A4-0209/95

Resolution on a communication from the Commission to the Council and the European Parliament on directions for the EU on environmental indicators and green national accounting - the integration of environmental and economic information systems

The European Parliament,

- having regard to the communication from the Commission to the Council and the European Parliament, COM(95)0670 - C4-0009/94,

- having regard to Articles 2 and 130r(2) of the EC Treaty,

- having regard to its resolution of 17 November 1992 on a Community Programme of Policy and Action in relation to the Environment and Sustainable Development ((OJ C 337, 21.12.1992, p. 34.)),

- having regard to the Council resolution on a Community Programme of Policy and Action in relation to the Environment and Sustainable Development ((OJ C 138, 17.5.1993, p. 1.)),

- having regard to the Commission White Paper on growth, competitiveness and employment ((Bulletin of the European Communities - Commission No. 6/93.)),

- having regard to its resolution of 9 March 1994 on the need to assess the true costs of 'Non-Environment' ((OJ C 91, 28.3.1994, p. 130.)),

- having regard to its resolution of 22 April 1994 on inclusion of environmental considerations in the calculation of the gross national product ((OJ C 128, 9.5.1994, p. 473.)),

- having regard to the report by the Committee on the Environment, Public Health and Consumer Protection and the opinions of the Committee on Budgets, the Committee on Economic and Monetary Affairs and Industrial Policy and the Committee on Research, Technological Development and Energy (A4-0209/95),

A. whereas the European Union must promote sustainable, non-inflationary development which respects the environment and whereas this requires new instruments and guidance systems to adapt and manage economic policies,

B. whereas one of the priorities of the European Union is to promote the action needed to establish a proper balance between the environment, quality of life and the economy, so as to achieve sustainable development, as advocated by Parliament in its resolution on the Fifth Action Programme and by the Commission in its White Paper,

C. whereas it is essential for the European Union to lay the foundations in a coordinated manner, to integrate environmental and economic information systems, by establishing a harmonized European system of sustainable or environmental accounting,

D. whereas the harmonized statistics gathered must be useful for decision- making and political management measures and also to serve as economic guidelines to ensure sustainable development,

E. whereas a European environmental accounting system including as a priority a system of environmental pressure indices and promoting, as a first step, economic evaluation of all the 'external factors', initially by means of satellite accounts, is indispensable,

F. whereas environmental accounting must put a financial value on all aspects of the use and depletion of resources, environmental damage and environmental functions, thus avoiding the current undervaluation of resources provided by nature, which leads to a predatory use of natural capital ((Cf. Fulai Sheng: Real Value for Nature: an overview of global efforts to achieve true measures of economic progress (WWF Report May 1995).)), as there can be no sustainable development without environmental accounting ((Per Sorup: 'Sustainability Accounting - a support document for preparation of the conference 'Taking Nature into Account', Brussels, 31 May - 1 June 1995, Institute for Prospective Technological Studies, Seville.)),

G. whereas the European Union must resolve the confusion between sustainable development and sustainable growth,

H. having regard to the outcome of the conference on 'Taking Nature into Account' held on 31 May and 1 June 1995 in Brussels under the auspices of the European Parliament, the Commission, the WWF and the Club of Rome,

1. Warmly welcomes the Commission communication and reiterates that there can be no sustainable development without environmental accounting to put a financial value on all aspects of the use and depletion of resources, environmental damage, depreciation of natural capital and environmental functions;

2. Points out that the value of landscape, the logging of forests, the soil degradation caused by unsustainable agriculture and the depletion of water resources entail costs to society which should be evaluated in economic terms;

3. Also points out that to the direct costs of humanity's depredations of nature, in 'green' or environmental accounting additional expenditure and investment must be added to remedy or compensate for the damage;

4. Calls on the Commission to inform Parliament on the Commission's work and views on how to deal with so-called defensive expenditures and investments which restore or compensate environmental damage, in the context of the system of national accounts, since in the current system of national accounts, some categories of these expenditures contribute to GDP;

5. Considers that, if the EU is to arrive at a common framework for 'green' accounting, a European system of integrated economic and environmental indices (ESI) must be established within the next few years, to provide a common comparative framework to identify and assess environmental costs and quantify them in the system of national accounts;

6. Considers that until now, traditional national accounting systems (national accounts, visible or invisible accounts and their traditional expressions such as the GNP, etc.) have had the basic objective of providing macro- economic indicators to enable governments to direct their economic efforts, measure productivity and intervene in the market, whilst taking no account of the financial value of the 'depreciation' of natural capital, which distorted the real value of national accounts;

7. Considers that in order to remedy this situation and put into practice the concepts of integration and sustainable development, the chosen approach of 'satellite accounts' is the most appropriate at present, not forgetting that the final stage must be the establishment of an environmental GNP, as stated in Table 17, Objective 4(a) of the Fifth Community Action Programme on the Environment;

8. Therefore calls on the Commission to set up a working group to put this undertaking into practice and to report regularly to the European Parliament;

9. Asks that the European System of Environmental Pressure Indices (ESEPI) take into account the specific environmental characteristics of each country (e.g. acid rain in Germany, erosion in Spain, etc.) in order to define a single framework or structure which would work in an equally precise, exact and reliable manner in all the various EU Member States and which should be used to establish the European Weighting Coefficients (EWCs);

10. Urges the Commission no longer to equate sustainable growth with sustainable development, as a society wishing to be based on sustainability can only use the revenue produced by its natural capital and never the natural capital itself, if it is not to mortgage its future;

11. Points out that the environmental policy which has always been upheld by Parliament over more than 20 years and is enshrined in the Treaty on European Union (TEU) is an 'ex ante' or preventive policy whenever possible and not an 'ex post' or curative policy;

12. Asks therefore that national accounts in their 'satellite account' format should not be confined to evaluating damage to the environment and the financial cost of this damage, but that potential uses should also be included and economic processes and activities which involve a potential threat of environmental deterioration, damage or depreciation should be identified, if we are truly laying the foundations for the attainment of sustainable development;

13. Points out the need, difficult though it may be, to put value on the depletion and degradation of natural resources in order to estimate the economic costs of using natural capital;

14. Requests therefore that an initial capital value should be put on the natural environment and that the costs and lost future benefits be deducted; one formula might be to give them a financial value based on the amount which consumers or users would be prepared to pay for these aspects of the environment, or existing methods of financial evaluation could be perfected, in order to put a price on shade, enjoyment, etc.;

15. Calls for a clarification of the concepts of ecology and environment which are not differentiated in the Communication, since in many cases the environment covers more than ecology, as it includes, for example, domestic refuse, etc.;

16. Calls on the Commission to define more precisely the time and financial resources needed to implement this European framework for integrated environmental and economic accounting and to submit a precise timetable; emphasizes that adequate resources must be made available for the implementation of these activities, to avoid delays in the national statistical offices; and points out that Action 3, i.e. forming a European System of Integrated Economic and Environmental Indices (ESI), to which no resources are allocated, requires an annual appropriation of ECU 750 000 for the years 1995 to 1998;

17. Also asks that this process of environmental accounting be applied in due course to the European Union budget;

18. Asks the Commission that, for the sake of clarity, precision and setting appropriate priorities, it consider rephrasing Actions 2 and 4 of point 5 of its Communication as follows:

'2. setting priorities for collecting physical and environmental pressure indicators, defining the methodology for compiling these indicators and setting the priorities for jointly establishing European weighting coefficients for the aggregation of these indicators, with the aim of creating environmental pressure indices or a European System of Environmental Pressure Indices (ESEPI).'

'4. Continuing and enlarging work on satellite accounts to national accounts of essential value for environmental accounting such as environmental expenditures, natural resource accounting, methods of calculating natural capital depreciation.';

19. Notes that, with regard to Action 3 in environmental problem areas, weighting coefficients are to be drawn up on the basis of technical know-how to express physical indicators of environmental pressure in environmental pressure indices. The environmental problem areas will be those defined by the fifth Environmental Action Programme; there should be no reciprocal weighting or aggregation of environmental problem areas;

20. Calls on the Commission to add a new Action 7, pursuant to the EU's preventive or 'ex ante' policy, with a view to establishing and updating an inventory of environmental resources and their current and potential uses, and identifying economic processes and activities entailing potential threats of deterioration, environmental damage or depletion of natural or environmental resources;

21. Considers that valuation in financial terms is still one of the most difficult aspects, both conceptually and operationally, and therefore it should have been clearly stated under Action 5 that the components of the natural system should also be included in the evaluation of environmental damage; nevertheless, given that there is as yet no suitable system of quantitative valuation, considers that it is better for the moment to use some guidelines on valuation rather than none at all and as such they should be included under this heading;

22. Emphasizes that coordination of the activities leading to the establishment of this European framework for environmental accounting should take place pursuant to Article 15 of Regulation (EC) 1210/90 on the establishment of the European Environment Agency and Decision 808/94 adopting a four-year development programme on environmental statistics;

23. Urges the Commission to incorporate in its Conclusions the modifications set out in the explanatory statement;

24. Hopes to receive a progress report by mid-December 1997, with details of:

(a) the initial results of Actions 3 (including environmental expenditure) and 2 and the possible implications for policy-forming at EU level;

(b) the methodology used to draw up a series of European weighting coefficients and the financial valuation of environmental damage;

(c) an appropriate financial memorandum for the programme;

25. Once more welcomes the Communication and congratulates the Commission, as it considers this to be an important step towards achieving the model of sustainable development advocated by the TEU, the Fifth Action Programme and the Delors White Paper; considers therefore that the planned budgetary allocation should be supported and, possibly, increased;

26. Instructs its President to forward this resolution to the Commission, the Council and the Member States, to the European Environment Agency, Eurostat and the national statistical offices, to the OECD, the United Nations and the World Bank.