Research Professorship Environmental Policy Prof. Udo E. Simonis
FS II 95-404
Environmental Protection Expenditures in Germany
by
Udo E. Simonis and Christian Leipert
Wissenschaftszentrum Berlin für Sozialforschung gGmbH (WZB) Science Center Berlin
Reichpietschufer 50, D-10785 Berlin
Environmental Protection Expenditures in Germany Abstract
The conventional economic accounting system has not played an enlightening role in statistically revealing the actual damage to the environment. It can, how
ever, be methodologically improved; and it should be complemented by assess
ments of the ecological costs of the production process.
In this paper statistical evidence is provided on the level and structure of en
vironmental damages and protection expenditures in the Federal Republic of Germany, i.e., on the environmental damage itself and on the environmental protection investments by industry and government, the capital stock for envi
ronmental protection, the total costs of and expenditures for environmental protection.
Umweltschutzausgaben in Deutschland Zusammenfassung
Die herkömmliche ökonomische Rechnungslegung (Volkswirtschaftliche Ge
samtrechnung) hat bisher zu wenig zur statistischen Erhellung der Umweltschä
den beigetragen; sie kann jedoch methodisch verbessert und sie sollte durch Er
mittlung der ökologischen Kosten der Produktion ergänzt werden. In diesem Pa
pier wird ein statistischer Nachweis erbracht über das Niveau und die Struktur der Umweltschäden und des Umweltschutzes in der Bundesrepublik Deutsch
land - über die Umweltschutzinvestitionen der Industrie und des Staates, das Umweltschutz-Anlagevermögen, die gesamten Kosten und Ausgaben für den Umweltschutz.
1. Ecological Effects of Production and the Growth of the Gross National Product
The national economic accounts are no longer suitable, if indeed they ever were, for a true evaluation of the rationality of economic activity. Such an evaluation would presuppose that the growth of the Gross National Product (GNP) could also be interpreted ecologically. But that is not the case - and may never have been. GNP is not only an economic aggregate of goods and services that are socially desirable, rather it is a mix of desirable and undesirable goods and services, the latter being forced upon the individual and society through the deterioration of environmental conditions (and of living conditions in general).
The increase in these negative environmental effects of production is inter alia a manifestation of the fact that due to the scale and structure of economic activity the limits of resource utilization and the carrying capacity of the natural environ
ment are increasingly being reached or exceeded (resource depletion and/or environmental degradation).
Resource depletion and environmental degradation, in turn, give rise to mul
tiple counteractions at all economic levels, in private households, in the public and the business sectors. Thus the task obviously is to avert the negative envi
ronmental effects of production, to mitigate existing damage and to prevent further environmental degradation. The expenditures associated with these counteractions at all economic levels can be called compensatory or defensive costs or expenditures.
As with other, autonomous expenditures, these costs are included in the na
tional economic accounts and enter the statistical computation of GNP. This practise, however, affects the interpretation of the central macro-economic indi
cator. GNP rises in the wake of a production process that disregards the environment, and it rises still further when the given environmental damages are mitigated through induced economic activities ...
The factor common to all such examples is that the reaction of GNP is ex
actly opposite to what one should expect from a welfare indicator. As the tradi
tional economic accounting system makes no distinction between autonomous and defensive expenditures, it is readily apparent that economic growth regis
tered by the accounts is in part nothing but a compensation for damages done to the environment. This means that a part (an ever greater part?) of the economic activities reflected in the GNP proceeds merely from the environmentally defec
tive mode of production applied in industrial society.
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2. Economic Growth, Environmental Damage, and Curative Environmental Protection Technology
The increase in environmental damage associated with the production process and of the compensatory expenditures triggered by that increase are due prima
rily to two interrelated factors: (a) the scale and structure of economic activity, and (b) the type and extent of spatial concentration of production. Environmen
tal damage has accumulated in the wake of a production process in an economic world in which limited environmental resources have been exploited at practic
ally no cost. In this way, an environmentally unsound economic structure has emerged that must thoroughly be redesigned and reorganized in order to be sus
tainable in the long run. The challenge is what has been called ecological mod
ernization o f industrial society (Simonis, 1989).
Further economic growth would be questionable from the perspective of welfare i f the production increase attainable is insufficient (or barely sufficient) to compensate for the additional environmental damage it causes. This possibili
ty persits even if environmental damage is treated with added on ( “end-of- p ip e “) technologies, the hitherto dominant strategy of environmental policy.
Based on the existing technological structure of the economy, this react-and- cure strategy is an attempt to regulate environmental pollution through treatment technologies (such as filters and catalytic converters) designed to trap and collect harmful emissions in a concentrated form at the end of the production process. However, experience has shown that marginal purification costs in
crease with the level of purification. With a basically unchanged technological structure, continued growth of production would thus call for disproportionately high expenditures on environmental protection if the absolute emission level of the economy is to be kept constant, and more so if it is to be reduced.
Apart from the attendant escalation of compensatory costs, curative environ
mental protection is insufficient also form the ecological point of view. It means using end-of-pipe equipment to abate environmentally harmful emissions. This equipment, however, must first be manufactured, and since its production re
quires energy and material resources, it is linked with further and often harmful emissions. The desulphurization of flue gas, for instance, produces gypsum;
energy and material resources are consumed in the operation and maintenance of these installations, too. In short, additional use of resources leads to addition
al though different emissions.
In the long run, then, ex-post treatment of environmental damage cannot provide neither an economically efficient nor an ecologically effective solution.
4
Economically, there is the danger of perpetuating a growth process, in which an ever larger part of GNP gets “devoured“ by abatement activities. Ecologically, it is ineffective to have the construction and operation of environmental protection facilities burdening the environment still further by (partly) consum
ing the very materials and energy they are intended to conserve. Ultimately, ecologically effective and economically efficient environmental protection can lie only in the systematic prevention of environmentally harmful emissions, i.e., in integrated, clean technologies and in basically low-emission products.
3. Computation of Environmental Costs and Expenditures - Statistical Evidence on the Federal Republic of Germany
In the following case study on the Federal Republic of Germany (former W est
ern Germany), several categories of compensatory costs will be identified to provide a basis for examining the above presented hypothesis, saying that the share of compensatory (or “defensive”) costs in GNP is increasing. It is extremely important to clarify this issue, for a verification would indicate not only the potentially counter-productive trends of industrial society, but also the need and prospects for its ecological structural adjustment.
The ecological (and the social) costs associated with the production process can be divided into three categories:
a) Costs whose purpose is either to compensate for past environmental damage or to prevent future environmental damage;
b) production, income, and property losses; and
c) persistent damage to human health, flora and fauna, buildings, and works of art (real environmental damage).
In principle it is possible to assign a monetary value to the first two of these cat
egories and to parts of the third. The costs that fall into the first category re
present the defensive economic activities of private households, firms, and the state. Those costs are included in the GNP. The focus in the following sections of this paper is on defining, operationalizing, and empirically verifying the components of these compensatory expenditures.
The second category deals with production, income, and property losses re
sulting from environment- or work-related illness, accidents, premature retire
ment, or death; similar losses caused by environmental damage in the economic
5
sectors; losses of non-renewable resources; and damage to property (such as forest blight or fish death, resulting form environmental pollution).
The third category comprises all real damage not already covered by the first two categories, i.e., all ecological costs that have not been eliminated or avoided by suitable compensatory economic activities. In no case should they be ignored when drawing up a balance of accounts for industrial society. Given the deficiencies of curative environmental policy, there is ample reason to believe that this category is crucial to a comprehensive cost assessment. How
ever, statements on the extent and pace of real environmental damage are often subject to debate. Such statements are particularly difficult to make because of the market-oriented thinking in economics and the resulting “blindness“ to eco
logical costs. The main reason, however, is that pioneering work on the relation
ships between economic and ecological systems is still rare, or a consensus on respective conventions still missing.
In presenting our findings on the three categories of costs as they relate to the Federal Republic of Germany, we shall begin with an assessment of the an
nual environmental protection investments, gross capital stock, and current ex
penditures for environmental protection. These calculations are the outcome of a research project undertaken at the (former) International Institute for Environ
ment and Society (IIES) of the Science Center Berlin in close cooperation with the Federal Statistical Bureau. The IIES project covered the period from 1975 to 1985 and first established the respective data which in the Statistical Yearbooks of 1989 and following were published and up-dated as official data by the Fe
deral Statistical Bureau.
3.1 Environmental Protection Investments
Tables 1 and 2 show the findings on the development of environmental protec
tion investments by industry (manufacturing sector) and government (public in
vestments), at both current and constant prices. In 1992, industry’s environmen
tal protection investments in waste disposal, water quality control, noise abatement, and air pollution control amounted to DM 6.2 billion in current prices; in the case of the government (national, regional, and local govern
ments), the level of investment came close to DM 12.7 billion.
From 1975 through 1992, some DM 83.9 billion were invested by industry and DM 135.9 billion by the government. During this period, environmental protection investments in the Federal Republic of Germany thus amounted to 6
Table 1: Environmental Protection Investments, Manufacturing Sector, Federal Republic o f Germany Total
Investments
Waste Disposal
Water Pollution Control
Noise Abatement
Air Pollution Control
Year Current 1991 Current 1991 Current 1991 Current 1991 Current 1991
Prices Prices Prices Prices Prices Prices Prices Prices Prices Prices
1975 2,480 4,310 170 290 900 1,530 200 340 1,210 2,160
1976 2,390 3,980 190 320 820 1,340 220 360 1,150 1,960
1977 2,240 3,620 200 320 740 1,190 200 330 1,100 1,790
1978 2,150 3,370 170 260 680 1,060 200 310 1,110 1,740
1979 2,080 3,110 150 230 760 1,130 200 300 970 1,460
1980 2,660 3,750 220 300 910 1,280 240 340 1,290 1,840
1981 2,930 3,900 250 330 950 1,290 210 280 1,530 2,010
1982 3,560 4,470 390 500 1,130 1,460 230 290 1,810 2,220
1983 3,690 4,560 290 360 1,100 1,400 230 290 2,070 2,510
1984 3,500 4,140 270 330 1,040 1,290 230 270 1,960 2,240
1985 5,630 6,380 330 390 1,060 1,270 260 310 3,970 4,410
1986 7,300 8,030 420 490 1,150 1,340 250 280 5,480 5,920
1987 7,710 8,400 610 690 1,310 1,510 270 300 5,530 5,900
1988 8,030 8,840 530 600 1,580 1,790 270 300 5,640 6,150
1989 7,630 8,280 710 770 1,950 2,130 260 280 4,710 5,090
1990 7,230 7,520 820 860 2,000 2,080 300 310 4,120 4,280
1991 6,520 6,520 900 900 1,870 1,870 340 340 3,430 3,430
1992 6,240 6,010 ... ... ...
Source: HES research project. Data for 1986 and following from Statistical Yearbook 1989 and following.
o
Table 2: Environmental Protection Investments, Government Sector, Federal Republic o f Germany oo
Total Investments Year Current
Prices
1991 Prices
1975 4,740 8,380
1976 5,270 9,100
1977 4,860 8,100
1978 5,860 9,200
1979 6,940 9,990
1980 8,060 10,560
1981 7,390 9,380
1982 6,500 8,270
1983 6,030 7,620
1984 5,900 7,320
1985 6,750 8,320
1986 7,540 9,080
1987 7,930 9,390
1988 8,200 9,550
1989 9,080 10,280 1990 10,380 11,060 1991 11,840 11,840 1992 12,650 12,010
Waste Disposal
Water Pollution Control Current 1991 Current
Prices Prices Prices
300 540 4,430
290 500 4,960
310 520 4,530
330 520 5,460
390 580 6,440
470 650 7,420
520 690 6,700
570 740 5,740
510 650 5,330
460 560 5,310
550 670 5,960
680 810 6,610
880 1,040 6,740
1,010 1,170 6,880
1,250 1,400 7,500
1,490 1,580 8,460
1,780 1,780 9,690
Noise Abatement 1991
Places
Current Prices
7,830 0
8,570 0
7,560 10
8,560 70
9,250 110
9,690 150
8,470 160
7,300 180
6,740 170
6,590 130
7,350 230
7,970 230
7,990 280
8,030 270
8,500 300
9,030 390
9,690 350
Air Pollution Control 1991
Prices
Current Prices
1991 Prices
0 10 10
0 10 20
10 10 10
110 10 10
160 0 10
200 10 20
210 10 10
220 10 10
220 20 20
160 20 20
280 20 20
280 30 30
330 30 30
320 40 40
330 40 40
410 40 40
350 30 30
Source: IIES research project. Data for 1986 and following from Statistical Yearbook 1989 and following.
about 5% of the total investments of industry and 15% of government, respectively.
As can be seen from Table 1, air pollution control investments represent by far the largest category of environmental protection investments by the manufac
turing sector of German industry.
A detailed analysis of the environmental protection investments by industry showed that in the period under investigation there was no significant increase in the share of integrated or low-emission technologies. Their share in the total volume of environmental protection investments by industry rose from 19.6% in 1975 to 24.0%o in 1980, sank to 16.3% in 1982, and rose again to about 24.0%
in 1985 and after.
As can be seen from Table 2, water pollution control is by far the major area of governmental environmental protection activities in the Federal Republic of Germany. In the area of waste disposal, investments started to increase in the second half of the 1980s, whereas government investments in noise abatement did not become notable until the middle of the 1980s, and are still rather low, and more so in the area of air pollution control.
3.2 Capital Stock for Environmental Protection
The data in Table 3 trace the real growth of the gross capital stock fo r environ
mental protection over nineteen years. They provide an overview of the fixed assets for environmental protection in various economic sectors, but do not take into account the extent to which these fixed assets had already been depre
ciated. In 1988, these assets amounted to DM 97 billion for industry and DM 269 billion for the government sector.
From 1975 through 1993, the volume of fixed assets in industry rose by nearly 150%, in the government sector by 110%. The increase of investment in air and water purification was especially marked. Since the total capital stock of West German industry amounted to approximately DM 1,200 billion in 1975 and to DM 1,500 billion in 1985, the share of the capital stock for environmen
tal protection was about 2.4%o in 1975 and 3.0% in 1985. In the governm ent’s case, that share was in the range of 10%> of total capital stock.
Breaking down the fixed assets for environmental protection into the catego
ries of environmental sectors and individual branches of industry, a somewhat diversified picture emerges. In the government’s case, some 95%> of the fixed
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In millions of DM
Table 3: Gross Capital Stock fo r Environmental Protection (1991 Prices), Federal Republic o f Germany*
Economic Sectors 1975 1980 1985 1987 1988 1989 1990 1991 1992 1993
Industry 39,130 51,380 61,670 70,770 76,300 82,150 87,330 91,620 94,780 97,290
Energy and Water Utilities, Mining
5,360 7,350 12,800 20,060 24,790 29,000 31,930 33,630 34,590
Manufacturing 33,140 43,210 48,090 49,940 50,750 52,370 54,600 57,150 59,310 ...
Construction Industry 630 810 780 760 760 780 800 840 880
Government 128,780 168,800 205,140 219,090 226,580 234,110 242,230 251,000 260,420 269,870 Industry and Government 167,910 220,170 266,800 289,860 302,880 316,260 329,560 342,620 355,200 367,160
Index (1975 = 100)
Industry 100 131 158 181 195 210 223 234 242 249
Energy and Water Utilities, Mining
100 137 239 374 463 541 596 627 645
Manufacturing 100 130 145 151 153 158 165 172 179
Construction Industry 100 129 124 121 121 124 127 133 140
Government 100 131 159 170 176 182 188 195 202 210
Industry and Government 100 131 159 173 180 188 196 204 212 219
* Stock at the beginning of the year
Source: HES research project. Data for 1986 and following from Statistical Yearbook 1989 and following.
assets were committed to water pollution control, an outcome of the large num
ber of canalization and water purification plants set up by German municipal and regional authorities. In industry, environmental protection equipment was installed primarily for air (49%) and water pollution control (36%), while 8% of it was installed for waste disposal, and 8%> also for noise abatement. W ater pol
lution control facilities accounted for the largest share of investments in the chemical industry (55%) and the crude oil processing industry (47%). By con
trast, air pollution control assets accounted for most (70%) of the investments reported for the energy industry, and metal production and processing indus
tries.
3.3 Costs of Environmental Protection
We also calculated the overall costs o f environmental protection, defined as the depreciation of fixed assets over time, and the operating expenses of environ
mental protection facilities; Table 4 shows the operating expenses for industry and government in current prices and in form of an index (1975 = 100).
In 1975, the operating expenses and the depreciations (total costs) amount
ed to about DM 4.7 billion for industry and DM 4.8 billion for government (see Table 5). In 1992, these sums had risen to about DM 18.6 and 18.7 billion, res
pectively, thereby increasing the total costs of environmental protection in the Federal Republic of Germany from about DM 9.5 billion in 1975 to DM 37.4 billion in 1992. (Table 5 also shows the respective figures at 1991 prices.)
3 .4 Total Expenditures for Environmental Protection
Finally, the total expenditures fo r environmental protection in the Federal Re
public of Germany are presented, comprising investments and operating ex
penses for environmental protection facilities (see Table 6). In 1992, the sum a- mounted to DM 18.9 billion in industry and DM 24.4 billion for government, to
talling DM 43.4 billion for both. For the other economic sectors, such as agri
culture, forestry, trade, transport, communication, and other services, it is as
sumed that between DM 1.0 and 2.0 billion went into environmental protection investments, and the same sum into operating expenses. Total expenditures for waste disposal, water and air pollution control, and noise abatement in the Fed
eral Republic of Germany can thus be said to have amounted to at least DM 45.4 billion in 1992, may be even 47.4 billion.
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IO
Table 4: Operating Expenses fo r Environmental Protection, Industry and Government, Federal Republic o f Germany, Current Prices
In millions of DM
Economic Sectors 1975 1980 1985 1986 1987 1988 1989 1990 1991 1992
Industry 3,200 5,160 7,850 8,010 8,570 9,370 10,390 11,190 12,050 12,750
Energy and Water Utilities, Mining
350 620 1,490 1,810 2,260 2,760 3,220 3,530 3,790
Manufacturing 2,820 4,500 6,300 6,150 6,250 6,560 7,110 7,590 8,180
Construction Industry 30 50 60 60 60 60 60 70 80
Government 2,980 4,670 6,430 6,980 7,510 7,810 8,370 9,340 11,040 11,800
Industry and Government 6,180 9,830 14,280 14,990 16,080 17,180 18,760 20,530 23,090 24,550
Index (1975 = 100)
Industry 100 161 245 250 268 293 325 350 377 398
Energy and Water Utilities, Mining
100 177 426 517 646 789 920 1,009 1,083
Manufacturing 100 160 223 218 222 233 252 269 290
Construction Industry 100 167 200 200 200 200 200 233 267
Government 100 157 216 234 252 262 281 313 370 396
Industry and Government 100 159 231 243 260 278 304 332 374 397
Source: TIES research project. Data for 1986 and following from Statistical Yearbook 1989 and following.
Table 5: Total Costs* o f Environmental Protection, Federal Republic o f Germany, in millions o f D M
Industry Government Industry and Government
Year Current Expen
ditures
Depreci
ations
Total Costs
Current Expen
ditures
Depreci
ations
Total Costs
Current Expen
ditures
Depreci
ations
Total Costs
1975 3,200 1,500 4,700
At Current Prices
2,980 1,900 4,880 6,180 3,400 9,580
1980 5,160 2,210 7,370 4,670 3,660 8,780 9,830 5,580 15,410
1985 7,850 3,120 10,970 6,430 4,320 10,750 14,280 7,450 21,720
1990 11,190 5,100 16,300 9,340 5,820 15,160 20,530 10,930 31,460
1992 12,750 5,940 18,690 11,800 6,990 18,790 24,550 12,930 37,480
1975 3,200 1,500 4,700
At 1991 Prices
2,980 1,900 4,880 6,180 3,400 9,580
1980 5,160 2,210 7,370 4,670 3,370 8,040 9,830 5,580 15,410
1985 7,850 3,120 10,970 6,430 4,320 10,750 14,280 7,450 21,720
1990 11,190 5,110 16,300 9,340 5,820 15,160 20,530 10,930 31,460
1992 12,750 5,940 18,690 11,800 6,990 18,790 24,550 12,930 37,480
* Current expenses and depreciations.
Source: IIES research project. Data for 1986 and following from Statistical Yearbook 1989 and following.
Table 6: Total Expenditures* fo r Environmental Protection, Federal Republic o f Germany
Year
Industry Government Industry and Government
Current Prices 1991 Prices Current Prices 1991 Prices Current Prices 1991 Prices In millions of DM
1975 5,680 9,710 7,720 13,510 13,400 23,220
1976 6,000 9,800 8,530 14,490 14,530 24,290
1977 6,170 9,810 8,390 13,730 14,560 23,540
1978 6,370 9,840 9,760 15,200 16,130 25,040
1979 6,760 9,810 11,330 16,380 18,090 26,190
1980 7,820 10,690 12,730 16,890 20,550 27,570
1981 8,830 11,100 12,510 15,870 21,340 26,960
1982 10,060 11,950 11,890 14,810 21,950 26,760
1983 10,560 12,360 11,640 14,260 22,200 26,630
1984 10,830 12,210 11,830 14,170 22,660 26,380
1985 13,470 14,770 13,180 15,540 26,650 30,300
1986 15,310 16,920 14,520 17,060 29,830 33,980
1987 16,280 17,900 15,440 17,820 31,720 35,720
1988 17,400 19,010 16,010 18,240 33,410 37,250
1989 18,020 19,140 17,450 19,280 35,480 38,410
1990 18,420 19,020 19,720 20,820 38,140 39,840
1991 18,570 18,570 22,880 22,880 41,450 41,450
1992 18,990 18,460 24,450 23,490 43,440 41,950
* Current expenditures and investments
Source: HES research project. Data for 1986 and following from Statistical Yearbook 1989 and following.
3.5 Extended Accounting
If one accepts certain statistical conventions and focuses on the actual expendi
tures for environmental protection, the quantitative findings of our research pro
ject provide some clues to the economic magnitude of the environmental pro
blems in the Federal Republic of Germany. The concept used can be improved further, but different concepts of monetary environmental accounting can be proposed as well. These two possibilities should now briefly be described.
Further improvements to the concept of monetary environmental accounting presented here can first of all be envisaged by incorporating additional informa
tion on environmental protection expenditures incurred in the sectors of agricult
ure, forestry, trade, transport, communication, and other services. Unfortunately, so far no reliable data exist for these sectors. Neither is there reliable statistical information available on the environmental protection activities of the private households.
For a more comprehensive concept of environmental accounting it would be reasonable to link the data on expenses and capital investments for environmen
tal protection with non-monetary data on the emissions in the various sectors of the economy. Several possibilities of complementing or integrating monetary and non-monetary data have been discussed; one option is setting up “satellite system s” to complement the conventional systems of national economic ac
counts.
Particularly, systematically and continously reporting on the emissions of the various sectors of the economy would indicate their share in the total pollu
tion load. In addition, this would facilitate the analysis of the links between eco
nomic production, environmental damage and environmental protection. Con
necting the emission data with the mput-output table of the economy would also make it possible to calculate the indirect emissions originating form certain eco
nomic activities induced by the demand for intermediary goods and services from other sectors.
4. Estimation of Environmental Damages
The compilations presented above showed that actual environmental protection expenditures in the Federal Republic of Germany amounted to over DM 26.6 billion in 1985. Since then, these expenditures have continued to rise to 43.4 bil
15
lion in 1992. Nevertheless, the figure for 1985 was much below the estimated magnitude of the real annual damages to the environment in 1985.
Such estimates, of course, are politically important. Due to methodical pro
blems, however, environmental damages so far cannot be calculated but only be roughly estimated. They are difficult in the sense that they have to be generated outside traditional statistical conventions. Since damages to the natural environ
ment are not automatically registered by the economic accounting systems, esti
mating the damages depends on auxiliary concepts and categories, particularly on assumptions about people’s willingness to pay for the compensation or pre
vention of such damage.
For the Federal Republic of Germany, in 1986 Wicke et al. have estimated the annual, environmental damage, in terms of the economically measurable damage induced by air pollution, water pollution, soil contamination, and noise.
The estimates are both interesting and surprising. They indicate the huge eco
nomic significance of environmental damage, albeit on the basis of somewhat inconsistent methods.
Table 7 presents the aggregated estimates for four environmental sectors (air, water, soil, and noise). The estimated magnitude of the annual damages to the environment in the Federal Republic of Germany in 1985 was extremely high: DM 103.5 billion, or roughly 6% of the country’s GNP. This (fictitious) fi
gure was about four times that of the (actual) total annual expenditures for envi
ronmental protection in that year. In other words, the damages to the environ
ment are still enormous despite the large sum of protection expenditures spent.
It should be added that the Federal Republic of Gennany, of course, is not the only industrialized country with such high annual environmental damages.
Unfortunately, internationally comparable data on environmental damages so far have not yet been established.
5. Outlook
The traditional economic accounting systems have not helped much to ascertain the damage done to our natural environment. These systems, so far, do not suf
ficiently distinguish between economic processes that are harmful to the envi
ronment and those that are not, thereby reinforcing the (false) impression that environmental protection is possible only through further economic growth.
Therefore, ecological modernization o f industrial society (or sustainable
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Table 7: Environmental Damage in the Federal Republic o f Germany ( “Measurable D am age” in billions o f D M p e r year)
Environmental Sector Environmental Damage
Air Pollution appr. 48.0
Health hazards Material damage
Degradation of vegetation Forest blight
between 2.3-5.8 more than 2.3 more than 1.0 between 5.5 and 8.8
Water Pollution far more than 17.6
Damage to rivers and lakes
Damage to the North Sea and Baltic Sea Contamination of ground water
more than 14.3 far more than 0.3 more than 3.0
Soil Contamination far more than5.2
Costs of the Chernobyl disaster Restoration of ‘yesterday’s waste’
Costs of preserving biotopes and species Other soil contamination
far more than 2.4 more than 1.7 more than 1.0 far more than 0.1
Noise more than 32.7
Degradation of residential amenities Productivity losses
Noise impacts
more than 29.3 more than 3.0 more than 0.4
Grand total of damage more than 103.5
Note by the author: The figures are based on recent studies conducted both in Germany and abroad. Existing gaps were filled with the authors own estimates.
Evaluation: Extremely cautious estimates of all environmental damages.
Source: Wicke et al., 1986, p. 123.
development) requires a broader information base than those systems do pro
vide. To us it seems especially important that the traditional accounting systems, both at the micro-level and macro-level of the economy, be complemented by assessments of the ecological costs incurred by the economic process.
However, it would be illusive to believe that improved assessments of costs would automatically prevent environmental degradation and/or enhance environ
mental quality. One must not take it for granted that ecological principles will 17
easily be implemented to ensure long-term sustainability of industrial society.
Private as well as bureaucratic interests could well insist on the continuation of cost-intensive, curative environmental protection instead of adopting preventive environmental policy by promoting clean technology and low-emission pro
ducts. In short, the question of how to harmonize ecological imperatives and economic interests continues to persist.
18
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