes, subsidies, gross operating surplus and mixed income were almost entirely connected to the non-financial corporation part of 900020 Refuse collection and sanitation.CFC The total consumption of fixed capital (CFC) at 365 Mill. DKK is split up by general government and non-financial corporations on the assumption that the consumption of fixed capital in general government sector equals the gross operating surplus. Hereby, a net operating surplus at zero is obtained for the general government part of 900020 Refuse collection and sanitation. This way of calculating consumption of fixed capital leads to a proportion of CFC to input of intermediate consumption and compensation of employees which is less than 5 per cent. Compared to the general share at 10 per cent for general government as such (see section 3.1) this seems at first rather low, but can be explained by the fact that the activities, to a large extent, are composed of road sweeping and snow clearing, i.e. activities which, to a limited extent, depend on the use of fixed capital in the form of constructions.Market output All output from the industries 370000 and 900010-900030 within the institutional sectors non-financial corporations and households is market output sold to other units in the economy.Non-environmental The greater part of the market output from these industries/institutional output sectors can be characterised as characteristic environmental services, i.e. the purpose is to protect the environment. However, in the Danish national accounts the output also includes non-environmental output. This output is related to production of own account software and fringe benefits provided by the industries to their employees. In chapter 6 actual numbers for the split in environmental and non-environmental output are given. 15 Table 5. Output from 900020 Refuse collection and sanitation 1994 of which Total S.13 General Government S.11 Non-financial 900020 Corporations and S.14 Households (CEPA 3.Waste Management)ESA Mill. DKK Mill. DKK Per cent Mill. DKK Per cent P.1 Output 5,014 346 7 4,668 93 P.2+D21-D.31 Intermediate consumption 3,006 316 11 2,690 89 D.1 Compensation of employees 1,094 15 1 1,079 99 D.29 Other taxes on production 39 0 0 39 100 D.39 Other subsidies on production 19 0 0 19 100 B.2g+B.3g Gross operating surplus and mixed 895 15 2 879 98 income (=P.1-P.2-D.1-D.29+D39) K.1 Consumption of fixed capital 365 15 4 350 96 B.2n+B.3n Net operating surplus and mixed 529 0 0 529 100 income (=B.2g+B.3g-K.1) Source: Danish National Accounts16 4. Current Transfers to ProducersBesides the revenues from sale of services and subsidies on production the specialised producers can have receipts connected to the current activities in the form of specific current transfers (ESA D.7 Other current transfers). These are unrequited payments received by the producers with the exception of taxes, subsidies, investment grants and other capital transfers.4.1. General GovernmentTable 6 Table 6 shows in the case of general government the current transfers to the producers by accounting items, by financing units and by CEPA classes. The information is stated on basis of the DIOR database.Central and local General governments receive other current transfers at 162 Mill. DKK of government which central government receives 19 Percent and local government 81 per cent. 104 Mill. DKK of the other current transfers come from central government and go mainly to local government. 8 Mill. DKK go from local government to central government. 37 Mill. DKK go from other resident units to the local government and 12 Mill. DKK of current transfers are received by central government from the European Union. CEPA 44 Mill. DKK or 27 per cent of current transfers are allocated to protection of biodiversity and landscape (CEPA 6) while the rest - 117 Mill. DKK or 73 per cent - are allocated to other environmental protection activities (CEPA 9). Table 6. Current transfers to specialised producers within general government 1994ESA D.7 Government From From local From From Total Per cent Accounting No. central government other European of (DIOR) government resident Union total units 1,000 DKK CEPA 1-9 Central and local government, total 104,383 7,919 37,000 12,301 161,603 100 Central government, total 10,383 7,919 0 12,301 30,603 19 Local government, total 94,000 37,000 131,000 81CEPA 6. Protection of Biodiversity and Landscape 17,383 7,627 7,000 12,224 44,234 27 CG 23.51.01.10 The National Forest and Nature Agency - operation 10,382 7,223 17,605 CG 23.52.01.10 Nature management et cetera; projects - operation 12,218 12,218 CG 23.52.02.20 Encouragement of deciduous forest - project grant 6 6 CG 23.31.01.10 National Env. Res. Institute - operation 1 404 405 LG 48 Water course management 7,000 7,000 14,000CEPA 9. Other Environmental Protection activities 87,000 292 30,000 77 117,369 73 CG 23.11.01.10 Min. of Env. - general activity 24 77 101 CG 23.21.01.10 Danish Environmental Agency - operation 268 268 LG 52 Other environmental activities 87,000 30,000 117,000 Source: The DIOR data base17 4.2 Non-Financial Corporations and Households No current transfers Other specialised producers of characteristic environmental services (i.e. 370000, 900010-900030) receive no current transfers5. Capital Transactions Types of capital Capital transactions relevant in relation to the production of characteristic transactions services consist of gross fixed capital formation (ESA P.51), acquisitions less disposals of non-produced non-financial assets (ESA K.2), investment grants received (ESA D.92) and other capital transfers received (ESA D.99) by units carrying out characteristic environmental activities.5.1 General GovernmentTable 7 Table 7 shows the gross fixed capital formation and the acquisition less disposal of non-produced non-financial assets (land etc.) by general government in relation to the production of characteristic environmental services. Central and local 57 per cent of the total at 225 Mill. DKK were capital formation and acqui- government sitions less disposals by central government while 43 per cent were transactions by local government.CEPA 47 per cent of the capital transactions were related to the protection of biodiversity and landscape. 22 per cent were related to research and development, and 27 per cent to other environmental protection activities.Furthermore, it is seen that the acquisition less disposal of non-produced non-financial (land etc.) accounts for 47 Mill. DKK or approx. 20 per cent of total acquisition less disposal of non-financial assets. Investment grants For the government sector only 12 Mill. DKK of other capital transfers and other capital (ESA D.99) were received in 1994 by local government units. No invest- transfers received ment grants (D.92) were received by general government in relation to the production of characteristic environmental services. Table 7. Acquisitions less disposals of non-financial assets (net) related to government sector's output of characteristic environmental activities by accounting items 1994P.51 K.2 Government Gross Fixed Non- Total Accounting No. Capital Produced, (DIOR) Formation Non- Financial Assets 1,000 DKK Per Cent CEPA 1-9. Central and local government, total 178,482 46,796 225,278 100 Central government, total 81,482 46,796 128,278 57 Local government, total 97,000 0 97,000 43CEPA 4. Protection of Soil and Groundwater 7,811 0 7,811 3 CG 23.61.01.10 Geological Survey of Denmark and Greenland - operation 7,811 7,811CEPA 6. Protection of Biodiversity and Landscape 59,697 46,796 106,493 47 CG 23.51.01.10 The National Forest and Nature Agency - operation 12,667 12,667 CG 23.51.01.50 The National Forest and Nature Agency - construction budget 3,531 3,531 CG 23.51.01.60 The National Forest and Nature Agency - gov. assets sale -18,708 -17 -18,725 CG 23.52.01.10 Nature management et cetera; projects - operation 622 622 CG 23.52.02.10 Nature management et cetera - construction appropriation 2,585 46,813 49,398 LG 38 Nature conservation 1,000 1,000 LG 48 Water course management 58,000 58,000CEPA 8. Research and Development 50,201 0 50,201 22 CG 19.31.01.00 Risø National Laboratory 19,106 19,106 CG 23.31.01.10 National Env. Res. Institute - operation 21,339 21,339 CG 23.31.01.20 National Env. Res. Institute - construction budget 6,162 6,162 CG 23.31.01.52 National Env. Res. Institute - improvement and renovation 433 433 CG 24.33.02.10 Various grants - agricultural research 3,161 3,161CEPA 9. Other Environmental Protection Activities 60,773 0 60,773 27 CG 23.11.01.10 Min. of Env. - general activity 8,678 8,678 CG 23.11.01.90 Min. of Env. - commercial activity 1 1 CG 23.11.11.00 Environment Complaints Board 189 189 CG 23.11.21.00 Nature Complaints Board 1,100 1,100 CG 23.21.01.10 Danish Environmental Agency - operation 12,805 12,805 LG 52 Other environmental activities 38,000 38,000 Source: The DIOR data base5.2 Non-Financial Corporations and HouseholdsTable 8 Table 8 shows capital transactions related to production of characteristic environmental services by non-financial corporations and households. Sewage removal and We find that the largest gross fixed capital formation (GFCF) was related to disposal sewage removal and disposal. 2,453 Mill. DKK were allocated to that.Refuse collection and GFCF by the industry 900020 Refuse collection and sanitation was 571 sanitation Mill. DKK of which 23 Mill. DKK fell within the institutional sector general government and the remaining 548 Mill. DKK within non-financial corporations. The split of the industry into institutional sectors is done by a 4 per cent allocation to general government and a 96 per cent allocation to19 non-financial corporations. These percentages correspond to the shares for consumption of fixed capital (see table 5). Refuse dumps 173 Mill. DKK of GFCF took place in relation to refuse dumps and refuse disposal plants.Recycling For recycling of waste and scrap no information of GFCF is found in the Danish national accounts.Capital transactions Capital transactions related to non-produced, non-financial assets (net) consist mainly of acquisitions less disposals of land. 88 Mill. DKK of non-produced, non-financial assets were disposed of (net) in relation to refuse collection and sanitation within non-financial corporations. For the other industries only minor transactions took place in relation to this type of assets.Investments grants Investments grants and other capital transfers received by the specialised etc. producers within non-financial corporations amounted to 85 Mill. DKK for sewage removal and disposal and 52 Mill. DKK for refuse dumps and refuse disposal plants. These capital transfers were received from general government.Table 8. Capital transactions related to non-financial corporation's production of characteristic environmental activities by accounting items 1994370000 900010 900020 900030 Recycling Sewage Refuse collection and sanitation Refuse dumps of waste removal and and refuse dis- and scrap disposal posal plants (CEPA 3. (CEPA 2. Waste (CEPA 3. (CEPA 3. Waste Waste Water Waste Management) Management) Management) Management) Total of which1 S.13 General S.11 Non- Government Financial Corp Mill. DKK P.51 Gross fixed capital formation n.a. 2,453 571 23 548 173K.2 Non-produced, non-financial n.a. 3 -107 -19 -88 -3 assets, net D.92+D99 Investments grants and other n.a. 85 0 0 0 52 capital transfers received 1 The S.13 part is estimated as 4 per cent of the total for 900020. 4 per cent corresponds to the general government part of fixed capital consumption, cf. table 5. Source: Danish National Accounts 20 6. Production of Characteristic Environmental Services In this chapter the information in tables 1-8 above is summed up in the form of the so-called SERIEE table B (cf. Eurostat 1994, p. 59) 6. As the source of tables 1-8 in all cases are the Danish national accounts and the DIOR database a complete consistency between the resulting SERIEE table B and the national accounts is obtained, not only with respect to concepts and definitions, but also in relation to actual numbers7.Two versions of In order to be able to focus on both the specialised producers of the envi- SERIEE table B ronmental services and the environmental domains protected by the activities two versions of the SERIEE table B have been constructed. Table 9 shows the usual table B by producers - more or less as it is outlined in Euro- stat, 1994 - whereas table 10 shows table B with focus on CEPA classes instead of producers.6.1 SERIEE Table B by producersProducers - table 9 Table 9 sums up table 1-8 for each group of characteristic producer, i.e. general government and the four selected industries within S.11 Non-financial corporations and S.14 Households. The table is divided into three main sections: Section 1 presents current transactions and characteristics related to the production of characteristic environmental services. Section 2 presents capital transactions related to the production while section 3 - based on the other two sections - show how much of the current and capital resources for the production which have been financed by the producers themselves. Section 1 and 2 are further divided into subsections.Use of resources Subsection 1.1 shows how the output is made up by the use of resources in the form of intermediate consumption, compensation of employees, other taxes less other subsidies on production and gross operating surplus. The numbers in subsection 1.1 of table 9 come from tables 2, 4 and 5. A total output of selected characteristic environmental services at 13,234 Mill. DKK is found. The largest contributions to this output comes from the two industries 900010 Sewage removal and disposal, and 900020 Refuse collection and sanitation with 4,172 Mill. DKK and 4,668 Mill. DKK, respectively. General government contributed with 2,505 mill DKK or less than 20 per cent of the total output. 900030 Refuse dumps and refuse disposal plants had an output at 1,133 Mill. DKK while the output from 370000 Recycling of waste and scrap was 756 Mill. DKK worth. 6 Some additional information from the national accounts not shown in tables 1-8 has been used, though, for the drawing up of SERIEE table B. 7 This remark applies to the following SERIEE tables B1, A, C and C1 as well. 21 Table 9. SERIEE B - Output of selected characteristic environmental services by specialised producers - Denmark 1994 General Others (S.11 and S.14) Total Govern- 370000 900010 900020 900030 ment Recycling Sewage Refuse Refuse (S. 3) of waste removal collection and dumps and and scrap and sanitation refuse disposal (S.11 part disposal only) plants 1. CURRENT TRANSACTIONS Mill. DKK 1.1 Current uses 2,505 756 4,172 4,668 1,133 13,234 Intermediate consumption 1,060 597 1,820 2,690 550 6,717 of which characteristic services1) na. 1 16 37 17 71 of which adapted and connected products na. na. na. na. na. na. Compensation of employees 1,217 81 1,352 1,079 416 4,145 Other taxes less other subsidies on production 02) -7 -3 21 -3 8 of which other taxes on production 02) 2 9 39 4 54 of which other subsidies 02) 9 12 19 7 47 Gross operating surplus 228 85 1,003 879 170 2,365 of which consumption of fixed capital 228 76 34 350 74 762 of which net operating surplus 0 10 969 529 96 1,604 1.2 Output 2,505 756 4,172 4,668 1,133 13,234 Non-environmental output 0 1 1 5 1 8 of which related products 0 0 0 0 0 0 of which other non-environmental output 0 1 1 5 1 8 Environmental protection output 2,505 755 4,171 4,663 1,132 13,226 of which non-market 2,354 - - - - 2,354 principal 2,354 - - - - 2,354 secondary 0 - - - - 0 of which market 150 755 4,171 4,663 1,132 10,872 principal 150 755 4,171 4,663 1,132 10,872 secondary 0 0 0 0 0 0 of which ancillary n.r n.r n.r n.r n.r 0 1.3 Current env. protection resources 312 755 4,171 4,663 1,132 11,033 Market output 150 755 4,171 4,663 1,132 10,872 Current transfers 162 0 0 0 0 162 2. CAPITAL TRANSACTIONS 213 76 2,371 460 118 3,238 2.1 Gross fixed capital formation 178 763) 2,453 548 173 3,428 2.2 Other capital uses, net 47 na. 3 -88 -3 -41 2.3 Investment grant received 12 na. 0 0 0 12 2.4 Other capital transfers received 0 na. 85 0 52 137 3. FINANCING BY PRODUCERS 2,405 76 2,371 460 118 5,4301 Information on intermediate consumption of characteristic services is to be found in table 11 below 2 For general government, other taxes and other subsidies are included in the numbers for intermediate consumption 3 No estimate exists, so gross fixed capital formation is assumed to be equal to consumption of fixed capital Rounding errors may occur22 In relation to the total output from the Danish economy in 1994 at 1,584,234 Mill. DKK (Statistics Denmark, 1999) the output of characteristic environ mental services adds up to 0.8 per cent. It should be emphasised, however, that this 0.8 per cent is a low estimate because table B - as described in chapter 1 - does not include all characteristic environmental services. Related to production of environmental characteristic services there was an intermediate consumption at 6,717 Mill. DKK, compensation of employees at 4,145 Mill. DKK, taxes less subsidies on production at 8 Mill. DKK, consumption of fixed capital at 762 Mill. DKK and a net operating surplus and mixed income at 1,604 Mill. DKK. Non-environmental Subsection 1.2 shows the output split up by non-environmental output and output environmental output. The non-environmental output comes from activities within the non-financial corporations and consists of fringe benefits for employees and own-account software production (see section 3.2 in chapter 3). The non-environmental output is only 8 Mill. DKK out of the total output at 13,234 Mill. DKK.Market and non- Section 1.2 also reveals a split up of the environmental protection by market market and non-market output. Amounting to 10,872 Mill DKK the market output environmental output forms the main part of the environmental output. All of the output from the activities within the non-financial corporations and household sectors is market output. For general government 150 Mill. DKK out of total environmental output at 2,505 is market output. Thus, the remaining 2,354 Mill. DKK, are the total non-market output of characteristic environmental services. The information about non-market output comes from table 3.Current Section 1.3 shows current environmental protection resources, i.e. the environmental amounts, which the characteristic producers receive in connection with the protection resources current transactions. The total current resources are the sum of market output plus current transfers to producers. The total current environmental protection resources are 11,033 Mill. DKK of which the market output is 10,872 Mill. DKK and current transfers only 162 Mill. DKK. The number for current transfers come from table 6. Capital transactions Section 2 of table 9 contains information about the capital transactions of the specialised producers. The major part of the total capital transactions is made up by gross fixed capital formation of 3,428 Mill. DKK. Other capital uses, net is at -41 Mill. DKK. These capital uses consist of e.g. acquisitions less disposals of land. Thus, the negative signs show that the specialised producers disposed of more land etc. than they acquired (see also tables 7 and 8). The specialised producers received 12 Mill. DKK as investment grants and 137 Mill. DKK as other capital transfers. The total effect of these transactions is a net expenditure in connection with capital transactions at 3,238 Mill. DKK. All information on the capital transfers in SERIEE table B comes from the tables and text of chapter 5.Financing by Finally, section 3 in table 9 shows how much financing the specialised pro- producers ducers themselves bear in connection with the production of characteristic environmental services. The total financing by producers is 5,430 Mill. DKK. This amount equals the output of environmental protection services23 plus the balance of capital transactions minus the current environmental protection resources. It is seen that the main part of the total financing by producers is borne by general government and by 900010 Sewage removal and disposal. The financing in these cases is 2,405 Mill. DKK and 2,371 Mill. DKK, respectively. For general government the need for producer financing results from a big non-market output, while the need for producer financing by 900010 Sewage removal and disposal results from a big gross capital formation which is only, to a small extent, balanced by investment grants and other capital transfers received. 6.2 SERIEE Table B by CEPA GroupsCEPA groups - table Table 10 corresponds to table 9 but the different items concerning the pro- 10 duction and financing of the characteristic environmental services is shown by CEPA groups instead of specialised producers. By comparing tables 9 and 10 it is seen that the totals in the right hand column are the same.The allocation of the different items to CEPA groups has been carried out by using the information in tables 1 and 3-8. As an example, it is seen from table 1 that intermediate consumption of general government in relation to CEPA group 1 Protection of ambient air and climate was 3,530,000 DKK. This amount is also found in table 10 - as 4 Mill. DKK - under current uses and CEPA 1. Output Of the total output at 13,234 Mill. DKK waste management (CEPA 3) had the largest share. More than half of the output or 6,558 Mill. DKK were related to this group. The output aiming at waste water management (CEPA 2) was 4,172 Mill. DKK and output of other environmental protection activities (CEPA 9) was 1,565 Mill. DKK. Output related to the other CEPA groups was small. CFC and net The largest consumption of fixed capital (500 Mill. DKK) was related to operating surplus waste management (CEPA 3), while the largest net operating surplus was attributed to waste water management (969 Mill. DKK) followed by waste management (634 Mill. DKK). CEPA It is worth noticing that the activities related to protection of ambient air and climate (CEPA 1) are practically non-existing given the present delimitation of activities (see chapter 1). Non-market output (see subsection 1.2 of table 10) is mostly related to CEPA 9 Other environmental protection activities (1,542 Mill. DKK) 8, but also in relation to biodiversity and landscape protection (CEPA 6 - 461 Mill. DKK) ) as well as research and development (CEPA 8 - 304 Mill. DKK) are non-market output found. The other way around, it can be concluded that market services are almost entirely related to waste water management and waste management. This is also reflected in subsection 1.3 for current environmental protection resources of which the market output is the dominant part. 8 606 Mill. DKK of this non-market output is made up by local government administration (see table 1, account number LG 00). 24 Capital transactions are mainly related to waste water management (CEPA 2) though a gross fixed capital formation at 2,453 Mill. DKK. For CEPA group 3 Waste management we find a gross fixed capital formation amounting to 797 Mill. DKK.Table 10. SERIEE B - Output of selected characteristic environmental services by CEPA groups - Denmark 1994 CEPA 1 CEPA 2 CEPA 3 CEPA 4 CEPA 6 CEPA 8 CEPA 9 Total Ambient Air Waste Waste Soil and Biodiver- Research Other Env. and Water Manage- Ground- sity and and Protection Climate Manage- ment water Land- Develop- Activities ment scape ment1. CURRENT TRANSACTIONS Mill. DKK 1.1 Current uses 4 4,172 6,558 61 481 394 1,565 13,234 Intermediate consumption 4 1,820 3,837 24 306 133 594 6,717 of which characteristic services1) 0 16 55 0 0 0 0 71 of which adapted and connected products na. na. na. na. na. na. na. na. Compensation of employees 0 1,352 1,576 32 131 225 829 4,145 Other taxes less other subsidies on production -3 11 8 of which other taxes on production 9 45 54 of which other subsidies 12 35 47 Gross operating surplus 0 1,003 1,134 6 44 36 142 2,365 of which consumption of fixed capital 0 34 500 6 44 36 142 762 of which net operating surplus 0 969 634 0 0 0 0 1,604 1.2 Output 4 4,172 6,558 61 481 394 1,565 13,234 Non-environmental output 1 7 8 of which related products 0 0 0 of which other non-environmental output 1 7 8 Environmental protection output 4 4,171 6,551 61 481 394 1,565 13,226 of which non-market 4 0 0 43 461 304 1,542 2,354 principal 4 0 0 43 461 304 1,542 2,354 secondary 0 0 0 of which market 0 4,171 6,551 18 19 90 23 10,872 principal 0 4,171 6,551 18 19 90 23 10,872 secondary 0 0 0 0 0 0 0 0 of which ancillary n.r n.r 0 n.r n.r n.r n.r 0 1.3 Current env. protection resources 0 4,171 6,551 18 63 90 140 11,033 Market output 0 4,171 6,551 18 19 90 23 10,872 Current transfers 0 0 0 0 44 0 117 162 2. CAPITAL TRANSACTIONS 0 2,371 654 0 106 50 57 3,238 2.1 Gross fixed capital formation 2,453 797 8 60 50 61 3,428 2.2 Other capital uses, net 3 -91 47 -41 2.3 Investment grant received 0 0 8 4 12 2.4 Other capital transfers received 85 52 137 3. FINANCING BY PRODUCERS 4 2,371 654 42 524 354 1,481 5,4301 Information on intermediate consumption of characteristic services is to be found in table 11 below Rounding errors may occurFinancing by Looking at financing by producers of current activity and capital transac- producers tions, we find that 44 per cent corresponding to 2,371 Mill. DKK of the total producers' financing at 5,430 Mill. DKK fall within waste water management. Waste management required a producer financing at 654 Mill. DKK, protection of biodiversity and landscape a producer financing at 524 mill,25 DKK and other environmental protection activities a producer financing at 1,481 Mill. DKK.For waste water management and waste management gross fixed capital formation, obviously, brings about a substantial part of the need for producer financing. For waste management the producer financing would have been even higher if other capital uses were non-negative. Now, -91 Mill. DKK of other capital uses, net is found. It comes from a net selling of land. 26 7. The Use of Characteristic Environmental ServicesUse equals output In this chapter focus is on the use of the output of characteristic environmental services by industries as intermediate consumption and by households and general government as final consumers. The use is determined in a way which corresponds to the output as defined and determined in the previous chapters. Thus, the total output is allocated to industries/institutional sectors which use the characteristic environmental services. Purchasers's prices The output in the previous chapters was valued at basic prices. Seen from the user´s side and in relation to the expenditures for the users and the financing of the expenditures the relevant concept, however, is purchasers´ prices. Thus, in this chapter a bridge between the output at basic prices and the use at purchasers' prices is made.Section 7.1 deals with the use of output from general government while section 7.2 presents information about the use of output from non-financial corporations and households. The statement of the use of the characteristic environmental services in this chapter is used in chapter 8 for the construction of SERIEE table B1: Supply and use tables for characteristic environmental services (see Eurostat, 1994).Non-environmental As the aim of SERIEE table is to highlight the environmental protection output disregarded output only the output which falls within this category is taken into account. It means that the so-called non-environmental output (see table 9, section 1.2) is disregarded in the following. 7.1 Use of Output from General GovernmentMarket and non- The total output of characteristic environmental services from general go- market output vernment at 2,505 Mill. DKK were - as seen from table 9 - divided into market output at 150 Mill. DKK and non-market output at 2,354 Mill. DKK.The market output is assumed to be for intermediate consumption purposes while the non-market output per definition is allocated to government consumption.No VAT etc. It is furthermore assumed that the market output from general government is free from non-deductible value added taxes, product taxes, product subsidies and trade margins. This means that the output at basic prices corresponds to the output at purchasers´ prices. The non-market output is per definition not sold and therefore not subjected to value added tax, product taxes, subsidies or trade margins. Hence, also in this case the output at basic prices equals the output at purchasers´ prices.27 7.2 Use of Output from Non-Financial Corporations and HouseholdsThe environmental output from the industries within non-financial corporations and households was 10,721 Mill. DKK9, which can be entirely attributed to market output. Input-output tables From the industry x industry input-output tables integrated with the Danish national accounts it is possible to establish information about the use of the above-mentioned output. The input-output tables show, among other things, intermediate consumption and final demand of the output from each of 130 industries in the Danish national accounts, including the four environmental industries in focus in the present context. Only environmental In order to use the information from the input-output tables for the output industries it is necessary, however, to clear the information of the use of non-environmental output (fringe benefits and own account software) and - in the case of 900020 Refuse collection and sanitation - for the output coming from the institutional sector general government. This clearing is quite straightforward to carry out. The general government part of output ends up as government consumption, the fringe benefits as final consumption by households and the own account software as intermediate consumption. Basic prices Table 11 shows information from the input-output table on the use of output - table 11 from the four industries after it has been cleared of non-environmental output and the general government part. All entries refer to amounts at basic prices. Intermediate Moving across the table from top to bottom a column shows how the envi- consumption and ronmental output (ESA P.1) from the non-central government part of the final demand corresponding industry is used as intermediate consumption (ESA P.2) and for final demand (ESA P.3).For 370000 Recycling of waste and scrap almost all of the environmental output at 755 Mill. DKK is used for intermediate consumption. Only 1 Mill. DKK goes to households' final consumption.Industries' intermediate consumption of sewage removal were at 29 per cent equal to 1,219 Mill. DKK, while households' use of these services were at 71 per cent equal to 2,951 Mill. DKK. 61 per cent (2,837 Mill. DKK) of the 4,663 Mill. DKK worth of environmental services related to refuse collection and sanitation were used by the industries and 39 per cent (1,826 Mill. DKK) by the households as consumers.For refuse dumps and refuse disposal plants the picture is analogous. 62 per cent (704 Mill. DKK) of the total output at 1,132 Mill. DKK were interme-9 755+4,171+4,663+1,132=10,721 Mill. DKK, see table 9, section 1.2 28 diate consumption and 38 per cent ( 429 Mill. DKK) were final consumption by households.For the total environmental output from the four industries at 10,721 Mill DKK we find that 5,513 corresponding to 51 per cent were used for intermediate consumption and 5,207 Mill. DKK for final consumption by households. 71 Mill. DKK Table 11 shows also the intermediate consumption of environmental ser- environmental vices by the four environmental industries themselves. It shows e.g. that the services used by the use of services from 900010 Sewage removal and disposal by 900020 Re- industries themselves fuse collection and sanitation were 24 Mill. DKK. In total the four industries used environmental services worth of 1, 16, 37 and 17 Mill. DKK, respectively. This gives a total of 71 Mill. DKK of intermediate consumption of environmental services by the four environmental industries. No government It should be observed that no government consumption of these environ- consumption etc. mental services takes place. This is due to the above-mentioned clearing of the central government part of output and use. Thus, the government consumption falls outside table 11.No exports, no investments and no stock changes of environmental services take place. Table 11. Use of characteristic services from non-financial corporations (basic prices) 1994 ESA P.1 Output from: 370000 900010 900020 900030 Total Recyc- Sewage Refuse Refuse ling of removal collection dumps waste and and and and refuse scrap disposal sanitation disposal plants(CEPA 3) (CEPA 2) (CEPA 3) (CEPA 3)Mill. DKK Mill. DKK Per cent Used by: P.2 370000 Recycling of waste and scrap 0 0 1 0 1 P.2 900010 Sewage removal and disposal 2 7 6 1 16 P.2 900020 Refuse collection and sanitation 7 24 0 7 37 P.2 900030 Refuse dumps and refuse disposal plants 1 3 2 11 17 P.2 Other industries 743 1,186 2,828 684 5,442 P.2 Total intermediate consumption 754 1,219 2,837 704 5,513 51P.3 Households' final consumption 1 2,951 1,826 429 5,207 Total final demand 1 2,951 1,826 429 5,207 49 P.1 Total value of use 755 4,171 4,663 1,132 10,721 100 (=value of output of characteristic services) Source: Danish National Accounts (the 1994 input-output table)29 In order to arrive at a statement of the expenditures at purchasers prices by the users of environmental services it is necessary to add value added tax (ESA D.211) and other taxes on the use of output (ESA D.214) and finally to subtract product subsidies (ESA D.319) from the uses at basic prices10.Information about these taxes and subsidies is given below. The information comes from the commodity flow system (supply-use system) underlying the Danish national accounts and input-output tables. For each of the commodities (services) used for intermediate consumption by industries and for final demand the system shows the input at basic prices and the associated trade margins, value added tax, and product taxes less subsidies. VAT - table 12 Table 12 shows the value added taxes corresponding to the transactions in table 11. In total 1,157 Mill. DKK of non-deductible value taxes are paid by the users in connection with the characteristic environmental services. In relation to the use at 10,721 Mill. DKK at basic prices (table 11) the actual rate of non-deductible value added taxes reach approximately 11 per cent. This can be compared with the (theoretical) rate of value added tax at 25 per cent.Low actual rate of It is interesting to note that the proportions of VAT value added tax paid by industries (48 per cent) and by households (52 per cent) are quite close to the proportions found for the uses at basic prices (table 11). It could be expected that the shares of value added tax paid would be lower for industries and higher for households, because industries have, normally, better possibilities of deducting the value added tax. With respect to environmental services it is the case, however, that also households, to a large extent, are exempted from paying value added taxes. This applies for example - as can be seen from tables 11 and 12 - to the services from 900010 Sewage removal and disposal. Value added taxes paid by households are 85 Mill. DKK and the use at basic prices is 2,951 Mill. DKK. This gives a actual value added tax rate at 2.9 per cent. Other taxes and Table 13 presents net figures for other product subsidies - table 13 taxes less other subsidies on products. A total of10 Wholesale and retail trade margins are zero. 30 390 Mill. DKK is found. These product taxes are entirely related to the output of services from refuse collection and sanitation. The net figure includes a tax on waste paid by the industries and households creating the waste. 96 per cent of the tax, net are paid by industries and 4 per cent by households.31 Table 12. VAT on the use of characteristic services from non-financial corporations 1994 ESA D.211 Output from: 370000 900010 900020 900030 Total Recyc- Sewage Refuse Refuse ling of removal collection dumps and waste and and and refuse scrap disposal sanitation disposal plants (CEPA 3) (CEPA 2) (CEPA 3) (CEPA 3)Mill. DKK Mill. Per cent Used by: DKK P.2 370000 Recycling of waste and scrap 0 P.2 900010 Sewage removal and disposal 1 1 2 P.2 900020 Refuse collection and sanitation 0 P.2 900030 Refuse dumps and refuse disposal plants 0 P.2 Other industries 14 446 94 553 P.2 Total intermediate consumption 0 14 447 95 556 48P.3 Households' final consumption 85 419 97 602 P.51 Total final demand 0 85 419 97 602 52P.1 Total value added tax on use 0 99 866 192 1,157 100 Source: Danish National Accounts (the 1994 commodity flow system)Table 13. Other product taxes less subsidies1 on the use of characteristic services from non- financial corporations 1994 ESA D.214- D.319 Output from: 370000 900010 900020 900030 Total Recyc- Sewage Refuse Refuse ling of removal collection dumps and waste and and refuse and scrap disposal sanitation disposal plants (CEPA 3) (CEPA 2) (CEPA 3) (CEPA 3)Used by: Mill. DKK Mill. Per cent DKK P.2 370000 Recycling of waste and scrap 0 P.2 900010 Sewage removal and disposal 1 1 P.2 900020 Refuse collection and sanitation 0 P.2 900030 Refuse dumps and refuse disposal plants 0 P.2 Other industries 375 375 P.2 Total intermediate consumption 0 0 376 0 376 96P.3 Households' final consumption 14 14 P.51 Total final demand 0 0 14 0 14 4P.1 Total other taxes1 on input 0 0 390 0 390 100 1Taxes less subsidies on products except VAT and import taxes Source: Danish National Accounts (the 1994 commodity flow system)32 8. Supply and Use Tables for Environmental Characteristic ServicesThis chapter presents so-called supply-use tables for the characteristic environmental services. The tables corresponds to table B1 of the SERIEE manual (see Eurostat, 1994). Two supply and use tables are presented: One, which shows the supply and use by producers, and one, which is by CEPA classes. The supply and use tables supplement the two SERIEE B tables for production of characteristic environmental services (table 9 and 10) in chapter 6.The tables are based on the information about environmental output as given in the SERIEE B tables (tables 9 and 10, section 1.2) and the information in chapter 7. In order to explain the relation between the supply and use tables and the previous tables and chapters, footnotes with references are provided.Purpose The purpose of the tables is to show:  how the uses of the environmental services valued at purchasers´ prices are allocated to intermediate consumption, final consumption by government and households, capital formation, and exports (section 1 of the tables). how the total supply (at purchasers´ prices) appears as the sum of output at basic prices, imports, non-deductible value added tax and other taxes less subsidies on products (rows 3-6 of the tables).8.1 SERIEE Table B1 by ProducersSERIEE B1 by Table 14 is the supply and use table for characteristic environmental producers - table 14 services by producers.The table heading lists the producers of the environmental services, while the first column text lists the different components of use and supply.Use The total use of characteristic environmental services for intermediate consumption was 6,596 Mill. DKK valued at purchasers´ prices 11. Of this amount 74 Mill. DKK were related to intermediate consumption by the environmental industries themselves12, and 6,522 Mill. DKK to other producers. More than half (3,660 Mill. DKK) of the intermediate consumption of environmental services was provided by 900020 Refuse collection and sanitation as market output.8,176 Mill. DKK were the value at purchasers´ prices of environmental services used for final consumption13. Non-market output from general government was at 2,354 Mill. DKK and market output from 900010 Sewage11 Tables 11-13: 5,513+556+376 Mill. DKK and section 7.1: 150 Mill. DKK 12 Tables 11-13: 1+16+37+17+2+1 = 74 Mill. DKK 13 Tables 11-13: 5,207+602+14 Mill. DKK and Section 7.1: 2,354 Mill. DKK 33 removal and disposal at 3,036 Mill. DKK. Together, this adds up to more than two thirds of the final demand use.There is no use of the environmental services for either gross capital formation or exports.By adding the total intermediate consumption and total final demand for environmental services an amount of total use at purchasers´ prices at 14,772 Mill. DKK is obtained.Supply This amount can also be reached from the supply side by starting from the output at basic prices at 13,226 Mill. DKK (row 3)14, and adding non-deductible value added taxes at 1,157 Mill. DKK and other taxes less subsidies at 390 Mill. DKK.Table 14 - SERIEE B1. Supply and use table for environmental characteristic services by producers - Denmark 1994Non- Market Total market Supply by: General General 370000 900010 900020 900030 Total Govern- Govern- Recycling Sewage Refuse Refuse ment ment of waste removal collection dumps and and scrap and and refuse disposal sanitation disposal plants Mill. DKK 1. Use of resident units (purchaser's price) 2,354 150 755 4,269 5,919 1,325 12,418 14,772 1.1 Use for Intermediate consumption - 150 754 1,233 3,660 799 6,596 6,596 1.1.1 of which specialised producers - 10 34 11 19 74 74 1.1.2 of which other producers - 150 744 1,199 3,649 780 6,522 6,522 1.2 Use for final consumption 2,354 0 1 3,036 2,259 526 5,822 8,176 1.3 Use for gr.cap.formation (land improvement) 0 0 2. Use for exports - 0 0 Total uses (1+2) = total supply (3+4+5+6) 2,354 150 755 4,269 5,919 1,325 12,418 14,772 3. Environmental protection output (basic prices) 2,354 150 755 4,171 4,663 1,132 10,871 13,226 4. Imports 0 0 5. Non-deductible VAT 99 866 192 1,157 1,157 6. Other taxes less subsidies on products 390 390 390 Rounding errors may occur14 Table 11: 755+4,171+4,663+1,132=10,721 Mill. DKK and section 7.1: 2354 + 150 (see also table 10, section 1.2, environmental output). 34 8.2 SERIEE Table B1 by CEPA GroupsSERIEE B1 by Table 15 is the supply and use table for characteristic environmental CEPA - table 15 services by CEPA groups.The table heading lists the environmental services by relevant CEPA classes, while the first column text - as in the case of table 14 - lists the different components of use and supply. Use Starting with the use in section 1 of the table we find that out of the total use at 14,772 Mill. DKK approximately 54 per cent (7,999 Mill. DKK 15) were environmental services aimed at waste management (CEPA 3), and 29 per cent (4,269 Mill. DKK16) services for waste water management (CEPA 2). Table 15 - SERIEE B1. Supply and use table for environmental characteristic services by CEPA groups - Denmark 1994 CEPA 1 CEPA 2 CEPA 3 CEPA 4 CEPA 6 CEPA 8 CEPA 9 Total Supply by: Ambient Waste Waste Soil Biodiver- Research Other Air and Water Manage- and sity and and Env. Pro- Climate Manage- ment Ground Land- Develop- tection ment -water scape ment Activities Mill. DKK 1. Use of resident units (purchaser's price) 4 4,269 7,999 61 481 394 1,565 14,772 1.1 Use for intermediate consumption 1,233 5,213 18 19 90 23 6,596 1.1.1 of which specialized producers 34 40 0 0 0 0 74 1.1.2 of which other producers 1,199 5,173 18 19 90 23 6,522 1.2 Use for final consumption 4 3,036 2,786 43 461 304 1,542 8,176 1.3 Use for gr.cap.formation (land improvement) 0 0 0 0 0 2. Use for exports 0 0 0 0 0 Total uses (1+2) = total supply (3+4+5+6) 4 4,269 7,999 61 481 394 1,565 14,772 3. Output (basic prices) 4 4,171 6,551 61 481 394 1,565 13,226 4. Imports 0 0 0 0 0 5. Non-deductible VAT 99 1,058 0 0 0 0 1,157 6. Other taxes less subsidies on products 0 390 0 0 0 0 390 Rounding errors may occur15 Table 10: 6,551 Mill. DKK , table 12: 0 + 866 + 192 Mill. DKK, table 13: 390 Mill. DKK. 16 Table 10: 4,171 Mill. DKK, table 12: 99 Mill. DKK. 35 The services related to waste water management were to a large degree used for final consumption (3,036 Mill. DKK17), while the services for waste management were more directed towards intermediate consumption (5,213 Mill. DKK18). Services for protection of biodiversity and landscape (CEPA 6), and research and development (CEPA 8) were worth 481 Mill. DKK and 394 Mill. KK, respectively19. The major part was used for final demand (government consumption)20.Supply On the supply side we see that almost all value added taxes and all other taxes, net were related to waste management (CEPA 3).17 Table 11: 2,951 Mill. DKK, table 12: 85 Mill. DKK. 18 Table 11: 754+2,837+704 Mill. DKK, table 12: 447+95 Mill. DKK, table 13: 376 Mill. DKK 19 Table 10 20 The intermediate consumption part is given by the market output from general government (see table 3). The final demand part is the residual in relation to the total government output (see table 1) within CEPA groups 36 9. National Expenditure - SERIEE Table ANational expenditure Table 16 shows the national expenditure related to characteristic environ- - table 16 mental services. The table is identical to table A of the SERIEE manual (Eurostat, 1994), except for the fact that the general table A of the SERIEE manual also includes information of so-called adapted and connected products. These are not included in table 16, because only characteristic environmental services are in focus in this report.All numbers in table 16 come from the tables in the previous chapters. In order to explain the relation between the other tables and table 16, footnotes with references are also provided in this chapter.Definition of national National expenditure for environmental protection related to characteristic expenditure for environmental services (row section 7 of table 16) is defined as the sum of environmental (Eurostat, 1994 p. 39): protection a) final consumption of characteristic environmental services (row 1.1) b) intermediate consumption of environmental services by resident units other than for characteristic activities (row 1.2). Intermediate consumption for other characteristic services are excluded in order to avoid double counting c) gross capital formation (and acquisitions less disposals of non- produced non-financial assets) for characteristic activities (row 2) d) gross capital formation in characteristic services (row 3) e) specific transfers (current and capital) of resident units which are not a counterpart of previous items (row 4)21. f) less financing by the rest of the world (row 6)Users/beneficiaries The national expenditure and its components are classified by users/beneficiaries i.e. the groups which actual use or benefit from the environmental protection expenditures. Please observe that this is not necessarily the same groups which actually pay for or bear the burden of financing the expenditures (that issue is highlighted in the next chapters, instead). The users/beneficiaries are listed in the heading of table 16. Total national According to row 7 in table 16 the total national expenditure related to cha- expenditure racteristic environmental services are 18,120 Mill. DKK. This expenditure consists of consumption of characteristic services at 14,699 Mill. DKK. (row 1), a gross capital formation necessary for the production of environ21 The SERIEE manual includes subsidies on the production of characteristic services as part of the national expenditure. This seems at first a little strange, but the implicit reason must be an assumption that the subsidies lowers the value of output, and thus understates the real expenditures when the services are sold. In cases where the subsidies are turned into higher operating surplus and mixed income this does not hold. 37 mental services at 3,387 Mill. DKK ( row 2), specific transfers at 47 Mill. DKK (row 4). This gives a sum of uses at 18,132 Mill. DKK (row 5) of which 12 Mill. DKK are financed by the rest of the world (row 6). Final consumption Looking at the consumption of characteristic environmental services we find final consumption by central government, local government and households at 901 Mill. DKK, 1,453 Mill. DKK, and 5,822 Mill DKK (respectively)22.Intermediate Intermediate consumption of environmental services is at 6,522 Mill. DKK23. consumption The users of the intermediate consumption are non-characteristic producers, i.e. producers not involved in the production of characteristic services. In table 16 intermediate consumption by the specialised producers (74 Mill. DKK) is not included in order to avoid double counting (the expenditures are per definition included - and paid for - when the final output from characteristic producers are made up from the input/cost side). Total The total intermediate and final consumption of characteristic environmental services at 14,699 Mill. DKK correspond to the specification in table 14 of the total use at 14,772 Mill. DKK, when the intermediate consumption at 74 Mill. DKK by specialised producers is accounted for.GFCF The gross capital formation for production of environmental services is split between the general government (225 Mill. DKK) and other specialised producers i.e. the four environmental industries mentioned earlier (3,162 Mill. DKK24).Specific transfers etc. Specific transfers, consisting of 47 Mill. DKK of other subsidies on production - originally given to the producers of characteristic services - are split between non-characteristic producers (24 Mill. DKK) and households (23 Mill. DKK) as users, because they are the ones, which ultimately use the characteristic services.25 26Table 16 - SERIEE A. National expenditure related to characteristic environmental services - Denmark 1994 Producers General Households Rest Total government as actual of the as consumers world collective consumerSpecialized Other producers producers22 Total local and central government consumption 3,354 = 901+1,453 Mill. DKK, see non-market output in table 14. The split between local and central government is found by subtracting market output from total output: 1,034 - 133= 901 mill. DKK and 1,470-17= 1,453 Mill. DKK, see tables 1 and 2. Household consumption is obtained as market output for final consumption, see table 14. 23 Table 14 intermediate consumption by other producers. 24 Table 9: gross fixed capital formation plus other capital uses, net, general government 178+47=225 Mill. DKK. Others: 76+2,453+548+173+3-88-3=3,162 Mill. DKK. 25 Table 9, section 1.1 , other subsidies: 47 Mill. DKK. The split between users are made in proportion to the use of characteristic services at basic prices as seen in table 11 (5,442 and 5,207 Mill. DKK respectively). 26 Please observe that only other subsidies on production are included, because product subsidies are not shown explicitly in table 9. This means that the environmental expenditures are understated by the product subsidies. 38 COMPONENTS OF NATIONAL General Other Non- Non- Central Local EXPENDITURE FOR government specialized characteristic government government ENVIRONMENTAL PROTECTIONMill. DKK 1. Consumption of specific products 0 0 0 6,522 901 1,453 5,822 0 14,699 1.1 Final consumption of environmental - - - - 901 1,453 5,822 - 8,176 protection services market ------5,822 - 5,822 non-market - - - - 901 1,454 - 2,354 1.2 Intermediate consumption of n.r n.r 0 6,522 - - - - 6,522 environmental protection services market n.r n.r 0 6,522 - - - - 6,522 ancillary n.r n.r 0 - - - - - 0 2. Gross capital formation for 225 3,162 0 - - - - - 3,387 environmental protection activities1 3. Gross capital formation in specific n.r n.r 0 0 - - - - 0 products 4. Specific transfers n.r n.r 0 24 0 0 23 0 47 4.1 subsidies on production2 n.r n.r 0 24 0 0 23 0 47 environmental protection services n.r n.r 0 24 0 0 23 0 47 4.2 other specific transfers (-) (-) (-) 0 0 0 0 0 0 current (-) (-) (-) 0 - - 0 0 0 capital (-) (-) (-) 0 - - - 0 0 5. Total uses of resident units (1+2+3+4) 225 3,162 0 6,546 901 1,453 5,845 0 18,132 current uses - - 0 6,546 901 1,453 5,845 0 14,745 capital uses 225 3,162 0 0 - - - 0 3,387 6. Financed by the rest of the world 0 0 0 0 12 0 0 0 12 current uses - - 0 0 12 0 0 0 12 capital uses 0 0 0 0 - - - 0 0 7. National expenditure for 225 3,162 0 6,546 889 1,453 5,845 0 18,120 environmental protection (5-6) current - - 0 6,546 889 1,453 5,845 0 14,735 capital 225 3,162 0 0 - - - 0 3,3871 And their acquisition less disposal of non-produced non-financial assets 2 Includes only other subsidies on production and not product subsidies Rounding errors may occur39In addition to the subsidies on production 162 Mill. DKK27 of subsidies are paid to general government characteristic producers as specific transfers. These subsidies are not included in section 4 of table 16. The reason is that the subsidies go to non-market producers, and that the subsidies are not de- ducted at the cost based estimation of output. This means that the value of the services are unaffected by the subsidies and an inclusion of the subsidies in table A would then overstate the real expenditures.European Union 12 Mill DKK of subsidies28 are paid by the European Union to general government. The amount is entered as a subsidy to general government as collective consumer in table 16. It can be discussed, of course, whether this amount should be included at all. The reason again is that the subsidy goes to cost based non-market output, and that the subsidy as such hasn't lowered the value of output. However, the amount is included in the table because it seems appropriate to show the amount flowing into the Danish economy in relation to the characteristic environmental services.Total national National expenditure for characteristic environmental services in Denmark expenditure are 18.1 billion DKK in 1994 as stated above. As already noted some expenditure items could not be included in this report. For some items not covered preliminary estimates have been made in the 1996 report by Statistics Denmark (Nordentoft and Vesselbo, 1996). For example connected and adapted products have been estimated at about 1.7 billion DKK and national expenditure related to ancillary activities in industry at about 2.7 billion DKK (the 1996 report made major reservations on the quality and representativity of the data and estimation procedures underlying the latter estimate). However, these figures may give a first illustration of the orders of magnitude of some of the items not covered in this report. This also illustrates that with the data derived directly from the national accounts a very substantial part of the observable environmental protection expenditure and activities can be described at relatively low costs.27 Table 9, section 1.3 28 Table 6: Transfers received by central government from the European Union. 40 10. Financing - SERIEE Table C Financing of national The purpose of table 17 - corresponding to table C of the SERIEE manual expenditure - table 17 (Eurostat 1994) - is to identify the way in which the national expenditure, as stated in table 16 (SERIEE A), is financed by units of the various sectors of the economy. The users/beneficiaries in the heading of the table are those of table 16. The financing units are regrouped according to institutional sectors in the first column (Eurostat, 1994 p. 62).Financing units For each component of national expenditure as figured in table 16, the financing unit, i.e. the unit actually bearing the expenditure, is identified in the first column text in table 17. The total national expenditure by resident units is 18,120 mill. DKK as seen in the last row of table 17 (and table 16). When 12 Mill. DKK of subsidies from the European Union to central government as collective consumer is added the total national expenditure of 18,132 Mill. DKK is reached. The financing of this amount is carried by general government by 2,763 Mill. DKK (15 per cent), corporations by 9,548 Mill. DKK (53 per cent) and households by 5,822 Mill. DKK (32 per cent).Central government Looking at the central government financing of 1,225 Mill. DKK the table financing reveals a breakdown on the users/beneficiaries side including 140 Mill. DKK29 for general government as producers, 137 Mill. DKK 30 for other specialised producers, 24 Mill. DKK31 for non-characteristic producers, 901 Mill. DKK32 for general government as consumer, and 23 Mill. DKK33 for households as consumers.Financing by local Local government finances a total of 1,539 Mill. DKK of the national ex- government penditure related to characteristic environmental services. 85 Mill. DKK34 are for the benefit of general government as producers and 1,453 Mill. DKK35 are for the benefit of local government as collective consumer.Financing by Financing by corporations is at 9,548 Mill. DKK of which 3,025 Mill DKK 36 corporations and 6,522 Mill. DKK37 benefit other specialised producers (i.e. the environmental industries) and non-characteristic producers, respectively. Financing by For households table 17 reveals a financing at 5,822 Mill. DKK38. This fi- households nancing corresponds to the market output of characteristic environmental services bought by households and, thus, used by households.29 Table 7: 128.3 Mill. DKK of gross fixed capital formation + Table 9, row 2.3: 12 Mill. DKK of investment grants (assumed to be grants from central to local government) 30 Table 9, row 2.4: Other capital transfers received by other specialised producers (137 = 85+52 Mill. DKK) 31 Table 16: subsidies production to non-characteristic producers 32 Table 16: Collective consumption by central government of non-market output. 33 Table 16: Subsidies on production to households as actual consumers 34 Table 7: 97 Mill. DKK of gross fixed capital formation by local government - Table 9, row 2.3: 12 Mill. DKK of investment grants received from central government, see footnote 29. 35 Table 16: Collective consumption by local government of non-market output. 36 Table 16, row 2: 3,162 Mill. DKK of gross fixed capital formation by specialised producers. Table 9, row 2.4: Other capital transfers received from central government (137 = 85+52 Mill. DKK), see footnote 30. 37 Table 16: market output sold to non-characteristic producers 38 Table 16:, section 1.1: final consumption of market output 41 Financing of current The last column in table 17 shows the financing of total current expenditures expenditures by the financing sectors. Financing of capital expenditures can be obtained by subtracting financing of current expenditures from financing of total expenditures.39 Table 17. SERIEE C. Financing related to characteristic environmental services - Denmark 1994 USERS/BE NEFICIARProducers General Households Rest of Total Of which : IES government as actual the World current as collective consumers expendi- consumer tureFINANCING UNITS Specialized Other producers producers General Other Non- Non- Central Local government specialized charac- government government & NPISHs teristicMill. DKK 1. General government 225 137 0 24 901 1,453 23 0 2,763 2,401 Central government 140 137 0 24 901 23 1,225 948 Local government 85 1,453 1,539 1,453 2. NPISHs ------0 0 3. Corporations 0 0 0 0 0 0 9,548 6,522 Specialized producers 3,025 3,025 0 Other producers 0 6,522 6,523 6,522 4. Households 5,822 5,822 5,822 NATIONAL EXPENDITURE 225 3,162 0 6,546 901 1,453 5,845 0 18,132 14,745 Rest of the World 12 12 12 Uses of resident units 225 3,162 0 6,546 889 1,453 5,845 0 18,120 14,735 Rounding errors may occur39 The source for the information of financing of the current expenditures is the same as for total expenditures, see footnotes 29-38. 42 11. Financial Burden - SERIEE Table C1Definition of financial The financial (or cost) burden of environmental protection related to cha- burden racteristic environmental services is the burden of units, industries and institutional sectors to the financing of current national expenditure for environmental protection plus calculated interest payments on fixed capital less any net operating surplus (in the case of specialised producers) (Eurostat, 1994 p. 44).Table 18 Table 18 shows the financial burden related to the financing of current expenditures and the interest payments of fixed capital less operating surplus. The heading shows the sectors, which bears the financial burden. The first column text shows the elements of the financial burden.National current Table 17 showed that the total national current expenditure at 14,745 Mill. expenditure was financed by general government, corporations and households by 2,401 Mill. DKK, 6,522 Mill. DKK and 5,822 Mill. DKK, respectively. This financing is found as a financial burden in the first row of table 18.VAT The second row of table 18 subtracts 1,157 Mill. DKK as received value added tax from the financial burden borne by general government 40. Value added tax received by general government in connection with the intermediate consumption for production of characteristic environmental services is by convention of the SERIEE manual not subtracted from the financial burden of general government. The implicit reason must be that this value added tax is not related to the environmental services, but instead to products used as inputs. Thus, the value added tax would have been collected as well if the inputs were used for other purposes.Other taxes Row 3 subtracts 54 Mill. DKK of taxes on production of characteristic environmental services (excluding product taxes) from the environmental burden of general government41. Net operating surplus Net operating surplus does not constitute actual outlays for market specialised producers (Eurostat, 1994, p. 65). Therefore, these surpluses amounting to 1,604 Mill. DKK42 are subtracted from the environmental industries in row 4. Interest of fixed Finally, table 18 includes a financial burden of 381 Mill. DKK correspon- capital ding to the interest of fixed capital. The burden is split between environ mental industries (267 Mill. DKK) and general government (114 Mill. DKK) 43. 40 Table 12: Total non-deductible value added tax related to the use of characteristic environmental services. 41 Table 9, section 1.1: taxes on production. 42 Table 9, section 1.1, total net operating surplus 43 The interest on fixed capital is, arbitrarily, calculated as 50 per cent of the consumption of fixed capital. Based on table 9, section 1.1 we get: for environmental industries: .267 = 0.5 *(534 = 76+34+350+74) Mill DKK. For general government 114 = 0,5*228 Mill. DKK. 43 Table 18. SERIEE C1. Financial burden related to characteristic environmental services - Denmark 1994ELEMENTS OF ENVIRONMENT- Corporation Households General Total RELATED FINANCIAL BURDEN Environmental Non-environ- government industries mental industries Mill. DKK 1. Financing of current national expenditure 0 6,522 5,822 2,401 14,745 2. Nondeductible VAT on current expenditure - - -1,157 -1,157 3. Taxes on production - - - -54 -54 4. Net operating surplus -1,604 - - - -1,604 5. Any other profits - - 0 6. Interest on fixed capital 267 0 114 381 A. Financial burden of env. protection (1+2+3-4-5+6) -1,337 6,522 5,822 1,305 12,312Rounding errors may occur44 ReferencesEurostat, 1994: SERIEE 1994 Version. Statistical Document, 8E. ECSC- EC-EAEC, Brussels - Luxembourg Eurostat,1996: European System of Accounts - ESA 1995, ECSC-EC- EAEC, Brussels - Luxembourg Nordentoft, Anders and Vesselbo, Eyvind, 1996: SERIEE. Report to Eurostat. Statistics Denmark. Statistics Denmark, 1997: New National Accounts 1988-1996: ESA 95. Statistiske Undersøgelser nr. 47. Statistics Denmark, 1998: Statistiske Efterretninger, Nationalregnskab, offentlige finanser og betalingsbalance, 1998:23.Statistics Denmark, 1999: Nationalregnskabsstatistik 1997. Danmarks Statistik, Februar 1999.

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