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Danish Environmental Exports of Products and Consultancy Services within the Water Sector in 1999

Appendix 1

Demarcation of the water sector
In order to calculate Danish environmental exports in the water sector, it has been necessary to consider how the sector should be defined. Based on the official statistics, it is not possible on the basis of either in-trade or goods nomenclatures to define the water sector, neither for the supply sector nor for the wastewater sector. In addition there may occasionally be doubts as to whether a given line of production belongs under the environment or the energy sector.

In in-trade nomenclatures, physico-economic units are classified by the principal end product of the workplace. That means, for example, that the manufacture of scrap-based iron and steel products is placed under Iron and steelworks, the manufacture of pulp from waste paper under Pulp manufacturing, recycling of waste oil for the manufacture of fuel oil under Mineral oil industry etc., and the desulphurization of gas under Extraction of crude oil and natural gas etc. Consequently, biogas plants are listed under the energy sector (Gas supply) and the disposal of chemical waste by incineration is allocated to the environment sector (Landfills and waste incineration facilities).

Looking purely at the demarcation of an individual sector, there seems to be a general trend to make the sector rather capacious, i.e. to include areas which, seen in isolation, other sectors of society feel belong to their area. That can be convenient, of course, for anyone wishing to demarcate a specific sector, but it is not workable for statistical computations. Traditionally, for instance, building insulation is regarded as an activity within the building and construction sector, but some people today feel it belongs under the energy sector and others think that insulation is an activity at home in the environment sector. In the same way, windmills and biogas plants are sometimes listed under the environment sector and sometimes under the energy sector.

Before undertaking a more detailed demarcation of the water sector on the basis of products, companies, trades etc., it may be useful to lay down some more general guidelines for delineation between the environment and energy sectors.

Delineation between the environmental and energy sectors might be based on end-products/services:

Another important distinction in this context is to differentiate between primary production and secondary production. This is a principle generally applied in the sectoral classification of enterprises also.

Finally, a distinction needs to be made here between on the one hand companies carrying out environmental and energy production, and on the other hand suppliers of products and services for these companies.

In demarcating the water sector, it was decided in this study to include only commercial environmental production. It was therefore decided to define the limit for the water sectors, in popular terms, at the garden gate to private households. For example, exports of water meters for domestic water consumption have not been included in the inventory. Hence, the demarcation of the sectors involved was based on an operational approach.

Operational demarcation
Operational demarcation of the water sector includes the categories below. The categories were used in the questionnaire on which the study was based.