Economy-wide Material Flow Accounts for Denmark 1993-2002

Economy is recognized as a process of extracting materials from nature, transforming them, and at the end of the process (production and consumption), disposing them again in nature. Full understanding of this process calls for a complete understanding of physical dimension of the economy. After decades of research work it was acknowledged that environmental problems can occur at every step of this process. It was also recognized that not only problematic substances cause the environmental problems, but also problematic and not optimal allocation of matter related to economical activities. Industrial growth and rising population strain the global environment and allocation of material resources. As we all know, most changes, if not all, in the environment are brought about by human activities. These activities result in a flow of materials. These insights have contributed to a new approach to environmental accounting called Material Flow Accounting (MFA), with the purposes to look at the physical economy. This calls to the economy-wide material flow data. MFA data can be used to identify environmental problems connected to material flows, and to develop strategies for their prevention. However, usefulness of the data requires a systematic organisation of data into accounting system. In such a systematically organized accounting system the economy should be understand as a metabolism where materials are continuously streaming through the system, where it is commonly known that all materials that have once entered the economic system do not disappear. One part of the materials leaves the system in a form of exports, waste and emissions and another part is stored in the system in terms of buildings, etc. Materials stored in the system will also at some point become waste. MFA for a economy can be simply defined as consistent compilations of information on the overall material flow of that economy. Building MFA makes it possible to compile aggregate summary indicators and allow for broad analysis of the physical economy. Economy Wide Material Flow Accounts (MFA) has been developed as a tool for monitoring the economic metabolism. The underlying principle of economy-wide MFA is to account for all materials entering and leaving the economic system. In other words, economy-wide MFA show the amounts of physical inputs into an economy, material accumulation in the economy and outputs to other economies or back to nature (Eurostat 2001). Economy-wide MFA include the weight of all materials flowing in and out of the economy as a whole. They are therefore not to be confused with substance flow accounts – where the focus is put on specific chemical substances, which are monitored on a detailed level through different production and consumption processes. In the economy-wide MFA, all material flows are measured in the same unit: tonnes per year. From that point of view, economy-wide MFA can be seen as supplement to other environmental accounts. Two international co-operations on MFA under the leadership of the World Resources Institute and the publication in 2001 of Economy-wide material flow accounts and derived indicators – a methodological guide (Eurostat 2001) were the first step in an international presentation and harmonization of MFA accounts. In 2002, Eurostat published Material use in the European Union 1980 – 2000: Indicators and analyses, which contains the results of the revised and updated 1980-2000 version of the initial 1980-1997 economy wide MFA for the European Union compiled by the Wuppertal Institute. In 2005, IFF-Social Ecology presented Development of material use in the EU-15: 1970-2001 - Material composition, cross-country comparison, and material flow indicators. In 2002, Statistics Denmark has constructed MFA, including some aggregate indicators3 on a pilot-project basis. The accounts and indicators were established for the years 1981, 1990 and 1997 (Gravgård 2002). The pilot study showed that the statistical basis and methods are available for a production of accounts and indicators. The objectives of this report are: 1) to convert existing Danish experiences on MFA to a regular production system so that MFA can be published on a yearly basis as part of the existing Danish Environmental Accounts; 2) to establish a MFA and material flow database and indicators for the period 1993-2002. The system will focus on production of Direct Material Input (DMI) and Domestic Material Consumption (DMC) accounts and indicators. It is the intention to build the MFA system on a detailed database, which will make it possible to obtain a wide range of different information/indicators. Thus, all material flows will be related to industries and households. This means that DMI and DMC indicators will be broken down by final demand categories (individual consumption, collective consumption, investments, inventories and exports) and 130 industries. The system will also include a breakdown by material types. MFA and material flow indicators are compiled for the period 1993-2002 due to the fact that for this period a consistent time series is available. The description and analysis of selected hidden flows will be included as well.
Keyword: EW-MFA, DMI, DMC