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Definition: Environmental protection investment expenditure


Investment expenditure includes outlays in a given year (purchases and own-account production) for machinery, equipment and land used for Environmental Protection purposes. Total investments in a sector or industry is the sum of two categories. 

-End-of-pipe investments: These investments do not affect the production process itself, and the amount of pollution generated, instead they serve to treat pollution already generated.

-Investments in integrated technologies: These are investments which lead to a modified or adapted production process. They serve to reduce the amount of pollution generated. When a new production process is introduced, the Environmental Protection expenditure consists of the outlays over and above what would have been paid for a cheaper, viable, but less environmentally benign equipment. Where an existing plant is modified, the environmental investment is equal to the total outlays for the environmental adaptation. 

Investment expenditure includes purchases of connected and adapted capital goods such as septic tanks (end-of-pipe) and catalytic converters (integrated). These are sometimes not part of specific surveys but estimated based on existing information e.g. on number of units and unit costs. The coverage of adapted and connected products in the figures reported should be specified, as this could vary considerably between countries.
Integrated investments are not asked for specifically in the questionnaire but are calculated indirectly through the difference between the variables "total investments" and "of which end-of-pipe". Please make a note of the coverage if the figures reported as total investments in the Business sector do not cover both categories.
There is no division of investments into categories for the Public sector and Specialised producers. These investments are usually of an end-of-pipe type and the basic data sources (e.g. production statistics) do not allow this distinction.
Joint OECD/Eurostat Questionnaire 2002 on the State of the Environment, section on Environmental Expenditure