Environmental accounts1 show how the environment contributes to the economy, for instance through the extraction of raw materials. They show the impacts that the economy has on the environment such as energy consumption and air emissions. They also show how society responds to environmental issues, for example through taxation and expenditure on environmental protection.
Environmental accounts are ‘satellite accounts’ to the main National Accounts which means that they are comparable with economic indicators such as Gross Domestic Product (GDP).
Extraction of oil and gas continues to decline
Over the past decade, there has been a decline in the quantities of discovered oil and gas reserves. However, it is estimated that there are up to 1.3 billion tonnes of undiscovered oil resources and up to 1,010 billion cubic metres of undiscovered gas resources available in the UK.
There has been a considerable decrease in the physical extraction of oil and gas (see figure 1) in the UK. Between 2000 and 2012, the quantities extracted fell by 64.6% and 64.1% respectively. However, this has been partly offset by increases in imports of oil and gas from other countries.
The overall quantity of materials and resources available for use2 and consumption3 within the UK economy notably declined in 2008 and 2009 following the start of the economic downturn. In 2012, the quantities fell to their lowest levels at 747.1 million tonnes for use (11.7 tonnes per capita) and 590.2 million tonnes for consumption (9.3 tonnes per capita). However, densely populated countries such as the UK often consume smaller quantities of materials per person compared with those that are less densely populated.
Figure 1: Domestic extraction, imports and exports of oil and gas, 2000 to 2012
Energy consumption and greenhouse gas emissions increase
The production and consumption of goods and services in the economy depends on natural resources for fuel and energy. The amount of energy consumed closely relates to greenhouse gas (GHG) emissions. If the amount of energy consumed increases, the emission of GHGs generally rises as a result.
In 2012, despite slower growth in GDP, energy consumption and GHG emissions increased by 1.2% and 2.2 % respectively, which was mainly due to a 0.9°C drop in average air temperature during that year.
However, the overall trend in energy consumption and GHG emissions has been decreasing, particularly since 2008 (figure 2). This was largely a result of the economic downturn, which saw annual GDP fall by 5.2% in that year. Since then energy consumption and emissions have fluctuated broadly in line with the UK’s economic performance.
Figure 2: Energy consumption and greenhouse gas emissions, 2000 to 2012
- Source: Ricardo-AEA
Increase in energy from renewable sources
The difference between energy consumption and GHG emissions has gradually narrowed over time. This is partly due to the increasing use of renewable energy sources and more energy efficient processes in the production of goods and services. The economic downturn also had an effect because it reduced activity across the UK.
Energy consumption from renewable and waste sources has increased over the last decade, peaking at 9.6 million tonnes (oil equivalent) in 2012, although this only represented 4.5% of total energy consumption.
Revenue from environmentally related taxes increases
The government collects taxes on items that have proven negative impacts on the environment. They include taxes on petrol and diesel, motor vehicle duties paid by businesses and households, air passenger duty, and landfill tax, as well as various others.
Revenue from environmentally related taxes (in current prices) has gradually increased over the past two decades, peaking at £43.0 billion in 2013. This represented 7.5% of total revenue from taxes and social contributions in the UK and was equivalent to 2.7% of GDP.
Each year, the government funds environmental protection activities such as waste management, air and climate protection, and the protection of biodiversity and landscapes. In 2012, this amounted to £14.2 billion (in current prices), of which £11.5 billion (81.0%) was spent on the collection, treatment and disposal of waste. This was equivalent to 0.9% of GDP.
UK industries also spend money on in-house and external environmental protection activities. In 2012, the extraction, manufacturing, and electricity, gas and water industries spent £3.2 billion, mainly on waste water management (30.3%) and waste management (27.0%).
Where can I find out more environmental accounts?
These statistics were analysed by the Environmental Accounts team at ONS. The analysis was based on data published in UK Environmental Accounts, 2014. If you have any queries, please contact us at: firstname.lastname@example.org
Environmental accounts are compiled in accordance with the System of Environmental Economic Accounting (SEEA), which closely follows the UN System of National Accounts (SNA).
This is measured by Direct Material Input (Domestic extraction + Imports)
This is measured by Domestic Material Consumption (Domestic extraction + Imports – Exports)