Environmentally related transfers
Environmentally related transfers comprise financial flows associated with environmental objectives. They constitute an important instrument of environmental, climate and sustainability policy and support analyses of the economic impacts of environmental policy measures as well as the financing of environmental protection activities.
Environmentally related transfers include in particular:
- Environmental taxes
- Other environmentally related payments
- Environmental subsidies
The recording of these financial flows contributes to a better understanding of the interactions between the economy and the environment and supports the assessment of the effectiveness of environmental policy instruments.
Environmental Taxes
Environmental taxes are compiled according to an internationally harmonised framework developed by the European Commission, the OECD, and the International Energy Agency (IEA). An environmental tax is defined as any tax whose tax base has a proven negative impact on the environment. Examples include taxes on energy use, transport, resource extraction and environmentally harmful emissions.
Environmental taxes are classified into four categories:
- Energy taxes
- Transport taxes
- Resource taxes
- Pollution taxes
Environmental tax data facilitate both national and international comparisons and illustrate the importance of economic instruments in environmental policy.
Other Environmentally Related Payments
In addition to environmental taxes, there are other payments whose bases are likewise related to environmental impacts. As these revenues are not classified as taxes under the rules of the national accounts, they are reported separately as other environmentally related payments.
These include, among others:
- Water charges
- Wastewater charges
- Parking fees
- Motorway vignette revenues
- Heavy goods vehicle (HGV) road toll revenues
The inclusion of these financial flows provides a more comprehensive picture of environmentally related economic incentives.
Environmental Subsidies
Environmental subsidies comprise financial measures that support environmental and climate objectives or have direct impacts on the environment.
A distinction is generally made between:
- Environmentally motivated subsidies
- Environmentally beneficial subsidies
- Potentially environmentally harmful subsidies
Environmentally motivated subsidies support, for example, investments in energy efficiency, renewable energy sources, sustainable mobility and measures for the protection of natural resources.
The analysis of environmental subsidies and related measures is gaining increasing importance at both the European and international levels. It provides valuable information for assessing the effectiveness of environmental policy measures and supports the transparent reporting of public expenditure in the fields of environment and climate action.
Significance and Further Development of Environmentally Related Transfers
Environmentally related transfers illustrate how financial incentives are used to achieve environmental, climate and sustainability objectives. Taxes, charges and levies can contribute to reducing environmental pressures, while subsidies support sustainable behaviour and investment.
The data enable analyses of, among other things:
- The financing of environmental and climate protection measures
- The effects of economic instruments in the environmental domain
- The distribution of environmentally related burdens and subsidies
- The development of sustainable patterns of production and consumption
On this basis, environmental policy measures and their economic impacts can be assessed in a robust and evidence-based manner.
The statistical compilation of these financial flows is being continuously developed at both the European and international levels. A current focus is the measurement of Environmental Subsidies and Similar Transfers (ESST). For this purpose, the Environmental Subsidies and Similar Transfers Accounts (ESST) have been developed, enabling a harmonised analysis of subsidy schemes and transfer payments with environmental relevance.
The ESST constitute one of the new modules of environmental accounts and complement existing information on environmental taxes and other environmentally related payments. This provides a more comprehensive assessment of environmentally related financial incentives and their contribution to the sustainable transformation of the economy and society.
Further information on the ESST and their methodological foundations can be found in the chapter “New Modules of Environmental Accounts”.