1.1 Political background

Sustainable Development is the current paradigma of environmental policy. How can we develop our societies in a way which is “sustainable” in the long run? How can we pursue the many different goals of people in a way that no one, including our children and future generations, will be unduly deprived of basic rights? And, first of all, how can we define and measure Sustainable Development?

Both Agenda 21 , the final document of the United Nations Conference on Environment and Development (UNCED), and the European Union’s Fifth Environmental Action Programme , entitled “Towards Sustainability” (93/C 138, Official Journal of the EC, 17.5.93, p. 42ff), recognize the priority to strengthen the information systems needed to formulate a sustainable way of development. In the follow-up of the 1992 Rio Conference, former Commission president Delors convened a group of European Commission officials, under the roof of the Forward Studies Unit (cellule de prospective), to discuss options for providing environmental policy with statistical tools intended to perform the functions which the System of National Accounts (SNA) has had for economic policy in the second half of the 20th century.

The group, consisting of environmental experts working in the General Directorates of the Commission (e.g. environment, agriculture, energy, transport, economic instruments, research, regional development), started with an assessment of the on-going projects at national and international level, such as the Pressure-State-Response indicator model promoted by the OECD’s State of the Environment (SOE) group, or the UN SEEA Handbook which describes methodologies for including the environment into the SNA. The discussion of these approaches soon focused on the “right” valuation of environmental damages, as required e.g. for an “Environmentally-adjusted Domestic Product” (EDP, often called “Green GDP”). The participants realized, however, that there would not be a quick consensus on a common valuation procedure, given the huge differences in basic attitudes between economic sectors (putting the focus on material wealth and employment) and environmental organisations (stressing long-term aspects and global distribution issues subsumed under the “Sustainable Development” label). Although the possibility to substitute conventional GDP with a “greened” version was not totally excluded, there was a general feeling that this was a long-term option only. The vision of having statisticians decide whether an adjustment for environmental damages should amount to 1, 5 or 20% of current GDP was simply not realistic, given the enormous differences in academic monetary valuations even in well-studied fields such as Climate Change . Furthermore, it was quite obvious that the physical information base was insufficient. Before a valuation of damages caused by human activities could start, one should at least know the physical volume of these activities, e.g. how much carbon dioxide has been emitted in a given year and country. While there would be sufficient data for carbon dioxide emissions, it was obvious that for many other important human activities affecting the environment, e.g.

this information would not be available, at least not in the quality that would be required to value such activities in comparison with economic activities for which standardized statistical classifications have been used for many years.

First of all, there was not even a common understanding which activities should be included in a "Greened" GDP. Should the adjustment focus on "economic" variables, e.g. forest or groundwater resources, excluding however the "intangible" values such as the beauty of a landscape, or the extinction of a species with no apparent market value? Or should all "unwanted activities" be included in such a system, at the expense, however, of endless discussions on how to value a butterfly in monetary units?

There was no easy solution to this dilemma. After intensive discussions, the group finally opted for a two-pronged approach:

I. 'satellite' accounts alongside the national accounts and closely linked to them, some in physical and some in monetary terms, that will themselves provide a powerful analytical tool and in which the new concepts can be tested;

II. calculation of physical indicators and indices related to the pressures of human and economic activities on the environment.

The Commission decided to support these developments politically and financially (see the “fiche financière” of the Communication from the Commission to the Council and the European Parliament on “Directions for the EU on Environmental Indicators and Green National Accounting” (COM (94) 670 final, 21.12.94) . EUROSTAT, in its double role as a General Directorate of the Commission and the Statistical Office of the European Communities (and in the latter function responsible for the coordination of statistical work in the EU Member States), was put in charge of the main elements of this work (while basic research is being pursued by DG XII, the Commission’s research General Directorate).

The goals of the Communication were supported by resolutions of the European Parliament on October 11, 1995, and by the Council on December 12, 1997.

The indicator part of the Commission’s initiative, called a European System of Environmental Pressure Indices (ESEPI), is the subject of this handbook. Its principal goal is to give a comprehensive description of environmentally harmful human activities (“pressures”) in physical units at the aggregation level of “policy fields” such as Climate Change or Dispersion of Toxic Substances .