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MAIN PRINCIPLES OF CONSTRUCTION OF MATRIXES SYSTEM OF INTEGRATED ENVIRONMENTAL AND ECONOMIC ACCOUNTS
Sumy State University
The guidelines in the System of National Accounts (SNA) originated fifty years ago and have been revised several times since, most recently in 1993. One aspect of the latest revision was the greater attention paid to capital stocks and flows and in particular to the place of natural resources within the set of economic assets.
However, the existing system of the national account and the parameters designed on the basis of such account (for example, gross domestic product (GDP) or the national income) do not give an opportunity to estimate result of interaction of economy and an environment. As known, GDP is monetary value of all volume of final manufacture of the goods and services in national economy for one year. But GDP encounters barrier, in particular, at an estimation of ecological parameters. For example, the more the nation pollutes water, the more it needs to invest in systems on clearing water, the better it for GDP. That is, concerning an environment the aggregated parameters of system of national accounts have three basic lacks: they do not account an exhaustion of natural resources, insufficiently full take into account costs of protection of an environment, and also do not take into account degradation of quality of an environment and a consequence for health and well-being of people.
Thus, there is a necessity of introduction of the System of integrated Environmental and Economic Accounts (SEEA). SEEA – is an external satellite account for SNA. An external satellite account extends the scope of the system by including stocks, flows and transactions which are not covered by the existing SNA.
An identity which is central to the SEEA (and in fact to the SNA also) is that when flows of products are measured ex post, total supply and total demand (or use) must exactly balance. New goods and services are supplied either by production in the current period from resident producers or come from producers in the rest of the world as imports. Thus:
Total supply = domestic production + imports
These goods and services are either:
Total use (demand) = intermediate consumption + household final consumption +
+ government final consumption + capital formation + exports
Table 1. – A simple supply and use table for all
physical flows (million tones)
In fact some demand is met not from current production but by using up items which exist in inventories. Traditionally, changes in inventories appear in the total demand equation, appearing as a positive entry when items go into stocks and as a negative entry when they are withdrawn. We thus separate capital formation into two parts, fixed capital formation which relates to the acquisition of capital goods to be used repeatedly in future production (machinery and buildings, for example) and changes in inventories. Thus the composite equation reads:
Domestic production + imports = Intermediate consumption + household final consumption +
+ government final consumption + fixed capital formation + changes in inventories + exports.
This identity must hold for any product or group of products as long as they are measured in units which are consistent for every component. Thus although the identity above is most familiar to national accountants when expressed in monetary terms, it must also hold when expressed in a common physical unit. The simple supply and use table for all physical flows including rows and columns for natural resources, ecosystem inputs and residuals is shown in Table 1.
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