Initial Guidance for Environmental-Economic Accounting Classifications for Economic Statistics-Request for Comments on Future Natural Capital Accounting Statistical Classifications, 104226-104229 [2024-30058]

Agencies

• Management and Budget Office

[Federal Register Volume 89, Number 245 (Friday, December 20, 2024)]
[Notices]
[Pages 104226-104229]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-30058]


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OFFICE OF MANAGEMENT AND BUDGET


Initial Guidance for Environmental-Economic Accounting 
Classifications for Economic Statistics--Request for Comments on Future 
Natural Capital Accounting Statistical Classifications

AGENCY: Office of Information and Regulatory Affairs, Office of 
Management and Budget, Executive Office of the President.

ACTION: Notice of solicitation of comments on a preliminary draft of 
new statistical classification guidance for environmental-economic 
statistics.

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SUMMARY: The Office of Management and Budget (OMB), on behalf of the 
Environmental-Economic Accounting Classification Interagency Technical 
Working Group (ITWG), seeks public comments on an Interim Report which 
contains initial draft statistical classification guidance for

[[Page 104227]]

environmental-economic accounting classifications. Details about the 
Interim Report, its contents, and specific questions of interest for 
public comment are available in the SUPPLEMENTARY INFORMATION section 
below.

DATES: To ensure consideration of comments on this notice, they must be 
received no later than February 18, 2025. Because of delays in the 
receipt of regular mail related to security screening, respondents are 
encouraged to send comments electronically (see ADDRESSES section, 
below).

ADDRESSES: Submit comments through www.regulations.gov, a Federal E-
Government website that allows the public to find, review, and submit 
comments on documents that agencies have published in the Federal 
Register and that are open for comment. Enter ``OMB-2024-0011'' (in 
quotes) in the Comment or Submission search box, click Go and follow 
the instructions for submitting comments. Comments received by the date 
specified above will be included as part of the official record. OMB 
and the ITWG will respond to comments by issue and theme, and not to 
individual submissions. Please include the Docket ID (OMB-2024-0011) 
and the phrase ``Environmental-Economic Accounting Classifications 
Guidance'' at the beginning of your comments. Please also indicate 
which questions in the SUPPLEMENTARY INFORMATION of this notice are 
addressed in your comments.
    Privacy Act Statement: OMB is issuing this request for comments 
pursuant to its authority to oversee the Federal statistical system 
under 44 U.S.C. 3504(e). Submission of comments in response to this 
notice is voluntary. Information you provide will be used to inform 
sound decision making regarding potential future OMB statistical 
classifications. Please note that all submissions received in response 
to this notice may be posted on www.regulations.gov or otherwise 
released in their entirety, including any personal and business 
confidential information provided. Do not include in your submissions 
any copyrighted material; information of a confidential nature, such as 
personal or proprietary information; or any information you would not 
like to be made publicly available. The OMB System of Records Notice, 
OMB Public Input System of Records, OMB/INPUT/01, 88 FR 20913 
(www.federalregister.gov/documents/2023/04/07/2023-07452/privacy-act-of-1974-systemof-records), includes a list of routine uses associated 
with the collection of this information.
    Electronic Availability: Federal Register notices are available 
electronically at https://www.federalregister.gov/.
    For general inquiries email: [email protected]. 
Please note: Communication through this email will not be included in 
the record for OMB-2024-0011. Comments should be submitted through 
www.regulations.gov.

SUPPLEMENTARY INFORMATION: Pursuant to its authority under 44 U.S.C. 
3504(e), the Office of Management and Budget (OMB) announces the start 
of the classification development process for new statistical 
classification guidance for environmental-economic statistics. OMB, on 
behalf of its Environmental-Economic Accounting Classification 
Interagency Technical Working Group (ITWG), seeks public comment on an 
Interim Draft report which contains an initial draft of statistical 
classification guidance, as well as on the specific topics presented in 
Section IV of this Federal Register Notice (FRN). This is the first of 
multiple FRNs requesting public comment in the process leading up to 
OMB publishing new statistical classification guidance for 
environmental-economic statistics. OMB anticipates issuing final 
guidance in 2028.

I. Background on National Economic Accounts

    National economic accounts were created to organize the broad 
concept of an economy in a useful way, beyond just an understanding of 
the size of its many components, to also understand their systematic 
interdependencies. The U.S. National Income and Product Accounts (NIPA) 
are used to compute Gross Domestic Product (GDP), calculate a national 
balance sheet, and help conduct long-term forecasting. Existing 
national economic accounts data for the United States, however, do not 
include environmental data, leaving an incomplete view of U.S. assets 
and economic dependencies on natural assets.\1\
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    \1\ Off. of Sci. & Tech. Pol'y, Off. of Mgmt. & Budget, & Dep't 
of Com., National Strategy to Develop Statistics for Environmental-
Economic Decisions (Jan. 2023), available at www.whitehouse.gov/wp-content/uploads/2023/01/Natural-Capital-Accounting-Strategy-final.pdf.
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    International statistical standards are created for national 
economic statistics in order to promote consistency and comparability 
that can help all nations in a complex, interconnected world economy, 
but are also broad enough and allow for nation-level adaptations. The 
United States actively participates and assists in developing these 
international standards. The United States' NIPA accounts are compliant 
with the United Nations Statistical Commission's System of National 
Accounts (SNA, 2008),\2\ which is being revised in 2025.
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    \2\ United Nations Stat. Comm'n, System of National Accounts 
2008, United Nations, unstats.un.org/unsd/nationalaccount/sna2008.asp (last visited Oct. 30, 2024).
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    U.S. and international economic accounting standards and account 
structures are routinely and cyclically improved to make them more 
comprehensive and accurate. As part of this iterative improvement 
process, the United States and the international statistical community 
have committed to developing environmental-economic statistics that 
extend the SNA through the newer international statistical standards 
and supporting documents that comprise the System of Environmental-
Economic Accounting (SEEA) framework. The U.S. commitment includes the 
United States' January 2023 National Strategy to Develop Statistics for 
Environmental-Economic Decisions (National Strategy). The SEEA Central 
Framework (SEEA-CF, 2012) \3\ is an international statistical standard 
that offers principles and guidance for constructing physical flow 
accounts and physical asset accounts that cover specific environmental 
assets (e.g., land, water, timber, harvestable marine resources), along 
with economic accounts that cover a named set of human economic 
activities that manage environmental resources.
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    \3\ United Nations et al., System of Environmental-Economic 
Accounting 2012 (2014), available at seea.un.org/sites/seea.un.org/files/seea_cf_final_en.pdf.
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    As the SEEA is generally additive with the SNA, it does not alter 
the SNA's fundamental principles. The SEEA aligns with existing SNA 
accounting principles and boundaries, while extending them to 
explicitly include the environment and environmental flows. Thus, 
accounting rules for environmental-economic accounting begin by 
orienting, to the extent possible, with preexisting rules for national 
economic statistics including the national balance sheet.

II. Role of the Office of the Chief Statistician of the United States 
and the U.S. Federal Statistical System in Developing Statistical 
Classification Standards

    The U.S. Federal statistical system is decentralized, with 16 OMB-
recognized statistical agencies and units (RSAUs) that have data 
collection as their primary mission and over 100 other agencies that 
collect statistical data,

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along with carrying out other primary missions. The Chief Statistician 
of the United States at OMB serves as coordinator of the Federal 
statistical system under the authority of the Paperwork Reduction Act 
of 1995 (PRA), and must ensure the efficiency and effectiveness of the 
system as well as the integrity, objectivity, impartiality, utility, 
and confidentiality of information collected for statistical 
purposes.\4\ The PRA also charges the Chief Statistician of the United 
States with coordinating the Federal statistical system by developing 
and overseeing the implementation of Government-wide principles, 
policies, standards, and guidelines concerning the presentation and 
dissemination of statistical information.\5\ These coordination efforts 
promote the efficiency and effectiveness of the Federal statistical 
system. More information on the Federal statistical system, including 
its structure and policies that govern it, is available at 
www.statspolicy.gov.
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    \4\ See 44 U.S.C. 3504(e)(1).
    \5\ See 44 U.S.C. 3504(e)(3).
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    The Office of the Chief Statistician of the United States is 
initiating the development of new statistical classification guidance 
for an environmental-economic statistics series, in alignment with the 
January 2023 National Strategy to Develop Statistics for Environmental-
Economic Decisions (National Strategy). This National Strategy was 
jointly published by the Office of Science and Technology Policy, the 
Office of Management and Budget, and the Department of Commerce, and 
presents a plan for developing the first U.S. national system to 
standardize environmental-economic statistics, built from the 
collaborative efforts of 27 Federal departments, agencies, and offices. 
The National Strategy itself underwent public comment,\6\ and is built 
on decades of theoretical and empirical research.
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    \6\ See Off. of Mgmt. & Budget, Revised Strategic Plan on 
Statistics for Environmental-Economic Decisions, 88 FR 5374 (Jan. 
27, 2023), available at www.federalregister.gov/documents/2023/01/27/2023-01608/revised-strategic-plan-on-statistics-for-environmental-economic-decisions.
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    Ultimately, completion of the National Strategy's 15-year plan 
would create statistical classifications for a new national economic 
statistics series, that further connects the environment to the 
economy. This would provide a reliable, regularly updated statistical 
series of data. It would introduce environmental-economic accounting of 
the nation's environmental assets like land, water, and clean air, and 
economic flows associated with these assets, to supplement the National 
Income and Product Accounts (NIPA) from which the United States 
calculates GDP and understands economic interdependencies across 
sectors and resources. This FRN publicly announces the start of this 
classification development process and also seeks public comment on the 
initial draft of statistical classification guidance on the Phase I 
accounts within the National Strategy.
    The Chief Statistician of the United States initiated the 
development of new statistical classification guidance via the 
convening of an Environmental-Economic Accounting Classification 
Interagency Technical Working Group (EEA-C ITWG) in November 2023. This 
working group, made up of Federal experts on economic classification 
and environmental-economic accounting from more than a dozen Federal 
agencies, is charged to help advise OMB by providing recommendations 
for account classifications and guidance on how to develop official 
environmental-economic accounting classifications to define accounts 
for environmental-economic statistics to pair with traditional economic 
statistics accounts.
    The EEA-C ITWG developed an Interim Report,\7\ which contains the 
first draft of their recommendations for future statistical 
classification guidance for environmental-economic accounting 
classifications. This Interim Report represents the first interagency 
effort to build the principles and processes to construct an 
environmental-economic accounting classification system for use in 
official economic statistics in the United States. This classification 
work will deepen and expand from this foundation.
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    \7\ The Interim Report is available on regulations.gov docket.
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    The Interim Report includes one chapter for each of six 
Environmental Sectors per Phase I in the National Strategy, and in full 
knowledge that the Interim Report is preliminary. The accounts are Air 
Emissions, Water, Land, Environmental Activities & Jobs, the first 
phase of Marine natural capital accounts, and Forests.\8\
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    \8\ Note that Forests accounts were added from the Phase II set 
to the Phase I set described in the National Strategy, because the 
ITWG agreed they were mature enough to be included in this first 
classification effort, provided that ecosystem services are not 
considered in this ``Phase I'' classification building effort.
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    Request for comment at this stage is the first of several public 
interaction and solicitations in support of this effort, in the spirit 
of robust and wide engagement during the classification development 
processes, and a key step in the EEA-C ITWG's development of account 
classifications and guidance. As that process continues, the EEA-C ITWG 
will consider public feedback from this request for comments and from 
any public listening sessions that this group or its account sub-groups 
may hold. There will be a further request for public comment in 2025, 
before an EEA-C ITWG Final Report is submitted to the Chief 
Statistician of the United States. Further, similar classification work 
and public comment opportunities are expected on Phase II and Phase III 
accounts (i.e., the remaining 10 environmental sector accounts) from 
the National Strategy.
    This FRN seeks public input on the potential approaches to building 
categories and on the initial six accounts. It is general, checking 
alignment with theory and practical constraints, and also requests 
comment on certain potential metrics associated with specific accounts 
and categories that are presented in the Interim Report's account 
chapters. In the next round of public comment in 2025, the EEA-C ITWG 
expects to ask for public comment about a more detailed and complete 
classification set, including possible metrics for the classification 
tables. Note that constructing the classification system is key, but 
only one part of the larger effort to develop environmental-economic 
accounts.
    The National Strategy defines a suite of targets, timelines, and 
tasks to build statistics to support environmental-economic decisions. 
Among these are Headline Summaries (e.g., changes in natural capital 
wealth); Satellite Accounts and Supporting Products (e.g., ``Hazards'' 
account, dashboards, and an environmental activities report); 
Environmental Sector accounts (in Phases I, II and III); and Supporting 
Activities (e.g., engagement across accounts and cross-cutting topics 
like classification systems, data sharing, and valuation standards). 
From this wider suite, the building of common U.S. environmental-
economic accounting classifications will help to ensure agencies are 
using standardized categories and definitions. As with any standardized 
statistical classification, common taxonomies of mutually exclusive and 
comparable categories will serve as a unifying platform for consistent 
statistical data development. Each Environmental Sector account (e.g., 
Water, Land) will be comprised of multiple tables or sub-accounts. 
Environmental-economic accounting classifications will name essential 
rows and columns in specific tables or accounts.

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III. EEA-C ITWG Interim Report--Chapter Content

    Each of the six account chapters in the Interim Report begins with 
an introduction of the account topic area, followed by an overview of 
the relevant conceptual history and an exploration of other countries' 
or intergovernmental organizations' relevant work in the account topic 
area that may be considered for application in the United States (e.g., 
``United Nations,'' ``Organisation for Economic Co-operation and 
Development,'' or ``European Union''). Any relevant U.S. work is also 
described, in order to promote efficiency when the application of past 
U.S. or international approaches is feasible and desirable (section 2). 
Each account chapter then proposes a classification framework and 
guidance particular to that account (which is usually a set of accounts 
within that topic area (section 3); discusses current data gaps and 
limitations to be considered when attempting consistent national 
quantification within the proposed classification framework (section 
4); and closes with a conceptual discussion of connections to other 
accounts, and guidance for using the proposed account in its current 
form (section 5).

IV. Request for Information

    The National Strategy recommends that environmental-economic 
accounts be pragmatic and useful for a wide range of decision-making 
(Recommendation 1), comparable through time and across accounts 
(Recommendation 2), and align with international accounting standards 
as our national economic accounts do (Recommendation 3). The accounts 
have been developed thus far with beneficial input from 27 U.S. 
departments and agencies. In order to improve the utility of these 
accounts to users as the accounts are further developed over time, it 
is important to seek feedback across a broad range of perspectives. We 
therefore focus this request for public comment on the following 
questions. The questions posed below are those the EEA-C ITWG deemed 
most significant and relevant to its recommendations and do not 
indicate positions of OMB or the agencies participating in the EEA-C 
ITWG. The questions have been sorted into broad categories for ease of 
review. Responses should be concise, and if summarizing or depending on 
published works, please include citations and electronic links to 
reference materials, studies, research, and other empirical data that 
are not widely available.
    1. Is the overall U.S. approach to environmental-economic 
accounting, as proposed through this initial set of classifications, 
consistent with the principles of environmental-economic accounting and 
economic statistics? Is there pertinent information or are there key 
priorities that the EEA-C ITWG should consider when improving the 
recommendations for classifications? Does the overall approach adhere 
to national economic accounting concepts, and reasonably balance these 
with the goals of simplicity, feasibility, and reproducibility? If 
noting a break from the Interim Report's methods or current 
recommendations, please cite sources and be specific as to anticipated 
consequences of not making the change.
    2. Are the specific approaches--framing of accounts, which account 
tables are recommended in each environmental-economic account type--
taken in these six account chapters and any related supplemental 
materials clear, logical, and consistent with (a) the precepts of 
national economic accounting (SEEA-CF as supplemental to SNA); (b) the 
environmental-economic accounting needs of U.S. agencies and other 
domestic stakeholders; and (c) the need for international comparability 
of environmental-economic accounts? If there are concerns with any 
specific approaches, please note how the overall approach or specific 
accounting structures as recommended in the Interim Report may be 
improved, being as specific as possible.
    3. Considering first what agencies can currently measure, what 
relevant categories or subcategories are missing from the initial set 
of accounts? Or, are there categories included in this draft that 
should not be included? Please name or describe them, and reasons for 
changing the proposal. Where metrics are discussed that may fill 
account table cells, comment on the appropriateness of these metrics, 
and whether specific changes may improve the usefulness of the accounts 
to specific stakeholders.
    4. Are there additional, alternative, or forthcoming data sources 
that should be considered to (a) improve classifications in these 
chapters; or (b) facilitate how these accounts accurately measure the 
components and subcomponents of these accounts? Please explain why or 
why not, and how specific data sources would improve the utility of 
specific accounts.
    5. As the EEA-C ITWG moves to consider metrics that cannot yet be 
measured, but that may serve stakeholder needs, are there 
recommendations for specific categories and metrics not presently 
measurable but that should be targeted for inclusion in the future, or 
general recommendations for how to expand on that list? If a metric or 
classification has not been considered to date in the United States 
nationally, is there an example of its feasibility (sub-nationally in 
the United States or elsewhere internationally)?

V. Timing for Developing This New OMB Statistical Classification 
Guidance

    Following this public comment period, the EEA-C ITWG will review 
the comments and revise draft statistical classification guidance on 
the Phase I accounts. Then OMB will publish the EEA-C ITWG's proposed 
recommendations for public comment in a subsequent Federal Register 
Notice. The EEA-C ITWG will then review the comments and develop final 
recommendations to the Chief Statistician of the United States at OMB 
on the statistical classification guidance on the Phase I accounts in a 
Final Report. The EEA-C ITWG will follow a similar process to make 
recommendations for the Phase II and III accounts (i.e., the remaining 
10 environmental sector accounts) in the National Strategy. OMB will 
review the culminative recommendations and make decisions for Phases I-
III. It is expected that OMB would be issuing final guidance in an 
Environmental-Economic Accounting Classifications Manual in 2028.

Karin A. Orvis,
Chief Statistician of the United States.
[FR Doc. 2024-30058 Filed 12-19-24; 8:45 am]
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