Economic Intensity of Greenhouse Gas Emissions 2021

Introduction

This is the first edition of this new release from the CSO. It combines in a novel way published CSO National Accounts estimates of Output, Gross Value Added (GVA) and Modified GNI (GNI*) with CSO Environmental Accounts estimates of Greenhouse Gas (GHG) Air Emissions.

The NACE Rev. 2 industry sectoral classification is used in this publication for 21 economic groups (A21) for both presentation and confidentiality purposes. Both sets of estimates are available disaggregated to 64 economic sectors (A64). The composition of the A21 groups is described in the relevant tables and charts and in more detail below. The release is an attempt to both highlight and quantify these economic emission intensity changes, rather than provide reasons for these changes. The underlying data are available in more detail (A64) allowing users to construct their own bespoke estimates for specific sectors of particular interest. This release is also, in part, a means to highlight to our users the type of comparative analysis which is possible using these data.   

The Output Method (also known as the Production Approach) measures Gross Value Added (GVA) as the value of Output (what is produced) less the value of goods and services used in producing these outputs (the inputs or intermediate consumption). To put it more simply, outputs minus inputs equals value-added.

Modified GNI (GNI*) is a measure of economic activity which excludes many globalisation effects which disproportionally impact the measurement of the size of the Irish economy. GNI* is based on Gross National Income (GNI). GNI at market prices is equal to Gross National Product (GNP) at market prices plus EU subsidies less EU taxes. This is more commonly described as being equal to Gross Domestic Product (GDP) plus net primary incomes from abroad.

To produce Modified GNI (GNI*) CSO take GNI and adjust for:

• factor income of Redomiciled Companies
• depreciation on R&D Service Imports and Trade in Intellectual Property (IP)
• depreciation on Aircraft Leasing

Constant prices

GVA and GNI* estimates are presented in both current and constant prices in this release. Constant prices are an attempt to remove the effects of price increases from the value estimates to show only volume effects. Output estimates in constant prices are not available for the majority of EU Member States (available for 12 of 27). An advantage of current prices is that they reflect the lived experience, rather than through the artificial construct of constant prices. However current prices (value changes) have the disadvantage of including price changes along with volume changes. Current prices would not generally be favoured for comparisons of different periods or periods with large price increases. Here, however, the same period is being examined and prices were relatively stable (i.e. the rate of inflation was generally low) over much of the 2012-2021 in both Ireland and across many EU Member States. Nevertheless, constant prices are also provided to remove these price effects and provide clearer comparisons over time. Single year 2021 tables and figures are shown in current prices to reflect the lived experience. See Table 4.1.

Air emissions accounts using residence and territory principles

Air Emissions Accounts classify emissions of greenhouse gases and air pollutants by emitting economic sector, using the NACE classification as used in National Accounts, including households as consumers. Both these National Accounts and Air Emissions estimates use the ‘residence’ principle of National Accounts. In summary this means that the emissions are assigned to the country where the company causing the emission is based ('resident'). Emissions from international shipping and aviation are assigned to the countries where the airline/shipping company is based, regardless of where the emission takes place. This means that there can be large differences between the Air Emissions Accounts (using the residence principle) and the National Inventories (using the territory principle).

In summary, the main differences between air emissions accounts (AEA) and GHG emission inventories are:

The impact of the COVID-19 pandemic can be seen in the reduced GHG air emissions in 2020 and 2021 compared with 2019. This is almost entirely observed in the Transportation and Storage (H) sector (NACE 49-53), particularly in Air Transport (NACE 51).

The GHG figures used in this release are sourced from the CSO Environment Division’s publication ‘Environmental Accounts Air Emissions’ available at:
https://www.cso.ie/en/releasesandpublications/ep/p-eaae/environmentalaccountsairemissions2020/

These CSO Environment Division figures are in turn based on the air emissions inventories submitted annually by the Environmental Protection Agency (EPA) to the United Nations under the United Nations Framework Convention on Climate Change (UNFCCC) and under the Convention on Long-Range Transboundary Air Pollution (CLRTAP).

By combining both these National Accounts and Air Emissions estimates it is possible to establish an ‘intensity’ of GHG air emissions per euro of Output and GVA generated in the Irish economy. These are also shown in a time-series, enabling examination of trends within and across sectors over time.

EU Comparisons

Ireland is shown alongside other EU Member States. EU data were sourced from the Eurostat database. Eurostat is the statistical office of the European Union and is part of the European Commission. These charts illustrate the data available at the start of January 2023 and are subject to revision. Eurostat greenhouse gas estimates for Ireland are used for 2021. Eurostat data are available at:
https://ec.europa.eu/eurostat/web/climate-change/data/database

Definitions

Output at basic prices covers the value of all goods produced for sale, including unsold goods, and all receipts for services rendered. Output furthermore covers the market equivalent of goods and services produced for own use, such as own account capital formation, services of owner-occupied dwellings and agricultural products produced by farmers for own consumption.

Gross Value Added (GVA) measures the added value generated in an economy by the production of goods and services. Output minus Intermediate Consumption equals GVA. Intermediate Consumption at market prices includes all goods and services used up in the production process in the accounting period, regardless of the date of purchase.

GVA is conceptually the same aggregate as Gross Domestic Product (GDP). The difference between the two concepts is that GDP is measured after including product taxes (for example excise duties, non-deductible VAT, etc.) and deducting product subsidies while GVA is measured prior to adding product taxes but includes product subsidies.

Greenhouse Gases: The three main greenhouse gases included in this publication are carbon dioxide (CO₂), nitrous oxide (N2O) and methane (CH4).

Carbon dioxide emissions are the result of burning fossil fuels such as coal, turf and petroleum for heat, power, and transport. Industrial processes such as cement production also emit CO₂.

Nitrous oxide emissions arise from nitrogen fertilisers used in agriculture and a small number of industrial processes.

Methane emissions are caused by the digestive systems of ruminant animals, waste water treatment plants and landfill sites.

There are other greenhouse gases: hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulphur hexafluoride (SF6) and nitrogen trifluoride (NF3). The emissions from these fluorinated gases (F-gases) account for approximately 2% of total greenhouse gas emissions in Ireland.

Greenhouse gas emissions by different gases are compared using the global warming potentials (GWPs) for a 100-year time horizon from the Intergovernmental Panel on Climate Change (IPCC) Fourth Assessment Report of 2007. The GWP is a measure of the global warming effect of a given mass of a greenhouse gas compared with the global warming effect of the same mass of carbon dioxide. For example, the GWP for methane is 25 and that of nitrous oxide is 298.

Greenhouse gases other than carbon dioxide may be therefore converted into tonnes of carbon dioxide equivalent by multiplying their masses by their global warming potentials. For example, 35,000 tonnes of methane are equivalent to 875,000 (35,000 x 25) tonnes of carbon dioxide for a 100-year time horizon.

Composition of NACE A21 codes