Liberalising Trade in Environmental Goods and Services: In Search of ‘Win-Win-Win’ Outcomes

Abstract

Environmental goods and services have been identified as key sectors where the potential is fairly high for ‘win-win-win’ outcomes from trade liberalisation for the promotion of environmental protection and economic development. It is considered that expansion of trade liberalisation in environmental goods and services could help address acute environmental problems and resource efficiency in many countries, particularly the developing countries. The global market in environmental goods and services shows rapid growth potential and this may economically benefit both developed and developing countries.

At the Fourth Ministerial Conference of the World Trade Organisation (WTO) at Doha in November 2001, WTO members agreed in Paragraph 31 (iii) of the Doha Ministerial Declaration (DMD) as follows: ‘31. With a view to enhancing the mutual supportiveness of trade and environment, we agree to negotiations, without prejudging their outcome, on…(iii) the reduction or, as appropriate, elimination of tariff and non-tariff barriers to environmental goods and services.’

The DMD further states that the elimination of trade barriers would lead to ‘win-win-win’ situations, as it would have beneficial effects on trade, the environment and development. Questions arise (a) what are environmental goods and services, (b) what kind of ‘win-win-win’ situations may emerge from their further liberalisation, and (c) what specific trade and environmental interests can WTO members identify from the ‘win-win-win’ scenarios?

This research considers the issues raised by the call for trade liberalisation in environmental goods and services sector. Chapter 2 examines the environment industry and Chapter 3 provides various definitions of environmental goods and services by international organisations and WTO developed and developing members. It outlines the definitional challenges and briefly explores some post-Doha developments. Chapter 4 and 5 analyse the mandate under the DMD and the implications for trade. Chapter 6 identifies and examines the environmental regulatory framework required to address the increasing demand for environmental goods and services.

Chapter 7 explores various challenges related to the market structure and Chapter 8 provides conclusion and policy recommendations.

Keywords: environmental goods and services, Doha Mandate, WTO