Using environmental accounts to understand and compare energy statistics, UK and international: November 2022

• The UN System of Environmental-Economic Accounting (SEEA) provides a framework for statistics looking at links between economy and environment, including energy, and comparing internationally.

• The UK produced 17 types of environmental account in 2021, which is the highest number for any country.

• The UK's energy sector had the third highest level of total greenhouse gas emissions (residence basis) among certain European countries in 2020, after Germany and Poland.

• The UK energy sector's emissions intensity decreased by around 61% between 2008 and 2018.

• Economic output for the production of renewable energy is lower as a percentage of GDP in the UK compared with other European countries such as Denmark and Latvia.

• Africa is the continent with the highest share of energy from renewable sources, while Oceania has the highest renewable source share when solid biomass is excluded.

• SEEA statistics and related indicators are being used for monitoring progress on domestic and international frameworks such as the Sustainable Development Goals, and in the Office for National Statistics' "GDP and Beyond" work.

• More countries developing environmental accounts-based estimates will enable broader and more detailed international comparisons.

The environment is a broad issue area, and with two major UN global conferences, on climate change and biodiversity, in November and December 2022, it has risen up the agenda.

To help understand complex environmental issues, robust and accessible statistics and data are vital.

The environmental accounts are known as satellite accounts, alongside the national accounts that -- for example -- provide gross domestic product statistics. They help us to understand the interactions between the economy and the environment, and can be grouped into three broad types: ecosystem, physical flow, and monetary. Statistics, data and information for these are in our annual UK environmental accounts bulletin and our UK natural capital accounts bulletin.

Unlike territorial measures often used for greenhouse gas emissions, the environmental accounts are on a residence basis, covering activity by UK residents and UK-registered businesses, whether they happen to be in the UK or overseas. The UK climate change statistics Portal article Measuring UK greenhouse gas emissions explains the different measures of emissions.

Environmental accounts are also comparable across countries. The United Nations (UN) System of Environmental-Economic Accounting (SEEA) provides internationally agreed guidelines for producing these environmental accounts, consistent with UN guidance on national accounts.

The UN SEEA Global Assessment shows how many countries around the world are using SEEA to design and produce their own environmental accounts. The map shows the number of accounts produced by each country active in using SEEA in 2021. Results from the 2022 assessment will be published next year.

Figure 1: The production of environmental accounts is well-underway around the world

Map of the number of environmental accounts in development or production, world, 2021

Notes:

1. Blank countries do either not produce any environmental accounts or have not submitted their accounts data to the UN Committee of Experts on Environmental Economic Accounting

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The UK produced 17 types of environmental account in the 2021 assessment, the highest number. Other European countries with large numbers of accounts include the Netherlands, which produces 15 accounts, and Spain with 14. In Asia, Indonesia produces 16 accounts and the Philippines produces 12. In the Americas, Mexico produces 13 accounts, Canada produces 11 and Colombia produces 9. In Africa, Zambia and South Africa have the most accounts, with 10 and 9 respectively.

Among world regions, European countries produce the most environmental accounts. The European Union's statistical office established a legal regulation for EU member states, requiring them to produce the accounts. Eurostat's article on environmental accounting explains their work in more detail. Prior to its exit from EU, the UK submitted accounts data to Eurostat.

Energy statistics

Statistics on the energy sector are an example of what the environmental accounts can offer.

While a wide range of energy statistics is available, making international comparisons challenging, SEEA-based environmental accounts enable comparisons across countries and different types of account.

We use available SEEA data for the UK, Europe and a small number of other countries. To offer a broader perspective, we also use some additional non-SEEA data on renewable energy shares.

Greenhouse gas (GHG) emissions data by industry are available for EU member states using the European standard classification of industry (NACE) (as shown on the Eurostat website), along with the UK, Norway, Switzerland and Iceland. At the higher levels, NACE is the same as the UK's Standard Industrial Classification (UK SIC). NACE/SIC D is the relevant sector for energy, titled "electricity, gas, steam and air conditioning supply", which also includes renewable energy.

Among these countries, Germany emitted the most greenhouse gases (GHGs) from this sector in 2020, although these had declined by 39% since 2008. The UK was the third-largest emitter of GHGs in this group, after Poland. The UK's emissions on this measure declined by 58% over the same period.

The greatest declines in energy sector emissions between 2008 and 2020 were seen in Denmark (77%), Luxembourg (74%) and Spain (67%).

Reductions in energy sector emissions could reflect changes in economic activity -- for example, a shift from manufacturing to services.

They could also reflect changes in emissions intensity, which is the level of emissions per unit of gross value added (GVA).

While UK energy sector emissions intensity fell 61% between 2008 and 2018, Greece (82%), Luxembourg (81%), Croatia (78%) and Estonia (78%) all saw greater declines over the period, as did some other countries for which statistics are available.

Global air emissions

The Organisation for Economic Co-operation and Development (OECD) statistics database includes a wide range of environment-related data. This includes air emissions, sourced from Eurostat and national statistics offices, and produced using the system of environmental economic accounting (SEEA). These are also available for the energy sector specifically.

In addition to the European countries above, the OECD also collates data for Australia, Canada, Colombia, the Republic of Korea and New Zealand. Time series vary by country, with the UK and New Zealand having data for the longest period, 1990 to 2020.

UK energy sector greenhouse gas emissions declined by 63% between 1990 and 2020, while New Zealand's emissions remained broadly flat over the same period.

As more countries develop their environmental accounts statistics on emissions, it should be possible to make more detailed international comparisons.

Our UK environmental goods and services sector (EGSS) statistics provide estimates of output and employment (full-time equivalent, or FTE) for 17 different environmental activities. These statistics include, for example, the production of renewable energy at the "exploitation phase" -- when the energy is produced -- which includes electricity, heat, and biofuels. Activities like the design and installation of renewable energy equipment are excluded.

EGSS estimates are also available for other European countries from Eurostat, including the EU member states, along with the UK, Norway, Switzerland, Iceland and Serbia.

Output

Among these countries, the share of total GDP accounted for by all EGSS activities is highest in Finland, at 17.5% on average over 2015 to 2019 (years for which most countries are available), followed by Estonia (11.9%), Denmark (10.6%) and Austria (10.1%). For the UK, the average share over this period is around 3.6%, which is smaller than the European countries' average.

For 2015 to 2019 (years for which the most countries are available), the highest share of total GDP related to the production of renewable energy was in Denmark (5.3% on average), Latvia (3.4%), Finland (3.3%) and Luxembourg (3.2%, driven by high growth in 2018 and 2019). The UK's share of GDP related to renewable energy was 0.6% on average.

From 2015 to 2019, apart from Luxembourg, the UK had the highest increase in the value of output in the production of renewable energy, among these countries.

Employment

The full-time equivalent (FTE) employment in the EGSS as a share of the national population aged from 15 to 64 years adjusts for working-age population. Fewer European countries provide estimates of employment than of output.

The highest FTE employment in EGSS as a share of national working-age population is in Finland (3.9% on average over 2015-2019), Luxembourg (3.8%) and Estonia (3.6%). The UK's share of 0.9% is similar to the shares in Germany (1.1%) and Ireland (1.1%).

The share of the national working age population working in the production of renewable energy specifically is highest in Denmark (0.60% on average from 2015 to 2019), Estonia (0.54%), Austria (0.49%) and Latvia (0.48%). For the UK, on average 0.03% of the working-age national population work in this activity, the same share as in Belgium.

Only the generation of renewable energy is captured in EGSS -- for UK-only data, our Low Carbon and Renewable Energy Economy (LCREE) Survey collects data on other economic activity like the design and installation of necessary infrastructure. The similarities and differences between EGSS and LCREE are explained in our Comparing environmental economy estimates article.

The Organisation for Economic Co-operation and Development (OECD) publishes country-level data on renewable energy supply as a share of total primary energy supply, based on International Energy Agency (IEA) data. Unlike the OECD data, these environmental accounts are not based on the system of environmental economic accounting (SEEA). We use these to provide additional international comparisons. They are part of the OECD's Green Growth Indicators, and are calculated on a territorial basis rather than a residential basis (see Section 10). For further information see the OECD's methodology report (PDF, 997KB).

Data are available for 1990, 1995, 2000, 2010 and 2015 through to 2020 with gaps for some countries, especially for 2020. Data for 139 countries are captured, representing all the world regions.

Considering the average for 2015 to 2019, all countries with more than 70% of total energy supply coming from renewable sources are in Africa, except for Haiti and Iceland. If solid biomass is excluded, the percentage shares drop for most countries.

North America has the lowest share of its primary energy supply from renewables where biomass is included, and Africa has the lowest share where biomass is excluded. Oceania (which captures data for Australia and New Zealand) has the most when solid biomass is excluded. Removing solid biomass has the greatest effect for Africa, as well as for Asia and Latin America and the Caribbean.

Of the 139 countries for which data are available, 106 have increased their share of energy from renewable sources (where solid biomass is excluded).

The UK's renewable share has increased between 2015 and 2020. This is a similar picture as in our Environmental accounts on energy use dataset, though with different growth rates because of methodological differences. The IEA uses the United Nations' International Recommendations for Energy Statistics, see Section 10, Data sources and quality, for more details.

The full list of countries and all years of data are available in the dataset accompanying this release.

Environmental statistics based on the United Nations (UN) System of Environmental-Economic Accounting (SEEA) can provide indicators to support measurement and monitoring of national and international policy and statistical frameworks.

The Office for National Statistics is using SEEA data in our "GDP and Beyond" work programme, including using our UK natural capital accounts estimates to estimate measures of "inclusive income" to complement GDP. More information is in our workplan for measuring inclusive income.

The UN's Sustainable Development Goals (SDGs) are an example of an international framework. The ONS' environmental accounts help to monitor global SDG Indicator 7.3.1, as shown on the GOV.UK website, "Energy intensity measured in terms of primary energy and GDP". This requires information on economic activity by industry, which is provided in the SEEA accounts as they are consistent with the UK National Accounts.

The UN Global Assessment discussed in Section 3 is used to measure progress against global SDG Indicator 15.9.1 on implementing environmental reporting using the accounts. It will now also be used for the UN's SDG Indicator 12.b.1, on sustainable tourism.

The UN Economic Commission for Europe's set of climate change indicators also use SEEA -- see Section 3.4 of the Conference of European Statisticians Indicator Set. Indicators include energy intensity of economic production, the use of environmental taxes, and energy use by households.

With increasing development and publication of SEEA-based environmental accounts, more statistics will be available to support such measurement and monitoring.

Employment

Employment is measured in terms of full-time equivalent (FTE) employees, where one FTE employee may be thought of as one person working full-time for one year.

Emissions intensity

The level of emissions released per unit of economic output. A lower value suggests that an activity is less energy or emissions intensive. It is calculated by dividing emissions by gross value added.

Energy sector

In this article, this term refers to Standard Industrial Classification Section D, which is electricity, gas, steam and air conditioning supply. This is compatible with the European standard classification of industry (NACE) Section D, as shown on the Eurostat website.

Greenhouse gas emissions

The greenhouse gases (GHG) included in the atmospheric emissions accounts are those covered by the Kyoto Protocol: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulphur hexafluoride (SF6), and nitrogen trifluoride (NF3). These gases contribute directly to global warming and climate change, because of their positive radiative forcing effect. The potential of each GHG to cause global warming is assessed in relation to a given weight of CO2, so all greenhouse gas emissions are measured as carbon dioxide equivalents (CO2e).

Gross value added

Gross value added (GVA) is the value of an industry's outputs minus the value of intermediate inputs used in the production process.

Output

Output is the total value of the goods and services produced in the given time period, such as in one year.

Renewable energy

Renewable energy sources do not run out when they are used. The specific types of energy measured can differ slightly between sources. The Organisation for Economic Co-operation and Development (OECD) data in Section 6 includes hydropower, geothermal, solar (thermal and photovoltaic), wind and tide/wave/ocean energy, combustible renewables (liquid biomass, biogas) and waste (renewable municipal waste), and solid biomass in one case.

Residence basis

Estimates compiled on a residency basis include data relating to UK residents and UK-registered businesses, regardless of whether they are in the UK or overseas. Data relating to foreign visitors and foreign businesses in the UK are excluded.

Territorial basis

Estimates compiled on a territorial basis include emissions physically produced within the UK's geographical borders, whether the business or individual is registered in or a resident of the UK or not.

Total primary energy supply

This measure, used by the International Energy Agency, includes energy production plus the trade balance (imports minus exports), minus international marine and aviation bunkers, and considering stock changes. More information is available in the OECD's Green Growth Indicators methodology report (PDF, 997KB).

World region

There is no universally used definition for world regions. The regions referenced in the text in Section 3, on the Global Assessment, and Section 6 on renewable energy shares, are from the UN's Department of Economic and Social Affairs, using the six geographic regions. The dataset accompanying this release lists the countries included in the source data for Sections 3 and 6, and which region they have been classed in.

More information on the UK's air emissions data is in our Environmental accounts on air emissions Quality and Methodology Information (QMI) report. The article Measuring UK greenhouse gas emissions, published on GOV.UK in November 2021, explains the different measures of emissions that are used (residential, territorial, and consumption). Estimates of emissions intensity are calculated using the Standard Industrial Classification (SIC) estimates of output used in the National Accounts, so these estimates are only available for residential emissions. The consumption emissions article, published by the Department for Environment, Food and Rural Affairs, shows emissions by industry sections but not emissions intensity -- however they do show emissions embedded in trade, unlike residential accounts.

Eurostat data for the UK for emissions intensity is used in Section 4, to ensure comparability with other countries. We publish updated data on emissions intensity that use a different data source for gross value added (GVA). We have also published estimates more recently than Eurostat, as we have left the EU and Eurostat are no longer calculating estimates for the UK. This means that the Office for National Statistics (ONS) estimates account for methodological changes to GVA, such as double deflation, and are available for more recent years. The overall trend is similar but the levels differ -- see our Atmospheric emissions: greenhouse gas emissions intensity by industry dataset.

More information on the UK's environmental goods and services sector (EGSS) data is in our Environmental accounts on the environmental goods and service sector (EGSS) Quality and Methodology Information report and our UK environmental good and service sector (EGSS) methodology annex. For the international comparison, Classification of Resource Management (CReMA) 13A has been used (except for the Netherlands and Luxembourg, which class data in CReMA 13). CReMA 13A is the production of energy from renewable sources. To adjust employment estimates for the working-age population (those aged between 15 and 64 years), Eurostat data were used to provide an estimate for each country that uses the same general methodology. This population adjustment is only approximate and does not account, for example, differences in retirement ages between countries.

Data for emissions and EGSS are taken from the Eurostat Data Browser under the environment theme. Data from the Organisation for Economic Co-operation and Development (OECD) are from the statistics database under the environment theme.

The OECD data on shares of renewable energy, which are taken from the International Energy Agency, do not show the same values as the ONS system of environmental economic accounting (SEEA) accounts on energy. This is because a different international set of standards, the International Recommendations for Energy Statistics (IRES), as shown on the United Nations (UN) website, is used.

One important difference is that SEEA accounts are compiled on a residence basis and energy balances based on IRES are on a territorial basis (that is, all households or businesses physically in UK territory are included). SEEA aims to integrate environmental data (in this case, on energy supply) with wider economic data -- this is consistent with the UN's System of National Accounts. This is not the case for energy balance data based on IRES. Chapter XI (11) of the Energy Statistics Compilers Manual provides more information on the differences between the two sets of statistics.

We will continue to develop our methodology for our environmental accounts, including assessing their comparability with other countries.

We are continuously developing our natural capital accounts and published our latest Natural capital accounts roadmap in August 2022, which also notes the benefits of international comparability. Natural capital accounts estimates will also be used in our work on measuring inclusive income.

We are also developing quarterly estimates of greenhouse gas emissions (residence basis) consistent with the environmental accounts, which is informed by high quality work from other statistics offices.