Economy-wide material flow accounts (EW-MFA) is a framework to compile statistics linking flows of materials from natural resources to a national economy. [1] EW-MFA are descriptive statistics, in physical units such as tonnes per year.
EW-MFA is consistent with the principles and system boundaries of the United Nations System of National Accounts (SNA) and follows the residence principle. [2] This means that EW-MFA is also a part of the System of Integrated Environmental and Economic Accounting (SEEA). [3]
The underlying definition of economy-wide material flow accounts includes statistics on the overall material inputs into national economies, the changes of material stock within the economic system and the material outputs to other economies or to the environment. Statistics on EW-MFA cover all solid, gaseous, and liquid materials, except for water and air. However, water in products is included. EW-MFA includes statistics on material flows crossing the national (geographical) border, i.e. imports and exports. [1]
EW-MFA strives to produce a mass balance of material flows. It systematically categorises material input and output flows crossing the functional border between economy (technosphere, anthroposphere) and environment. Mass balances are defined as "...on the first law of thermodynamics (called the law of conservation of matter), which states that matter (mass, energy) is neither created nor destroyed by any physical process". [4]
In principle, the statistics will show which countries are dependent on others for natural resources and which are major exporters of natural resources. The statistics also show if a countries production is sustainable, i.e. whether the economy of a country can produce more products using fewer natural resources.
In the European Union between 2000 and 2007, resource productivity increased by almost eight percent. [5] Resource productivity of the EU is expressed by the amount of gross domestic product (GDP) generated per unit of material consumed (Domestic Material Consumption, see below), in other words GDP / DMC in euro per kg. This means that less material was consumed in order to produce the same amount of products in the EU. However, breaking down the components of the index it is seen that both GDP and DMC are increasing, only not equally fast.
When the European Council met in Helsinki in December 1999, part of the agenda was dedicated to establishing an understanding of how economies are dependent on the use of natural resources and that these resources are not in limitless supply. [6]
The following year, Eurostat, together with the Wuppertal Institute and national statistical offices in Europe, developed the first statistical guideline for how to compile statistics and subsequent indicators on material flows.
There is a link between the System of Integrated Environmental and Economic Accounting (SEEA) and EW-MFA. Statistics are based on the same principles (the residence principle of the SNA) and thus become the EW-MFA a sub-component of the SEEA. The EW-MFA links the environment to the economy through the flows of materials extracted, processed and traded.
The only international data collection on EW-MFA is conducted through Eurostat. In 2011 the European Council and European Parliament passed a statistical regulation for the compilation of annual statistics on material flows. [7]
Most European statistical offices compile the statistics on EW-MFA through the use of existing statistics. Trade statistics, some agricultural statistics and other sources are used in combination to create EW-MFA statistics.
The statistics on EW-MFA are usually combined in order to create indicators. The definitions explained below are extracted from the work of Eurostat and are applied by the national statistical officies who are following the framework of EW-MFA.
Direct material consumption (DMC) is defined as the total amount of material directly used in an economy, i.e. it equals domestic extraction plus imports minus exports. [1] DMC does not include upstream hidden flows related to imports and exports of raw materials and products. [8]
Domestic material input (DMI) summarizes domestic extraction of resources and the imports, i.e. all materials which are of economic value and are used in production and consumption activities, except balancing items. [1] DMI is not additive across countries. Due to the inclusion of trade within the EU double counting would occur if one would add several countries together. [8]
Physical trade balance (PTB) equals physical imports minus physical exports. This means that in relation to monetary trade balances which is exports minus imports) the flows are the reverse. It measures the fact that in economies money and goods move in opposite direction. A physical trade surplus indicates a net import of materials, whereas a physical trade deficit indicates a net export. [1]
Net additions to stock (NAS) measures the ‘physical growth of the economy’, i.e. the quantity (weight) of new construction materials used in buildings and other infrastructure, and materials incorporated into new durable goods such as cars, industrial machinery, and household appliances. Materials are added to the economy’s stock each year (gross additions), and old materials are removed from stock as buildings are demolished, and durable goods. [1]
Domestic processed output (DPO) measures the total weight of materials which are released back to the environment after having been used in the domestic economy. These flows occur at the processing, manufacturing, use, and final disposal stages of the production-consumption chain. Included in DPO are emissions to air, industrial and household wastes deposited in controlled and uncontrolled landfills, material loads in wastewater and materials dispersed into the environment as a result of product use (dissipative flows). Recycled material flows in the economy (e.g. of metals, paper, glass) are not included in DPO. [1]
The balance of trade, commercial balance, or net exports, is the difference between the monetary value of a nation's exports and imports over a certain time period. Sometimes a distinction is made between a balance of trade for goods versus one for services. The balance of trade measures a flow of exports and imports over a given period of time. The notion of the balance of trade does not mean that exports and imports are "in balance" with each other.
The economy of Canada is a highly developed market economy. It is the 9th largest GDP by nominal and 15th largest GDP by PPP in the world. As with other developed nations, the country's economy is dominated by the service industry which employs about three quarters of Canadians. Canada has the third highest total estimated value of natural resources, valued at US$33.2 trillion in 2019. It has the world's third largest proven petroleum reserves and is the fourth largest exporter of petroleum. It is also the fourth largest exporter of natural gas. Canada is considered an "energy superpower" due to its abundant natural resources and a small population of 37 million inhabitants relative to its land area.
The economy of Croatia is a developing high-income service based economy with the tertiary sector accounting for 60% of total gross domestic product (GDP). After the collapse of Communism, Croatia went through a process of transition to a market-based economy in the 1990s, but its economy suffered badly during the Croatian War of Independence. After the war, the economy began to improve. Before the financial crisis of 2007–08 the Croatian economy grew at 4–5% annually, incomes doubled, and economic and social opportunities dramatically improved.
The economy of Denmark is a modern mixed economy with comfortable living standards, a high level of government services and transfers, and a high dependence on foreign trade. The economy is dominated by the service sector with 80% of all jobs, whereas about 11% of all employees work in manufacturing and 2% in agriculture. Nominal gross national income per capita was the seventh-highest in the world at $58,439 in 2020. Correcting for purchasing power, per capita income was Int$57,781 or 10th-highest globally. Income distribution is relatively equal, but inequality has increased somewhat during the last decades, however, due to both a larger spread in gross incomes and various economic policy measures. In 2017, Denmark had the seventh-lowest Gini coefficient of the 28 European Union countries. With 5,822,763 inhabitants, Denmark has the 36th largest national economy in the world measured by nominal gross domestic product (GDP) and 51st largest in the world measured by purchasing power parity (PPP).
International trade is the exchange of capital, goods, and services across international borders or territories because there is a need or want of goods or services.
The economy of Latvia is an open economy in Northern Europe and is part of the European Union's (EU) single market. Latvia is a member of the World Trade Organization (WTO) since 1999, a member of the European Union since 2004, a member of the Eurozone since 2014 and a member of the OECD since 2016. Latvia is ranked the 14th in the world by the Ease of Doing Business Index prepared by the World Bank Group. According to the Human Development Report 2011, Latvia belongs to the group of very high human development countries. Due to its geographical location, transit services are highly developed, along with timber and wood-processing, agriculture and food products, and manufacturing of machinery and electronic devices.
The economy of Poland is an industrialized, mixed economy with a developed market that serves as the sixth largest in the European Union (EU) and the largest among the former Eastern Bloc members of the EU. Since 1988, Poland has pursued a policy of economic liberalization and today stands as the greatest success story of all the post-communist states of Europe - its economy was the only one in the EU to avoid a recession through the 2007–08 economic downturn, and as of 2019 the Polish economy has been growing steadily for the past 28 years, a record high in the EU and only surpassed by Australia in the world economy. GDP per capita at purchasing power parity has grown on average by 6% p.a. over the last 20 years, the most impressive performance in Central Europe resulting in the country increasing its GDP seven-fold since 1990.
The economy of Switzerland is one of the world's most advanced free market economies. The service sector has come to play a significant economic role, particularly the Swiss banking industry and tourism. The economy of Switzerland ranks first in the world in the 2015 Global Innovation Index and third in the 2020 Global Competitiveness Report. According to United Nations data for 2016, Switzerland is the third richest landlocked country in the world after Liechtenstein and Luxembourg, and together with the latter and Norway the only three countries in the world with a GDP per capita (nominal) above US$70,000 that are neither island nations nor ministates.
The economy of Iceland is small and subject to high volatility. In 2011, gross domestic product was US$12 billion, but by 2018 it had increased to a nominal GDP of US$27 billion. With a population of 350,000, this is $55,000 per capita, based on purchasing power parity (PPP) estimates. The financial crisis of 2007–2010 produced a decline in GDP and employment that has since been reversed entirely by a recovery aided by a tourism boom starting in 2010. Tourism accounted for more than 10% of Iceland's GDP in 2017. After a period of robust growth, Iceland's economy is slowing down according to an economic outlook for the years 2018–2020 published by Arion Research in April 2018.
The economy of Belgium is a modern, capitalist economy that has capitalised on the country's central geographic location, highly developed transport network, and diversified industrial and commercial base. Belgium was the first country to undergo an industrial revolution on the continent of Europe in the early 19th century and has since developed an excellent transportation infrastructure of ports, canals, railways, and highways to integrate its industry with that of its neighbours. Industry is concentrated mainly in the populous Flanders in the north, around Brussels and in the two biggest Walloon cities, Liège and Charleroi, along the sillon industriel. Belgium imports raw materials and semi-finished goods that are further processed and re-exported. Except for its coal, which is no longer economical to exploit, Belgium has few natural resources other than fertile soils. Nonetheless, most traditional industrial sectors are represented in the economy, including steel, textiles, refining, chemicals, food processing, pharmaceuticals, automobiles, electronics, and machinery fabrication. Despite the heavy industrial component, services account for 74.9% of GDP, while agriculture accounts for only 1% of GDP.
An import in the receiving country is an export from the sending country. Importation and exportation are the defining financial transactions of international trade.
Material flow analysis (MFA), also referred to as substance flow analysis (SFA), is an analytical method to quantify flows and stocks of materials or substances in a well-defined system. MFA is an important tool to study the bio-physical aspects of human activity on different spatial and temporal scales. It is considered a core method of industrial ecology or anthropogenic, urban, social and industrial metabolism. MFA is used to study material, substance, or product flows across different industrial sectors or within ecosystems. MFA can also be applied to a single industrial installation, for example, for tracking nutrient flows through a waste water treatment plant. When combined with an assessment of the costs associated with material flows this business-oriented application of MFA is called material flow cost accounting. MFA is an important tool to study the circular economy and to devise material flow management. Since the 1990s, the number of publications related to material flow analysis has grown steadily. Peer-reviewed journals that publish MFA-related work include the Journal of Industrial Ecology, Ecological Economics, Environmental Science and Technology, and Resources, Conservation, and Recycling.
Material flow accounting (MFA) is the study of material flows on a national or regional scale. It is therefore sometimes also referred to as regional, national or economy-wide material flow analysis.
Domestic material consumption is a measurement of the total amount of material directly used in an economy, excluding hidden flows. DMC equals DMI minus exports.
Water accounting is a discipline that seeks to provide comprehensive, consistent and comparable policy relevant information related to water. Based on the experience of more than fifty years of national accounts, the discipline that provides the elements to calculate the Gross Domestic Product (GDP), the United Nations Statistics Division (UNSD) developed the System of Environmental and Economic Accounting for Water (SEEA-Water), which has been adopted by the United Nations Statistical Commission (UNSC) as a statistical interim standard in 2007.
System of Environmental-Economic Accounting (SEEA) is a framework to compile statistics linking environmental statistics to economic statistics. SEEA is described as a satellite system to the United Nations System of National Accounts (SNA). This means that the definitions, guidelines and practical approaches of the SNA are applied to the SEEA. This system enables environmental statistics to be compared to economic statistics as the system boundaries are the same after some processing of the input statistics. By analysing statistics on the economy and the environment at the same time it is possible to show different patterns of sustainability for production and consumption. It can also show the economic consequences of maintaining a certain environmental standard.
Environmental protection expenditure accounts (EPEA) are a statistical framework that describes environmental activities in monetary terms and organises these statistics into a full set of accounts, just like that of the national accounts. The EPEA is part of the System of Integrated Environmental and Economic Accounting which, in March 2012, was adopted as a statistical standard by the United Nations Statistical Commission.
Natural capital accounting is the process of calculating the total stocks and flows of natural resources and services in a given ecosystem or region. Accounting for such goods may occur in physical or monetary terms. This process can subsequently inform government, corporate and consumer decision making as each relates to the use or consumption of natural resources and land, and sustainable behaviour.
The annual United Kingdom National Accounts records and describes economic activity in the United Kingdom and as such is used by government, banks, academics and industries to formulate the economic and social policies and monitor the economic progress of the United Kingdom. It also allows international comparisons to be made. The Blue Book is published by the UK Office for National Statistics alongside the United Kingdom Balance of Payments – The Pink Book.
Environmentally extended input-output analysis (EEIOA) is used in environmental accounting as a tool which reflects production and consumption structures within one or several economies. As such, it is becoming an important addition to material flow accounting.
