A - old.cbs.gov.il · Web viewConsequently, defensive measures have been initiated to protect the environment, such as regulation of the treatment of waste and of wastewater, creation

A. General

Technological and industrial development has contributed to economic growth and

prosperity. However, at the same time, it has led to increased pollution and the exploitation of

natural resources and raw materials; much of this has a negative and harmful effect on the

environment. These negative effects can be perceived on a global level, for example, in

substantial consumption of energy involving the use of fossil fuels (primarily oil, coal and

gas). The combustion of these fuels contributes to the greenhouse effect and to the creation

of acid rain. On a local level, for example, the effects are seen in the use of plastic materials

that dissolve only after very long periods of time, and which pollute and damage land and

marine environments.

Over the years, the international community has become aware that the failure to handle the

damage caused by industry has harmed humanity and the environment, which is essential

for human life. Consequently, defensive measures have been initiated to protect the

environment, such as regulation of the treatment of waste and of wastewater, creation of

standards regarding levels of emission of air pollutants, and the actual reduction of emissions

of air pollutants and of greenhouse gases. The economic costs of these activities are seen at

various levels – from the individual's through those of the nation and the international

community.

The Manufacturing and Electricity industries constitute an important part of the business

activity that takes place within the economy, and both of these industries take many

measures to protect the environment. In order to assess these industries' expenditure on

environmental protection, every two years, the Central Bureau of Statistics ("the CBS")

conducts a survey entitled "Expenditure on Environmental Protection in the Manufacturing

and Electricity Industries" (including Mining and quarrying). The survey has taken place since

2008.

This publication presents data for the Manufacturing and Electricity industries for 2014

(following up on the prior publications that included the data for 2008, 2010, and 2012).

The survey's goals were to assess the financial expenditures of the Manufacturing and

Electricity industries on environmental protection – measures aimed at reducing the damage

to air quality, water quality, soil quality, etc. The expenditures that were assessed included,

among others: current expenditure incurred in the operation of facilities treating the various

types of pollution, investments in wastewater treatment plants, and investments in

technologies that reduce emissions of various pollutants.

( 9 )

The State of Israel is required to deal with environmental protection matters that arise in

various domains, such as waste, air pollution, and wastewater. In order to determine an

effective environmental policy, the existing situation and the relevant costs must be

examined overall. Reliable information regarding the expenditures for environmental

protection in the Manufacturing and Electricity industries will assist decision-makers in

choosing the appropriate ways in which to take action, in light of the economic implications of

such actions.

The publication of such data for the Manufacturing sector is an additional stage in

constructing a satellite account of the environmental protection expenditures in all of the

country's sectors. Correspondingly, the CBS publicizes annual data on expenditure on

environmental protection by the public sector (government, local authorities and non-profit

institutions). For the sake of completing the picture, data must be collected from the trade,

service and agriculture sectors, as well as the private sector.

The audience for the data in this publication are decision-makers in the public sector such as

the Ministry of Environmental Protection, the Ministry of Finance, the Ministry of Economy

and Industry (formerly the Ministry of Industry, Trade and Labor), interested parties within the

business sector such as the Manufacturers Association of Israel and manufacturing and

electricity establishments, international entities such as the OECD and the UN, academic

institutions, and research institutions.

This publication presents the financial expenditures for environmental protection according to

the definitions in the Eurostat Environmental Expenditure Statistics – Industry Data Collection

Handbook and according to OECD questionnaires, divided into industries, as is the OECD

standard.1 The expenditure is specified for each industry, by environmental domain

(protection of the air and the climate, wastewater treatment, waste treatment, etc.), by

economic classification (investment or current expenditure), and by technological

classification (end-of-pipe solution or clean technology).

1 The industries were classified according to: Central Bureau of Statistics (2012). Standard Industrial Classification of All Economic Activities, 2011. Technical Publication No. 80. Jerusalem: Author.

( 10 )

B. Main Findings

In 2014, the expenditure on environmental protection in the Manufacturing and Electricity

industries amounted to approximately NIS 3 billion. Of this, NIS 1.4 billion, comprising 47% of

all expenditures, consisted of investments in fixed assets and NIS 1.6 billion (53%) consisted

of current expenditure. Table 1 shows the breakdown between investments and current

expenditure over the years. During 2008 to 2014, the expenditure for environmental

protection increased by over 20%. The table also shows the fluctuations in investments

among the years and the change in the percentage of investment relative to current

expenditure.

Table 1. Expenditure on Environmental Protection2008, 2010, 2012, 2014

2008 2010 2012 2014

NIS million

Percent-age of total

NIS million


NIS million


NIS million


Total 2,457 100 2,556 100 3,125 100 3,024 100

Investment 1,295 53 995 39 1,652 53 1,425 47

Current expenditure 1,162 47 1,562 61 1,474 47 1,598 53

( 11 )

Diagram 1 shows the breakdown between current expenditure and investment in the various

industries. Expenditure on environmental protection was highest in Electricity supply (35) and

Manufacture of chemicals and chemical products, pharmaceutical products, rubber and

plastic products (20–22). In contrast, expenditure on environmental protection in 2014 was

lowest in Manufacture of wood and Manufacture of textiles, wearing apparel, leather and

related products (13–15).

(1) A complete list of the industries along with their codes appears in Appendix 1.(2) The industry Manufacture of wood, cork, and straw products (16) is not presented due to sampling errors of over 30%.

0 200 400 600 800 1,000 1,200

Textile, wearing apparel and leather products

Basic metals

Paper, printing and reproductionof recorded media

Refined petroleum products

Mining and quarrying

Non-metallic mineral products

Food products, beverages and tobacco

Metal products, machinery and equipment, furniture

Chemicals, pharmaceutical, rubberand plastic products

Electricity supply

NIS million

1. INVESTMENT AND CURRENT EXPENDITUREON ENVIRONMENTAL PROTECTION, BY INDUSTRY (DIVISION)(1)(2)

2014

Investment Current expenditure

( 12 )

In 2014, there was an 8% increase in current expenditure compared to 2012. It can be seen

that the changes were not uniform in the various industries (Diagram 2). The highest

increase (in percentages) in current expenditure on environmental protection from 2008 to

2014 was in Manufacture of food products, beverages, and tobacco products (10–12). In

Manufacture of basic metals and Machinery and equipment, there was a decrease from 2012

to 2014.

With regard to the composition of current expenditure, internal expenses in 2014 were similar

to those in 2012, and substantially lower than in 2008 and 2010.

(1) A complete list of the industries along with their codes appears in Appendix 1.

0 100 200 300 400 500

Wood and wood products, excl. furniture


Basic metals






Electricity supply

Metal products, machinery and equipment,furniture


NIS million

2. CURRENT EXPENDITURE ON ENVIRONMENTAL PROTECTION,BY INDUSTRY (DIVISION)(1)

2008, 2012, 2014

2008 2012 2014

( 13 )

Findings by Environmental Domain

When the data are examined according to the environmental domain (Diagram 3), it appears

that, similar to previous years, in 2014 as well, most of the expenditures were related to

protection of air quality and climate (52%). The next highest expenditures were for treatment

of waste (21%) and wastewater treatment (17%). Over the years, the expenditure in the

domain of air and climate has increased to the detriment of the expenditure in the domains of

treatment of waste and wastewater.

3. EXPENDITURE ON ENVIRONMENTAL PROTECTION,BY ENVIRONMENTAL DOMAIN

Similar to 2012, the highest expenditures on wastewater treatment were in Manufacture of

chemicals, pharmaceutical products, rubber and plastic products (20–22), as well as in

Manufacture of food products, beverages and tobacco products (10–12), and were NIS 156

million and NIS 141 million, respectively. The expenditures on treatment of waste were

incurred primarily in Manufacture of chemicals, pharmaceutical products, rubber and plastic

products (20–22) and in Manufacture of metal products, machinery and equipment, and

furniture (25–33) – each more than NIS 190 million. The highest expenditures on treatment

of waste were in those industries in 2012 also.

( 14 )

2012

Air and climate46.3%

Other9.3%

Hazardous waste9.9%

Wastewater25.1%

Waste9.4%

Total expenditure -NIS 3.13 billion

2014

Waste10.9%

Wastewater17.0%

Hazardous waste10.4%

Other10.1%

Air and climate51.6%

Total expenditure -NIS 3.02 billion

Findings by Technological Classification

The survey examined, among other characteristics, the type of treatment (technological

classification) for which the expenditure was incurred – meaning whether the expenditure

was for an activity that used clean technology (pollution prevention) or whether it was for

end-of-pipe solutions (treatment of pollution after its creation). Expenditure on investments in

end-of-pipe solutions constituted approximately 89% of investments, whereas only

approximately 11% of investments were for clean technology solutions (Diagram 4). In

comparison with the data of surveys from previous years (2008, 2010, 2012), there was a

decrease in investment in clean technology solutions in manufacturing, by approximately

25% compared to 2008 and 2010 and approximately 14% compared to 2012. The

percentage of current expenditure on end-of-pipe solutions out of total current expenditure

was approximately 73%.

(1) A complete list of the industries along with their codes appears in Appendix 1.(2) Divisions 13–15 and 16 were combined due to confidentiality. Divisions 25–33 were not included due to relative sampling errors of over 30%.

0 100 200 300 400 500 600 700 800 900

Basic metals


Textile, wearing apparel and leather productsand wood products, excl. furniture






Electricity supply

NIS million

4. INVESTMENT IN ENVIRONMENTAL PROTECTION,BY TECHNOLOGY TYPE AND INDUSTRY (DIVISION)(1)(2)

2014

End-of-pipe solution Clean technology

( 15 )

Current Expenditure on Environmental Protection Out of Total Revenue

Current expenditure on environmental protection (excluding Electricity supply), as a

percentage of all revenue of the Manufacturing industry (excluding Electricity supply),

amounted to an average of 0.3%. The highest percentage of current expenditure on

environmental protection out of all revenue was 0.7%, in Mining and quarrying (3–5),

(Diagram 5).

5. CURRENT EXPENDITURE ON ENVIRONMENTAL PROTECTION,OUT OF TOTAL REVENUE, BY INDUSTRY (DIVISION)(1)

2014

0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7


Wood and wood products, excl. furniture

Metal products, machinery and equipment, furniture

Basic metals






Percentage of revenue

(1) A complete list of the industries along with their codes appears in Appendix 1.

( 16 )

Expenditure on Environmental Protection in Manufacturing and in the Public Sector

Data on expenditures on environmental protection in the public sector, which are based on

the Accountant General’s performance reports and on financial reports of local councils,

government companies, the national institutions and non-profit organizations, are published

annually by the CBS in the Annual Tables. Diagrams 6 and 7 show a comparison between

expenditure on investments and current expenditure in the public sector and in the

Manufacturing and Electricity industries, by environmental domain. It can be seen that the

major portion of the expenditure on investment of the public sector was in the wastewater

domain and in the animal, plants and landscape domain. In contrast, in the Manufacturing

and the Electricity industries, the major portion of the investment was in the domain of air

quality and climate. The major portion of the current expenditure in the public sector was in

the domains of waste, animal, plants and landscape, whereas in the Manufacturing and the

Electricity industries the current expenditure was divided almost equally among the domains

of air quality and climate, wastewater, and waste.

6. INVESTMENT IN ENVIRONMENTAL PROTECTION IN THE PUBLIC SECTOR AND IN MANUFACTURING AND ELECTRICITY

2014

0

200

400

600

800

1,000

1,200

Air Wastewater Waste Soil Animal,plants andlandscape

Other

NIS

mill

ion

Manufacturing and electricity Public sector

( 17 )

7. CURRENT EXPENDITURE ON ENVIRONMENTAL PROTECTIONIN THE PUBLIC SECTOR AND IN MANUFACTURING AND ELECTRICITY

2014

0

1,000

2,000

3,000

4,000

5,000

Air Wastewater Waste Soil Animal,plants andlandscape

Other

NIS

mill

ion

Manufacturing and electricity Public sector

( 18 )

International Comparisons

In the absence of available international data, the comparison with data for the European

Union countries is for 2012.

Diagram 8 presents total expenditure on environmental protection in various countries, in

terms of euros per capita. The diagram shows that the total expenditure on environmental

protection in euros per capita in Israel was similar to that in Romania and Poland, and lower

than the average in the European Union.

8. EXPENDITURE ON ENVIRONMENTAL PROTECTIONIN MANUFACTURING AND ELECTRICITY IN ISRAEL

AND IN EUROPEAN UNION COUNTRIES2012

0

50

100

150

200

250

Ser

bia

Latv

ia

Lith

uani

a

Por

tuga

l

Bul

garia

Cyp

rus

Spa

in

Cro

atia

Uni

ted

Kin

gdom

Est

onia

Hun

gary

Slo

vaki

a

Rom

ania

Isra

el

Pol

and

Bel

gium

Eur

opea

n U

nion

Aus

tria

Cze

ch R

epub

lic

Finl

and

Sw

eden

Nor

way

Slo

veni

a

Euro

s pe

r cap

ita

( 19 )

Total expenditure on environmental protection in Manufacturing and Electricity was 0.3% of

the GDP in 2012 in Israel (similar to 2010). In the European Union countries in 2012, the

average expenditure on environmental protection in the Manufacturing and Electricity

industries (including the gas and water supply industries) was 0.4% of GDP (Diagram 9).

9. EXPENDITURE ON ENVIRONMENTAL PROTECTIONIN MANUFACTURING AND ELECTRICITY AS A PERCENTAGE OF GDP

IN ISRAEL AND IN EUROPEAN UNION COUNTRIES2012

0.0

0.2

0.4

0.6

0.8

1.0

1.2

Cyp

rus

Uni

ted

Kin

gdom

Spa

in

Por

tuga

l

Latv

ia

Aus

tria

Bel

gium

Isra

el

Nor

way

Sw

eden

Eur

opea

n U

nion

Finl

and

Lith

uani

a

Est

onia

Cro

atia

Slo

vaki

a

Ser

bia

Bul

garia

Hun

gary

Rom

ania

Pol

and

Cze

ch R

epub

lic

Slo

veni

a

Perc

enta

ge o

f GDP

In Israel, the expenditure on environmental protection as a percentage of GDP was similar to

the percentages in Norway, Belgium, and Austria, but lower than the percentages in Eastern

European countries such as Slovenia, Poland, and the Czech Republic.

( 20 )

Diagram 10 presents the percentage of expenditure on environmental protection by

expenditure on investment and current expenditure in European Union countries. The

diagram indicates that the ratio of expenditure on investments to current expenditure in Israel

was similar to that in Serbia and Lithuania, and differed from countries such as Cyprus,

where the current expenditure was higher relative to the expenditure on investment, as well

as from countries such as Lithuania, where the opposite was true. The percentage of current

expenditure in Israel was lower than the European Union average.

10. CURRENT EXPENDITURE AND INVESTMENT IN ENVIRONMENTAL PROTECTION IN MANUFACTURING AND ELECTRICITY,


0

20

40

60

80

100

Cyp

rus

Uni

t ed

Kin

gdom

Hun

gar y

Eur

o pea

n U

nion

Por

t uga

lS

pain

Bel

gium

Aus

tr ia

Cze

ch R

epub

li cR

oma n

iaP

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dN

orw

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nlan

dS

lova

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Bul

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Sw

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Cr o

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Lit h

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Slo

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erb i

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Perc

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f exp

endi

ture

Current expenditure Investment

( 21 )

In 2012, protection of air quality and climate, treatment of wastewater, and treatment of

waste (regular and hazardous) constituted the main expenditure on environmental protection

in the Manufacturing and Electricity industries, both in the various European Union countries

(77%) and in Israel (93%, similar to the figure in 2014). The breakdown of expenditure on

investment among the main environmental domains (air and climate, wastewater, and waste)

is presented in Diagram 11.

11. EXPENDITURE ON ENVIRONMENTAL PROTECTION,BY MAIN ENVIRONMENTAL DOMAINS,


0

20

40

60

80

100

Cyp

rus

Nor

way

Gre

ece

Hun

gary

Italy

Slo

vaki

aB

elgi

umS

pain

Ger

man

yP

ortu

gal

Aus

tria

Finl

and

Rom

ania

Bul

garia

Cro

atia

Cze

ch R

epub

licE

ston

iaS

wed

enIs

rael

Lith

uani

aP

olan

dS

love

nia

Perc

enta

ge o

f inv

estm

ent

OtherWaste

WastewaterAir

( 22 )

C. Terms, Definitions and Classifications

1. Environmental protection activities and expenditures

Environmental protection activities are activities conducted for the main purpose of

treating, reducing, preventing, or eliminating pollutants, pollution or deterioration of the

environment caused by the activity of the business.

A number of key areas of activity that affect the environment can be identified among the

various activities carried out by businesses. These activities include supervision, prevention,

reduction and disposal of environmental pollutants.

The main areas of activity carried out by the businesses for the purpose of protecting the

environment are:

Investment in equipment, rehabilitation of equipment and increasing the efficiency of

processes for improving the environmental impact and for preventing the creation of

pollution.

Prevention, monitoring, supervision and reduction of the level of pollution.

Treatment of waste that has been created.

Rehabilitation of sites that have suffered environmental degradation after they were

used.

Establishment of environmental management systems and the adoption of

environmental standards.

External payments for environmental protection activity, consulting, payments of

taxes and fees relating to environmental protection.

Expenditure on environmental protection is equal to the total of investment in fixed assets

and current expenditure for environmental protection activity.

The definition of expenditure on environmental protection is based on the definition in the

Eurostat Environmental Expenditure Statistics - Industry Data Collection Handbook and on

OECD guidelines.

The expenditures relate to activities carried out during the reported period, which is the year

2014.

( 23 )

The only expenditures included are those whose main purpose is environmental protection,

even if the activities are carried out as a result of environmental legislation, in order to

comply with consumers' requirements or in order to improve the business's image and that of

its product. The expenditure of a particular business relates to the activity of that business,

even if such activity was carried out by external parties. The included expenditures are only

those borne by the business itself. For example, if an environmental hazard was created

through the activity of Business A and handled by Business A and by an additional party,

Business A's expenditures will include only its expenditures for handling the hazard.

Expenditures for various activities that have an impact on environmental protection, but for

which such protection is not their main purpose, are not included. For example, expenditures

that resulted primarily from an interest in saving energy and resources or because of

considerations concerning safety and health in the business's physical area are not included.

The following are also not included: loss of income, fines and penalties, and a decline in the

value of capital (depreciation).

2. Classification of data

Expenditures for environmental protection are classified according to a number of criteria:

A. Environmental impact

The European Union's statistical organization (Eurostat) has published a document which

classifies various activities according to environmental issues.2

This document includes a multi-purpose classification of the measures used for

environmental protection and serves as a classification of activities, products, investments

and other transactions aimed at protecting the environment. This classification serves as a

standard for reporting to international parties.

In accordance with the classification, eight domains of environmental protection were

defined:

1. Protection of air quality and climate – the prevention or reduction of gas, liquid or

particle emissions into the atmosphere and the monitoring of air pollution.

2. Treatment of wastewater – the collection and transportation of wastewater, reduction

of the amount of wastewater and of materials in wastewater, maintenance of systems

for the treatment of wastewater and the monitoring of wastewater.

2 Classification of Environmental Protection Activities – CEPA 2000.

( 24 )

3. Treatment of waste (divided between hazardous and non-hazardous waste) – the

prevention or reduction of the amount of waste, including collection, transportation,

treatment, disposal and monitoring of waste. It does not include the treatment of

radioactive waste.

4. Protection of soil, groundwater and surface water – the protection of soil and of water

sources from contamination, the purification or disposal of contaminated soil and

groundwater and the monitoring of soil and of water sources.

5. Reduction of exceptional noise and vibrations – reduction at source of noise and

vibrations, isolation of the sources of noise, and the monitoring of noise and vibration

levels.

6. Protection of animals, plants and landscape – protection of species, landscapes and

habitats, historical sites, landscape camouflage, and rehabilitation of landscapes and

habitats.

7. Protection against radiation – protection of the environment against radiation,

transportation and treatment of radioactive waste and the monitoring of radiation.

8. Other activities aimed at protecting the environment (including research and

development) – management of environmental systems, research and development

regarding environmental issues, training of personnel and consulting regarding

environmental issues, etc.

( 25 )

B. Type of technology

The technological classification has implications for the manner in which the expenditure will

be calculated and for the analysis of the data from a sustainable development perspective.

Environmental protection activities are classified into two main types of treatment:

1. "End-of-pipe solutions" – treatment of the pollution after it has already been created

(including measurement).

Use of technologies that treat pollution – methods, technologies, equipment and

processes aimed at the absorption of pollutants that are created during the manufacturing

process, the control and measurement of the levels of pollution, and the treatment or

disposal of pollutants. These processes are generally carried out at locations completely

outside the production line, and their removal does not impact on its continued activity.

According to the definition, the main goal of the use of these technologies, methods,

processes and equipment is to protect the environment.

For example: filters for treating emissions of air pollutants, waste collection facilities, etc.

This type of technology prevents the spread of pollutants that have been created, collects

and disposes of such pollutants, treats or removes them, or measures levels of pollution.

2. "Clean technologies" – the prevention of the generation of pollution.

The use of technologies that prevent pollution – methods, technologies, equipment and

processes that aim at the prevention or reduction of the amount of pollution generated at the

source. These components are generally a part of the production process.

Clean technologies can be implemented in two ways: through the modification of existing systems such as a transition to cleaner fuels (which contain less sulfur), or through the

installation of new systems such as the use of reverse osmosis water softening systems,

which reduces the quantities of salts in the wastewater.

These technologies reduce the emissions generated by the production process, and use raw

materials that are safe for the environment ("green raw materials"). These activities are

characterized by the use of new equipment and processes that cause less degradation of the

environment, and thus reduce the pollution that is generated at source.

( 26 )

Pollution prevention can be carried out through the improvement of old equipment, the

purchase of new equipment, the re-design of the product (with the objective of reducing the

pollution generated during its production), the reduced use of raw materials (with the

objective of reducing the quantity of emissions), the replacement or improvement of

processes, the re-use and recycling of raw materials, energy saving and conservation (with

the objective of reducing pollution), prevention of spills, maintenance and training of

personnel.

Calculation of expenditures for clean technologies:

The additional expenditure on clean technology is calculated in comparison to the

expenditure for a cheaper technology that the business could have used. An example would

be the additional expenditure incurred for use of environmentally friendly solvents, as

compared to the expenditure on cheaper solvents that cause more pollution.

Calculation method:

A = B - C

A – Additional expenditure on "clean technology" (expenditure for pollution prevention)

B – Expenditure for the part of the system, which aims to prevent pollution

C – The alternative, cheaper expenditure

3. The "other" category includes logistical and administrative activities such as training of

personnel and environmental management systems, which are not categorized as either

end-of-pipe solutions or as clean technologies.

( 27 )

C. Financial-accounting character of the expenditure

This classification distinguishes between investment in fixed assets and current expenditure.

The survey also collected data on revenue, subsidies, and grants received by the business

which are related to environmental protection activities.

1. Investment includes investment in fixed assets that are related to environmental

protection activities.

The definition of an investment is based on the accounting standards followed by the

business's bookkeeping department. The investments relate to assets that are expected to

serve the business for a period exceeding one year, including both tangible assets (buildings

and equipment) and "intangible" assets (know-how and patents) which have been recorded

in the business's books of account as investments.

Environmental protection investments include purchases of land, investments in existing

equipment and buildings, improvements, modifications and renovations that extend an

asset's life span or which increase the efficiency of equipment, investments in new

equipment and buildings, investments in methods, technologies and processes, and other

investments in measures that can be taken to prevent environmental degradations.

These investments do not include: the decline in value of equipment or an economic loss due

to regulations that require the use of different equipment, or assets received in the context of

the business's re-structuring (mergers, etc.)

An expenditure for the leasing of equipment, and which is not recorded as a fixed asset, will

not be included as an investment in assets, but will instead be considered to be a current

expenditure.

The manner in which investments are calculated:

Investments are calculated before the change in the value of the assets – i.e., the

amount recognized is the amount of the investment when it was made, and not after

the value of the asset has increased or decreased.

The purchase of products from an external party is calculated according to the

amount of the payment.

Products manufactured by the business are calculated according to the cost of

production.

Payments of value added tax (VAT) are not included as part of the investments.

( 28 )

2. Current expenditure – expenditures that served the business in the ongoing operation

of environmental protection activities.

The definition of a current expenditure is based on the accounting standards followed by the

business's bookkeeping department. Current expenditure include expenditures related to the

operation of environmental equipment, expenditures relating to treatment of waste, general

expenditures for environmental protection, expenditures incurred in purchasing

environmental services, leasing of equipment, salaries and accompanying expenses, rental

payments, consumption of energy and the use of other products, and the purchase of

external services.

Calculation method:

Payments for activities carried out by an external party are calculated according to

the amount of the payment.

Activities and products manufactured by the business are calculated according to the

cost of production.

Payments of value added tax (VAT) are not included as part of current expenditure.

Current expenditure is divided between internal current expenditure and purchases and payments. This division is important for the construction of a satellite account of

environmental protection expenditures, in order to prevent double counting of expenditures

among the various sectors – the public sector, the business sector, the households sector

and the providers of environmental services.

a. Internal current expenditure include all expenditures on activities carried out within

the business, and do not include any payments to external parties. These expenditures

include those incurred for the consumption of energy and perishable goods,

expenditures for personnel, leasing of equipment, and expenditures for operation of

environmental protection systems, general administration, and research and

development.

b. Payments and purchases are various fees and payments paid to external parties in

exchange for the receipt of environmental services that relate to the business's activity.

These expenditures include payments for the collection and treatment of solid waste,

treatment of polluted soil, collection and treatment of wastewater by external parties,

fees, payments to external advisors, receipt of licenses and know-how for operating and

maintaining equipment used for environmental protection, environmental control, etc.

They do not include payments of VAT.

( 29 )

3. Environmental protection revenue, subsidies and grants

a. Revenue – financial income derived from activities, the purpose of which is the

protection of the environment, such as the sale to another business of by-products to be

used as raw materials, the recycling of the business's collected waste for re-use in the

production process, etc.

b. Grants or subsidies – Financial assistance (direct or indirect) received by the business

for activities whose purpose is the protection of the environment.

( 30 )

D. Methodology

1. Survey population

The survey population includes manufacturing businesses and businesses engaged in the

generation and distribution of electricity, having 10 or more employee jobs. The included

businesses are those that have been classified as belonging to Section B – Mining and

quarrying, Section C – Manufacturing, and to Division 35 (Electricity supply) in Section D, as

defined in the Standard Industrial Classification of all Economic Activities, 2011 (see

Appendix 1).3

Due to the change in the Standard Industrial Classification, Publishing was removed from the

survey population.

2. Survey period

The data on expenditures relate to activities that took place in 2014, including investments

that were made in 2014 and which were, from an accounting perspective, spread out over

more than a single year. Expenditures for depreciation of equipment purchased for an

environmental protection purpose were not included.

3 See: Central Bureau of Statistics (2012). Standard Industrial Classification of All Economic Activities, 2011. Technical Publication No. 80. Jerusalem: Author.

( 31 )

3. Sampling method

Sampling frame

The sampling frame is based on the sampling frame used in the Manufacturing Indices

survey carried out by the CBS Senior Department of Business-Economic Statistics. The

sampling frame included all businesses engaged in the Manufacturing (excluding diamonds)

and Electricity supply industries, which are included in the businesses register maintained at

the CBS and which were active in the year 2014.

Businesses that did not belong to the survey population – businesses that are not a part of

the Manufacturing industries, businesses that did not have employee data in 2014,

businesses that ceased operations at the beginning of 2014 and businesses with an average

of 9 or less employee jobs in 2014 – were removed from the sampling frame.

Planning and drawing of the sample

The sampling frame was divided into 11 groups of Manufacturing and Electricity supply

industries (sampled industries), in accordance with the OECD recommendations. These

industry groups are characterized by operational and technological homogeneity in the

environmental context. For example, a paper manufacturing business will mostly incur

expenditures for treatment of wastewater, as compared to a business that is engaged in

mining and quarrying, which will incur mostly expenditures for protection of air quality.

For the purpose of planning the sample, size strata were defined for each sampled industry,

based on the average number of employee jobs in the year 2014.

The sample was drawn using sampling strata which were defined by combining the 11

Manufacturing and Electricity supply industry groups with the size strata. For each sampled

industry, the highest size stratum, made up of the largest businesses, was the "take-all"

stratum, from which all businesses were certain to be taken in the sample, while the other

size strata are referred to as the "take-some" strata, for which the likelihood of their inclusion

in the sample was lower than 1. For a list of the industries, see Appendix 1.

The sample was allocated among the different size strata within each of the industry groups

in accordance with the algorithm developed by Lavallee and Hidiroglou (1988).4 The

algorithm determines, for each sampled industry, the boundaries of the size strata and the

number of businesses to be sampled in each stratum, such that a minimal sample size can

be obtained for the desired level of precision. The sample that was drawn included

approximately 373 sampling units, some of which were comprised of a number of

businesses. In the end, appeals were addressed to 444 businesses.

4 Lavallee, P. & Hidiroglou, M. A. (1988). On the Stratification of Skewed Populations. Survey Methodology 14(1), 33–43.

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The degree of precision was determined for the sample according to the size of the

businesses. Therefore, it should be possible to obtain a similar level of precision for other

variables examined in the survey that correlate strongly with the size of the business. The

sampling error is expected to be higher for other variables examined in the survey that do not

correlate with the size of the business.

Within each stratum, all businesses have an equal likelihood of being sampled, in

accordance with the sampling allocation and the number of businesses in the stratum.

4. Investigation method

As a preliminary stage preceding the data collection, businesses were identified through

telephoned requests to businesses that appeared in the sample, and various details that

were needed prior to issuance of the questionnaires were clarified. At this stage, all the

general details regarding the business were collected, a determination was made as to

whether each business operated at several sites, and contact persons were identified who

would fill out the questionnaires. The main purpose of the identification stage was to prepare

the infrastructure that would enable the most efficient collection of the data.

The data was collected through questionnaires that were completed with the assistance of an

interviewer who visited the business. At the first stage, the questionnaire was sent to the

business's contact person (such as the environmental protection supervisor, the business's

engineer, or the director of operations), for the purpose of collecting the needed data and

preparing the material required before the arrival of the interviewer. Because the

questionnaire deals with information regarding environmental protection expenditures, it was

necessary, in some cases, to obtain information from additional parties within the business

(such as an accountant or chief financial officer) regarding the financial expenditures.

The data collection took place over a period of eight months, from September 2015 to April

2016.

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5. Response

Although this survey is complex, there was a high response rate, and most businesses took

the time to answer the survey questions. Nevertheless, because of the complexity of the

subject and the difficulty involved in obtaining the relevant data within the businesses, it may

be that some of the businesses did not provide a full report of all environmental protection

expenditures.

Altogether, in 2014, questionnaires were received from 385 businesses out of a total of 444

businesses that had been included in the sample.

Table 2. Interview Results(as a Percentages of all Businesses Included in the Sample), 2014

Interview results Percentage

Accepted 87

Not accepted 13

Closed/inactive business 2

Business's activity did not match the survey 7

Refusals and others 4

The non-response rate was 13%, of which 2% were businesses that had closed. In 7% of the

active businesses, the activity did not match the survey population and the businesses did

not belong to the Manufacturing and Electricity industries. Because of the response burden,

because they refused to participate, or for other reasons, 4% of the businesses were not

counted.

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6. Data handling

The checking of the questionnaires and of the data involved two stages. In the first stage, the

questionnaires were examined after their receipt. This stage included a review of the

completeness of the reporting regarding the business's details and the contact person, and a

check of the completeness of the classification of expenditures that had been reported. The

questionnaires were also checked in order to determine whether they included reporting of

expenditures that had been expected to be seen in all of the businesses (such as

expenditures for treatment of waste).

In the second stage, the quality control and preparation stage, additional checks were carried

out – regarding the completeness of the questionnaire, the degree to which the type of

expenditures matched (i.e., that they were expenditures for activities the purpose of which

was environmental protection), the classification of the expenditures in light of the description

of the activity, the size of the expenditures, the degree of conformity between the business's

reported main activity and the economic industry in which it is classified in the businesses

register, the degree of conformity between the reported expenditure and the reported

quantity from the section “waste and wastewater in manufacturing”, and a comparison to the

report from previous years.

To the extent additional clarification was needed, a follow-up request was addressed to the

contact person. After the information that was needed to complete the questionnaires was

received, the questionnaires were entered into an information system.

7. Estimation method

Each of the businesses covered in the survey was assigned a "weighting coefficient" that

expressed the number of businesses it represented for the survey year.

The weighting coefficient was calculated in two stages, as follows:

First stage – the business's preliminary weighting coefficient was calculated as the inverse of

its sampling probability. The greater a business's sampling probability, the fewer businesses

it represented.

Second stage – the business's final weighting coefficient was obtained by multiplying the

preliminary weighting coefficient by a factor that corrected for the non-responders in each

sampling stratum. The higher the non-response rate was in a particular stratum, the larger

the non-response correction coefficient.

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8. Reliability of the data

The data presented in the tables are estimates based on a sample survey and are subject to

various possible errors:

a. Sampling errors

Sampling errors result from the fact that the businesses that were investigated were only a

sample, and not the entire survey population. The sample on which the current survey was

based on is only one of a number of possible samples that could have been included through

the same sampling method and for the purpose of obtaining a sample of the same size.

Obviously, estimates that are based on different samples will differ from each other, and

almost all of them will be different than the value that would be obtained if information had

been collected from the entire population and not just from the sample.

The estimate is the value, estimated from the specific sample in this survey, of the corresponding value X which would have been obtained had data been collected from the

entire population.

The sampling error of the estimate is an average measure of the variability between all of the different values of the estimate that would have been obtained from all possible samples of the same size using the same sampling method, and the value that would have

been obtained under the same conditions of data collection, from the entire population.

The relative sampling error of the estimate / is estimated by the ratio between the

sampling error and the estimate. In order to caution the reader against using estimates that

are liable to have high sampling errors, estimates having relative sampling errors between

15% and 30% are shown in parentheses in the tables of the publication, and estimates

having relative sampling errors higher than 30% are not shown (the ~ symbol appears

instead).

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b. Non-sampling errors

Non-sampling errors in a survey can result from a variety of factors at each stage of data

collection and processing, and they also arise when information is collected from the entire

population and not only from a sampling of units.

The main non-sampling errors in the survey were the following:

1. Errors in coverage of the survey population: the sampling frame is subject to the

possibility of under-coverage of businesses in the population. This under-coverage

can result from a variety of causes, such as the presence of new businesses that

have not yet been included in the businesses register at the time the sample was

produced, industry classification errors, erroneous assessment of a business (for

example, a business with 10+ employee jobs being assessed as a business that is

too small to meet this threshold amount).

2. Errors resulting from non-responses: errors resulting from the fact that businesses do

not respond, either because they refuse to respond, or for other reasons. This can

bias the estimates to a certain extent, since the characteristics of businesses that

responded to the survey can be different from those that did not respond. The

estimation method used is intended to reduce this bias.

3. Response errors: errors resulting from a misunderstanding of the questions, from

disinterest in responding, or from an inability to respond.

4. Data-entry errors: the responses to the questionnaires are entered into a data-base

and errors can occur during the data-entry process, some of which are identified and

corrected through later checks of all the entered data.

5. Errors arising during the various stages of processing; errors in the data processing.

Some of these errors are identified and corrected through later checks of all the

obtained data.

It is difficult and sometimes even impossible to assess non-sampling errors. It is important to

note that during the planning and execution of the survey, efforts were made to minimize the

number of such errors as much as possible.

9. Data confidentiality

In accordance with the Statistics Ordinance, the CBS is obligated to safeguard the

confidentiality of the data obtained from businesses. For this reason, in certain cases the

data is presented collectively so as not to show particularized data.

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A - old.cbs.gov.il · Web viewConsequently, defensive measures have been initiated to protect the environment, such as regulation of the treatment of waste and of wastewater, creation