The expenditures for environmental protection are deducted because they compensate for earlier negative externalities of economic and human activities. They include the removal, reduction and prevention of environmental pollution. These are defensive expenditure that either attempt to restore the damaged level of environmental quality (rehabilitation measures) or aim at the prevention of forthcoming deteriorations (avoidance measures).
Due to data availability and the effort of data collection, the coverage of expenditures for environmental protection by official statistics is limited to the economically most relevant sectors. These environmental protection areas are “waste disposal”, “protection of water quality”, “noise abatement” and “air pollution control”. State measures for radiation protection, nature conservation, expenditures for environmental management are not included; the expenditures for climate protection are included only since 2006. Moreover, “only” the expenditures from productive industry, government and privatized public companies are considered whereas the whole area of commercial waste disposal companies is not included, due to missing data.
The values considered here display de facto a considerable part of the environmental protection expenditures. The Federal Statistical Office assumes that the results can be regarded as a lower limit of the total economic expenditures for environmental protection.
The environmental protection expenditures have decreased from 44 billion euro in 1996 to 36 billion euro in 2010 – a reduction of roughly 20 %. One explanation is that in the meantime the basic structures for waste disposal and wastewater treatment are developed. This consideration refers to the distinction of investments and current expenditures for environmental protection: Especially the former are declining. Whereas in 1996 they still amounted to 16 billion euro, in 2010 they had fallen to 9 billion euro. The current expenditures for environmental protection declined as well, though to a much lower extent, from approximately 28 billion euro to 27 billion. Currently, the methodology of the calculated is under revision by Eurostat and the german statistical office. Therefore, the calculated values go only until 2010; between 2011 and 2014, the data is estimated.
In 2009 water conservation accounted for the largest share among the environmental areas covered with 41,3 %. Air pollution control made up 7,2 % and noise abatement only one percent. Climate protection, which is covered since 2006, contributed 4,9% in 2009. There are only slight shifts throughout the years, primarily towards an increase of waste disposal expenditures and newly added climate protection expenditures whereas the share of water conservation is declining.
There are time lags between the emergence and the (partly) restoration of environmental damages, that have to considered when interpreting the time series. In the mid and long term, declining environmental impacts lead to a reduction of compensatory environmental protection expenditures as well. Since the environmental protection expenditures positively contribute to GDP, a decline of environmental pollution would reduce GDP. In contrast, the NWI would show an improvement because the deductions shrink.