Research P ro fe s s o rs h ip E n viro n m e n ta l P o lic y Science C ente r B e r lin
FS I I 88-410
ENVIRONMENTAL PROTECTION EXPENDITURES The German Example
by
C h r is tia n Lei p e r t and Udo E. S im onis
To be p u b lis h e d in : " R iv is t a In te r n a z io n a le d i S c ie n z e , Economiche e C o m m e rc ia li" , M ila n o 1988/89.
W is s e n s c h a fts z e n tru m B e r lin f ü r S o z ia lfo rs c h u n g gGmbH (WZB) S cie n ce C e n te r B e r l in , R e ic h p ie ts c h u fe r 50, 1000 B e rlin (W e s t) 30
E n v ir o n m e n ta l P ro te c tio n E x p e n d itu r e s T h e G erm an E x a m p le
A b s t r a c t
In t h i s p a p e r s t a t i s t i c a l e v id e n c e is p r o v id e d on th e le v e l a n d s t r u c t u r e o f e n v ir o n m e n t a l d a m a g e a n d p r o t e c t io n e x p e n d it u r e s in th e F e d e r a l R e p u b lic o f G e rm a n y , i . e . , o n th e e n v ir o n m e n t a l p r o t e c t io n in v e s tm e n t s b y i n d u s t r y a n d g o v e r n m e n t, th e c a p i t a l s to c k f o r e n v ir o n m e n t a l p r o t e c t io n , th e t o t a l c o s ts o f a n d e x p e n d it u r e s f o r e n v ir o n m e n t a l p r o t e c t i o n . I t is a r g u e d t h a t th e c o n v e n tio n a l e c o n o m ic a c c o u n t in g s y s te m s h a v e n o t p la y e d a n e n l i g h t e n i n g r o le in s t a t i s t i c a l l y r e v e a l i n g th e a c t u a l d a m a g e to th e e n v ir o n m e n t . T h e y c a n , h o w e v e r , b e m e t h o d o lo g ic a lly im p r o v e d ; a n d th e y m u s t b e c o m p le m e n te d b y a s s e s s m e n ts o f th e e c o lo g ic a l c o s ts o f th e p r o d u c t io n p r o c e s s .
Um we 11 s c h u tz a u s g a b e n
Das B e is p ie l d e r B u n d e s r e p u b lik D e u ts c h la n d
Z u s a m m e n fa s s u n g
In d ie s e m P a p ie r w i r d e in s t a t i s t i s c h e r N a c h w e is e r b r a c h t ü b e r d ie U m w e lts c h ä d e n u n d d e n U m w e lts c h u tz in d e r B u n d e s r e p u b lik D e u ts c h la n d - ü b e r d ie U m w e lt s c h u t z in v e s t it io n e n d e r I n d u s t r i e u n d d e s S ta a te s , d a s U m w e lts c h u tz - A n la g e v e r m ö g e n , d ie g e s a m te n K o s te n u n d A u s g a b e n f ü r d e n U m w e lts c h u tz . D ie h e r k ö m m lic h e ö k o n o m is c h e R ech
n u n g s le g u n g ( V o l k s w i r t s c h a f t l i c h e G e s a m tr e c h n u n g ) h a t b is h e r zu we
n ig z u r s t a t i s t i s c h e n E r h e l lu n g d e r U m w e lts c h ä d e n b e ig e t r a g e n ; s ie k a n n m e th o d is c h v e r b e s s e r t u n d s ie m uß d u r c h E r m it t lu n g d e r ö k o lo g is c h e n K o s te n d e r P r o d u k t io n e r g ä n z t w e r d e n .
3
T h e f a c t o r s com m on to a l l th e r e s p e c t iv e e x a m p le s is t h a t th e r e a c t i o n o f th e GNP is e x a c t ly o p p o s ite to w h a t o n e m ig h t e x p e c t fro m a w e lf a r e i n d i c a t o r . As th e t r a d i t i o n a l e c o n o m ic a c c o u n tin g s y s te m m a k e s n o d i s t i n c t i o n b e tw e e n
autonomous
( r e a l ) a n dd e fe n siv e
(com p e n s a t o r y ) e x p e n d it u r e s , i t is n o t e a s i l y a p p a r e n t t h a t e c o n o m ic g r o w t h r e g is t e r e d b y th e a c c o u n ts is in p a r t n o t h in g b u t a co m p e n s a t i o n f o r d a m a g e s d o n e to th e e n v ir o n m e n t . T h is m e a n s t h a t a p a r t ( a n e v e r g r e a t e r p a r t ? ) o f th e e c o n o m ic a c t i v i t i e s r e f le c t e d in th e GNP p r o c e e d s m e r e ly fro m th e p r o b le m a t ic m ode o f p r o d u c t io n u s e d in i n d u s t r i a l s o c ie t y .2 . Econom ic G ro w th , E n v iro n m e n ta l D a m ag e, a n d C u r a t iv e E n
v ir o n m e n ta l P ro te c tio n T e c h n o lo g y
T h e in c r e a s e in e c o lo g ic a l c o s ts a s s o c ia te d w it h th e e c o n o m ic p ro c e s s a n d o f th e c o m p e n s a to r y e x p e n d it u r e s t r i g g e r e d b y t h a t in c r e a s e a r e d u e p r i m a r i l y to tw o i n t e r r e l a t e d d e v e lo p m e n ts : ( a ) th e ty p e a n d s t r u c t u r e o f e c o n o m ic g r o w t h , a n d ( b ) th e ty p e a n d e x te n t o f th e s p a t i a l c o n c e n t r a t io n o f p r o d u c t io n . E n v ir o n m e n t a l d a m a g e h a s a c c u m u la t e d in th e w a k e o f a g r o w th p r o c e s s in a n e c o n o m ic w o r ld in w h ic h li m i t e d n a t u r a l r e s o u r c e s h a v e b e e n u s e d o r b u r d e n e d a t p r a c t i c a l l y n o c o s t. In t h i s w a y , a n e n v i r o n m e n t a ll y u n s o u n d e c o n o m ic s t r u c t u r e h a s e m e rg e d t h a t m u s t n ow be q u i c k l y r e d e s ig n e d a n d r e o r g a n iz e d to o p e r a te on a s u s t a in a b l e b a s is in th e lo n g r u n . T h is ta s k c a n b e c a lle d th e
ecological m odernization o f in d u s tr ia l so ciety
( S i m o n i s ) .
F u r t h e r e c o n o m ic g r o w t h m ig h t come to a p p e a r q u e s t io n a b le fro m th e p e r s p e c t iv e o f w e lf a r e
i f
th e p r o d u c t io n in c r e a s e a t t a i n a b l e is in s u f f i c i e n t ( o r b a r e l y s u f f i c i e n t ) to c o m p e n s a te f o r th e a d d i t i o n a l e n v ir o n m e n t a l d a m a g e i t c a u s e s . T h is p o s s i b i l i t y p e r s is t s e v e n i f e n v ir o n m e n t a l p o l l u t i o n is t r e a t e d w it hadded on ("e n d -o f-p ip e ") tech
n o lo g ie s,
th e h i t h e r t o d o m in a n t s t r a t e g y o f e n v ir o n m e n t a l p r o t e c t io n . B a s e d on th e e x i s t i n g t e c h n o lo g ic a l s t r u c t u r e o f th e e c o n o m y , t h i s r e a c t - a n d - c u r e s t r a t e g y is a n a tte m p t to r e g u la t e e n v ir o n m e n t a l p o l6
l u t i o n t h r o u g h tr e a tm e n t te c h n o lo g ie s (s u c h a s f i l t e r s a n d c a t a l y t i c c o n v e r t e r s ) , d e s ig n e d to t r a p a n d c o lle c t h a r m f u l e m is s io n s in a c o n c e n t r a t e d fo r m a t th e e n d o f th e p r o d u c t io n p r o c e s s . H o w e v e r, e x p e r ie n c e h a s s h o w n t h a t p u r i f i c a t i o n c o s ts in c r e a s e a s th e le v e l o f p u r i f i c a t i o n r i s e s . W ith a b a s i c a l l y u n c h a n g e d t e c h n o lo g ic a l s t r u c t u r e , c o n t in u e d g r o w th in p r o d u c t io n w o u ld th u s c a l l f o r d i s p r o p o r t i o n a t e l y h ig h e x p e n d it u r e s on e n v ir o n m e n t a l p r o t e c t io n i f th e a b s o lu t e e m is s io n le v e l is to be k e p t c o n s t a n t , a n d m o re so i f i t is to b e r e d u c e d .
A p a r t fr o m th e a t t e n d a n t e s c a la t io n o f c o m p e n s a to r y c o s ts , c u r a t i v e e n v ir o n m e n t a l p r o t e c t io n is p r o b le m a t ic fro m th e e c o lo g ic a l p o i n t o f v ie w a s w e l l . I t m e a ns u s in g e n d - o f - p ip e e q u ip m e n t to a b a te e n v i r o n m e n t a l l y h a r m f u l e m is s io n s . T h is e q u ip m e n t , h o w e v e r , m u s t f i r s t be m a n u f a c t u r e d , a n d s in c e i t s p r o d u c t io n r e q u ir e s e n e r g y a n d n a t u r a l r e s o u r c e s , i t is lin k e d w it h f u r t h e r b u t s o m e tim e s d i f f e r e n t e m is s io n s . T h e d e s u lp h u r i z a t io n o f f l u e g a s , f o r in s t a n c e , p r o d u c e s g y p s u m . E n e r g y a n d m a t e r ia l r e s o u r c e s a r e c o n s u m e d in th e o p e r a t io n a n d m a in te n a n c e o f th e s e i n s t a l l a t i o n s , to o . In s h o r t , a d d i t i o n a l u s e o f r e s o u r c e s le a d s to a d d i t i o n a l e m is s io n s .
In th e lo n g r u n , th e n , e x - p o s t tr e a tm e n t o f e n v ir o n m e n t a l d a m a g e c a n n o t p r o v i d e a r e a s o n a b le s o lu t io n , n e i t h e r e c o n o m ic a lly n o r eco
l o g i c a l l y . E c o n o m ic a lly , th e r e is th e d a n g e r o f p e r p e t u a t in g a n a r t i f i c i a l g r o w t h p r o c e s s , in w h ic h a n e v e r l a r g e r p a r t o f th e GNP g e ts
" d e v o u r e d " b y a b a te m e n t a c t i v i t i e s . E c o l o g i c a l l y , i t is u n s o u n d to h a v e th e c o n s t r u c t io n a n d o p e r a t io n o f e n v ir o n m e n t a l p r o t e c t io n f a c i l i t i e s , b u r d e n in g th e e n v ir o n m e n t s t i l l f u r t h e r b y c o n s u m in g th e v e r y r a w m a t e r i a l s a n d e n e r g y th e y a r e in t e n d e d to c o n s e r v e . U l t i m a t e ly , e c o l o g i c a l l y s o u n d a n d e c o n o m ic a lly e f f e c t iv e e n v ir o n m e n t a l p r o t e c t io n c a n l i e o n ly in th e s y s te m a tic p r e v e n t io n o f e n v ir o n m e n t a l l y h a r m f u l e m is s io n s , i . e . , in b a s i c a l l y
low -em ission p ro d u cts
a n d inin te g r a te d , clean technologies.
7
3 . C o m p u ta tio n o f E n v ir o n m e n ta l C osts a n d E x p e n d itu r e s - S t a t is t ic a l E v id e n c e on th e F e d e r a l R e p u b lic o f G e rm a n y
In th e f o l lo w in g c a s e s t u d y on th e F e d e r a l R e p u b lic o f G e rm a n y , s e v e r a l c a te g o r ie s o f c o m p e n s a to r y c o s ts w i l l be a s c e r ta in e d to p r o v i d e a b a s is f o r e x a m in in g th e a b o v e p r e s e n te d h y p o t h e s is t h a t th e s h a r e o f c o m p e n s a to ry ( o r " d e f e n s iv e " ) c o s ts in th e GNP is in c r e a s
i n g . I t w o u ld be e x tr e m e ly im p o r t a n t to c l a r i f y t h i s is s u e , f o r th e a n s w e r m ig h t in d ic a t e n o t o n ly th e p o t e n t i a l l y c o u n t e r - p r o d u c t iv e t r e n d s o f i n d u s t r i a l s o c ie ty , b u t a ls o th e p r o s p e c ts f o r i t s
ecological s tr u c tu r a l a d ju stm e n t.
T h e e c o lo g ic a l a n d s o c ia l c o s ts a s s o c ia te d w it h th e p r o d u c t io n p ro c e s s c a n b e d i v i d e d in t o th r e e c a t e g o r ie s :
( a ) c o s ts w hose p u r p o s e is e i t h e r to c o m p e n s a te f o r p a s t e n v ir o n m e n t a l d a m a g e o r to p r e v e n t f u t u r e e n v ir o n m e n t a l d a m a g e (c o m p e n s a t o r y o r d e fe n s iv e e c o n o m ic a c t i v i t i e s ) ;
( b ) p r o d u c t io n , in c o m e , a n d p r o p e r t y lo s s e s ; a n d
( c ) d a m a g e to h u m a n h e a lt h , f l o r a a n d f a u n a , b u i l d i n g s , a n d w o r k s o f a r t ( r e a l e n v ir o n m e n t a l d a m a g e ) .
In p r i n c i p l e i t is p o s s ib le to a s s ig n a m o n e ta r y v a lu e to th e f i r s t tw o o f th e s e c a te g o r ie s a n d to p a r t s o f th e t h i r d . T h e c o s ts t h a t f a l l i n t o th e f i r s t c a te g o r y r e p r e s e n t th e d e fe n s iv e e c o n o m ic a c t i v i t i e s o f p r i v a t e h o u s e h o ld s , f i r m s , a n d th e s t a t e . T hose c o s ts a r e in c lu d e d in th e G N P. The fo c u s in th e f o l l o w i n g s e c tio n s o f t h i s c h a p t e r is on d e f i n i n g , o p e r a t i o n a l i z i n g , a n d e m p i r i c a l y v e r i f y i n g th e c o m p o n e n ts o f th e c o m p e n s a to ry e x p e n d i t u r e s .
T h e s e c o n d c a te g o r y d e a ls w it h p r o d u c t io n , in c o m e , a n d p r o p e r t y lo s s e s r e s u l t i n g fro m e n v ir o n m e n t a l o r w o r k - r e l a t e d i l l n e s s , a c c i
d e n t s , p r e m a tu r e r e t ir e m e n t , o r d e a t h ; s i m i l a r lo s s e s c a u s e d b y e n v ir o n m e n t a l d a m a g e in th e e c o n o m ic s e c to r s ; lo s s e s o f n o n r e n e w a b le r e s o u r c e s ; a n d d a m a g e to p r o p e r t y (s u c h a s f o r e s t b l i g h t o r f i s h d e a t h , r e s u l t i n g fro m e n v ir o n m e n t a l p o l l u t i o n ) .
8
o
Table 1: E n viro n m en ta l P rotection In v e s tm e n ts , M a n u fa ctu rin g Sector, F ederal R ep u b lic o f Germany
Y ear
T o ta l In vestm en ts
Waste D is p o s a l
W ater P o llu t io n C o n tr o l
N o ise Abatem ent
A ir P o llu t io n C o n tr o l C u rre n t
P r ic e s
1980 P r ic e s
C u rre n t P r ic e s
1980 P r ic e s
C u rre n t P r ic e s
1980 P r ic e s
C u rre n t P r ic e s
1980 P r i c e s
C u rre n t P r ic e s
1980 P r ic e s In M illio n s o f DM
1975 2,480 3,090 170 210 900 1 ,1 1 0 200 240 1 ,2 1 0 1,5 3 0
1976 2,390 2,830 200 230 820 960 220 260 1 ,1 5 0 1,3 8 0
1977 2,250 2,560 200 230 740 850 210 230 1 ,1 0 0 1,2 5 0
1978 2 ,15 0 2,370 170 180 680 750 200 220 1 ,1 0 0 1,2 2 0
1979 2,080 2 ,19 0 160 160 760 800 200 210 960 1,0 20
1980 2,650 2,650 210 210 910 910 240 240 1,2 9 0 1,2 9 0
1981 2,940 2,8 10 250 240 950 910 210 200 1,5 3 0 1,4 6 0
1982 3,560 3,250 390 360 1 ,1 3 0 1,0 3 0 230 210 1 ,8 1 0 1,6 5 0
1983 3,690 3,270 290 260 1,10 0 990 230 200 2,070 1,8 20
1984 3,500 3,10 0 270 240 1,0 40 920 230 190 1,9 6 0 1 ,7 5 0
1985* 5,620 4,940 330 280 1,0 60 910 260 220 3,970 3,530
A verage Annual Change in %
1975/84 + 3 .9 - 0.0 + 5 .3 + 1 . 5 + 1 .6 - 2 .1 + 1 .6 - 2 .6 + 5 .5 + 1 . 5
1975/79 - 4 .3 - 8 .2 - 1 .5 - 6 .6 - 4 .1 - 7 .9 0.0 - 3 .3 - 5 .6 - 9 .6
1979/84 + 1 1 .0 + 7 .2 + 1 1 .0 + 8 .4 + 6 .5 + 2 .8 + 2 .8 - 2 .0 + 1 5 .3 + 1 1 .4
* = p r e lim in a r y
S o u rce: IXES r e s e a r c h p r o j e c t
Table 2: Environmental Protection Investm ents, Government Sector, Federal Republic of Germany
Y ear
T o t a l In vestm en ts
W aste D is p o s a l
W ater P o llu t io n C o n tr o l
N o ise Abatem ent
A ir P o llu t io n C o n tr o l C u rre n t
P r ic e s
1980 P r ic e s
C u rre n t P r ic e s
1980 P r ic e s
C u rre n t P r ic e s
1980 P r ic e s
C u rre n t P r ic e s
1980 P r ic e s
C u rre n t P r ic e s
1980 P r ic e s In M illio n s o f DM
1975 4,740 6 ,4 10 300 390 4,430 6 ,0 10 0 0 10 10
1976 5,270 6,950 290 360 4,970 6,580 0 0 10 10
1977 4,860 6 ,19 0 310 370 4,530 5,800 10 10 10 10
1978 5,860 7,020 330 370 5,450 6,560 70 80 10 10
1979 6,940 7,640 390 420 6,440 7,10 0 110 120 0 0
1980 8,060 8,060 470 470 7,430 7,430 150 150 10 10
1981 7,390 7 ,1 5 0 520 500 6,700 6,480 160 160 10 10
1982 6,500 6,300 570 540 5,740 5,580 180 170 10 10
1983 6,030 5 ,8 10 510 470 5,330 5 ,16 0 170 170 20 10
1984 5,900 5,590 450 410 5,300 5,050 130 120 20 10
1985* 6 ,750 6,350 550 490 5,950 5,630 230 210 20 20
A verage Annual Change in %
1975/84 + 2 .5 - 1 .5 + 4 .6 + 0.6 + 2 .0 - 1 .9 X X X X
1975/80 + 1 1 .2 + 4 .7 + 9 .4 + 3.8 + 10 .9 + 4 .3 X X X X
1980/84 - 7 .5 - 8 .7 - 1 . 1 - 3.4 - 8 .1 - 9 .2 - 3 .5 - 5 .4 X X
* = p r e lim in a r y
x = S tatem en t in co m p le te S o u rce: IIES r e s e a r c h p r o j e c t
F ro m 1975 t h r o u g h 1985, DM 3 3 .2 b i l l i o n w e re in v e s te d b y i n d u s t r y a n d DM 6 8 .3 b i l l i o n b y th e g o v e r n m e n t. D u r in g t h i s p e r io d , e n v i r o n m e n ta l p r o t e c t io n in v e s tm e n ts in West G e rm a n y th u s a m o u n te d to a b o u t 4% o f th e t o t a l in v e s tm e n ts o f i n d u s t r y a n d 15% o f g o v e r n m e n t, r e s p e c t i v e l y .
A s c a n b ee seen fr o m
Table 1,
a i r p o l l u t i o n c o n t r o l in v e s tm e n ts a r e b y f a r th e la r g e s t s h a r e o f a l l th e e n v ir o n m e n t a l p r o t e c t io n in v e s t m e n ts o f th e m a n u f a c t u r i n g s e c to r o f th e G e rm a n i n d u s t r y .A d e t a i l e d a n a l y s i s o f th e e n v ir o n m e n t a l p r o t e c t io n in v e s tm e n ts b y i n d u s t r y s h o w e d t h a t in th e p e r io d u n d e r i n v e s t i g a t i o n t h e r e w a s no s i g n i f i c a n t in c r e a s e in th e s h a r e o f
in te g ra te d
o rlow em ission tech
n o lo g ie s.
T h e ir s h a r e in th e t o t a l v o lu m e o f e n v ir o n m e n t a l p r o te c t io n in v e s tm e n ts b y i n d u s t r y ro s e fro m 19.6% in 1975 to 24.0% in 1980, s a n k to 16.3% in 1982, a n d ro s e a g a in to 24.0% in 1985.A s c a n b e seen fr o m
Table 2,
w a t e r p o l l u t i o n c o n t r o l is b y f a r th e m a jo r a r e a o f g o v e r n m e n ta l e n v ir o n m e n t a l p r o t e c t io n a c t i v i t i e s in th e F e d e r a l R e p u b lic o f G e r m a n y . In th e a r e a o f w a s te d is p o s a l, in v e s t m e n ts s t a r t e d to in c r e a s e in th e s e c o n d h a l f o f th e 1970s, w h e re a s g o v e r n m e n t in v e s tm e n ts in n o is e a b a te m e n t d i d n o t becom e n o ta b le u n t i l th e b e g in n in g o f th e 1980s, o r a r e s t i l l i n s i g n i f i c a n t , a s in th e a r e a o f a i r p o l l u t i o n c o n t r o l .3 .2 C a p it a l S to c k f o r E n v ir o n m e n t a l P r o te c tio n
T h e d a t a p r o v id e d in
Table 3
t r a c e th e r e a l g r o w t h o f th e g ro s sc a p ita l stock fo r en viro n m en ta l p rotection
o v e r tw e lv e y e a r s . T h e y p r o v i d e a n o v e r v ie w o f th e f i x e d a s s e ts f o r e n v ir o n m e n t a l p r o te c t io n in v a r i o u s e c o n o m ic s e c to r s , n o t i n c l u d i n g th e e x te n t to w h ic h th e s e f i x e d a s s e ts h a d a l r e a d y b e e n d e p r e c ia t e d . In 1986, th e s e a s s e ts a m o u n te d to n e a r l y DM 48 b i l l i o n f o rin d u s tr y
a n d DM 164 b i l l i o n f o r th egovernm ent secto r.
12
Table 3: Gross C a p ita l Stock fo r E n viro n m en ta l P rotection (1980 P r ic e s ), F ederal R ep u b lic o f Germany
Economic Sectors 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986*
In M illions of DM
Industry 28,590 31,030 33,100 34,770 36,110 37,160 38,530 39,920 41,660 43,290 44,640 47,730
Energy 6 water
u t i l i t . , mining 4,210 4,520 4,900 5,090 5,320 5,610 5,980 6,640 7,800 8,710 9,850 12,330 Manufacturing 23,890 25,970 27,640 29,090 30,190 30,930 31,920 32,670 33,250 33,980 34,210 34,830 Construction In-
dustry 490 540 560 590 600 620 630 620 610 600 580 570
Government 101,140 106,870 113,090 118,500 124,690 131,450 138,560 144,710 149,940 154,610 158,990 164,040 Industry and
Government 129,730 137,900 146,190 153,270 160,800 168,610 177,090 184,640 191,600 197,900 203,630 211,770 Index (1975 - 100)
Industry
Energy 6 water
100 109 116 122 126 130 135 140 146 151 156 167
u t i l i t . , mining 100 107 116 121 126 133 142 158 185 207 234 293
Manufacturing Construction In-
100 109 116 122 126 129 134 137 139 142 143 146
dustry 100 110 114 120 122 127 129 127 124 122 118 116
Government 100 106 112 117 123 130 137 143 148 153 157 162
Industry and
Government 100 106 113 118 124 130 137 142 148 153 157 163
* - preliminary
Source: IIES research project
F ro m 1975 t h r o u g h 1986, th e v o lu m e o f f i x e d a s s e ts in e a c h o f th e s e tw o s e c to r s ro s e b y m o re t h a n 60%, th e in c r e a s e o f in v e s tm e n t in a i r a n d w a t e r p u r i f i c a t i o n b e in g e s p e c ia lly m a r k e d . S in c e th e t o t a l c a p i t a l s to c k o f G e rm a n
in d u s tr y
a m o u n te d to a p p r o x im a t e ly DM 1 ,2 0 0 b i l l i o n in 1975 a n d to DM 1 ,5 0 0 b i l l i o n in 1985, th e s h a r e o f th e c a p i t a l s to c k f o r e n v ir o n m e n t a l p r o t e c t io n w a s a b o u t 2.4% in 1975 a n d 3.0% in 1985. In th eg o v ern m en t's
c a s e , t h a t s h a r e w a s in th e r a n g e o f 10% o f t o t a l c a p i t a l s t o c k .In 1986, n e a r l y 60% o f i n d u s t r y ' s t o t a l c a p i t a l s to c k f o r e n v i r o n m e n ta l p r o t e c t io n (DM 4 7 .7 b i l l i o n ) w a s c o n c e n tr a te d in th e c h e m ic a l
i n d u s t r y (DM 1 1 .7 b i l l i o n ) , e n e r g y , w a t e r u t i l i t i e s , a n d m in in g (DM 1 0 .2 b i l l i o n ) , a n d m e ta l p r o d u c t io n a n d p r o c e s s in g (DM 6 .3 b i l l i o n ) .
B r e a k i n g d o w n th e f i x e d a s s e ts f o r e n v ir o n m e n t a l p r o t e c t io n in t o th e c a t e g o r ie s o f e n v ir o n m e n t a l s e c to r s a n d i n d i v i d u a l b r a n c h e s o f i n d u s t r y , a s o m e w h a t d i v e r s i f i e d p i c t u r e e m e rg e d . In th e
g o vern m en t's
c a s e , some 95% o f th e f i x e d a s s e ts w e re c o m m itte d to w a t e r p o l l u t i o n c o n t r o l , a n o u tc o m e o f th e la r g e n u m b e r o f c a n a l i z a t i o n a n d w a t e r p u r i f i c a t i o n p l a n t s s e t u p b y m u n ic ip a l a n d r e g io n a l a u t h o r i t i e s . In
in d u s tr y ,
e n v ir o n m e n t a l p r o t e c t io n e q u ip m e n t w a s i n s t a l l e d p r i m a r i l y f o r a i r (49%) a n d w a t e r p o l l u t i o n c o n t r o l (3 6 % ), w h ile o n l y 8% o f i t w a s i n s t a l l e d f o r w a s te d is p o s a l, a n d 8% f o r n o is e a b a te m e n t. W a te r p o l l u t i o n c o n t r o l f a c i l i t i e s a c c o u n te d f o r th e la r g e s t s h a r e o f in v e s t m e n t in th e c h e m ic a l i n d u s t r y (55% ) a n d th e c r u d e o i l p r o c e s s in g i n d u s t r y (4 7 % ). B y c o n t r a s t , a i r p o l l u t i o n c o n t r o l a s s e ts a c c o u n te d f o r m o s t (70%) o f th e in v e s tm e n ts r e p o r te d f o r th e e n e r g y i n d u s t r y , w a t e r u t i l i t i e s , a n d m e ta l p r o d u c t io n a n d p r o c e s s in g i n d u s t r i e s .3 .3 C o s ts o f E n v ir o n m e n t a l P r o te c tio n
We c a lc u la t e d th e
co sts o f environm ental p ro tectio n ,
d e f in e d a s th e d e p r e c ia t io n o f th e f i x e d a s s e ts o v e r tim e , a n d th e o p e r a t in g e x p e n s e s o f e n v ir o n m e n t a l p r o t e c t io n f a c i l i t i e s ;Table k
s h o w s th e o p e r a t i n g e x p e n s e s f o r i n d u s t r y a n d th e g o v e rn m e n t in c u r r e n t p r ic e s a n d in fo r m o f a n in d e x (19 75 = 1 0 0 ).14
Table k: O perating E xp en ses fo r E n viro n m en ta l P ro tectio n , I n d u s tr y a n d G overnm ent, F ederal R epub
lic o f Germany
Economic Sector 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985*
In M illions of DM
Industry 3,200 3,610 3,930 4,240 4,660 5,160 5,920 6,550 6,930 7,390 7,930
Energy £ water
u t i l i t . , mining 360 410 450 490 550 620 740 910 1,080 1,250 1,520
Manufacturing Construction In-
2,810 3,160 3,440 3,710 4,070 4,490 5,1,30 5,580 5,790 6,080 6,350
dustry 30 40 40 40 40 50 50 60 60 60 60
Government 3,000 3,280 3,550 3,920 4,410 4,690 5,120 5,390 5,610 5,930 6,430
Industry and
Government 6,200 6,890 7,480 8,160 9,070 9,850 11,040 11,940 12,540 13,320 14,360
Index (1975 - 100)
Industry 100 113 123 133 146 161 185 205 217 231 248
Energy £ water
u t i l i t . , mining 100 114 125 136 153 172 206 253 300 347 422
Manufacturing Construction In-
100 113 123 132 145 160 183 199 206 216 226
dustry 100 133 133 133 133 166 166 200 200 200 200
Government 100 109 118 131 147 156 171 180 187 198 214
Industry and
Government 100 111 121 132 146 159 178 193 202 215 232
* - preliminary
Source: TIES research project
Table 5: Total Costs o f E n viro n m en ta l P r o te c tio n , F ederal R ep u b lic o f Germany (in M illio n s o f DM}
In d u s tr y Government I n d u s tr y and Government
C u rre n t D e p r e c i- T o t a l C u rre n t D e p r e c i- T o t a l C u rre n t D e p r e c i- T o t a l Y ear exp en - a t io n s c o s t s exp en - a t io n s c o s t s exp en - a t io n s c o s t s
d it u r e s d it u r e s d it u r e s
A t c u r r e n t p r i c e s
1975 3,200 1,5 2 0 4,72 0 3,000 1,9 2 0 4,920 6,200 3,440 9,640
1980 5 ,16 0 2,250 7 ,4 10 4,690 3,390 8,080 9,850 5,640 15 ,4 9 0
1985 7,9 30 3 ,16 0 11,0 9 0 6,430 4,340 10 ,7 7 0 14 ,3 6 0 7,500 21,860
A t 1980 p r i c e s
1975 4,050 1,8 7 0 5,920 3,790 2 ,570 6,360 7,840 4,440 12,28 0
1980 5 ,16 0 2,250 7 ,4 10 4,690 3,390 8,080 9,850 5,640 15 ,4 9 0
1985 6,230 2,640 8,870 5,340 4,030 9 ,3 70 1 1 ,5 7 0 6 ,6 70 18 ,240
S o u rce: IXES r e s e a r c h p r o j e c t
In 1975, th e o p e r a t in g e x p e n s e s
and
th e d e p r e c ia t io n s(to ta l co sts)
a m o u n te d to DM 4 .7 b i l l i o n f o r i n d u s t r y a n d DM 4 .9 b i l l i o n f o r g o v e r n m e n t (se e
Table
5 ) . In 1985, th e s e sum s ro s e to DM 11.1 a n d 1 0 .8 b i l l i o n , r e s p e c t iv e ly , t h e r e b y in c r e a s i n g th e t o t a l c o s ts o f e n v ir o n m e n t a l p r o t e c t io n in th e F e d e r a l R e p u b lic o f G e rm a n y fro m DM 9 .6 b i l l i o n in 1975 to DM 2 1 .9 b i l l i o n in 1985.3 .4 T o ta l E x p e n d it u r e s f o r E n v ir o n m e n t a l P r o te c tio n
F i n a l l y , we c a lc u la t e d th e
to ta l e x p e n d itu re s fo r environm ental p ro tec tio n ,
c o m p r is in g th e in v e s tm e n tsand
th e o p e r a t in g e x p e n s e s f o r e n v ir o n m e n t a l p r o t e c t io n f a c i l i t i e s (se eTable
6 ) . In 1985, th e sum f o r th e F e d e r a l R e p u b lic o f G e rm a n y a m o u n te d to n e a r ly DM 1 3 .6 b i l l i o n in i n d u s t r y a n d DM 1 3 .2 b i l l i o n f o r g o v e r n m e n t, t o t a l l i n g DM 2 6 .7 b i l l i o n f o r b o th s e c to r s . F o r th e o t h e r e c o n o m ic s e c to r s , l i k e a g r i c u l t u r e , f o r e s t r y , t r a d e , t r a n s p o r t , c o m m u n ic a tio n , a n d o t h e r s e r v ic e s , i t is a s s u m e d t h a t a t le a s t DM 0 .7 b i l l i o n w e n t in t o e n v ir o n m e n t a l p r o t e c t io n in v e s tm e n ts , a n d th e sam e in t o o p e r a t in g e x p e n s e s . T o ta l e x p e n d it u r e s f o r w a s te d is p o s a l, w a t e r a n d a i r p o ll u t i o n c o n t r o l, a n d n o is e a b a te m e n t in W est G e rm a n y c a n th u s be s a id to a m o u n t to a t le a s t DM 28.1 b i l l i o n f o r 1985.
3 .5 E x te n d e d A c c o u n tin g
I f o n e is w i l l i n g to f o l lo w c e r t a i n s t a t i s t i c a l c o n v e n tio n s a n d to fo c u s on th e
a ctu a l e x p e n d itu re s
f o r e n v ir o n m e n t a l p r o t e c t io n , th e q u a n t i t a t i v e f i n d i n g s o f o u r r e s e a r c h p r o je c t p r o v id e some c lu e s to th e e c o n o m ic m a g n itu d e o f th e e n v ir o n m e n t a l p r o b le m s o f th e F e d e r a l R e p u b lic o f G e r m a n y . T h is c o n c e p t c a n , o f c o u r s e , be im p r o v e d f u r t h e r , b u t d i f f e r e n t c o n c e p ts o f m o n e ta r y e n v ir o n m e n t a l r e p o r t i n g c a n b e p ro p o s e d a s w e l l . T h e se tw o p o s s i b i l i t i e s s h o u ld n ow be b r i e f l y in v e s t i g a t e d .17
00
Table 6: Total E x p e n d itu re s fo r E n viro n m en ta l P rotection, F ed era l R ep u b lic o f Germany
Y ear
In d u s try Government In d u s tr y and Government
C u rre n t p r i c e s
1980 p r i c e s
C u rre n t p r i c e s
1980 p r i c e s
C u rre n t p r i c e s
1980 p r i c e s In M illio n s o f DM
1975 5,680 7 ,14 0 7,74 0 10,200 13,420 17,3 4 0
1976 6,000 7 ,19 0 8,850 10,940 14 ,55 0 1 8 ,13 0
1977 6 ,18 0 7,18 0 8 ,410 10,340 14 ,59 0 17 ,5 2 0
1978 6,390 7,200 9,780 1 1 ,4 7 0 1 6 ,1 7 0 18 ,6 7 0
1979 6 ,740 7 ,19 0 1 1 ,3 5 0 12,38 0 18,090 19 ,5 7 0
1980 7 ,8 10 7,8 10 12 ,7 5 0 12 ,7 5 0 20,560 20,560
1981 8,860 8 ,160 1 2 ,5 1 0 11,9 4 0 2 1,3 7 0 20,100
1982 1 0 ,1 1 0 8,820 11,8 9 0 1 1 ,1 3 0 22,060 19,950
1983 10,620 9,070 11,6 4 0 10 ,72 0 22,260 19 ,7 9 0
1984 10,890 9,090 11,8 3 0 10,630 22,720 19 ,7 2 0
1985* 13 ,5 5 0 1 1 ,1 7 0 13 ,18 0 11,6 9 0 26,730 22,860
A vera g e Annual Change in %
1975/84 + 7 .5 + 2 .7 + 4 .8 + 0 .5 + 6 .0 + 1 .4
1975/80 + 6 .6 + 1 .8 + 1 0 .5 + 4 .6 + 8 .9 + 3 .5
1980/84 + 8 .7 + 3 .9 - 1 .9 - 4 .4 + 2 .5 - 1 .0
* = p r e lim in a r y
Sources XIES r e s e a r c h p r o j e c t
T able 7: E nvironm ental Damage in the F ederal R epublic o f Germany ("M easurable Damage" in B illio n s o f DM p e r Year)
E n viron m en tal S e c to r s E nvironm ental Damage
A ir P ollution
c a . 48.0H e a lth h azard s M a t e r ia l damage
D e g ra d a tio n o f v e g e t a t io n F o r e s t b l i g h t
between 2 .3 - 5 .8 more than 2 .3 more than 1 .0 between 5 .5 - 8.8
Water P ollution
f a r more than 1 7 .6Damage to r i v e r s and la k e s
Damage t o th e N orth Sea and B a l t i c Sea C o n tam in ation o f ground w ater
more than 1 4 .3 f a r more th an 0 .3 more than 3.0
S o il C ontam ination
f a r more than 5 .2C o s ts o f C h ern obyl d i s a s t e r
R e h a b i li t a t i o n o f " y e s t e r d a y ’ s w a ste"
C o s ts o f p r e s e r v in g b io to p e s and s p e c ie s O th e r s o i l co n ta m in atio n
more than 2 .4 more than 1 . 7 more than 1 .0 f a r more than 0 .1
N oise
more than 3 2 .7D e g ra d a tio n o f r e s i d e n t i a l a m e n itie s P r o d u c t i v i t y lo s s e s
"N o ise r e n t s "
more than 2 9.3 more than 3.0 more than 0.4
Grand t o t a l o f damage more than 10 3 .5
N o te b y th e a u t h o r : T h e f i g u r e s a r e b a s e d o n r e c e n t s t u d ie s c o n d u c t e d b o th in G e rm a n y a n d a b r o a d . E x i s t i n g g a p s w e re f i l l e d w it h th e a u t h o r ’ s o w n e s tim a te s .
E v a l u a t i o n : E x tr e m e ly c a u t io u s e s tim a te s o f a l l e n v ir o n m e n t a l d a m a g e .
S o u r c e : W ic k e e t a l . (1 9 8 6 : 1 2 3 ).
21
5 O u tlo o k
T h e t r a d i t i o n a l e c o n o m ic a c c o u n tin g s y s te m s h a v e n o t h e lp e d m uch to a s c e r t a in th e d a m a g e d o n e to th e e n v ir o n m e n t . T h e se s y s te m s c a n n o t s u f f i c i e n t l y d i s t i n g u i s h b e tw e e n e c o n o m ic p ro c e s s e s t h a t a r e h a r m fu l to th e e n v ir o n m e n t a n d th o s e t h a t a r e n o t , t h e r e b y r e i n f o r c i n g th e ( f a l s e ) im p r e s s io n t h a t e n v ir o n m e n t a l p r o t e c t io n is p o s s ib le o n ly t h r o u g h f u r t h e r e c o n o m ic g r o w t h . T h e r e fo r e , th e
ecological moderniz
a tio n o f in d u s tr ia l so c iety
( a n d th e e c o lo g ic a l o r i e n t a t i o n o f e c o n o m ic p o l i c y ) r e q u ir e s a b r o a d e r in f o r m a t io n b a s e t h a n th o s e s y s te m s do p r o v i d e . To u s i t seem s e s p e c ia lly im p o r t a n t t h a t th e c o n v e n tio n a l a c c o u n t in g s y s te m s ( b o th a t th e m ic r o - le v e l a n d th e m a c r o - le v e l o f th e e c o n o m y ) b e c o m p le m e n te d b y a s s e s s m e n ts o f th e e c o lo g ic a l c o s ts i n c u r r e d b y th e p r o d u c t io n p r o c e s s .H o w e v e r , i t w o u ld b e i l l u s o r y to b e lie v e t h a t im p r o v e d a s s e s s m e n ts o f c o s ts w o u ld a u t o m a t i c a l l y e n h a n c e e n v ir o n m e n t a l q u a l i t y . One m u s t n o t t a k e i t f o r g r a n t e d t h a t th e a t t e n t i o n to e c o lo g ic a l p r i n c i p l e s , b e i n g a p r e r e q u i s i t e f o r th e lo n g - t e r m s u s t a i n a b i l i t y o f i n d u s t r i a l s o c ie t y , w i l l e a s i l y b e im p le m e n te d . P r i v a t e a s w e ll a s b u r e a u c r a t i c i n t e r e s t s c o u ld w e ll i n s i s t on th e c o n t in u a t io n o f c o s t - in t e n s iv e , c u r a t i v e e n v ir o n m e n t a l p r o te c t io n in s t e a d o f q u i c k l y a d o p tin g p r e v e n t i v e e n v ir o n m e n t a l p o l ic y b y p r o m o tin g lo w - e m is s io n p r o d u c t s a n d c le a n t e c h n o lo g y . In s h o r t , th e q u e s tio n o f h ow to h a r m o n iz e e c o lo g i
c a l im p e r a t iv e s a n d e c o n o m ic in t e r e s t s w i l l p e r s i s t .
22
B ib i io g r a p h y
B in s w a n g e r , H .C . e t a l . ( 1 9 8 8 ):
A r b e i t o h n e U m w e ltz e r s tö r u n g . S t r a t e g ie n e in e r n e u e n W ir t s c h a f t s p o l i t i k (W o rk W ith o u t E n v ir o n m e n t a l D e s t r u c t io n . S t r a t e g ie s f o r a New E c o n o m ic P o l i c y ) , new e d i t i o n , F r a n k f u r t .
H a m e r, G . (1 9 8 6 ):
S a t e llit e n s y s te m e im R ahm en d e r W e it e r e n t w ic k lu n g d e r V o l k s w i r t s c h a f t lic h e n G e s a m tre c h n u n g ( S a t e l l i t e S yste m s a n d th e F u r t h e r D e v e lo p m e n t o f th e N a t io n a l A c c o u n t s ) , i n : H a n a u , K . / H u j e r , R . / N e u b a u e r , W. ( E d s . ) , W i r t s c h a f t s - u n d S o z i a l s t a t i s t i k , G o e ttin g e n , p p . 6 0 - 8 0 .
K e i t e r , M . (1 9 8 5 ):
A u fw e n d u n g e n f ü r U m w e lts c h u tz im P r o d u z ie r e n d e n G e w e rb e (E n v ir o n m e n t a l P r o te c tio n E x p e n d it u r e in th e M a n u f a c t u r in g S e c to r ) , i n : U m w e lt u n d E n e r g ie . H a n d b u c h f ü r d ie b e t r i e b l i c h e P r a x i s , F r e i b u r g i . B r .
L e i p e r t , C . (1 9 8 2 ):
B r u t t o s o z i a l p r o d u k t , d e f e n s iv e A u s g a b e n u n d N e tto w o h lfa h r ts m e s s u n g (G ro s s N a t io n a l P r o d u c t, D e fe n s iv e E x p e n d it u r e a n d Net N a t io n a l W e lf a r e ) , B e r l i n : I IE S .
L e i p e r t , C . (1 9 8 6 ):
S o c ia l C o s ts o f E c o n o m ic G r o w th , i n : J o u r n a l o f E c o n o m ic Is s u e s , N o . 1, 20, p p . 1 0 9 -1 3 1 .
P e s k in , H .M . (1 9 8 1 ):
N a t io n a l Incom e A c c o u n ts a n d th e E n v ir o n m e n t , i n : P e s k in , H .M . e t a l . ( E d s . ) : E n v ir o n m e n t a l R e g u la t io n a n d th e U .S . E c o n o m y , B a lt im o r e a n d L o n d o n , p p . 7 7 -1 0 3 .
R e id e n b a c h , M . (1 9 8 5 ):
D ie U m w e lts c h u tz a u s g a b e n des ö f f e n t l ic h e n B e r e ic h s . P ro b le m e d e r E r f a s s u n g s o w ie D a r s t e llu n g d e r A u s g a b e n u n d i h r e r F in a n z ie r u n g 1971-1981 ( E n v ir o n m e n t a l P r o te c tio n E x p e n d it u r e in th e P u b lic Sec
t o r . P ro b le m s D e te r m in in g a n d P r e s e n t in g E x p e n d itu r e s a n d t h e i r F i n a n c in g 1 9 7 1 -1 9 8 2 ), B e r l i n .
R y l l , A . / S c h a e f e r , D . ( 1 9 8 6 ):
B a u s t e in e f ü r e in e m o n e tä re U m w e lt b e r ic h t e r s t a t t u n g ( F o u n d a tio n s f o r M o n e ta r y E n v ir o n m e n t a l R e p o r t in g ) , B e r l i n : I IE S .
S im o n is , U .E . ( E d . ) ( 1 9 8 8 ):
Ö k o n o m ie u n d Ö k o lo g ie . A u s w e g e a u s e in e m K o n f l i k t (E c o n o m y a n d E c o lo g y . W ays o u t o f a C o n f l i c t ) , 5 th e d i t i o n , K a r ls r u h e .
S im o n is , U .E . (1 9 8 8 ):
E c o lo g ic a l M o d e r n iz a tio n o f I n d u s t r i a l S o c ie ty . T h re e S t r a t e g ic E le m e n ts , B e r l i n : I IE S .
23
S t a t is t is c h e s B u n d e s a m t (1 9 8 2 , 1 9 8 3 ):
I n v e s t it io n e n f ü r U m w e lts c h u tz im P r o d u z ie r e n d e n G e w e rb e 1979, 1980 u n d 1981 (T h e F e d e r a l B u r e a u f o r S t a t i s t i c s : In v e s tm e n ts f o r E n v ir o n m e n t a l P r o te c tio n in th e M a n u f a c t u r in g S e c to r 1979, 1980 a n d 1 9 8 1 ), S t u t t g a r t , M a in z .
S t e ig e r , A . (1 9 7 9 ):
S o z i a lp r o d u k t o d e r W o h lfa h r t? K r i t i k am S o z ia lp r o d u k t k o n z e p t . D ie S o z ia le n K o s te n d e r U m w e ltz e r s tö r u n g (S o c ia l P r o d u c t o r W e lfa re ? A C r i t i c a l R e v ie w o f th e GNP C o n c e p t. T he S o c ia l C o s ts o f E n v i r o n m e n ta l D e s t r u c t i o n ) , D ie s s e n h o fe n .
W ic k e , L . e t a l . (1 9 8 6 ):
D ie Ö k o lo g is c h e n M i l l i a r d e n (T h e E c o lo g ic a l B i l l i o n s ) , M u n ic h .
24
