Government Finance Statistics Manual 2014

384 Government Finance Statistics Manual 2014

case of fi shing licenses, and in other cases they may

relate to the use of the environment as a sink for emis-

sions. For a discussion of licenses and permits to use

natural resources, see A4.18–A4.50.

Environmental payments by governments

A7.128 Payments by government related to envi-

ronmental issues are recorded in a number of places

in GFS and the SNA. Th e treatment largely depends

on how the payments relate to production and con-

sumption and whether they are considered to be cur-

rent or capital in nature.

A7.129 All of the payments considered in this sec-

tion are transfers (see paragraph 3.10). Consequently,

this section does not include payments by govern-

ment for the purchase of goods and services related to

the environment.

Environmental subsidies and similar transfers

A7.130 An environmental subsidy or similar trans-

fer is a transfer that is intended to support activities

that protect the environment or reduce the use and

extraction of natural resources. It includes those

transfers defi ned in GFS as subsidies (25), social ben-

efi ts (27), grants (26), and transfers not elsewhere clas-

sifi ed (282).

A7.131 Subsidies or other transfers should be

treated as environmental when the primary intent

or purpose of the government is that resources

be used for either environmental protection or

resource management purposes. The determina-

tion of primary purpose should not be based on

whether the use of the resources by the recipient

of the transfer results in positive outcomes for the

environment. While it is reasonable to consider

that the purpose of the government in making the

transfer and the purpose of the recipient are the

same, it may not be the case that the expenditure of

the transferred resources results in beneficial envi-

ronmental outcomes even if this was the intent. For

detailed descriptions of the classification of these

transfers, refer to Chapter 6.

A7.132 In principle, a decision as to whether the

primary purpose of a transfer is environmental should

be made for each individual transfer. Th en, once a de-

cision on the primary purpose has been made, the

total value of the transfer is treated as being for that

primary purpose.

A7.133 In practice, information on transfers by

government is usually contained in budget and other

government expenditure data. Generally, these data do

not show individual transactions and more commonly

show information by type of government program,

thus including a large number of individual transfers.

It is usually the case that such programs have multiple

purposes, and hence determining the number and

value of individual transfers that have a primary pur-

pose of environmental protection or resource man-

agement may require additional information.

A7.134 In these situations, it may be necessary to

estimate the share of the value of transfers for a given

government program that refl ects the value of indi-

vidual transfers within the program that have envi-

ronmental protection or resource management as

their primary purpose.