The United Nations System of National Accounting (SNA) framework provides an internationally agreed methodology for national economic accounts. SNA accounts are the main source of information for the internationally comparable economic aggregates and indicators which are used to assess the economic performance of countries. Examples are gross domestic product (GDP), value added, income, consumption, economic growth rate and government deficit,.
GDP is hence the best-known measure of macroeconomic activity. It has also come to be regarded as a proxy indicator for overall societal development and progress in general. However, GDP does not measure environmental sustainability or social inclusion, and these limitations need to be taken into account when using it in policy analysis and debates. The need to strengthen the data and indicators that complement GDP is increasingly recognised, and several international initiatives have been launched to address these issues. Taking stock of these, in August 2009, the European Commission adopted a communication ‘GDP and beyond - measuring progress in a changing world’ (EC, 2009). This communication explicitly addresses the need for environmental accounting (Section 3.5) and recalls that since 2006, the Commission had called on the European Union (EU) and its Member States to ‘extend the national accounts to key aspects of Sustainable Development. The national accounts will therefore be complemented with integrated environmental-economic accounting that provides data that are fully consistent’. The development of the accounts is eagerly anticipated, since ‘in the longer term it is expected that more integrated environmental, social and economic accounting will provide the basis for new top-level indicators’.
From 2000, the EEA has experimented with the computation of water accounting (EEA, 2001a, 2001b and 2001c) to test river quality accounting and analyse highly significant indicators. These developments were based on principles, established in the mid 1980s (Weber, J.-L., 1986); the hydrologically based improvements were tested in a couple of countries only, with France being one of these (Babillot, 1995).
Building hydrologically consistent water accounting to usefully address the balance between resource and uses is a very complex task. Here, the resource is the water that can be exploited by the economy at a certain place in the catchment at a certain moment in time and uses the actual abstractions, evaporation and returns in the same place at the same time. However, and even if the needs for maintaining ecosystem functions are set aside for simplifying the approach, it is not possible to estimate the resource as the sum of volumes of wa ter in the different compartments because the intrinsic specificities of the water pathways (water flows through rivers, exchanges between soil and underground systems, multiple uses of water along a river, etc.) on the one hand and the uses as the simple sum of abstracted volumes on the other hand. At the end, there can be ’competition’ between resource and uses which identification requires appropriate methodology and data to mitigate uncertainties if information and gaps in knowledge.
Following the fundamentals developed from the mid 80s and supported by different policies related to biodiversity (e.g. the EU 2010 strategy and the Millennium Ecosystem Assessment), the physical accounts were developed by the EEA with the intention of addressing new challenges and their computation carried out to check the effectiveness of the approach and the appropriateness of the existing data collection systems.