Final consumption of environmental protection services

According to ESA 2010 (§ 3.94) final consumption expenditure (P.3) consists of expenditure incurred by resident institutional units on goods or services that are used for the direct satisfaction of individual needs or wants or the collective needs of members of the community.

Final consumption of EP services by households (ESA 2010, § 3.95) consists of expenditure incurred by households on the purchases of EP services. This is consumption to satisfy their individual needs. It includes households’ “payments for non-market output” i.e. their payments of various fees and charges that represent less than 50% of the costs of production of the non-market EP services. The final consumption expenditure of households is recorded at purchaser's prices.

In national accounts, the consumption of products for the benefit of the community at large e.g., public administration, justice services, defence services, etc. is conventionally attributed to the general government. This is the final consumption by the general government. Those services are typically produced by the government itself, so they can be identified and measured from the production side.

Correspondingly, final consumption expenditure of EP services by general government and NPISH (ESA 2010, §§ 3.97, 3.98 and 3.117) is equal to the value of their non-market output less payments for non-market output.