4655.0 - Australian Environmental-Economic Accounts, 2019 Quality Declaration 
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 26/07/2019   
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EXPLANATORY NOTES

INTRODUCTION

Australian Environmental-Economic Accounts (AEEA) contains accounts for key environmental themes. The AEEA is data focused, with minimal interpretation or analysis.

In the AEEA, accounts are provided for environmental assets, water, energy products, greenhouse gas (GHG) emissions, and environmentally related taxes. The publication highlights the capacity of environmental accounts to support analyses across various environmental themes and also between environmental and economic themes. Where available, a time series of information has been provided for each of the environmental themes. As the ABS has developed its environmental accounting program incrementally, the different accounts have time series of varying lengths. A summary of work undertaken by the ABS in the area of environmental accounting is provided below. Information about the System of Environmental-Economic Accounting (SEEA) Central Framework, which provides the conceptual framework of the AEEA, also appears below. References are also made to related ABS environmental accounts publications for further guidance on data sources, concepts and estimation methodologies. Please see the Glossary for brief definitions and descriptions of terms used in the AEEA.


SYSTEM OF ENVIRONMENTAL-ECONOMIC ACCOUNTING

The AEEA is based on the SEEA Central Framework. The SEEA Central Framework is a conceptual framework designed to support understanding and measurement of the interactions between the economy and the environment, and the stocks and changes in stocks of environmental assets. The SEEA Central Framework was adopted by the United Nations Statistical Commission as an international statistical standard in 2012.

The SEEA Central Framework uses a systems approach to organise environmental and economic information, covering, as completely as possible, the stocks and flows that are relevant to the analysis of environmental and economic issues. In using this approach, the SEEA Central Framework applies the accounting concepts, structures, rules and principles of the System of National Accounts (SNA). In practice, environmental-economic accounting includes the compilation of physical supply and use tables, functional accounts (such as environmental taxation accounts and environmental expenditure accounts), and asset accounts for natural resources.

The integration of information concerning the economy and the environment is an interdisciplinary exercise. The SEEA Central Framework brings together, within one measurement system, information on water, minerals, energy, timber, fish, soil, land and ecosystems, pollution and waste, production, consumption and accumulation. Each of these areas has specific and detailed measurement approaches that are integrated in the SEEA Central Framework to provide a comprehensive view.

The SEEA Central Framework provides a foundation for related topic and theme specific statistical publications. A SEEA module related to water (‘SEEA-Water’) has been in operation since 2007, and a module related to agriculture, forestry and fisheries ('SEEA-AFF') has been endorsed by the United Nations as an Internationally Agreed Methodological Document in support of the SEEA Central Framework. A further SEEA module related to energy (SEEA-Energy) was published in 2019.


ENVIRONMENTAL ACCOUNTING IN THE ABS

The ABS first published environmental accounts in 1995, beginning with monetary estimates for a number of environmental assets within scope of the SNA asset boundary. In particular, estimates for subsoil assets and forests and land were developed within the ABS national accounts program and these are now an established feature of the national balance sheet within the Australian System of National Accounts (cat. no. 5204.0). Also during the 1990s the ABS commenced a program of environmental accounts development within its environmental statistics area and this program continues to drive the development of these accounts within the ABS often in partnership with other agencies.


SUMMARY INDICATORS

Estimates included in this data cube are broad indicator series, as well as their components, to allow users to assess the changing patterns of use/ consumption of environmental assets. It also includes indicator series for the emissions of Green House Gases (GHG), and Waste generation estimates (excluding fly ash) sourced from the Department of the Environment and Energy, National Waste Report.


SOCIO-ECONOMIC INDICATORS

Intensity Indicators

Resource intensity is a measure of the resources required for the provision of a unit of a good or service. Intensity represents a ratio of resources used to produce a unit of economic value. Intensity calculations are based on the System of Environmental-Economic Accounting (SEEA) basis, using the net use of natural resources by industry divided by the Gross Value Added (GVA).

Per Household Indicators

Per household calculations are based on resource consumption/ use/ generation by Australian households divided by the number of households in Australia. These figures highlights the consumption/ use/ generation patterns of households.

Per Capita Indicators

Per capita calculations are based on total consumption/ use/ generation for Australia divided by the population. Doing so allows the intensity of resource consumption/ use/ generation as a factor of the Australian resident population to be estimated.


ENVIRONMENTAL ASSETS

Estimates of the value of some environmental assets are included in the Australian System of National Accounts (cat. no. 5204.0) in inventories (e.g. plantation forests) and non-produced assets (e.g. land, minerals, timber in native forests), and are produced according to the SNA. The definition, classification, scope and valuation of environmental assets contained in AEEA is defined by the SEEA Central Framework. The SEEA Central framework uses the term environmental assets, which in other contexts is referred to as natural capital.

Scope

SEEA defines environmental assets as being "the naturally occurring living and non-living components of the Earth, together comprising the bio-physical environment that may provide benefits to humanity". Within the SEEA, assets are measured in both physical and monetary terms, whereas the SNA relates only to monetary information.

Monetary valuation of environmental assets is applied only to those assets meeting the SNA definition of an asset. SNA defines an asset as "a store of value representing a benefit or a series of benefits accruing to the economic owner by holding or using the entity over a period of time. It is a means of carrying forward value from one accounting period to another". The SNA and the SEEA Central Framework support consistent monetary valuation of environmental assets.

Coverage

In practice, the environmental assets included in the AEEA are land, mineral and energy assets and timber. Research is currently underway to extend the range of environmental assets for which monetary estimates can be generated (e.g. for water).

For estimates of mineral and energy assets, the ABS has adopted Australia’s National Classification System for Mineral Resources (Geoscience Australia) to assign physical and monetary stocks based on Economic Demonstrated Resources data.

Economic Demonstrated Resources are resources judged to be economically extractable and for which the quantity and quality are computed partly from specific measurements, and partly from extrapolation for a reasonable physical distance on geological evidence. ABS mineral and energy asset stocks align with Australia’s National Classification System for Mineral Resources.

Further information on environmental assets

Further information on data sources, concepts, and methods underpinning monetary and physical estimates of environmental assets can be found in Australian System of National Accounts: Concepts, Sources and Methods (cat. no. 5216.0).


WATER

The Water Account, Australia, 2016-17 (cat. no. 4610.0) was developed using the SEEA Central Framework and SEEA-Water. Water supply and use tables provide a framework to link core components of the national accounts to physical information. Physical data are presented in supply and use tables, while linkages to economic data are also made.

Physical supply and use of water

The physical supply and use of water tables measure, in physical terms, the supply and use of all water within the Australian economy. The tables relate to freshwater and include the following categories of water: self-extracted, distributed, in-stream use and reuse.

Items not covered by the water tables include:

  • the volume of rainwater used by agricultural crops/pastures that are directly rain fed
  • discharges to the environment resulting from the run-off of irrigation water
  • the reuse/recycling of water on-farm or on-site (i.e. within homes or businesses)
  • household water consumption from rainwater tanks (for households connected to mains supply)
  • non-point/diffuse discharges
  • the impact of storm water infiltration into the sewerage reticulation system.

Water consumption and water use

Water consumption is that part of water use not distributed to other economic units and not returning to the environment (to water resources, sea or ocean) because during use it has been incorporated into products, evaporated, transpired or otherwise consumed by households or businesses. The following accounting identities have been used:
  • Total water use is equal to the sum of distributed water use, self-extracted water use and reuse water use.
  • Water consumption is equal to the sum of distributed water use, self-extracted water use and reuse water use less water supplied to other users and less in-stream use. The use of distributed water by the environment is not included in total water consumption. Household reuse water supplied to the water supply and sewerage services industry is counted as consumption.

For most industries, water use and water consumption are the same, as most industries do not have in-stream use, nor do they typically supply water to other users. However, water consumption and use will vary considerably for some industries, especially the water supply, sewerage and drainage services industry, electricity and gas supply industry and mining industry, where in-stream water use and water supply volumes are significant.

Monetary supply and use of water

The monetary supply and use of water tables measure in monetary terms the supply and use of water within the Australian economy. Estimates are also provided for the supply and use of sewerage, waste water and drainage services (also referred to as water related services).

Monetary aggregates are provided for:
  • supply of distributed water and water related services in the economy by the water supply, sewerage and drainage services, mining, manufacturing, and electricity and gas supply industries
  • expenditure on water and water related services by industries, households and governments.

The scope of monetary estimates is limited to distributed water, reuse water and waste water, sewerage and drainage services. No estimates are made of the value of self-extracted water. Further, the scope is limited to 'net distributed water', which is defined as water that has been supplied from one economic unit to another for a fee, creating a measurable economic transaction. Net distributed water excludes distribution losses and supply to the environment for which there is no matching economic transaction.

Further information on water

For a detailed discussion of concepts, data sources and methods used in the water tables and of the methods used for calculating water supply and use (both physical and monetary), please refer to the explanatory notes of the Water Account, Australia, 2016-17 (cat. no. 4610.0).


ENERGY

Energy Account, Australia 2016-17 (cat. no. 4604.0) uses the SEEA as the basis for its conceptual framework.

Supply and use of energy

Energy tables in the AEEA record the physical supply and use of energy products within the Australian economy. Supply of energy includes both direct extraction of energy products (including renewables) and imports of energy products. The use of energy products relates to use by Australian industry, households and governments - including inventory changes and energy products used by non-residents (exports). The monetary supply and use of energy tables record monetary values for those flows where market (or near-market) transactions occur.

All energy accounts in the AEEA are compiled on a residence basis and therefore the national boundary relates to the activities of Australian resident units.

Energy flow accounts have generally been presented on a ‘net’ basis in this publication. Net measures of energy consider conversion losses associated with transforming one form of energy into another form. In this way, estimates for total net energy use avoid double-counting the amount of converted primary energy.

The net use of energy table records the different energy products consumed for final purposes (final use of energy plus energy losses due to conversions) and supplied to the rest of the world (exports), along with inventory changes. The main accounting identity underlying the net flow accounts for energy is:
Supply (imports + direct extraction) = Use (exports + final use of energy + energy losses due to conversions + inventory changes)

This accounting identity is valid only for the sum of all energy products in the economy and not for individual energy products. This is because the net supply table balances all energy use, whereas supply of an individual product will generally not equal use of that product due to losses and transformations.

Data contained in the net supply and use tables are used to compile time series of energy intensity. In concept, net supply and use of energy products most closely matches measures of monetary supply and use of energy products.

Energy products

The energy supply and use tables include the following energy products (though not all products are separately identifiable):
  • Black coal
  • Brown coal
  • Coal by-products (including blast furnace gas, coal tar, benzene/toluene/xylene feedstock and coke oven gas)
  • Brown coal briquettes
  • Metallurgical coke
  • Natural gas (includes coal seam gas)
  • Crude oil and feedstocks (including refinery feedstock, ethane and other petrochemical feedstocks)
  • Propane, butane, LPG
  • Petrol
  • Diesel
  • Other refined products (including aviation turbine fuel, aviation gasoline, kerosene, heating oil, and fuel oil)
  • Biofuels (including ethanol, biodiesel, landfill and sludge biogas, and other biofuels)
  • Wood and wood waste
  • Bagasse
  • Electricity
  • Solar
  • Wind
  • Hydro-electricity
  • Other (i.e. that are generated from fossil fuels)
  • Solar hot water
  • Uranium.

Industries

The industry classification used in the presentation of supply and use of energy follows the 2006 edition of the Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 (cat. no. 1292.0). The following industry breakdown is used in the energy tables of the AEEA:
  • Agriculture, forestry and fishing
  • Mining
  • Manufacturing
  • Electricity, gas, water supply and waste services
  • Other industries.

Further information on energy

For a detailed discussion of sources and methods used in the energy tables, including energy assets measured in petajoules, please refer to the explanatory notes of Energy Account, Australia 2016-17 (cat. no. 4604.0).


GREENHOUSE GAS EMISSIONS

Estimates of direct greenhouse gas (GHG) emissions contained in this publication are presented according to SEEA guidelines. In particular, the SEEA recommends converting the territory-based GHG emissions inventories produced according to United Nations Framework Convention on Climate Change (UNFCCC) guidelines onto a residence basis. When following the residence principle, the geographic boundary of a country is determined by the activities of economic units resident in that country.

The scope of GHG emissions included in this publication includes all emissions under the UNFCCC, and as defined by the Intergovernmental Panel on Climate Change. These include energy sectors (including stationary energy and transport); industrial processes; solvent and other product use; agriculture; waste; and land use, land use change and forestry.

The primary data source for estimates of inventories of GHG emissions by industry and households in Australia is the Department of the Environment and Energy's Australian Greenhouse Emissions Information System. The notion of 'economic sector' used within this system is consistent with the ANZSIC industry classification.

Department of the Environment and Energy produces its Australian National Greenhouse Accounts according to the UNFCCC. GHG Emissions compiled on this basis are recorded using the territory principle. When using the territory principle, GHG emissions occurring within the geographic boundary of a country are attributed to that country.

The adjustments required to convert the presentation of data onto a SEEA (residence) basis relate to emissions attributed to travellers while abroad, and international bunkering (related to international transport, principally shipping and aircraft).

Within the AEEA, direct GHG emissions estimates relate to the following gases:
  • carbon dioxide
  • methane
  • nitrous dioxide
  • synthetic gases (HFCs, SF6, CF4, C2F6).

Direct GHG emissions figures relate to the following industries and to households:
  • Agriculture, forestry and fishing
  • Mining
  • Manufacturing
  • Electricity, gas, water and waste services
  • Construction
  • Transport
  • Commercial and services.

Direct emissions

Direct emissions are produced from sources within the boundary of an organisation and as a result of that organisation’s activities. These emissions mainly arise from the following activities:
  • generation of energy, heat, steam and electricity, including carbon dioxide and products of incomplete combustion (methane and nitrous oxide)
  • manufacturing processes which produce emissions (for example, cement, aluminium and ammonia production)
  • transportation of materials, products, waste and people; for example, use of vehicles owned and operated by the reporting organisation
  • fugitive emissions: intentional or unintentional GHG releases (such as methane emissions from coal mines, natural gas leaks from joints and seals)
  • on-site waste management, such as emissions from landfill sites.

SEEA-related adjustments

In order to represent GHG emissions information on a SEEA basis, two adjustments to UNFCCC-based data are made:
  • an adjustment related to international travellers abroad based on information from the Australian National Accounts: Tourism Satellite Account (cat. no. 5249.0). Direct emissions related to road transport activities by residents abroad are added to Australian inventories, while emissions related to non-residents within the Australian territory are subtracted
  • an adjustment related to international bunkering for fuel used by international transport operators (primarily marine and aviation). This adjustment involves the addition to inventories of relevant GHG emissions produced by resident operators.


ENVIRONMENTAL TAXES

SEEA defines environmental taxes as "a tax whose tax base is a physical unit (or proxy of it) of something that has a proven, specific, negative impact on the environment", thereby increasing the price on activities and products that are harmful to the environment. SEEA categorises environmental taxes in four broad categories: energy, transport, pollution and resource taxes.

Environmental taxes include taxes on production and imports, capital taxes and current taxes on income and wealth. Environmental taxes will change over time as new taxes are introduced, such as the introduction and removal of the Carbon Pricing Mechanism (an energy tax) and the Mineral Resource Rent Tax (a resource tax).

The estimates of environmental taxes contained in the AEEA are presented by type of tax, and totals by paying industry and households. Estimates of environmental taxes contained in this publication relate to the following types of taxes:

Energy
  • Crude oil and LPG
  • Ozone protection and Synthetic GHG
  • Renewable Energy Certificates (RECs)
  • Carbon Pricing Mechanism
  • State based energy schemes.

Transport taxes
  • Stamp duty on vehicle registration
  • Luxury car tax
  • Passenger vehicle import duty
  • Other motor vehicle taxes.

Pollution Taxes
  • Waste levies.

Resource Taxes
  • Mineral resource rent tax
  • Land tax.

Environmental taxes have been applied to households, and the following industries:
  • Agriculture, fisheries and forestry
  • Mining
  • Manufacturing
  • Electricity, gas, water and waste services
  • Other industries.