Environmental costs and Dutch GDP, 1985-2002

Environmental costs as a proportion of gross domestic product (GDP) have remained stable since 1995 at approximately 2.5%.

Environmental costs as a proportion of GDP

In the period 1985 - 1995, environmental costs increased faster than GDP. From 1995 onwards, environmental costs have more or less followed GDP and continue to account for approximately 2.5% of GDP.

Gross domestic product is an indicator for the economy. Comparing environmental costs with changes in GDP results in a picture of the relative importance of the environment policy for the economy.

Causes of changes in environmental costs

The causes of the increase in the share of environmental costs in GDP are rising environmental costs for the disposal of waste and waste water, rising government expenditure and the application of a range of measures - mostly technical - in industry. The increase in environmental expenditure as a proportion of total government expenditure is mainly attributable to extra funds for implementation and enforcement, for climate change measures and for tackling soil contamination.

What are environmental costs?

Environmental costs are the annual costs (both capital investment and operating costs) of environmental control measures. The costs of measures with a positive impact on the environment but which pay for themselves within three years are not included under environmental costs. Neither are the costs related to the economic impact of the introduction of environmental measures, for example changes in sales volumes.

References

• Ministries (2002). Ministerial budgets for the years prior to 2004. Various ministries, The Hague.

Relevant sections and indicators in the Environmental Data Compendium

• Guide to 'Financial instruments' section
• Guide to 'Costs and financing environmental management' section
• Dutch environmental expenditure as a proportion of total government expenditure

Relevant information outside of the Environmental Data Compendium

• CBS (2002a). Statline. Kosten en financiering van het milieubeheer. Statistics Netherlands, Voorburg/Heerlen.
• CBS (2002b). Statline. Milieukosten van bedrijven. Statistics Netherlands, Voorburg/Heerlen.
• TME (1997). Achtergronddocument overheidsuitgaven en overdrachten. Institute for Applied Environmental Economics, The Hague