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Indicators and the System of Indicators and the System of Environmental and Economic Accounting Environmental and Economic Accounting

for Water for Water Regional Workshop on Water Accounting Regional Workshop on Water Accounting

Santo Domingo, Dominican RepublicSanto Domingo, Dominican Republic

16-18 July 200716-18 July 2007 Michael VardonMichael Vardon

United Nations Statistics DivisionUnited Nations Statistics Division

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OutlineOutline• Audience for indicators• Relationship of environment to economy

• Pressure-State-Response (Driving forces)• Key issues and concerns• Characteristics of Indicators• Past experience

• Millennium Development Goals• SEEAW indicators• Issues for indicator users and producers

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Audiences for informationAudiences for information

Indicators

Micro data

AccountingSNA, SEEA, SEEAW

PublicPoliticians

Policy MakersStrategic planners

Researchers

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The economy and the environment The economy and the environment have a complex, multifaceted have a complex, multifaceted relationshiprelationship

• Provides economic resources to production process (e.g. minerals, timber, water, energy)

• Provides non-economic resources to production process as well as other uses for mankind

• Receives wastes from the economy

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A model of interaction: Pressure – State – ResponseA model of interaction: Pressure – State – Response

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Concerns Concerns over the level impact the over the level impact the economy is having on environmenteconomy is having on environment

• Depletion of natural resource Depletion of natural resource (e.g. oil, forests, biodiversity)(e.g. oil, forests, biodiversity)

• Degradation of natural Degradation of natural resources (e.g. air and water resources (e.g. air and water pollution)pollution)

• Potentially catastrophic effects Potentially catastrophic effects (e.g. climate change)(e.g. climate change)

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QuestionsQuestions

• Are environmental endowments being used responsibly.

• Is their use posing a treat to economic development now?

• Will their unchanged use into the future pose future threats?

• Who benefits from use, who bares the cost of use?

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Characteristics of indicatorsCharacteristics of indicators

• Focus on outcomes Focus on outcomes • Have an unambiguous 'good' direction Have an unambiguous 'good' direction • Be supported by timely data of good qualityBe supported by timely data of good quality• Be available as a time seriesBe available as a time series• Be sensitive to changes Be sensitive to changes • Be summary in nature;Be summary in nature;• Be capable of disaggregation Be capable of disaggregation • Be interpreted easily by the general reader.Be interpreted easily by the general reader.

Adapted from Measures of Australia’s Progress 2002 Adapted from Measures of Australia’s Progress 2002 http://www.abs.gov.au/AUSSTATS/abs@.nsf/94713ad445ff1425ca25682000192af2/aa16f6e99c3078bfca256bdc001223f6!OpenDocument . .

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Millennium Development GoalsMillennium Development GoalsGoal 7: Ensure environmental sustainability

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MDG: Target 30 – access to MDG: Target 30 – access to improved drinking waterimproved drinking water

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MDG: MDG: Target 31 – Target 31 – access to access to improved improved sanitationsanitation

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Challenges to monitoring and Challenges to monitoring and achieving MDG 7achieving MDG 7

‘Countries face many difficulties in monitoring the MDG 7 indicators, as well as in the overall goal of making progress on environmental sustainability.”

“Insufficient availability of data and disaggregated data, lack of baseline data to act as references, and uncoordinated data collection inhibit the monitoring of targets set.”

Source: Making Progress on Environmental Sustainability,

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MDG 7:Steps for improvementMDG 7:Steps for improvement“While the MDG framework is best managed as a group of interrelated targets, MDG 7

warrants particular attention given the weaknesses both in monitoring and in overall progress. This report presents specific steps to be used in tailoring targets and indicators for MDG 7. The steps can be followed in the order offered here or in a different sequence:

1) assess country environmental issues;2) identify existing priorities;3) use analytical frameworks to determine additional critical parameters;4) set country-specific and verifiable targets;5) select indicators and establish a baseline to track progress;6) implement monitoring and data gathering systems;7) analyse and interpret results; and8) communicate the results to policy makers and the public.

Source: Making Progress on Environmental Sustainability,

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So for MDG (and other reporting So for MDG (and other reporting frameworks) we need…..frameworks) we need…..

• An analytical framework for understanding the relations An analytical framework for understanding the relations between the environment and the economybetween the environment and the economy

• Indicators of these relationshipsIndicators of these relationships• Monitoring and data systems to support the framework and Monitoring and data systems to support the framework and

indicatorsindicators• To be able analyse and interpret results and communicate To be able analyse and interpret results and communicate

results to policy makers and the publicresults to policy makers and the public

Integrated environmental and economic accounting provides Integrated environmental and economic accounting provides thisthis

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Why an accounting approach?Why an accounting approach?• Encourages the adoption of standardsEncourages the adoption of standards• Introduces accounting concepts to environmental Introduces accounting concepts to environmental

statisticsstatistics• Improves the quality and usefulness of both Improves the quality and usefulness of both

economic and environmental statistics by economic and environmental statistics by encouraging consistency and integrationencouraging consistency and integration

• Implicitly defines ownership and hence responsibility Implicitly defines ownership and hence responsibility for environmental impactsfor environmental impacts

• Encourages the development of comprehensive data Encourages the development of comprehensive data setssets

• Facilitates international comparisonsFacilitates international comparisons

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Strengths of the accounting Strengths of the accounting approachapproach

• Organised body of information facilitates integrated Organised body of information facilitates integrated economic-environmental analysis (complements economic-environmental analysis (complements sustainable development indicators, modelling)sustainable development indicators, modelling)

• Comprehensive and consistent, routinely producedComprehensive and consistent, routinely produced• Provides a system into which monetary valuations of Provides a system into which monetary valuations of

environmental costs can be incorporatedenvironmental costs can be incorporated• Allows trade-offs between the environment and the Allows trade-offs between the environment and the

economy (and within the economy), overtime and economy (and within the economy), overtime and between locations to be described and analysedbetween locations to be described and analysed

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SEEAW Indicators SEEAW Indicators (pages 169-183)(pages 169-183)

1. Water availability2. Water intensity and productivity3. Opportunities to increase water supply4. Cost and price of water supply and

wastewater treatment services

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Indicators of water availability: Indicators of water availability: FAO/AQUASTATFAO/AQUASTAT

• Internal Renewable Water ResourcesInternal Renewable Water Resources• ““Average annual flow of rivers and recharge of groundwater generated Average annual flow of rivers and recharge of groundwater generated

from endogenous precipitation.” (from endogenous precipitation.” (FAO/AQUASTAT)FAO/AQUASTAT)• External Renewable Water ResourcesExternal Renewable Water Resources

• ““Part of the country’s renewable water resources shared with Part of the country’s renewable water resources shared with neighbouring countries. Total external resources are the inflow from neighbouring countries. Total external resources are the inflow from neighbouring countries (trans-boundary groundwater and surface water neighbouring countries (trans-boundary groundwater and surface water inflows), and the part of the shared lakes or border rivers. The assessment inflows), and the part of the shared lakes or border rivers. The assessment considered the natural resources generally; if there are reservations in considered the natural resources generally; if there are reservations in neighbouring countries, they are called actual resources.” neighbouring countries, they are called actual resources.” ((FAO/AQUASTAT)FAO/AQUASTAT)

• Total Natural Renewable Water Resources Total Natural Renewable Water Resources • The sum of internal and external renewable water resources. It The sum of internal and external renewable water resources. It

corresponds to the maximum theoretical amount of water available for a corresponds to the maximum theoretical amount of water available for a country on an average year on a long reference period.” country on an average year on a long reference period.” ((FAO/AQUASTAT) FAO/AQUASTAT)

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Indicators of water availabilityIndicators of water availability• Per capita renewable resourcesPer capita renewable resources

• Ratio between Total renewable water resources and Ratio between Total renewable water resources and population size. (population size. (WWDR 2003, Margat 1996)WWDR 2003, Margat 1996)

• Annual Withdrawals of Ground and Surface Water as a Annual Withdrawals of Ground and Surface Water as a Percent of Total Renewable Water/Exploitation indexPercent of Total Renewable Water/Exploitation index

• The total annual volume of ground and surface water The total annual volume of ground and surface water abstracted for water uses as a percentage of the total abstracted for water uses as a percentage of the total annually renewable volume of freshwater. (annually renewable volume of freshwater. (UN, 2001)UN, 2001)

• Consumption Index Consumption Index • Ratio between Water Consumption and Total Ratio between Water Consumption and Total

Renewable Resources. (Margat, 1996)Renewable Resources. (Margat, 1996)

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Indicators for water intensity and productivityIndicators for water intensity and productivity

1 . W a te r u s e a n d p o llu tio n in te n s i ty (p h y s ic a l u n it s )

m 3 w a te r/u n it o f p h y s ic a l o u tp u t

To n s o f p o llu t io n /u n it o f p h ys ic a l o u tp u t

W a te r u s e o r to n s o f p o l lu tio n e m itte d p e r u n i t o f o u tp u t, s u c h a s

- -p o p u la tio n ,

- -n u m b e r o f h o u s e h o ld s , o r

- - to n s o f w h e a t , s te e l , e tc . p ro d u c e d

2 . W a te r a n d p o llu tio n in te n s i ty ( m o n e ta r y u n its )

m 3 w a te r/v a lu e o f o u tp u t

To n s o f p o llu tio n /v a lu e o f o u tp u t W a te r u s e o r to n s o f p o l lu tio n e m itte d p e r u n i t o f o u tp u t m e a s u re d in c u r re n c y u n its

3 . W a te r p ro d u c tiv ity r a t io s

G D P / m 3 w a te r

Va lu e -a d d e d b y s e c to r /m 3 w a te r

4 . W a te r ‘p o llu tiv ity ’ r a t io s

S e c to r s h a re o f p o ll u tio n /s e c to r sh a re o f G D P

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Indicators for opportunities to increase water supplyIndicators for opportunities to increase water supply

1 . R e tu r n f lo w s Q u a n t i ty o f r e tu rn f lo w s b y so u rc e

M a y d is t in g u is h re tu rn f lo w s f ro m t re a te d re tu rn f lo w s (f ro m m u n ic ip a l a n d in d u s tr ia l u s e rs ) f ro m u n tre a te d re tu rn f lo w s su c h a s a g r ic u ltu re

2 . W a te r re u s e R e u s e w a te r a s s h a re o f to ta l in d u s t r y w a te r u s e

M a y d is t in g u is h re u s e o f w a te r w ith in a p la n t fro m w a te r r e c y c le d b y m u n ic ip a l w a te r u t i l i ty

R e c y c le d w a te r a s s h a re o f to ta l w a te r u s e b y s e c to r

3 . L o ss e s L o s s e s in a b s t ra c t io n a n d tr e a tm e n t a s s h a re o f to ta l w a te r p ro d u c t io n

B o th th e a m o u n t a n d t h e re a s o n fo r th e s e lo s s e s a r e u s u a lly k n o w n b y th e w a te r u t i l i ty

U n a c c o u n te d fo r lo s s e s a s s h a re o f to ta l w a te r u s e

T h e s e lo s s e s o c c u r fo r a v a r ie ty o f c a u s e s a n d i t i s u s u a l ly n o t c e r ta in h o w m u c h e a c h c a u s e c o n tr ib u te s

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Indicators for cost and price of water supply and Indicators for cost and price of water supply and wastewater treatmentwastewater treatment

1 . S u p p ly c o s t a n d p r ic e o f w a te r

Im p lic i t w a te r p r ic e Vo lu m e o f w a te r p u rc h a s e d d iv id e d b y su p p ly

c o s t

A v e ra g e w a te r p r ic e p e r m 3 b y in d u s try Vo lu m e o f w a te r p u rc h a s e d d iv id e d b y a c tu a l

p a y m e n ts b y th a t in d u s t r y

A v e ra g e w a te r s u p p ly c o s t p e r m 3 b y in d u s t ry

Vo lu m e o f w a te r p u rc h a s e d d iv id e d b y c o s t o f s u p p ly to th a t in d u s t ry

S u b s id y p e r m 3 b y in d u s tr y A v e ra g e w a te r p r ic e m in u s a v e ra g e w a te r

su p p ly c o s t 2 . S u p p ly c o s t a n d p r ic e o f w a s te w a te r tre a tm e n t s e r v ic e s Im p lic i t w a s te w a te r t r e a tm e n t p r ic e Vo lu m e o f w a te r t re a te d d iv id e d b y s u p p ly

c o s t

A v e ra g e w a s te w a te r t r e a tm e n t c o s t p e r m 3 b y in d u s try

Vo lu m e o f w a s te w a te r d iv id e d b y t re a tm e n t c o s t fo r th a t in d u s tr y

A v e ra g e w a s te w a te r t re a tm e n t p ric e p e r m 3 b y in d u s tr y

Vo lu m e o f w a s te w a te r d iv id e d b y a c tu a l p a y m e n ts fo r tr e a tm e n t b y th a t in d u s tr y

S u b s id y p e r m 3 b y in d u s try A v e ra g e w a s te w a te r p r ic e m in u s a v e ra g e w a s te w a te r s u p p ly c o s t

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Indicators Indicators of access to and affordability of water and of access to and affordability of water and

sanitation servicessanitation services 1 . A c c ess to w a ter a n d sa n ita t io n ser v ice s

Av e ra g e d a ily w a te r c o n s u m p tio n b y h o u s e h o ld s , d iffe re n tia t in g ru ra l a n d u rb a n h o u s e h o ld s

P e rc e n t o f u rb a n h o u s e h o ld s w ith a c c e s s to s a fe d r in k in g w a te r P e rc e n t o f ru ra l h o u s e h o ld s w ith a c c e s s to s a fe d r in k i n g w a te r P e rc e n t o f u rb a n h o u s e h o ld s w ith a c c e s s to s a n ita t io n s e rv ic e s P e rc e n t o f ru ra l h o u s e h o ld s w ith a c c e s s to s a n i ta tio n s e rv ic e s

2 . A ffo rd a b ility o f w a te r

H o u s e h o ld e x p e n d itu re s fo r w a te r a s % o f to ta l e x p e n d i tu re s , d i ffe re n t ia tin g ru ra l a n d u rb a n

Av e ra g e p r ic e o f w a te r to h o u s e h o ld s , d iffe re n tia t in g ru ra l a n d u rb a n

Av e ra g e p r ic e o f w a te r fo r s u b s is te n c e a g r ic u l tu re ( i r r ig a t io n a n d l iv e s to c k w a te r in g )

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Links between the World Water Links between the World Water Development Report Indicators and Development Report Indicators and SEEAWSEEAW

• World Water Assessment Programme 2006World Water Assessment Programme 2006• 21 of 38 Indicators can be directly derived from the water 21 of 38 Indicators can be directly derived from the water

accountsaccounts• An 5 indicators can be partially derived An 5 indicators can be partially derived • 12 cannot be derived but can be included as supplementary 12 cannot be derived but can be included as supplementary

information. Of theseinformation. Of these• 4 are social indicators (e.g. urban and rural population)4 are social indicators (e.g. urban and rural population)• 3 are related to land areas and could be derived from 3 are related to land areas and could be derived from

land accountsland accounts• 3 are related to energy and could be derived from 3 are related to energy and could be derived from

energy accountsenergy accounts• Remaining 2 relate to ISO 14001 certificationRemaining 2 relate to ISO 14001 certification

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Key issues for indicator users and Key issues for indicator users and providersproviders

Limited resources mean some important decisionsLimited resources mean some important decisions• What topics are most important?What topics are most important?• What inter-linkages are needed?What inter-linkages are needed?• Scale (time and space)Scale (time and space)• Macro v. micro level statistics Macro v. micro level statistics • Level and change or cause and effectLevel and change or cause and effect• Accuracy and precision (Accuracy and precision (±±0.1%, 1.0% or 10%)0.1%, 1.0% or 10%)• Frequency (e.g. daily, annually or multi-yearly)Frequency (e.g. daily, annually or multi-yearly)• Perfection v. realistically deliverablePerfection v. realistically deliverable• Benefits and costs of data collection. Where do these occur (e.g. Benefits and costs of data collection. Where do these occur (e.g.

now/later, public/private, here/there)?now/later, public/private, here/there)?

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Recalling …..the economy and Recalling …..the economy and the environment have a complex, the environment have a complex, multifaceted relationshipmultifaceted relationship

• Provides economic resources to production process Provides economic resources to production process (e.g. minerals, timber, water, energy)(e.g. minerals, timber, water, energy)

• Provides non-economic resources to production Provides non-economic resources to production processes and other uses for mankindprocesses and other uses for mankind

• Receives wastes from the economyReceives wastes from the economy• Need an information system and indicators that Need an information system and indicators that

record these relationships in a consistent way record these relationships in a consistent way ….SEEAW provides this! ….SEEAW provides this!

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Contact detailsContact detailsMichael VardonAdviser on Environmental-Economic AccountingUnited Nations Statistics DivisionNew York 10017 USARoom DC2 1532

Phone: +1 917 367 5391Fax: +1 917 963 1374Email: vardon@un.org