Emission Permits
Thomas Olsen, Statistics Denmark
Presented by Ole Gravgård, Statistics Denmark
Prepared for the 13th London Group meeting,
Brussels, 29 September – 3 October 2008
Outline of presentation
• Treatment in SNA93, SEEA 2003 and SNA 2008
• Further developments for SEEA
– Physical flows
– Monetary flows
– Link to environmental taxes
– Some examples
• Points for discussion
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Treatment of emission permits
• AN.22 Non-financial intangible non-produced
assets (AN. 222 Leases and other transferable contracts)
SNA 1993
SEEA 2003
Other changes in volumes of assets: appearance
Capital account: sale
Revaluation account: change in market value
SNA 2008
Revised SEEA
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• Purchase from Government: Other taxes on
production
+ Creation of assets (other changes in volumes)
• SNA 2008 with extensions
Further developments for SEEA
• Accounts for the physical flows
– Link to the use of energy, emissions, economy, etc.
– Link between actual emissions and emission targets
• Who owns, holds and trades the permits?
• What is the relationship between the emissions of CO2 and
the emission permits?
• Have the industries acquired a sufficient number of permits
compared to their CO2 emissions?
• Basis for the national accounts’ treatment
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Further developments, cont.
• A supplementary description of the monetary flows
– Highlight the flows in order to understand the permit market
and the effects on the economy
• What is the value of the trade?
• Is it the energy companies or manufacturing industries that buy
permits in order to undertake their activities?
• What is the role of non-emitters (e,g. investment banks)
interested in the permits from an arbitrage perspective only?
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Further developments, cont.
• Link to the environmental taxes
– Describe the total economic regulation of – and
burden on - the industries
• The cost of CO2 permits in relation to the environmental
related taxes
• The value of the permits received for free in relation to
(other) environmental related subsidies
• Extending the environmental tax accounts to include the
costs of surrendering permits in general
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Link to use of energy, emissions etc.
Gross use of energy, CO2 emissions, CO2 permits and the link to the economy. Denmark, 2005.
Industries
Gross use
CO2
of energy emissions
TJ
Total
Households
1
2
3
4
5
6
7
8
7
Total industries
Agriculture, fishing and quarrying
Manufacturing
Electricity, gas and water supply
Construction
Wholesale and retail trade; hotels, rest.
Transport, storage and communication
Financial intermediation, business active.
Public and personal services
Emission permits
13th London Group meeting
Surren- CO2 permits
dered allocated
permits
Energy
related
taxes
1 000 tonnes CO2 / allowances
Energy Gross value
related
added
subsidies
Mill. Dkk
1 810 902
268 311
1 542 591
95 486
13 843
81 642
26 471
0
26 471
37 371
0
37 371
36 370
21 764
14 606
81 618
469 705
338 207
18 692
43 601
528 299
17 755
44 715
4 988
8 356
25 964
1 369
1 269
37 950
471
1 275
2 328
5 438
18 704
0
0
0
0
0
3 056
7 525
26 790
0
0
0
0
0
931
2 251
95
1 193
2 193
2 954
1 323
3 667
Employment
Persons
244 1 164 096 2 722 123
25
206 1 164 096 2 722 123
3
106
1
1
10
4
10
72
63 924
167 395
21 917
59 979
159 227
105 643
282 641
303 370
85 614
384 504
13 219
170 236
518 404
176 861
397 900
975 385
Physical stocks and flows of permits
Physical balance sheet
Industries
Opening
stock
Closing
stock
Grand- Purchased
fathered
(1)
(2)
CDM JI credits
credits
(3)
(4)
Sold
Surren- Surrendered
dered
allowan- (fines, etc)
ces
(6)
(7)
(8) (=1+...+56-7-8)
(5)
1 000 allowances / 1 000 tonnes CO2
Total
Households
1
2
3
4
5
6
7
8
Total industries
Agriculture, fishing and quarrying
Manufacturing
Electricity, gas and water supply
Construction
Wholesale and retail trade; hotels, rest.
Transport, storage and communication
Financial intermediation, business active.
Public and personal services
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+
+
+
+
÷
÷
÷
=
Monetary stocks and flows of permits
Monetary balance sheet
National Accounts Industries
Opening
stock
Closing
stock
Grand- Purchase
fathered
d
(1)
(2)
(3)
CDM JI credits
credits
(4)
Sold
(5)
Mill. [currency]
Total
Households
1
2
3
4
5
6
7
8
9
Total industries
Agriculture, fishing and quarrying
Manufacturing
Electricity, gas and water supply
Construction
Wholesale and retail trade; hotels
Transport, storage and comm.
Financial intermediation, business
Public and personal services
Emission permits
13th London Group meeting
Surrendered
allowances
(6)
(7)
Surren- Revaluadered
tion
(fines,
etc)
(8)
(9) (=1+...+5
-6-7-8+9)
Link between Danish emissions and targets
Tonnes CO2
110.000
Total emissions in
environmental
accounts
90.000
Difference
explained in
bridge table
70.000
Total emissions
reported to IPCC
Extra permits
explain the
gap
50.000
Kyoto emissions
level obliged to
30.000
1990
10
1992
1994
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13th London Group meeting
1996
1998
2000
2002
2004
2006
2008
Permits as a part of the environmental taxes
Traditional
environmental
taxes
Permits defined
as taxes
(SNA 2008)
Permits
Other
surrendered
permits
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Accounts for
environmental
related taxes
Accounts
for total
economic
regulation
Points for discussion
• Do you agree that the SEEA should follow the SNA 2008 as
a starting point (accepting the tax treatment)?
• Should the revised SEEA be developed to include the
physical flows of the permits?
• Should the revised SEEA offer supplementary information
highlighting the monetary flows related to the permits?
• Do you agree that environmental tax accounts should be
extended/supplemented to include the costs of
surrendering permits in general?
• How to proceed?
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Contact information
Thomas Olsen, Statistics Denmark
E-mail: Tol@dst.dk
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