I. BACKGROUND

1. The consultative meeting on environmental and resource accounting was held in ESCAP Bangkok, 3 and 4 October 1994 as an initial activity of the project entitled "Systems of Environmental and Resource Accounting". The project, which was funded by the Government of the Netherlands, was part of ESCAP efforts to assist the countries in developing the systems of environmental accounting; to help country experts with the comprehensive knowledge and understanding on the subject of -SNA satellite accounts- and the framework of the system of integrated environmental and economic accounts (SEEA); and to compile the figures of environmentally adjusted gross domestic product - green GDP. 2. The Statistics Division of ESCAP is responsible for the implementation of the project. The case study was planned to be undertaken in six developing countries namely: Guam, India, Iran, Pakistan, Philippines and Republic of Korea.

I. CONSULTATIVE MEETING

A. Participants

3. The consultative meeting was attended by four country-experts (those from Iran and Pakistan could not attend), and professional staff members from Statistics Division of ESCAP. The list of participants appears in annex I.

4. The group of experts was quite heterogeneous, in terms of professional background representing various governmental bodies and the research institutes. Hence, the discussion and consultations were very fruitful.

B. Organization and content

5. The consultative meeting covered the items, based on SNA 1993; Handbook on National Accounting, Series F. No. 61; Environmental Accounting: An Operational Perspective WP Series No. 1 DESIPA; and a short approach paper prepared by the consultant "Satellite System for Integrated Environmental and Economic Accounting"; and other references including country papers and outlines case study on the SEEA. Each topic was presented by the consultant and country paper by respective country experts, and was followed by an open and intensive discussions.

C. Summary of proceedings

Opening and closing sessions

6. The meting was opened by the Director of Statistics Division of ESCAP. In his remarks, he welcomed the country experts and explained and the background and objective of the project. He specifically stressed that eventually the practical guidelines to be developed by ESCAP, would draw significantly from the case study being undertaken by the participating countries.

7. At the end of the meeting, the Section Chief of Statistical Information Services Section, Statistics Division, explained other matters related to the project, and he also delivered the closing remarks. He congratulated the country experts on their active participation in the discussion, and expressed the hope to a successful implementation of the project in each respective country.

Discussion of the guidelines

8. The discussions follows the consecutive order of chapters in the document prepared by the consultant "Satellite System for Integrated Environmental and Economic Accounting", such a short approach paper containing the introduction to the understanding of the central framework of the SNA including the satellite system generated therefrom; the scope and coverage of environmental accounting; the SEEA versions. Discussion continued to the three main approaches to environmental accounting and the basic structure of the SEEA as the starting point to understand the general framework of environmental accounting, and ended by the elaboration of extended SNA framework. Some empirical evidence from the experience of a pilot study in the Philippines, Papua New Guinea, Mexico an Indonesia, has also been discussed.

9. Findings from the references were also put forward to the meeting for further discussion and to stimulate the broader analytical vision of the participants. The meeting discussed various methods and valuation principles and approaches to the estimation of natural resource depletion and environmental degradation.

10. Country papers were discussed thoroughly with a view to finalize the action plan for the implementation of case study on the SEEA in respective country. Natural resources and environmental assets were identified for each country to assign priority for the inclusion of the resource in the estimation of EDP of the country.

11. Definition and terminology, classification and standardization were discussed and provisionally adopted for the operational guidance in the country case study. Improvement of the concept, definition and methodology were expected from the real working experience during the implementation of the project in respective country.

12. Using table 2.2 and 2.4 of the Handbook (Series F. No. 61) as a basis, further discussion were concentrated to trace the disaggregation and/or aggregation values of entry into the cells of various version of the SEEA matrices. The purpose was to prepare relevant worksheet for the estimating the valuation of resources before linking them to the SEEA. However, the time limitation constraint of the consultative meeting, only selected semi-micro worksheet were discussed by using pilot study result of Indonesia, Papua New Guinea and Mexico.

13. Chapter VI of the Handbook had also been given special attention in the consultative meeting to give some idea of priority concern and choice of approaches and methods to be adopted in the implementation of the SEEA. The logic of the discussion following the chart in figures VI of the chapter - Implementing the SEEA.

III. CONCLUSIONS

14. The consultative meeting made some observations which are as following:

• The duration of the consultative meeting was quite short to cover all topics in the discussion. To take into consideration the vast diversity of the participants, further detailed elaboration and review of the specific topic and area were needed to come to the similar perception and common understanding of the subject.
• Part of the chapters in the 1993 SNA which is related to the central framework, the production accounts, accumulation accounts and satellite analysis and accounts need to be reproduced and distributed to the country expert who did not have chance to receive or reviewe the SNA before.
• The meeting was well-attended. All the country experts, except Iran and Pakistan, were able to participate in the meeting.

15. The consultant to the project should further elaborate the short approach paper and prepare respective worksheet, relevant to each methods and approach, starting from the very beginning to the aggregation and consolidation process to arrive at the SEEA.

16. The consultant together with the staff of the Statistics Division of ESCAP visit the participating country for observation and supervision during the period of implementation of the case study and to review the progress.

17. The consultant will have to prepare a set of detailed technical guidelines to assist the countries of the region in developing their environmental accounts as well as other necessary technical documentations for the Expert Group Meeting and the Regional Seminar.

Annex I

LIST OF PARTICIPANTS

GUAM

• Mr. William J. FitzGerald, Chief, Economic Development and Planning, Department of Commerce, Tamuning

INDIA

• Mr. V.K. Sharma, Associate Professor, Indira Gandhi Institute of Development Research, Bombay

PHILIPPINES

• Ms. Estrella V. Domingo, Assistant Director, Economic and Social Statistics Office (ESSO) National Statistical Coordination Board, Manila

REPUBLIC OF KOREA

• Mr. Seung-Woo Kim, National Project Director Korea Environmental Technology Research Institute (KETRI), Seoul

SECRETARIAT

• Ms. Seiko Takahashi Deputy Executive Secretary and Officer-in-Charge
• Mr. S. Thampi Acting Special Assistant to Executive Secretary
• Mr. Andrew J. Flatt Director, Statistics Division
• Mr. Bishnu Dev Pant Chief, Statistical Information Services Section, Statistics Division
• Mr. Loh, Meng Kow Statistician, Statistics Development Section, Statistics Division
• Ms. Francisca F. Martinez Statistician, Statistical Information Services Section, Statistics Division
• Mr. Ilpo Survo Programme Officer, Statistics Division
• Ms. Kesarin Roongruangmanirat Associate Statistician, Statistics Development Section, Statistics Division
• Ms. Patricia de Renty Associate Statistician, Statistics Development Section, Statistics Division
• Mr. Jagdish Kumar Regional Adviser on National Accounts
• Ms. Carmelita N. Erictra Expert on Gender Statistics, Statistics Division
• Mr. Atsushi Ueda Expert on Computerized Information Systems, Statistics Division
• Mr. Kusmadi Saleh Consultant, Statistics Division
• Ms. Sirilux Bohren Administrative Assistant, Statistics Division
• Mr. Colin S. McGregor Director, Division of Administration
• Mr. Hunter H.T. Chiang Chief, Conference and General Services Section, Division of Administration
• Mr. Khaled Khali Chief, United Nations Information Service

Annex II

TENTATIVE SCHEDULE

Annex III

ESCAP PROJECT ON SYSTEMS OF ENVIRONMENTAL AND RESOURCE ACCOUNTING

Recommendations for action by participating countries

1. GENERAL FRAMEWORK

Basic structure of the SEEA as discussed thoroughly in the 1993 SNA and its related handbook (Studies in Methods Series F, No. 61; and Working Paper Series No. 1 ST/ESA/1994/WP.1) will form the groundwork of conceptual as well as methodological aspects for the country case study. The participating countries will prepare set of environmental accounts for selected resource as well as compute the environmentally adjusted GDP and other associated parameters

2. DEFINITION AND TERMINOLOGY

Concept, definition and terminology related to the SEEA which is generally accepted for the use of case study are as follows:

• Natural environment. The natural environment is a unity of space with all things, resources, situations and living creatures, including human beings and their activities, influencing the continuity of each others lives and welfare.
• Natural resource. Everything which is inside and above the globe and potentially in nature and not included in the production process is called natural resources. Natural resources can be distinguished into renewable resources and non-renewable resources.

A renewable natural resource is a natural resource which can be reproduced or recreated in a relatively short period either by nature or by technology.

On the other hand, a non-renewable resource is a kind of resource that needs a long period of time (more than 100 years) for their creation.

• Economic Reserve. The meaning of economic reserve is the reserve of natural resources which can be used and marketed profitably under a certain market condition and technology. As an example, the oil reserve in an oil field is called an economic oil reserve when the known technology is able to extract oil and market it with a profit.
• Economic rent. The meaning of economic rent is a surplus of revenue above the cost to produce output and the cost to renew the natural resource and environmental condition.
• Unit rent. Unit rent is the result of economic rent divided by the volume of physical resource commodity produced. Theoretically, the calculation of unit rent may be approached by using a marginal unit, namely the difference between the price of the last output sold and the unit cost of production of that output. However, this approach is difficult to do in practice. Unit rent can also be estimated by using net price, where net price is meant to be the international price of a resource commodity minus all costs of production excluding tax, import duty and royalty, when royalty is considered as a cost of production.
• Defensive expenditure. Defensive expenditure is the executed expenses due to the activities to defend environment from damages or pollution created as the result of production process and consumption of society. Examples, are the expenditures to reduce air and water pollution, and to maintain soil fertility.
• Depletion. Depletion is a decrease in resource commodity to fulfil the needs of production and consumption. For the nonrenewable resources, depletion means extraction of the available natural resources. For instance, a depletion of oil and natural gas for a certain year is equal to the production of oil and natural gas for the same year. For the renewable resources, depletion means the total value of deduction elements of the stock. For example, forest harvest or extraction of the forest products, deduction of forest stock due to forest conversion and forest damage.

3. CLASSIFICATION

Classification of transactions, flows, stocks and other related SEEA matrices should be based on the Annexes A to E of the handbook (Series F, No. 61).

4. STANDARDIZATION

Standardization, conversion and other units of measurement for quantity, quality changes and other environmental impacts analysis will utilized the existing document available in WHO, FAO, ESCAP as well as own country source of information.

5. IDENTIFICATION OF RESOURCES FOR THE RESPECTIVE COUNTRY CASE STUDY

6. TIME REFERENCE OF DATA

The availability of data is one of the major problems of the study. However, the country case study to test the SEEA handbook from the operational perspective point of view, it is advisable to cover the information during the period of 1985-1992.

7. COMPLETION OF THE PROJECT

The draft case studies will be prepared by September 1995.

Annex IV

LIST OF DOCUMENT AND REFERENCE DISTRIBUTED

STAT/ERC/1

• Satellite system for integrated environmental and economic accounting
• Integrated Environmental and Economic Accounting, Handbook of National Accounting - Series F, No. 61
• An Operational Definition of Sustainable Development, Discussion Paper No. 21 (Revised)
• Natural Resource Accounting Soils: Towards an Empirical Estimate of Costs of Soil Degradation for India
• Integrated Environmental and Economic Accounting - A Case Study for Papua New Guinea, Environment Working Paper No. 54
• Integrated Environmental and Economic Accounting - A Case Study for Mexico, Environment Working Paper No. 50
• Wasting Assets: Natural Resources in the National Income Accounts
• Natural Resource Accounting: A Framework for India
• Environmental Accounting: An Operational Perspective, Working Paper Series No. 1
• Natural Resources Accounting for Sustainable Development
• Environmental and Natural Resource Accounting: Where to Begin?
• Wasting Assets, The need for national resource accounting
• Systems of Environmental and Resource Accounting for India

Recommendations for action by participating countries