National Accounts
Environmental Accounting
How to “educate” the users to
the potential of using
environmental accounts for
development policies: the case
of Italy
Cesare Costantino
10th London Group Meeting
United Nations Headquarter Complex
New York, 10-21 June 2006
“Educating” the users: a special issue
for environmental accounting
SEEA: Chapter 11
(on applications and policy uses)
examples
what can reasonably be done by statistical offices
on their own and what they would have to
undertake in collaboration with other agencies
Issues included in the research agenda
need for “educating” the users to the potential of using
the accounting approach for analysis and policy making
C. Costantino - Istat
The Italian experience
 Promotion
 Adoption of high level decisions
 Discussion in the Parliament
how to make users’ aware about the potential
of using environmental accounts still a
crucial issue in Italy
C. Costantino - Istat
Joint work by Istat and the Ministry of
Economy and Finance
• project launched in autumn 2004
• aimed at identifying ways in which environmental
accounting can improve the design, monitoring and
evaluation of development policies
• national knowledge management program
adopted by the CIPE
• follow up launched in spring 2006
Difficulties in managing the financial resources obtained
C. Costantino - Istat
Istat’s partner in the project
Ministry of Economy and Finance (MEF)
Department for Development and Cohesion Policies
Public Investment Technical Evaluation and Monitoring Unit
Public Investment Evaluation Unit (UVAL)
UVAL provides:
• technical support to public administrations. Specific tasks
include to help improve effective spending and to favour
better performance of European structural funds
• evaluations of various aspects of investment programmes
and development projects
especially interested in regional environmental accounts
C. Costantino - Istat
Main results of the Istat - Ministry of
Economy and Finance joint project
Specific objectives reached:
•
defined a framework
• identified a subset of environmental accounting aggregates especially
important for development policies
• calculated, on an experimental basis and by way of example, regional
estimates of some of the aggregates identified as especially important;
• formulated general hypotheses in order to start up a system of periodic
production of selected environmental accounting data on a regional scale
• disseminated a methodological document: “Development policies and the
environment: using environmental accounts for better decision making”
(htpp://www.dps.mef.gov.it/materialiuval)
C. Costantino - Istat
Main steps of the joint work
 concept of development policy in operational terms
 UVAL experts aware about the features of environm.
accounting and the specific outputs stemming from it
 examples of policy-makers’ questions concerning
environmental issues, to which environmental accounting
data can provide proper answers
 generalising of the policy-makers’ demand and
the corresponding supply by environm. accountants
 priorities for further work on environmental
accounting at Istat
C. Costantino - Istat
Operational definition of the
development policy concept
focus on capital
government decisions aimed at either directly or indirectly helping
to conserve and increase the stock of public and private capital
enlarged concept of capital
produced capital, human capital, natural capital, knowledge
capital, social capital
the natural capital
according to the SEEA concept and guidelines (e.g. & 1.23 of
the handbook on the different functions of the natural capital)
C. Costantino - Istat
Main features of
development policies
• objectives
conservation/ growth of the capital stock (different forms)
conservation/ growth of the stock of a given form of cap (specific components)
reduction of territorial disparities concerning capital stock
• target groups
different institutional sectors, different industries, different social groups
• instruments
public expenditure
fiscal system
regulation
public help for capacity building
focus on allocation of expenditure to stocks of capital, sectors, territories
C. Costantino - Istat
Allocative decisions by kind and
related policy-maker questions
kind of
allocation
among
different
forms of
capital
examples of questions
Which share of the materials used in production and
consumption processes ends up in residuals and
which share is turned into produced capital?

To what extent is the natural resources’ intake
needed to satisfy the key economic sectors’
requirements?

C. Costantino - Istat
Allocative decisions by kind and
related policy-maker questions
kind of
allocation
among
different
target
groups
examples of questions
What is the relationship between the economic
performance and the environmental performance of
various production activities?

Are the economic activities that pollute the most the
same ones that spend the most on environmental
protection?

C. Costantino - Istat
Allocative decisions by kind and
related policy-maker questions
kind of
allocation
examples of questions
Are there significant differences among territories in
terms of the availability of various natural resources
and their quality?

among
distinct
territories
Are the territories with the greatest pollution and
degradation the same ones that spend the most on

environmental protection?
C. Costantino - Istat
Answers from
environmental accounts
framework
focus on
how
examples
SEEA and ESEA
stress on main topics addressed, main phenomena
described and their type, stage of the DPSIR circuit at
issue
environmental accounting modules for which handbooks,
compilation guides, standard tables are available within the
ESS: EW-MFA, NAMEA, EPEA, asset accounts
- direct use of empirical evidence provided by env. accounts
- indirect use of data provided by env. accounts as an input
for modelling
based on data regularly produced by Istat
C. Costantino - Istat
Questions-answers: a framework
POLICY-MAKER QUESTIONS
Choice of objectives
Allocation
among forms
of capital
Allocation
among
territories
Choice of policy
instruments
ENVIRONM.
ACCOUNTING
MODULES
in what way can
A SPECIFIC
ENVIRONMENTAL
ACCOUNTING
MODULE be used
for the DIFFERENT
TYPES OF
ALLOCATIVE
DECISIONS
in what way can
DIFFERENT
ENVIRONMENTAL
ACCOUNTING MODULES
be used for A SPECIFIC
TYPE OF ALLOCATIVE
DECISION
C. Costantino - Istat
The potential of using env. accounts
at the individual decision stages
Choice of objectives
• allocation of resources among forms of capital
the information provided by environmental accounts for the
different forms of natural capital is of crucial importance, because
the degradation of the natural resources in question can, in the
medium- to long-term, compromise the prospects for development
of key economic sectors
• allocation of resources among territories
the information makes it possible to take into account the
differences in the respective environmental situations deemed
capable of impacting on the gaps in development
C. Costantino - Istat
The potential of using env. accounts
at the individual decision stages
Choice of policy instruments
• choice of mechanism (expenditure, fiscal and/or regulation policies)
the information provided by environmental accounts is deemed
reduced
• choice of target groups
the information appears especially important. Environmental
accounts can also provide indications for the fine-tuning of the
parameters of intervention tools (for example, determination of the
price changes needed to bring about changes in behaviour)
C. Costantino - Istat
Value added of the individual
environmental accounts
In relation to allocative decisions
• environmental accounts able, by their very nature, to provide
useful support for some decisions, not for others
• able to provide useful support by favouring the reading of
certain information at times and the reading of other information
at other times: they can be read at various levels and for
various objectives
• able to provide information not otherwise available from
other sources
• able to provide more complete and/or more detailed
information compared with other sources
C. Costantino - Istat
Value added of the individual
environmental accounts
For purposes of ex post evaluation of development policies
• the potential of using environmental accounts appears to be reduced, due
to the difficulty of distinguishing the effects of the public intervention and
effects originating from other causes
C. Costantino - Istat
A prioritisation exercise
key factors: importance for development policies, feasibility
C. Costantino - Istat
The case of Italy: some lessons learnt
 Users’ interest
• money for the project obtained from a public fund for the enhancement of
knowledge in general, not from a budget specific for environmental issues
• users’ willingness to assess the potential of using environmental accounts
due to their involvement in public expenditure
 Users’ capacity to understand environm. accounting
• examples of policy-makers’ questions concerning environmental issues
to which environmental accounting data can provide proper answers
• calculation of indicators identified as especially important
• focus on data regularly produced
 Funding
• after all, despite the Ministry’s willingness to pay, the society on the one
hand and the statistical system on the other hand are not really engaged
in developing environmental accounts and their use
C. Costantino - Istat
questions/points for discussion
 How to arouse users’ interest
• focusing on the need to integrate environmental and economic aspects
as a standing alone point, or making a major effort to address knowledge
issues with reference to overall sustainable development?
• are there specific users’ interests (e.g. improving public expenditure) on
which it is advisable to focus on?
 Finding best ways to dialogue with users
• to make use of a “questions-answers framework”?
• to avoid controversial issues, starting discussion from those accounts for
which handbooks, compilation guides, standard tables are available,?
• to concentrate on environmental accounts/aggregates deemed especially
important?
• to start discussion from those accounts that are already produced on a
regular basis?
• what else?
C. Costantino - Istat
questions/points for discussion
 To develop “methodological” documents
specifically aimed at “educating” users?
 Can an action aimed at “educating” users help
to elevate the SEEA to an international statistical
standard? and if so, how?
 How to make the society and the statistical
system actually engaged in developing
environmental accounts and their use?
C. Costantino - Istat
Thank you
for your kind attention
C. Costantino - Istat