Classification of Physical Flows Classification of Physical Flows

UNSD in cooperation with the Sub-group UNSD in cooperation with the Sub-group of the London Groupof the London Group

Introduction: Status of Proposed Introduction: Status of Proposed ClassificationClassification

• Proposal made to London Group on Proposal made to London Group on Environmental Accounting at May 2009 meetingEnvironmental Accounting at May 2009 meeting

• Discussions took place within the sub-groupDiscussions took place within the sub-group• Consultation with Eurostat experts on waste Consultation with Eurostat experts on waste

statistics statistics • Discussion by the Expert Group Meeting on Discussion by the Expert Group Meeting on

Classification (September 2009)Classification (September 2009)• Comments on revised proposal have been received Comments on revised proposal have been received

but not included in the paper yetbut not included in the paper yet

Information needs for tracking Information needs for tracking physical flowsphysical flows

• Need to track flows of materials from the Need to track flows of materials from the environment to the economy, within the environment to the economy, within the economy, returns to the environmenteconomy, returns to the environment

• Use for policy analysis, waste managementUse for policy analysis, waste management• Includes materials with no monetary valueIncludes materials with no monetary value• Principle of material balance requires Principle of material balance requires

information not usually found in economic information not usually found in economic accountsaccounts

Frameworks for definition and Frameworks for definition and classification of solid wasteclassification of solid waste

• Central Product Classification Version 2 Central Product Classification Version 2 (CPC Ver. 2) (CPC Ver. 2)

• SEEA 2003SEEA 2003

• Waste Framework Directive (WFD): Waste Framework Directive (WFD): European Waste Commission Statistical European Waste Commission Statistical Classifications (EWC Stat) Classifications (EWC Stat)

SEEA-2003 flowsSEEA-2003 flows

• Flows of natural resources and ecosystem Flows of natural resources and ecosystem inputs inputs Classified using the asset classificationClassified using the asset classification

• Physical product flows Physical product flows CClassified according to CPClassified according to CPC

• ResidualsResidualsCombine several classifications including Combine several classifications including solid wastesolid waste

IssuesIssues

1.1. Definition of waste and the scope of the Definition of waste and the scope of the waste accountswaste accounts

2.2. Distinctions between products and Distinctions between products and residualsresiduals

3.3. Alignment of the classification with the Alignment of the classification with the SEEA system boundariesSEEA system boundaries

4.4. Classification for waste, residuals and Classification for waste, residuals and ecosystem inputsecosystem inputs

Definition of wasteDefinition of waste

SEEA-2003SEEA-2003• Products Products are goods and services produced and are goods and services produced and

used within the economic sphere, including used within the economic sphere, including residuals that have positive value to the generatorresiduals that have positive value to the generator

• Residuals Residuals are not uniquely defined are not uniquely defined • Incidental and undesired outputs from the Incidental and undesired outputs from the

economy that have zero value to the generatoreconomy that have zero value to the generator• Flows from the economy to the environmentFlows from the economy to the environment

• Waste Waste is sub-item of residual – solid waste that is sub-item of residual – solid waste that stays within the economystays within the economy

CPC ver. 2CPC ver. 2• Covers everything that is transacted within the Covers everything that is transacted within the

economy (products and waste- CPC 39)economy (products and waste- CPC 39)• Principles of CPCPrinciples of CPC

• Industrial originIndustrial origin• Physical characteristics of productPhysical characteristics of product

• Waste scattered in several CPC classesWaste scattered in several CPC classes• Value is not a criterion for product definitionValue is not a criterion for product definition• CPC not appropriate for wasteCPC not appropriate for waste

Definition of waste – Cont’edDefinition of waste – Cont’ed

Proposed definition of waste (based on WFD)Proposed definition of waste (based on WFD) Waste includes all materials that are discarded and are Waste includes all materials that are discarded and are not reused, regardless of their destination or monetary not reused, regardless of their destination or monetary valuevalue

• Materials discarded directly to the environment without treatment Materials discarded directly to the environment without treatment are wasteare waste

• Materials reused without needing treatments are NOT wasteMaterials reused without needing treatments are NOT waste• Materials discarded and subsequently treated and recycled are Materials discarded and subsequently treated and recycled are

waste until recoveredwaste until recovered• Material collected by a waste collection scheme are wasteMaterial collected by a waste collection scheme are waste• Definition of waste does not depend on the value of the goods Definition of waste does not depend on the value of the goods

discarded (nor on the destination except for ISIC 38)discarded (nor on the destination except for ISIC 38)

Definition of waste – Cont’edDefinition of waste – Cont’ed

Scope of the waste accountsScope of the waste accounts

ISIC X HouseholdsProducer

ISIC Y

ISIC Z or HH

ISIC 381: waste collection

ISIC 383: materials recovery ISIC 382: treatment and disposal

1 2

3

4

5

6

7

8

8

1

Waste:Waste:

1,5,6,8 (part)1,5,6,8 (part)

Not waste:Not waste:

2,3,4,72,3,4,7

Waste accounts gross or net?Waste accounts gross or net?

• Gross waste accounts follow the flow of Gross waste accounts follow the flow of waste when it is first generated – when waste when it is first generated – when material is recovered some waste is material is recovered some waste is generated again, etc. until when it is generated again, etc. until when it is disposed of in a landfill or to the disposed of in a landfill or to the environment – double countingenvironment – double counting

• Should net waste accounts also be Should net waste accounts also be developed?developed?

Distinction between products, Distinction between products, waste and residualswaste and residuals

• Concept of products is aligned between Concept of products is aligned between SNA and SEEASNA and SEEA

• SEEA physical flows have broader scope SEEA physical flows have broader scope than SNA flows (include flows with zero or than SNA flows (include flows with zero or negative value)negative value)

Distinction between products, Distinction between products, waste and residualswaste and residuals

WasteWaste ResidualsResiduals

Materials that need Materials that need

treatment treatment

(with positive value)(with positive value)

Materials collected by ISIC 38Materials collected by ISIC 38

Materials that need treatment Materials that need treatment

(zero or negative price)(zero or negative price)

Materials returned to the environmentMaterials returned to the environmentwithout treatmentwithout treatment

Return flowsReturn flows

• Considerable overlap between waste and residuals Considerable overlap between waste and residuals – Do we need both?– Do we need both?

• General opinion is to maintain the concept of General opinion is to maintain the concept of residuals defined as:residuals defined as:Residuals as discarded materials with no Residuals as discarded materials with no monetary valuemonetary value

• Need to keep track of the all the flows Need to keep track of the all the flows • Need to keep track of what stays within the Need to keep track of what stays within the

economy and what goes back to the environment economy and what goes back to the environment for waste managementfor waste management

Distinction between products, Distinction between products, waste and residualswaste and residuals

Classifications and system Classifications and system boundaryboundary

Flows from the environment to the economy

Flows from the economy to the environment

ISIC 37, 38

ISIC X

Flows within the economy

ISIC Y

Natural resources Natural resources

ecosystem inputs ecosystem inputs

(balancing items)(balancing items)

ResidualsResiduals

Proposed structure of physical Proposed structure of physical flows classificationflows classification

• Flows from the economy to the environmentFlows from the economy to the environment• Natural resourcesNatural resources• Balancing items Balancing items

• Flows within the economyFlows within the economy• Flows from the economy to the environmentFlows from the economy to the environment

• Emissions to air Emissions to air • Emissions to water Emissions to water • Solid waste to uncontrolled landfill Solid waste to uncontrolled landfill • Dissipative use and dissipative lossesDissipative use and dissipative losses• Waste water (untreated)Waste water (untreated)• Return flows (water, treated materials, etc.)Return flows (water, treated materials, etc.)• Balancing items (evaporation, losses, etc.)Balancing items (evaporation, losses, etc.)

Proposals on classificationsProposals on classifications

• Use CPC for all physical flows, if relevant Use CPC for all physical flows, if relevant categories exist, and complement it with categories exist, and complement it with additional categories for flows from the additional categories for flows from the environment to the economy and back to the environment to the economy and back to the environmentenvironment

• CPC not appropriate for waste: often difficult to CPC not appropriate for waste: often difficult to distinguish between waste and other outputsdistinguish between waste and other outputs

• Use EWC Stat to classify solid waste rather than Use EWC Stat to classify solid waste rather than CPC 39 and other large CPC categoriesCPC 39 and other large CPC categories

• Use the classification of flows from the Use the classification of flows from the environment and to the environment as proposed environment and to the environment as proposed by Karl Schoerby Karl Schoer

Advantages of the proposalAdvantages of the proposal

• Alignment with CPC 2.0 and 2008 SNAAlignment with CPC 2.0 and 2008 SNA• Harmonization of terminology with the EWC (definition Harmonization of terminology with the EWC (definition

of waste)of waste)• Integration of EW-MFA as one of the building blocks of Integration of EW-MFA as one of the building blocks of

SEEA by defining flows from the environment to the SEEA by defining flows from the environment to the economy and return flows explicitly with reference to the economy and return flows explicitly with reference to the boundary between the economy and the environment boundary between the economy and the environment (comparable with EW-MFA concepts of inputs and outputs (comparable with EW-MFA concepts of inputs and outputs respectively)respectively)

• Avoiding the difficulty of having dissipative use of Avoiding the difficulty of having dissipative use of products, which can often only be inferred as balancing products, which can often only be inferred as balancing items, in a classification of residuals - they would simply items, in a classification of residuals - they would simply be flows from the economy to the environment.be flows from the economy to the environment.

Comments received Comments received

• Definition of waste – is it consistent with Definition of waste – is it consistent with the WFD? Should we take the narrow the WFD? Should we take the narrow approach (only materials collected by ISIC approach (only materials collected by ISIC 38)?38)?

• Definition of residuals – different views on Definition of residuals – different views on what it coverswhat it covers

• Unused extraction – does it enter the Unused extraction – does it enter the economy?economy?

Questions to London GroupQuestions to London Group

1.1. Do you agree with the proposed framework for the classification of flows Do you agree with the proposed framework for the classification of flows in the revised SEEA? in the revised SEEA? Specifically, do you agree with the alternative typology of flows to Specifically, do you agree with the alternative typology of flows to distinguish flows from the environment to the economy, flows within the distinguish flows from the environment to the economy, flows within the economy, and flows from the economy to the environment?economy, and flows from the economy to the environment?

2.2. Do you agree with the proposed definition of waste?Do you agree with the proposed definition of waste?3.3. Are the proposed gross flow accounts for waste useful, and are they Are the proposed gross flow accounts for waste useful, and are they

feasible?feasible?4.4. Do you agree with the proposed definitions of residuals and of flows to Do you agree with the proposed definitions of residuals and of flows to

and from the environment?and from the environment?5.5. Do you agree with the proposal to extend the classification of waste, at Do you agree with the proposal to extend the classification of waste, at

least until completion of a review by the Expert Group on Classifications, least until completion of a review by the Expert Group on Classifications, with EWC Stat categories for the purpose of classifying waste?with EWC Stat categories for the purpose of classifying waste?

6.6. Do you agree on the use of the categories developed by Karl Shoer to track Do you agree on the use of the categories developed by Karl Shoer to track flows to and from the environment, at least until these categories can be flows to and from the environment, at least until these categories can be evaluated by the Expert Group on Classifications?evaluated by the Expert Group on Classifications?